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                                                                   EXHIBIT 10.10
                                                                  EXECUTION COPY

                            STOCK PURCHASE AGREEMENT

                                   DATED AS OF

                               SEPTEMBER 22, 2000

                                  BY AND AMONG

                          PREMIUM STANDARD FARMS, INC.

                            PSF GROUP HOLDINGS, INC.

                                       AND

                           CONTIGROUP COMPANIES, INC.
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                                TABLE OF CONTENTS

<TABLE>
<S>               <C>                                                         <C>
ARTICLE 1         Purchase; Purchase Price; Closing............................1
     1.1          Purchase of Stock............................................1
     1.2          Purchase Price...............................................1
     1.3          Closing......................................................2
     1.4          Access to Records............................................2

ARTICLE 2         Representations and Warranties of Buyer......................2
     2.1          Organization and Qualification...............................2
     2.2          Capitalization...............................................2
     2.3          Authority Relative to this Agreement.........................3
     2.4          Securities Act Matters.......................................3
     2.5          Parent Financial Statements..................................4
     2.6          Undisclosed Liabilities......................................4

ARTICLE 3         Representations and Warranties of the Company................4
     3.1          Organization, Qualification and Corporate Power..............5
     3.2          Authorization of Transaction.................................5
     3.3          Capitalization...............................................6
     3.4          Financial Statements.........................................6
     3.5          Receivables..................................................6
     3.6          Absence of Certain Developments..............................7
     3.7          Undisclosed Liabilities......................................8
     3.8          Books and Records............................................9
     3.9          Taxes........................................................9
     3.10         Real Property Leases.........................................9
     3.11         Real Property Owned or Under Option.........................10
     3.12         Compliance, Utilities and Other Matters.....................11
     3.13         Assets......................................................13
     3.14         Inventory...................................................14
     3.15         Contracts and Commitments...................................15
     3.16         Litigation..................................................17
     3.17         Compliance with Law.........................................17
     3.18         Intellectual Property.......................................18
     3.19         Environmental and Land Use Matters..........................18
     3.20         Seller Products; Product Liability..........................22
     3.21         Securities Act Matters......................................23
     3.22         Disclosure..................................................23

ARTICLE 4         Additional Agreements.......................................24
     4.1          Employees...................................................24
     4.2          Severance Period............................................24
     4.3          Warn Act....................................................25
     4.4          Employee Benefit Plans......................................25
     4.5          Vacation....................................................25
</TABLE>
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<TABLE>
<S>               <C>                                                         <C>
     4.6          Worker's Compensation Claims................................25
     4.7          Further Assurances..........................................25

ARTICLE 5         Conditions to Closing.......................................25
     5.1          Conditions to Obligations of Each Party to Close............25
     5.2          Additional Conditions to the Buyer's Obligations............26
     5.3          Additional Conditions to the Seller's Obligations...........27

ARTICLE 6         Survival of Representations; Indemnification................28
     6.1          Survival of Representations.................................28
     6.2          Indemnification by Seller...................................29
     6.3          Notice and Defense of Claims................................30
     6.4          Calculation of Covered Liabilities; Insurance Proceeds......32
     6.5           Limitation on Indemnification..............................33
     6.6          Exclusive Remedy following Closing..........................33

ARTICLE 7         General Provisions..........................................34
     7.1          Public Statements...........................................34
     7.2          Mediation...................................................34
     7.3          Notices.....................................................34
     7.4          Interpretation..............................................36
     7.5          Amendment...................................................36
     7.6          Severability................................................36
     7.7          Miscellaneous...............................................36
     7.8          Counterparts................................................36
     7.9          Cumulative Remedies.........................................36
     7.10         Attorneys' Fees.............................................36
     7.11         Construction................................................36
     7.12         Brokers, etc................................................37
</TABLE>
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                            STOCK PURCHASE AGREEMENT

                  STOCK PURCHASE AGREEMENT dated as of September 22, 2000 (this
"AGREEMENT"), by and among Premium Standard Farms, Inc., a Delaware corporation
(the "BUYER"), PSF Group Holdings, Inc., a Delaware corporation (the "PARENT"),
and ContiGroup Companies, Inc., a Delaware corporation (the "SELLER").
Capitalized terms used and not elsewhere defined in this Agreement have the
respective meanings assigned to such terms in Appendix I hereto.

                                    RECITALS

         WHEREAS, Seller is engaged in the hog production business in the States
of North Carolina and Georgia d/b/a/ "CAROLINA FARMS" and "SOUTHERN MAID"
(collectively, the "CAROLINA FARMS");

         WHEREAS, all of the assets used in connection with the Carolina Farms
are now owned by Premium Standard Farms of North Carolina, Inc., a Delaware
corporation (the "COMPANY");

         WHEREAS, Seller owns one thousand (1,000) shares of the Company's
common stock, no par value (the "PURCHASED SHARES"), with such shares
constituting all of the issued and outstanding capital stock of the Company;

         WHEREAS, Buyer currently provides services to Seller in managing and
operating the Carolina Farms and has provided such services for several years;

         WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer the Purchased Shares.

         NOW THEREFORE, the parties hereby agree as follows:

                                    ARTICLE 1

                        Purchase; Purchase Price; Closing

                  1.1 Purchase of Stock. On the Closing Date, Seller shall sell,
convey, transfer and assign, upon the terms and subject to the conditions set
forth in this Agreement, to Buyer, free and clear of all liens, security
interests, charges, restrictions, encumbrances and claims of every kind, and
Buyer shall purchase from Seller, all but not less than all of the Purchased
Shares. In consideration of the sale of the Purchased Shares to Buyer, Buyer
agrees to pay to Seller the Purchase Price.

                  1.2 Purchase Price. The aggregate purchase price for the
Purchased Shares shall be THIRTY-TWO MILLION THREE HUNDRED THOUSAND AND NO/100
DOLLARS ($32,300,000) (the "PURCHASE PRICE"), and shall be payable at the
Closing one-half in cash and one-half in common stock of Parent as follows:


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                  (a) by the wire transfer of immediately available funds in the
         amount of SIXTEEN MILLION ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
         ($16,150,000) into an account designated by Seller;

                  (b) by the delivery of 9,219 shares of the Class B common
         stock, par value $.01 per share, of Parent (the "PARENT COMMON
         SHARES").

                  1.3 Closing. The closing of the transactions contemplated by
this Agreement (the "CLOSING") shall be held, subject to the satisfaction or
waiver by the appropriate parties of the conditions set forth herein, at the
offices of Blackwell Sanders Peper Martin LLP, 2300 Main Street, Suite 1000,
Kansas City, Missouri, at 9 a.m. local time on September 22, 2000, or at such
other place and time as the parties may mutually agree (the "CLOSING DATE").

                  1.4 Access to Records. After the date hereof, Seller and its
Agents shall have reasonable access during regular business hours to all books,
records, files and documents relating to the Company to enable Seller to prepare
and file tax returns, prepare for litigation or obtain or confirm any
information relating to the Company, in each case subject to Seller's agreement
to maintain the confidentiality of any of the same. Buyer shall maintain all
such books and records in the United States and, for a period of seven years
from the date hereof, and shall not destroy or dispose of any such books and
records without first providing to Seller adequate notice of such intended
destruction or disposal and the reasonable opportunity for Seller, at its
expense, to copy or move any such books or records prior to their destruction or
disposal.

                                    ARTICLE 2

               Representations and Warranties of Buyer and Parent

         Except as otherwise set forth in written disclosure schedules delivered
to Seller prior to or contemporaneously with the execution hereof (copies of
which are attached hereto), the Buyer and Parent hereby represent and warrant to
the Seller each of the following items 2.1 through 2.6. The representation and
warranties set forth below are limited and/or qualified by and may not be relied
upon by Seller to the extent of: (i) the knowledge of Seller acquired in the
course of its ownership of the capital stock of Parent and its participation in
the management of Buyer and/or Parent, and (ii) the knowledge of any of Seller's
current directors, officers, employees, managers and/or agents who are or were
directors, officers, employees, managers and/or agents of Buyer and/or Parent
and who are or were assigned to or engaged in substantial activities related to
or who performed substantial responsibilities, duties or assignments with
respect to, the management or operation of Buyer and/or Parent.

                  2.1 Organization and Qualification. Each of the Buyer and
Parent has been duly incorporated and is validly existing as a corporation and
in good standing under the laws of the State of Delaware and has the requisite
corporate power to carry on its business as now conducted.

                  2.2 Capitalization. Parent's entire authorized capital stock
consists of (a) 250,000 shares of Class A common stock, par value $.01 per share
(the "CLASS A STOCK"), of which 100,000 shares are issued and outstanding, (b)
300,000 shares of Class B common stock,


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par value $.01 per share (the "CLASS B STOCK"), of which 104,081.64 shares are
issued and outstanding, and (c) 10,000 shares of preferred stock, par value $.01
per share (the "PREFERRED STOCK"), none of which are issued and outstanding. All
of the issued and outstanding shares of Class A Stock and Class B Stock have
been duly authorized and are validly issued, fully paid and nonassessable.
Except as disclosed in Schedule 2.2, there are no outstanding or authorized
options, rights, warrants, calls, convertible securities, rights to subscribe,
conversion rights or other agreements or commitments to which Parent is a party
or which are binding upon Parent providing for the issuance or transfer by
Parent of additional shares of capital stock of Parent and Parent has not
reserved any shares of Common Stock for issuance, nor are there any outstanding
stock appreciation rights, phantom equity or similar rights, agreements,
arrangements or commitments based upon the book value, income or other attribute
of Parent.

                  2.3 Authority Relative to this Agreement. Each of the Buyer
and Parent has the requisite corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution and delivery
of this Agreement by the Buyer and Parent, and the consummation by the Buyer and
Parent of the transactions contemplated hereby, have been duly authorized by the
board of directors of the Buyer and Parent, and no other corporate proceedings
on the part of the Buyer or Parent are necessary to authorize this Agreement and
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Buyer and Parent and constitutes a valid and binding obligation
of each such company, enforceable in accordance with its terms. Except as
disclosed in Schedule 2.3, neither the Buyer nor Parent is subject to or
obligated under any provision of (a) its certificate or articles of
incorporation or bylaws, (b) any contract, (c) any license, franchise or permit
or (d) any law, regulation, order, judgment or decree, which would be breached
or violated by the execution, delivery and performance of this Agreement and the
consummation by it of the transactions contemplated hereby. No authorization,
consent or approval of, or filing with, any public body, court or authority is
necessary on the part of the Buyer or Parent for the consummation by the Buyer
and Parent of the transactions contemplated by this Agreement.

                  2.4      Securities Act Matters.

                  (a) Each of the Parent Common Shares to be issued as
         contemplated by this Agreement has been duly authorized and, when
         issued in accordance with this Agreement, will be validly issued, fully
         paid and nonassessable and free of preemptive rights.

                  (b) Neither Buyer nor Parent (nor any Person acting on their
         behalf) has, directly or indirectly, offered any Parent Common Shares
         to be issued hereunder for sale to, or solicited any offers to buy any
         such shares from, or otherwise approved or negotiated with respect
         thereto with, anyone other than Seller, and neither Buyer nor Parent
         (nor any Person acting on their behalf) has taken or will take any
         action that would cause the offer, issuance or sale of any such shares
         hereby to violate the provisions of Section 5 of the Securities Act of
         1933, as amended, or any applicable state securities laws and
         regulations.


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                  2.5 Parent Financial Statements. Seller has previously been
provided true and complete copies of the audited financial statements, including
the notes thereto, of Parent for the period ended March 27, 1999, and the year
ended March 31, 2000 (the "PARENT FINANCIAL STATEMENTS"). The Parent Financial
Statements present fairly, in all material respects, the financial position and
results of operations of Parent as of such dates in accordance with generally
accepted accounting principles ("GAAP") consistently applied throughout the
periods covered thereby.

                   2.6 Undisclosed Liabilities. Except as disclosed in Schedule
2.6, Parent does not have any material liabilities or obligations (known or
unknown, absolute, accrued or contingent) except: (a) liabilities which are
reflected and reserved against on the Parent Financial Statements in accordance
with GAAP, (b) liabilities incurred in the ordinary course of business and
consistent with past practice since the date of the Parent Financial Statements
(none of which relates to any breach of contract, breach of warranty, tort,
infringement or violation of Law), (c) future performance obligations (none of
which relates to any breach of Contract, breach of warranty, tort, infringement
or violation of Law), (d) liabilities and obligations arising out of or related
to Buyer's acquisition of The Lundy Packing Company and its affiliates and (e)
liabilities and obligations arising out of or related to Buyer's execution of
Fourth and Fifth Amendments to its Credit Agreement with U.S. Bancorp Ag Credit.

                                    ARTICLE 3

                    Representations and Warranties of Seller

         Except as otherwise set forth in written disclosure schedules (the
"SCHEDULES") delivered to Buyer prior to or contemporaneously with the execution
hereof (copies of which are attached hereto), the Seller hereby represents and
warrants to the Buyer each of the following items 3.1 through 3.22, which apply
to and relate solely to the Company and Carolina Farms and not to Seller in
general or other divisions, subsidiaries or affiliates of Seller. The Schedules
are numbered to correspond to the various sections of this Article 3 setting
forth certain exceptions to the representations contained in this Article 3 and
other Schedules attached are numbered to correspond to their respective section
of this Agreement. To the extent any of the representations and warranties set
forth in this Article 3 or elsewhere in this Agreement (to include attached
Schedules) are qualified to "Seller's knowledge," or a similar phrase, such
qualification means and the knowledge of Seller is limited to the knowledge of
Jeffrey L. Bradshaw ("SELLER'S OPERATING MANAGER"), Rudolph W. Kellerman and
David Moore as of the date of this Agreement or the date so indicated in the
representation or warranty. The representation and warranties set forth below
are also limited and/or qualified by and may not be relied upon by Buyer to the
extent of: (i) the knowledge of Buyer acquired in the course of providing
services to Seller and otherwise, (ii) the knowledge of any of Buyer's current
directors, officers, employees, managers and/or agents who were formerly
directors, officers, employees, managers and/or agents of Seller and who were
assigned to or engaged in substantial activities related to or performed
substantial responsibilities, duties or assignments with respect to Carolina
Farms, (iii) knowledge considered in the "public domain" and the general and
other knowledge of Buyer related to the industry in which Carolina Farms
operates and the changing governmental and


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regulatory oversight and environment relative thereto, including, without
limitation, Buyer's knowledge with respect to lagoons, land application fields,
the spraying and/or other disposal of solid and liquid waste therefrom and the
existing and/or potential liability and/or costs and expenses associated with
and arising from each and all of the foregoing, and (iv) information obtained
from Phase I or greater environmental audits conducted with respect to the Owned
Real Property, the Leased Real Property, the Facilities and/or other
improvements by Buyer or on behalf of Buyer, or for Seller and provided to Buyer
as a disclosure item in connection with this transaction.

         As used herein with respect to Seller or the Company, the term
"material" or any variation thereof shall be interpreted in this Agreement by
reference to the assets, operations, business and financial condition of the
Company taken as a whole.

         As used herein, the term "substantial" or any variation thereof means
and shall be interpreted in this Agreement to mean significant and/or
considerable; and when used in connection with compliance and/or conformity,
shall be interpreted and applied using a reasonable person standard.

         As used in this Agreement, the term "Person" or any variation thereof
means and shall be interpreted in this Agreement to include firms, companies,
associations, general partnerships, limited partnerships, limited liability
companies, trusts, business trusts, corporations and legal entities, including
public and quasi-public bodies, as well as individuals.

                  3.1 Organization, Qualification and Corporate Power. Each of
the Company and the Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company is duly
qualified to do business as a foreign corporation and in good standing in the
jurisdictions specified in Schedule 3.1, which are all the jurisdictions where a
failure to be so qualified or licensed would have a material adverse effect on
the Carolina Farms. The Company has full corporate power and authority and,
except as provided in Schedules attached hereto or otherwise in this Agreement,
all material authorizations, licenses and permits necessary to carry on the
business of the Carolina Farms and to own and use the properties owned and used
by it in connection with the same as such business is now being conducted and as
such properties are now being used.

                  3.2 Authorization of Transaction. The execution, delivery and
performance of this Agreement and the transactions contemplated by this
Agreement have been duly authorized by the board of directors of the Seller. No
other corporate approval on the part of the Seller or the Company is necessary
to authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby. The Seller has full corporate power and
authority to enter into this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Seller enforceable in accordance with its terms and conditions. Except as
disclosed in Schedule 3.2, other Schedules or elsewhere in this Agreement,
neither the execution and the delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (i) conflict in a material manner
with, result in a breach of, constitute a default under, result in the
acceleration of, or require the payment of any


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amounts under, or create in any party the right to accelerate, terminate, modify
or cancel (A) any written restriction, lien, encumbrance, indenture, contract,
lease, sublease, agreement or mortgage for borrowed money, instrument of
indebtedness or other obligation or liability to which Seller or the Company is
a party or by which it is bound or to which any of its assets is subject (or
result in the creation of any lien or encumbrance upon any of the Purchased
Shares or the Company's assets) or (B) any provision of the certificate of
incorporation or bylaws or other organizational documents of Seller or the
Company, or (ii) violate any Law to which Seller or the Company is subject, the
violation of which would adversely affect Buyer, the Company and/or the
transactions contemplated by this Agreement. No notice to, filing with or
authorization, consent or approval of, any public body, court or authority is
necessary by the Seller for the consummation by the Seller of the transactions
contemplated by this Agreement.

                  3.3 Capitalization. The Company's entire authorized capital
stock consists of 5,000 shares of common stock, no par value, of which 1,000
shares are issued and outstanding. No shares of capital stock of the Company are
held in treasury by the Company. Seller owns beneficially and of record all of
the outstanding shares of capital stock of the Company and such capital stock is
owned free and clear of all liens, security interests, charges, voting trusts,
restrictions, encumbrances and claims of every kind. All of the issued and
outstanding shares of the capital stock of the Company have been duly authorized
and validly issued, are fully paid and nonassessable and were offered, issued,
sold and delivered by the Company in compliance with all applicable state and
federal laws concerning the issuance of securities. There are no outstanding or
authorized options, rights, warrants, calls, convertible securities, rights to
subscribe, conversion rights or other agreements or commitments to which the
Company is a party or which are binding upon the Company providing for the
issuance or transfer by the Company of additional shares of capital stock of the
Company and the Company has not reserved any shares of Common Stock for
issuance, nor are there any outstanding stock appreciation rights, phantom
equity or similar rights, agreements, arrangements or commitments based upon the
book value, income or other attribute of the Company.

                  3.4 Financial Statements. Schedule 3.4 contains the unaudited
pro forma balance sheet of the Carolina Farms dated as of August 26, 2000 (the
"PRO FORMA BALANCE SHEET") and the related unaudited statement of income for the
five months then ended (the "FINANCIAL STATEMENTS"). The Financial Statements
have been delivered to Buyer and fairly present the financial position and
results of operations of the Carolina Farms as of such date and unless otherwise
indicated thereon or in a separate management letter accompanying the Financial
Statements, the same are substantially in accordance with generally accepted
accounting principles consistently applied for the period covered thereby,
subject to normal year-end adjustments and the absence of footnotes. August 26,
2000 is sometimes referred to herein as the "BALANCE SHEET DATE."

                  3.5 Receivables. All accounts and notes receivable reflected
on the Pro Forma Balance Sheet, and all of the Company's accounts and notes
receivable existing as of the Closing Date, unless otherwise indicated thereon
or in a separate management letter (a) have arisen in the ordinary course of
business of Carolina Farms and the Company, (b) are subject only to a reserve
for bad debts computed substantially in accordance with generally accepted
accounting principles consistently applied and reasonably estimated to reflect
the probable results of


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collection and (c) have been collected or, subject to such reserve and to
Seller's knowledge, recognizing Seller can not predict the future collectibility
of any such accounts and/or notes receivables, should be collectible in the
ordinary course of business of the Company in the aggregate recorded amounts
thereof in accordance with their terms. Schedule 3.5 lists any obligor which
together with all of its affiliates owed accounts and notes receivable reflected
on the Pro Forma Balance Sheet in an aggregate amount of $50,000 or more.

                  3.6 Absence of Certain Developments. Except as disclosed on
Schedule 3.6, on other Schedules or elsewhere in this Agreement, since the
Balance Sheet Date, with respect to the Company and Carolina Farms and not
Seller's business generally or other parts of Seller's business, to the Seller's
knowledge, there has not been, unless indicated below or on Schedules attached
to this Agreement or shown in any update of the Financial Statements delivered
to Buyer by Seller:

                  (a) any material adverse change in the condition of the
         assets, liabilities, financial condition, operations or current
         business of the Company and Carolina Farms, except for changes
         expressly contemplated by this Agreement;

                  (b) any sale, assignment or transfer of any of the Assets of
         the Company or Carolina Farms with a value of over $50,000 per asset,
         other than routine sales of inventory in the ordinary course of
         business;

                  (c) any cancellation or compromise of any material
         indebtedness by, or waiver or compromise of any right of material value
         to, the Company and Carolina Farms, whether or not in the ordinary
         course of business;

                  (d) any acceleration, termination, amendment, modification or
         cancellation or threat thereof by any party to any contract, lease,
         license or other agreement or instrument to which Seller or the Company
         is a party or by which it is bound so as to materially and adversely
         affect the properties, assets, liabilities or business of the Company
         and Carolina Farms;

                  (e) any capital expenditure or the execution of any lease or
         any incurring of liability therefor by Seller or the Company, in both
         instances requiring payments by the Company or Carolina Farms in excess
         of $10,000 per month per incurrence or $50,000 per month in the
         aggregate;

                  (f) any material delay in payment of or failure to pay any
         material obligation of the Company or Carolina Farms, other than in the
         ordinary course of business consistent with past practice;

                  (g) any failure to operate the business of the Company or
         Carolina Farms in the ordinary course so as to use reasonable efforts
         to preserve the material aspects of the business intact and to preserve
         for Buyer the goodwill of the Company's and Carolina Farms' material
         suppliers, customers and others having business relations with such
         entity;


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                  (h) any change in material accounting methods or practices by
         the Company or Carolina Farms affecting its assets, liabilities or
         business except as reflected on the Financial Statements or in a
         separate management letter;

                  (i) any damage, destruction or loss (whether or not covered by
         insurance) materially and adversely affecting the properties, business
         or prospects of the Company or Carolina Farms;

                  (j) any mortgage, pledge or other encumbrance of any asset of
         the Company or Carolina Farms, other than mortgages, pledges or other
         encumbrances incurred in connection with credit facilities entered into
         in the ordinary course of business, liens for current property taxes
         not yet due and payable and mortgages, pledges or other encumbrances
         which are to be released as of the Closing Date;

                  (k) any indebtedness incurred by the Company or Carolina Farms
         for borrowed money or any commitment to borrow money entered into by
         the Company or Carolina Farms, or any loans or other investments made
         or agreed to be made by the Company or Carolina Farms, in both
         instances other than in connection with credit facilities (to include,
         without limitation, trade payables) entered into in the ordinary course
         of business;

                  (l) any incurrence of liabilities involving in each instance
         $100,000 or more except in the ordinary course of business and
         consistent with past practice;

                  (m) any payment, discharge or satisfaction of any material
         liability, the effect of which would materially and negatively change
         the Financial Statements, other than the payment, discharge or
         satisfaction of liabilities in the ordinary course of business and
         consistent with past practice; or

                  (n) any other transaction material to the Company or Carolina
         Farms, other than in the ordinary course of business and consistent
         with past practice.

                  3.7 Undisclosed Liabilities. Except as disclosed in Schedule
3.7, to the knowledge of Seller, the Company does not have any material
liabilities or obligations except (a) liabilities which are reflected and
reserved against on the Pro Forma Balance Sheet in accordance with generally
accepted accounting principles, (b) liabilities incurred in the ordinary course
of business and consistent with past practice since the date of the Pro Forma
Balance Sheet (none of which relates to a breach of Contract, breach of
warranty, tort, infringement or violation of Law which, if determined adverse to
the Company, should result in a significant liability to the Company) and (c)
future performance obligations (none of which relates to a breach of Contract,
breach of warranty, tort, infringement or violation of Law which, if determined
adverse to the Company, should result in a significant liability to the Company)
under Contracts described in Schedule 3.15 or which are of the type described in
Schedule 3.15 but which because of the dollar amount or other qualifications are
not required to be listed on Schedule 3.15.


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<PAGE>   12
                  3.8 Books and Records. With respect to the Company and
Carolina Farms, the Seller has made and kept books and records and accounts,
which, in reasonable detail, accurately and fairly reflect the material
activities of such entity. With respect to such operations, the Seller has not
engaged in any material transaction, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds which have been
and are reflected in the normally maintained books and records of such entity.

                  3.9      Taxes.

                  (a) As used herein, the term "TAX" means any federal, state,
         local or foreign income, gross receipts, profits, franchise,
         withholding, payroll, employment, stamp, excise, occupation, sales,
         use, transfer, revenue, value added, real or personal property, social
         security, retirement, unemployment, license, capital, net worth,
         profits or similar tax, charge, fee, levy or other assessment, together
         with any interest, penalties or additions in respect therefor whether
         computed on a separate, consolidated, unitary, combined or any other
         basis.

                  (b) Except as disclosed in Schedule 3.9, on other Schedules or
         otherwise in this Agreement, and excepting ad valorem real and personal
         property tax liabilities assumed or required to be paid by Buyer, no
         state of facts exists, or upon the Closing, shall exist, that would
         constitute grounds for the assessment against Buyer, by reason of
         transferee liability or otherwise, of any liability for any Tax of any
         sort or any obligation under any tax-sharing, tax allocation or similar
         agreement to which Seller or the Company is a party attributable to any
         period ending on or before the Closing Date relating to the Carolina
         Farms or the transactions contemplated by this Agreement, which Tax
         would have been payable by Seller (not Buyer) but for this transaction
         and the closing hereof.

                  3.10     Real Property Leases.

                  (a) Set forth in Schedule 3.10 is a complete and accurate list
         and a brief description of all real property leased or subleased by the
         Company (as lessee or sublessee) (the "LEASED REAL PROPERTY"). With
         respect to each lease so set forth, and except as otherwise indicated
         in Schedule 3.10: (i) the lease has been validly executed and delivered
         by Seller or the Company and, to Seller's knowledge, by the other
         parties thereto and is in full force and effect; (ii) neither Seller,
         the Company nor to Seller's knowledge any other party to the lease, is
         in material breach or default, and to Seller's knowledge no event has
         occurred which, with notice or lapse of time, would constitute such a
         material breach or default and permit termination, modification or
         acceleration under the lease; (iii) the consummation of the
         transactions under this Agreement, including the assignment of the
         lease to the Company, will not cause a termination of the lease; (iv)
         to the Seller's knowledge, no party to the lease has repudiated any
         material provision thereof; (v) to Seller's knowledge there are no
         disputes or oral agreements in effect as to the lease, and there are no
         delayed payment programs in effect as to the lease; (vi) all
         improvements leased thereunder have been maintained substantially in
         accordance with the lease, applicable Laws and normal industry
         practice, and such improvements are


                                       9
<PAGE>   13
         generally suitable for the purposes for which they are being used and
         to Seller's knowledge, neither Seller nor the Company has received any
         notice from any governmental authority that any of the buildings and
         improvements is in material violation of any applicable Laws; and (vii)
         neither Seller nor the Company has assigned, sublet, transferred,
         conveyed, mortgaged, deeded in trust or encumbered any interest in the
         leasehold, except encumbrances, if any, which are to be released on or
         before the Closing Date.

                  (b) To the knowledge of Seller, except as disclosed in
         Schedule 3.10, each component of the Leased Real Property is in good
         condition, working order and repair, except for maintenance, repairs
         and replacements conducted or required in the ordinary course of the
         operation of the Leased Real Property, maintenance, repairs and
         replacements that do not adversely affect in a material manner the
         operation of the Leased Real Property as the same are now operated, and
         ordinary wear and tear.

                  (c) Except as disclosed in Schedule 3.10, to Seller's
         knowledge, no Person authorized to act on behalf of Seller or the
         Company has entered into any Contract, arrangement or understanding
         with respect to the future ownership, development, use, occupancy or
         operation of the Leased Real Property which (i) would be binding on the
         Company, and (ii) would have a material, adverse effect on the Company,
         the leased property and/or its future ownership, development, use or
         operation thereof by Buyer, other than options, rights of first refusal
         or other similar arrangements in favor of the Seller under the leases
         and subleases relating to the Leased Real Property, copies of which
         have been previously delivered to the Buyer.

                  (d) neither Seller nor the Company has received notice of any
         pending condemnation or eminent domain proceedings that affect in a
         material manner the Leased Real Property or, to the Seller's knowledge,
         there are no threatened or contemplated condemnation or eminent domain
         proceedings that affect in a material manner the Leased Real Property,
         and neither Seller nor the Company has received any notice, oral or
         written, of the intention of any governmental entity or other Person to
         take or use all or any material part thereof under the power of eminent
         domain.

                  3.11 Real Property Owned or Under Option. Schedule 3.11 lists
and describes in reasonable detail and contains a legal description of all real
property owned by the Company (the "OWNED REAL PROPERTY"). With respect to each
parcel of real property listed in Schedule 3.11, except as otherwise indicated
in Schedule 3.11 and in the special exceptions to title set forth on title
insurance commitments for each of the Owned Real Property, the documents noted
in such title commitments and surveys of each of the Owned Real Property
(collectively, the "PERMITTED OWNED REAL PROPERTY ENCUMBRANCES"), copies of
which are attached and/or have been delivered to Buyer:

                  (a) the Company has good and marketable fee simple title to
         the Owned Real Property, free and clear of all mortgages, pledges,
         security interests, encumbrances, covenants charges or other liens,
         easements and other restrictions, other than installments


                                       10
<PAGE>   14
         of real property taxes and special assessments not yet delinquent or
         which are to be assumed by Buyer at Closing;

                  (b) neither Seller nor the Company has received any notice of
         pending condemnation or eminent domain proceedings that affect in a
         material manner the Owned Real Property or, to the Seller's knowledge,
         there are no threatened or contemplated condemnation or eminent domain
         proceedings that affect in a material manner the Owned Real Property,
         and neither Seller nor the Company has received any notice, oral or
         written, of the intention of any governmental entity or other Person to
         take or use all or any material part thereof under the power of eminent
         domain;

                  (c) there are no leases, subleases, licenses, concessions or
         other agreements, written or oral, granting to any party or parties the
         right of use or occupancy of any portion of the Owned Real Property,
         except for possible incidental and temporary use, none of which, if
         any, would be binding on the Company following Closing;

                  (d) there are no outstanding options or rights of first
         refusal to purchase any of the Owned Real Property, or any portion
         thereof or interest therein;

                  (e) there are no Persons (other than the Seller) in possession
         of any of the Owned Real Property;

                  (f) each component of the Owned Real Property is in good
         operating condition and repair, except for ordinary wear and tear,
         maintenance, repairs and replacements conducted or required in the
         ordinary course of the operation of the Owned Real Property and
         maintenance, repairs and replacements that do not adversely affect in a
         material manner the operation of any of the Owned Real Property as the
         same are now operated; and

                  (g) the Leased Real Property described in Schedule 3.11 and
         the Owned Real Property comprise all of the real property used by the
         Seller and the Company in connection with the Carolina Farms.

                  3.12 Compliance, Utilities and Other Matters. Except as
disclosed in Schedule 3.12, with respect to the Owned Real Property and the
Leased Real Property (as indicated below), to the Seller's knowledge and except
as shown on or would be revealed by (i) the special exceptions to title set
forth on the title insurance commitments, the documents referenced in such title
commitments and/or the surveys with respect to the Owned Real Property, and (ii)
with respect to the Leased Real Property, if any, the leases themselves:

                  (a) the buildings and improvements on the Owned Real Property
         are located within the boundary lines of the parcels of land as shown
         on the surveys and/or described in the deeds with respect to each
         (excluding boundary line fences and driveways and utility lines
         extending into public rights of way), are not in material violation of
         setback requirements known to Seller's Operating Manager and which were
         applicable at the time such buildings and improvements were
         constructed, to Seller's knowledge are not in violation of zoning laws
         and ordinances, the violation of which would or could prohibit


                                       11
<PAGE>   15
         the current use of such properties, and do not encroach on any easement
         which burdens the land to an extent that they prevent the use of such
         easements for their beneficial purposes or could warrant a removal of
         the encroachment and the incurrence of a significant expense in
         connection therewith;

                  (b) the Company currently has vehicular access to the Owned
         Real Property and the Leased Real Property adequate for their current
         uses and to Seller's knowledge, such access will not be terminated upon
         consummation of the transactions contemplated by this Agreement;

                  (c) all buildings and improvements thereon have received all
         material approvals of governmental authorities (including licenses and
         permits) known to Seller to be reasonably necessary in connection with
         the current ownership or operation thereof and to Seller's knowledge,
         such buildings and improvements in general have been operated and
         maintained in substantial compliance with all material and applicable
         laws, rules and regulations; and

                  (d) all buildings and improvements thereon are supplied with
         utilities and other similar services or have available utilities and
         other similar services (e.g., on-site wells) reasonably adequate, to
         Seller's knowledge, for the present operation of such buildings and
         improvements; and

                  (e) to Seller's knowledge and (i) taking into account the
         changing nature of and the vagaries in application and enforcement of
         Environmental Laws and Environmental Permits relative to land
         application of effluents and lagoons and the numerous variables
         affecting land application of effluents and lagoons, all or any of
         which variables can change at any time, do frequently change without
         advance notice or opportunity to make appropriate adjustments and are
         expected to change, and (ii) excepting conditions that may in the
         future be caused by "Acts of God," each of the hog production
         facilities of Seller and the Company located on Owned Real Property is
         situated on farm land or currently has access to farm land (including
         land application fields) which should be reasonably sufficient in terms
         of size and current soil condition under normal weather conditions
         (normal weather conditions does not include hurricanes, tropical storms
         or other similar low pressure weather disturbances, tornadoes,
         flooding, drought or drought like conditions, earthquakes, variations
         in rainfall, temperatures or winds that do not in and of themselves
         change the "norm", and any matters deemed "Acts of God") to permit
         adequate land application of normal and customary effluents (including
         land application spraying) from the hog production operation as now
         conducted by Seller and the Company to the extent allowed under all
         known, material Environmental Permits and Land Use Approvals (each as
         defined below) currently applicable to such operations, as such
         Environmental Permits and Land Use Approvals are now applied and
         enforced with respect to such operations, and, subject to abnormal
         weather conditions as described in the parenthetical above and all of
         the assumptions, limitations, qualifications and/or conditions set
         forth above, to the Seller's knowledge, there should be reasonably
         sufficient lagoon capacity to store all effluents, as such improvements
         are currently operated, during periods of normal frequency and duration


                                       12
<PAGE>   16
         when land application is not permitted under such Environmental Permits
         and Land Use Approvals, as such Environmental Permits and Land Use
         Approvals are now applied and enforced with respect to such operations
         and assuming no moratorium on land application or other governmental or
         regulatory interference or interference by or disruption by some other
         Person, whether or not lawful, and assuming such periods have
         intervening periods of sufficient length to allow full restoration of
         the lagoons to normal levels.

                  3.13 Assets.

                  (a) Except as set forth in Schedule 3.13, other Schedules and
         elsewhere in this Agreement, the Company has good and marketable title
         to the non-inventory tangible personal property assets reflected on the
         Pro Forma Balance Sheet (collectively, the "TANGIBLE PERSONAL PROPERTY
         ASSETS") and none of the Tangible Personal Property Assets is subject
         to any lien, security interest, encumbrance or other adverse claim,
         except for liens which in the aggregate are not material in amount, do
         not materially detract from the value of the property or assets subject
         thereto or interfere with the present use and have not arisen other
         than in the ordinary course of business, or which are to be discharged
         on or before the Closing Date.

                  (b) Except as set forth in Schedule 3.13, the Tangible
         Personal Property Assets constitute all of the material tangible
         personal property assets used or held for use in connection with or
         material to the current business operations of Carolina Farms and the
         Company. The Tangible Personal Property Assets used in the business of
         Carolina Farms and the Company that are owned by any Person other than
         the Company are leased or licensed to the Company under current leases
         or license arrangements that are valid and with respect to all leases
         and licenses of Tangible Personal Property Assets that are material to
         the operation of the business of Carolina Farms as now conducted, they
         will remain in full force and effect following consummation of the
         transactions contemplated hereby, unless otherwise provided in the
         lease or license and assuming continued performance thereunder by Buyer
         and the Company. To the Seller's knowledge, the Tangible Personal
         Property Assets that are material to the operation of the business of
         Carolina Farms as now conducted are in all material respects in good
         operating condition and repair, taking into account normal wear and
         tear and the purposes for which such assets are currently used and
         subject to maintenance, repairs and replacements conducted or required
         in the ordinary course of the use thereof and maintenance, repairs and
         replacements that do not adversely affect in a material manner the use
         of such assets.

                  (c) To Seller's knowledge, and subject to the limitations,
         qualifications and conditions set forth elsewhere in this Agreement and
         on Schedules attached hereto with respect to such personal property
         assets or the real property assets (including, without limitation,
         those set forth in Section 3.12(e) above and those at the beginning of
         this Article 3), all of which are applicable under this paragraph, and
         assuming no abnormal conditions or events, or unusual, unexpected or
         unanticipated circumstances, and assuming the enforcement and
         application of all Laws, Permits and Approvals, including Environmental
         Laws, Permits and Approvals, as the same are now normally and typically
         applied to the use and/or operation of such assets, (i) the Tangible
         Personal Property


                                       13
<PAGE>   17
         Assets that are material to the operation of the business of Carolina
         Farms as now conducted are in all material respects reasonably suitable
         and adequate for the purposes for which such assets are currently used,
         subject, however, to normal wear and tear, maintenance, repairs and
         replacements conducted or required in the ordinary course of the use
         thereof and maintenance, repairs and replacements that do not adversely
         affect in a material manner the use of such assets and (ii) there are
         no actual, current and/or presently existing conditions (as opposed to
         future conditions, or potential, possible or probable conditions, or
         contingent conditions) known to Seller's Operating Manager directly
         affecting the Tangible Personal Property Assets and that are material
         to the operation of the business of Carolina Farms and the Company as
         now conducted, individually or in the aggregate, which should interfere
         in any adverse, material respect with the normal use and operation
         thereof as currently used or operated, or their adequacy for such use
         or operation.

                  3.14 Inventory.

                  (a) As used herein, the term "INVENTORY" means all swine
         livestock (including hogs, piglets and piglets in gestation), genetic
         lines related thereto and any associated biological materials (to the
         extent the Company has rights therein), all inventories of swine feed
         (including pre-purchased grain and feed ingredients), injectable and
         other treatments and similar materials for swine, and any other raw
         materials, work-in-process and finished goods, wherever located
         (including items in transit) related to swine.

                  (b) Except as set forth in Schedule 3.14, other Schedules and
         elsewhere in this Agreement, the Company has good and marketable title
         to the Inventory reflected on the Pro Forma Balance Sheet and none of
         such Inventory is subject to any lien, security interest, encumbrance
         or other adverse claim, except for liens which in the aggregate are not
         material in amount, do not materially detract from the value of the
         Inventory subject thereto or interfere with the present use and have
         not arisen other than in the ordinary course of business, or which are
         to be discharged on or before the Closing Date.

                  (c) To Seller's knowledge, substantially all of the Inventory,
         wherever located (including items in transit), owned by the Company and
         used or held for use in connection with the Carolina Farms (i) is
         currently usable or saleable in all material respects in the ordinary
         course of business as now conducted by Seller and the Company and
         taking into account market conditions, useful life of the Inventory and
         any other matters customarily affecting the use and sale of Inventory,
         (ii) is sufficient but not excessive, in the opinion of Seller's
         Operating Manager, in kind or amount for the conduct of the business of
         Carolina Farms and the Company as it is presently being conducted,
         taking into account market conditions, useful life of the Inventory and
         any other matters customarily affecting Inventory levels, (iii) meets,
         in all material respects and on average, after taking into account
         quality problems that are normal, customary and typical in the
         industry, applicable quality control standards of the Seller and the
         Company and all published and, to the Seller's knowledge, applicable
         governmental quality control standards, if any and (iv) is carried on
         the books of the Company at an amount which


                                       14
<PAGE>   18
         reflects valuations not in excess of the lower of cost or market
         determined substantially in accordance with generally acceptable
         accounting principles applied on a consistent basis, unless otherwise
         indicated on the books of the Company.

                  (d) To Seller's knowledge, with respect to livestock
         Inventory, unless otherwise indicated on a Schedule 3.14 attached
         hereto, (i) breeding females and boars are PIC genetic stock, (ii) the
         average sow parity is not greater than 4, (iii) all Seller documented
         outbreaks of PRRS, TGE and pseudo-rabies within the past one (1) year
         are identified in Schedule 3.14 and (iv) Seller has followed normal and
         customary industry standards to ensure that the administration of
         medications to the livestock Inventory is in all material respects
         substantially in accordance with valid, applicable Federal and state
         laws and regulations and no medication has been knowingly and willfully
         administered which is not labeled for swine and which use would be in
         violation of any valid, applicable Federal or state laws and
         regulations.

                  3.15 Contracts and Commitments.

                  (a) Except for those contracts set forth in Schedule 3.15,
         neither Seller nor the Company is a party to any material written or
         oral contract, agreement, commitment, lease, license, instrument,
         guaranty, bid or proposal related to the Carolina Farms or the Company
         (a "CONTRACT") which is:

                           (i) a mortgage, indenture, note, installment
                  obligation or other instrument relating to the borrowing of
                  money other than trade payables incurred in the ordinary
                  course of business;

                           (ii) a guarantee or any other evidence of liability
                  for any indebtedness of any other Person of any obligation
                  other than non-material promises or undertakings to or for the
                  benefit of employees and those incurred in the ordinary course
                  of the day-to-day operations of the business relating to
                  non-material matters;

                           (iii) a letter of credit, bond or other indemnity
                  (including letters of credit, bonds or other indemnities as to
                  which the Company is the beneficiary but excluding
                  endorsements of instruments for collection in the ordinary
                  course of the operation of such entity);

                           (iv) a currency or interest rate swap, collar or
                  hedge agreement;

                           (v) an offset, countertrade or barter agreement;

                           (vi) an agreement for the sale or lease by Seller or
                  the Company to any Person of the Company's assets other than
                  dispositions of Inventory in the ordinary course of the
                  operation of its business and dispositions of Tangible
                  Personal Property Assets no longer useful to its business and
                  infrequent and


                                       15
<PAGE>   19
                  incidental disposition of non-material Tangible Personal
                  Property Assets that occur in the ordinary course of the
                  operation of its business;

                           (vii) an agreement requiring the payment by the
                  Company of more than $50,000 under such agreement in any
                  12-month period for the purchase or lease of any machinery,
                  equipment or other capital assets;

                           (viii) a distributor, representative, broker or
                  advertising Contract that is not terminable by the Company at
                  will or by giving notice of 30 days or less, without
                  liability;

                           (ix) except as provided in Article IV of this
                  Agreement, a collective bargaining agreement, employment,
                  severance or consulting agreement or agreement providing for
                  severance payments or other additional rights or benefits
                  (whether or not optional) in the event of the sale or change
                  in control of Seller or the Company other than non-material
                  severance payments made by Seller to its employees in the
                  normal and ordinary course of business upon their termination
                  of employment;

                           (x) a joint venture or partnership agreement other
                  than with Buyer;

                           (xi) an agreement with any Person to sell, distribute
                  or otherwise market any products of the Company, including to
                  government contracts or subcontracts, other than short term
                  contracts made in the ordinary course of business consistent
                  with past practice;

                           (xii) a futures contract, option contract, derivative
                  contract, or any forward purchase contract in excess of 30
                  days;

                           (xiii) an agreement related to the production or use
                  of breeding stock other than agreements and undertakings made
                  from time to time by employees of Seller or the Company in the
                  course of their daily work, which agreements and undertakings
                  are made for the purpose of dealing with issues and problems
                  encountered in the ordinary course of business and for which
                  on-site decisions are typically made;

                           (xiv) an agreement related to swine management,
                  grow-out, finishing or feeding of swine or otherwise related
                  to the production or use of swine livestock other than
                  agreements and undertakings made from time to time by
                  employees of Seller in the course of their daily work, which
                  agreements and undertakings are made for the purpose of
                  dealing with issues and problems encountered in the ordinary
                  course of business and for which on-site decisions are
                  typically made;

                           (xv) an agreement requiring the payment to the
                  Company by any other Person of more than $50,000 under such
                  agreement in any 12-month period for the purchase of goods or
                  services;


                                       16
<PAGE>   20
                           (xvi) an agreement requiring the payment by the
                  Company to any Person of more than $50,000 under such
                  agreement in any 12-month period for the purchase of goods or
                  services; or

                           (xvii) an agreement imposing non-competition or
                  exclusive dealing obligations on the Company.

                  (b) The Seller has delivered or made available to the Buyer
         correct and complete copies of each written agreement listed in
         Schedule 3.15, as amended to date. Each Contract listed in Schedule
         3.15 is a valid, binding and enforceable obligation of the Company and,
         to Seller's knowledge, the other party or parties thereto, and is in
         full force and effect. Except as set forth in Schedule 3.15, (i) to
         Seller's knowledge, neither Seller, the Company nor any other party
         thereto, is in material breach of any term of any Contract listed in
         Schedule 3.15 or has repudiated any term of any such Contract, (ii) to
         Seller's knowledge, no event, occurrence or condition exists that, with
         the lapse of time, the giving of notice, or both, would become a
         material default under any such Contract by Seller, the Company or any
         other party thereto, (iii) neither Seller nor the Company has waived or
         released any of its material rights under any such Contract, the waiver
         or release of which adversely affects, in a significant manner, the
         rights and benefits of the Company under such Contract.

                  3.16 Litigation. Except as set forth in Schedule 3.16, there
is no action (of which Seller has knowledge), order, writ, injunction (of which
Seller has knowledge), judgment or decree outstanding that has a material
adverse effect on the Company or the Carolina Farms or any material claim, suit,
litigation, proceeding, labor dispute, arbitral action, governmental audit or
investigation of which Seller has received notice that could have such an effect
(collectively, "ACTIONS") pending or, to Seller's knowledge, threatened or
anticipated (a) against, related to or affecting the Company or the Carolina
Farms, (b) seeking to delay, limit or enjoin the transactions contemplated by
this Agreement, (c) that involve the risk of criminal liability to Seller, the
Company or their respective officers or directors arising out of the Carolina
Farms, or (d) in which Seller, or the Company is a plaintiff with respect to
matters arising out of the Carolina Farms. Except as set forth in Schedule 3.16,
with respect to the Carolina Farms, neither Seller nor the Company is in default
with respect to or subject to any judgment, order, writ, injunction or decree of
any court or governmental agency of which Seller or the Company has notice, and
there are no unsatisfied judgments against Seller or the Company except as shown
on the Financial Statements or other Schedules attached to this Agreement.

                  3.17 Compliance with Law. Except as set forth in Schedule
3.17, to Seller's knowledge, with respect to the Carolina Farms:

                  (a) neither the Seller nor the Company has violated in any
         material respect and is in material compliance with all applicable
         Laws, and any final, non-appealable judgment, decision, decree or order
         of any court or governmental agency, department or authority relating
         to the business or operations of Carolina Farms, including, without
         limitation, all applicable energy, public utility, zoning, building and
         health Laws and all


                                       17
<PAGE>   21
         applicable Laws promulgated by the United States Department of
         Agriculture and the United States Food and Drug Administration, except
         for such violations of Laws as would not reasonably be expected to
         materially and adversely affect the material assets, liabilities,
         operations, business or financial condition of the Company and Carolina
         Farms;

                  (b) the Company holds all material governmental licenses and
         permits (the "PERMITS") reasonably necessary for the operation of
         Carolina Farms as currently conducted;

                  (c) neither Seller nor the Company has received any written
         notice to the effect and Seller's Operating Manager has not been
         advised that Seller or the Company is not in substantial compliance
         with any such Laws, and Seller's Operating Manager has no reason to
         anticipate that any of its existing practices or policies are likely to
         result in material or substantial violations of any such Laws as now
         applied and enforced against Carolina Farms, except for such violations
         of Laws as would not reasonably be expected to materially and adversely
         affect the assets, liabilities, operations, business or financial
         condition of the Company and Carolina Farms; and

                  (d) the Seller has filed in a timely manner all material
         reports, documents and other materials it was required to file (and the
         information contained therein was, to Seller's knowledge, substantially
         correct and complete in all material respects) under all Laws
         (including rules and regulations thereunder) other than filings which
         have not had and should not have a material adverse effect on the
         assets, liabilities, business, operations or financial condition of the
         Company and Carolina Farms.

                  3.18 Intellectual Property. The Seller makes no representation
and warranties with respect to intellectual property, if any, being transferred
to Buyer under this agreement. The corporate and/or trade names used by Seller
in connection with Carolina Farms have not been protected by Seller.

                  3.19     Environmental and Land Use Matters.

                  (a) As used herein, the term "ENVIRONMENTAL LAW" means any
         past or present applicable Law and well established principles of
         common law affirmed and consistently applied in the State of North
         Carolina by the North Carolina Supreme Court (as to the Facilities
         located in North Carolina) and affirmed and consistently applied in the
         State of Georgia by a similar state court in the State of Georgia (as
         to the Facility located in Georgia) with respect to the regulation and
         protection of the environment, human health, safety, and natural
         resources, including any Law relating to Hazardous Materials, drinking
         water, surface water, groundwater, wetlands, landfills, open dumps,
         storage tanks, underground storage tanks, solid waste, waste water,
         storm water run-off, odors, air emissions, waste emissions, lagoons,
         land application areas or wells. Without limiting the generality of the
         foregoing, the term shall encompass each of the following statutes and
         the regulations duly promulgated thereunder, and any similar applicable
         state or local Laws, each as amended, (i) the Comprehensive
         Environmental Response, Compensation,


                                       18
<PAGE>   22
         and Liability Act of 1980 ("CERCLA"), (ii) the Solid Waste Disposal Act
         ("SWDA"), (iii) the Hazardous Materials Transportation Act ("HMTA"),
         (iv) the Toxic Substances Control Act, (v) the Clean Water Act, (vi)
         the Clean Air Act, (vii) the Safe Drinking Water Act, (viii) the
         National Environmental Policy Act of 1969, (ix) the Federal
         Insecticide, Fungicide and Rodenticide Act, the Resource Conservation
         and Recovery Act ("RCRA") and (xi) the provisions of the Occupational
         Safety and Health Act of 1970 and their State or local counterparts or
         equivalents, all as amended from time to time.

                  (b) As used herein, the term "FACILITIES" means the Owned Real
         Property listed on Schedule 3.19(b), and no other.

                  (c) As used herein, the term "ENVIRONMENTAL PERMIT" means any
         registration, application, filing, certification, notice, final,
         non-appealable order, license, permit, approval, consent,
         qualification, authorization and/or waiver of any governmental
         authority issued under or with respect to an Environmental Law.

                  (d) As used herein, the term "HAZARDOUS MATERIALS" means each
         and every element, compound, chemical mixture, contaminant, pollutant,
         materials, waste or other substance that is defined, determined or
         identified as hazardous or toxic under any Environmental Law or the
         Release of which is regulated or prohibited under any Environmental
         Law. Without limiting the generality of the foregoing, the term shall
         include (i) "hazardous substances" as defined in the CERCLA, and
         regulations promulgated thereunder, (ii) "hazardous waste" as defined
         in the SWDA and regulations promulgated thereunder, (iii) "hazardous
         materials" as defined in HMTA and regulations duly promulgated
         thereunder, (iv) "hazardous substances" and "pollutants" as defined in
         the Clean Water Act, and regulations promulgated thereunder, (v) any
         pollutant regulated under the Clean Air Act, and regulations
         promulgated thereunder, (vi) petroleum and petroleum products and
         byproducts, (vi) asbestos and (vii) polychlorinated biphenyls.

                  (e) As used herein, the term "RELEASE" means any spilling,
         leaking, pumping, pouring, emitting, emptying, discharging, injecting,
         storing, escaping, leaching, dumping, discarding, burying, abandoning
         or disposing into the environment, and shall include both acute and
         chronic releases, but shall exclude the escape and/or emission of
         nitrogen, ammonia and other gases, nutrients and substances into the
         air from or in connection with lagoons, land application fields and/or
         any spraying associated with either. For purposes of this Section 3.19,
         continued migration shall constitute a Release.

                  (f) Except as set forth in Schedule 3.19(f), the Seller and
         the Company have complied in all material respects with all
         Environmental Laws in connection with its ownership, use, maintenance
         and operation of the Facilities, except for violations of Environmental
         Laws which would not reasonably be expected to materially adversely
         affect the business, operations or financial condition of the Carolina
         Farms or the Company.


                                       19
<PAGE>   23
                  (g) Except as set forth in Schedule 3.19(g) and excepting the
         disposal of solid and/or liquid waste from its hog operations conducted
         at the Facilities to the extent such disposal is substantially in
         accordance with the normal and customary business practices of Seller
         and the Company for such activities, which practices are known by Buyer
         and are recognized by Buyer as being in accordance with current
         industry practice, to Seller's knowledge, neither the Seller nor the
         Company has any material liability under any Environmental Law with
         respect to the Facilities, including any such liability arising with
         respect to the Release or proposed Release of any Hazardous Materials,
         whether on property owned or controlled by the Seller, the Company or
         elsewhere, except for violations of Environmental Laws which would not
         reasonably be expected to adversely affect in a material manner the
         business, operations or financial condition of the Company and Carolina
         Farms;

                  (h) Except as set forth in Schedule 3.19(h), to Seller's
         knowledge, the Company is not required to obtain any material
         Environmental Permits to conduct the business of the Carolina Farms as
         it is presently being conducted, including those relating to (i) the
         Release or threatened Release of Hazardous Materials or (ii) the
         manufacture, processing, distribution, use, treatment, storage,
         disposal, transport or handling of Hazardous Materials, whether by the
         Seller, the Company or any third party on its behalf. Schedule 3.19(h)
         contains a complete and correct list of all material Environmental
         Permits, all of which are in full force and effect and, to the extent
         any of such Environmental Permits are not personal to Seller as opposed
         to running with the Facilities, all such Environmental Permits will
         remain in full force and effect following consummation of the
         transactions contemplated hereby. To Seller's knowledge, the Facilities
         are in substantial compliance with all Environmental Permits and
         Environmental Laws, and neither Seller nor the Company has received any
         notice from any governmental authority or any other Person indicating
         that the Facilities are not now in compliance or requesting information
         that may reasonably result in issuance of notice that the Facilities
         are not now in compliance. To Seller's knowledge, Schedule 3.19(h)
         further contains a complete and correct list of all periodic or other
         reports concerning the Facilities or operations at the Facilities
         submitted to any governmental agency by Seller or the Company within
         the past one year, including but not limited to NPDES, EPCRA, CERCLA,
         hazardous waste, air emissions reports, and any action plans.

                  (i) To Seller's knowledge, except as set forth in Schedule
         3.19(i), no underground storage tanks or underground storage
         receptacles for Hazardous Materials are located on the Facilities and
         there have been no uncorrected or non-mitigated material releases of
         Hazardous Substances in, on, under or from the Facilities. Except as
         set forth in Schedule 3.19(i), to Seller's knowledge, and (i) taking
         into account the changing nature of and the vagaries in application and
         enforcement of Environmental Laws and Environmental Permits relative to
         hog operations and the disposal of solid and/or liquid waste from hog
         operations, including, without limitation, those relative to land
         application of effluents and lagoons, and the numerous variables
         affecting hog operations and the disposal of solid and/or liquid waste
         from hog operations, all or any of which variables can change at any
         time, do frequently change without advance notice or opportunity to
         make appropriate adjustments and are expected to change, and (ii)


                                       20
<PAGE>   24
         excepting conditions that may in the future be caused by abnormal
         weather conditions (e.g., hurricanes, tropical storms or other similar
         low pressure weather disturbances, tornadoes, flooding, drought or
         drought like conditions, earthquakes and variations in rainfall,
         temperatures or winds that do not in and of themselves change the
         "norm") and/or "Acts of God," no conditions exist which (i) interfere
         with, prevent, or, with the passage of time, could interfere with or
         prevent continued compliance in all material respects with any of the
         Environmental Permits or any Environmental Law, (ii) may give rise to
         any substantial liability of the Company (whether based in contract,
         tort, implied or express warranty, criminal or civil statute or
         otherwise) under any Environmental Law or (iii) obligate the Company
         or, with the passage of time, could cause the Company to be obligated,
         to incur substantial cost in connection with the clean up, remediation,
         abatement or other restoration to a former condition, by themselves or
         jointly with others, of any contaminated surface water, ground water,
         soil or any natural resources associated therewith either on the
         Facilities or at any property owned by a third party, or any building,
         structural or insulation materials located on or in the Facilities that
         contain greater than 1% asbestos, and except as provided above, on
         Schedules attached hereto and elsewhere in this Agreement, neither
         Seller nor the Company has received any notice of, and Seller's
         Operating Manager is not otherwise aware of any material conditions
         which interfere with or prevent continued material compliance or give
         rise to any such material liability or obligation.

                  (j) Intentionally Deleted.

                  (k) Neither Seller nor the Company has (i) knowingly released
         any person from any claim under any Environmental Law or waived any
         rights concerning any violation of Environmental Law or (ii)
         contractually indemnified any person for any violation of Environmental
         Law related to the Facilities, except as listed on Schedule 3.19(k).

                  (l) Except as set forth in Schedule 3.19(l), there are no
         consent decrees, consent orders, settlement agreements, judgments,
         judicial or administrative orders or agreements (other than licenses
         and permits) with or liens by any governmental authority,
         quasi-governmental entity or other Person relating to any Environmental
         Law which regulate, obligate or bind the Company with respect to the
         Facilities and which are not generally applicable to all Persons owning
         and/or operating properties similar to the Facilities.

                  (m) To Seller's knowledge, true and correct copies of all
         Phase I or greater written environmental reports, audits or assessments
         conducted for Seller by independent, unrelated third Persons and
         related to the Facilities have been made available to Buyer for copying
         and/or inspection.

                  (n) To Seller's knowledge, except as set forth on Schedule
         3.19(n), there are no (i) accumulations of mining spoil, spent
         batteries, used tires, used appliances, out-of-service equipment, spent
         or outdated fertilizers or chemicals (or containers or packages
         therefor) or other accumulations of solid waste discarded at the
         Facilities (excluding animal waste in lagoons or sprayed on lands and
         fertilizers applied to lands in the


                                       21
<PAGE>   25
         ordinary course of business) or (ii) currently operated or formerly
         used landfills at the Facilities.

                  (o) To Seller's knowledge, (i) the Facilities are either
         grandfathered or have all applicable material special exceptions,
         special use permits, conditional use permits, variances, zoning
         permits, certificates of occupancy, consents and approvals ("LAND USE
         APPROVALS") as reasonably necessary to own and operate the Facilities
         as they are currently being operated, all such Land Use Approvals are
         in full force and effect and, to the extent the same are not personal
         to Seller and run with the Facilities, Seller does not know of any
         reason why such Land Use Approvals should not remain in full force and
         effect following consummation of the transactions contemplated hereby,
         assuming the continuation of current uses and Buyer's performance
         thereunder; (ii) the Facilities are either grandfathered or in
         compliance in all material respects with all Land Use Approvals and
         zoning and land use laws, rules, regulations, ordinances and judicial
         and administrative consents and orders ("LAND USE REQUIREMENTS")
         currently applicable to the Facilities as they are currently being
         operated and as such Land Use Requirements are now being applied and
         enforced in the locales where the Facilities are located; (iii) the
         Facilities are being operated substantially in compliance with all
         current nutrient management and waste management plans; (iv) with
         respect to the Facilities, neither Seller nor the Company has received
         any written notice from any Governmental Authority of any (a) material
         violation of any Land Use Requirements which has not been remedied, (b)
         pending or threatened proceedings or governmental action or (c) process
         that seeks to modify the zoning classifications of any of the
         Facilities; and (v) subject to the limitations, qualifications and
         conditions set forth elsewhere in this Agreement and on Schedules
         attached hereto with respect to the Purchased Assets (including,
         without limitation, those set forth in Section 3.12(e), 3.13(c),
         3.19(i) and those at the beginning of this Article 3), all of which are
         applicable under this paragraph, and assuming no abnormal conditions or
         events, or unusual, unexpected or unanticipated circumstances, and
         assuming the enforcement and application of all Land Use Approvals and
         Land Use Requirements as the same are now normally and typically
         applied to the use and/or operation of such assets, no current
         conditions exist which interfere with, prevent, or, with the passage of
         time, will interfere with or prevent continued compliance of the
         Facilities with the Land Use Requirements as they now exist or the
         operation of the Facilities as currently being operated, including,
         without limitation, any non-conforming use designations, other than as
         disclosed in Schedule 3.19(o) and any changes in Land Use Approvals
         and/or Land Use Requirements.

                  3.20 Seller Products; Product Liability. Except as set forth
on Schedule 3.20, to Seller's knowledge, there are no binding and final,
non-appealable statements, citations or decisions by any governmental authority
having jurisdiction over Seller's activities with respect to Carolina Farms
stating that any product produced, processed, manufactured, marketed or
distributed at any time by the Seller or the Company in connection with the
Carolina Farms ("SELLER PRODUCTS") is defective or unsafe or fails to meet in
any material respect any final rules and regulations of such governmental
authority.


                                       22
<PAGE>   26

         3.21 Securities Act Matters. Seller is an "accredited investor" as
defined under the Securities Act of 1933, as amended (the "SECURITIES ACT").
Seller is acquiring the Parent Common Shares hereunder solely for investment
purposes for its own account as principal and not with a view to resale or
distribution except pursuant to an effective registration statement filed under
the Securities Act or an applicable exemption from such registration. Seller
acknowledges that Parent's offering and sale of Parent Common Shares hereunder
will not be registered under the Securities Act or any other securities laws,
and that accordingly restrictions will apply to the Seller's ability to transfer
or sell such securities, and that an appropriate legend to such effect will be
placed on each stock certificate representing any such shares. Seller
acknowledges that none of the securities may be resold unless their offer and
sale are registered under the Securities Act and applicable state securities
laws, or unless appropriate exemptions from registration are available. Seller
agrees that it will not directly or indirectly offer, transfer, sell, pledge,
hypothecate or otherwise dispose of any Parent Common Shares (or solicit any
offer to buy, purchase or otherwise acquired, or to take a pledge of, any such
shares) except in compliance with the Securities Act and applicable state
securities laws and regulations. Seller acknowledges that it and its
representatives have had an opportunity to examine the financial and business
affairs of Buyer and Parent and an opportunity to ask questions of and receive
answers from management, and that it and its representatives have such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in Buyer and Parent in making
an informed investment decision with respect thereto.

         3.22 Disclosure. The representations and warranties and statements of
fact made by the Seller in this Agreement, in the Disclosure Schedule and in
certificates and other written statements or agreements specifically identified
in this Agreement and listed as a certificate or other written statement or
agreement which has been delivered or to be delivered pursuant to this Agreement
or in connection with the transactions contemplated herein are, to Seller's
knowledge, substantially accurate, correct and complete in all material respects
on the date of this Agreement and Seller has no reason to believe that the same
will not be substantially accurate, correct and complete in all material
respects at Closing, except to the extent that the Seller has advised Buyer
otherwise in writing prior to Closing, and will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements and information contained herein or therein not misleading in a
material manner. Notwithstanding anything to the contrary in Article 3, the
representations and warranties and statements of fact relate solely to Carolina
Farms and the Company and with respect to Section 3.19, the Facilities, and
unless otherwise specifically stated (i) exclude activities and matters relating
to or caused by previous owners of or other Persons with respect to any of the
Owned Real Property and/or Leased Real Property, unless known by Seller, (ii)
apply solely to the current operations of Carolina Farms and the Company and the
current use of the Facilities and other improvements and do not apply to and/or
relate to proposed or future events, conditions or circumstances, (iii) exclude
any representations, warranties or statements of fact with respect to proposed
or future governmental laws, rules, regulations, ordinances, permits and/or
licenses and/or a change in the application and enforcement of existing
governmental laws, rules, regulations, ordinances, permits and/or licenses and
(iv) excludes future matters relating to Carolina Farms, the Company, the
Facilities and/or other improvements arising from or resulting from conditions
caused by abnormal weather conditions (e.g., hurricanes, tropical storms or
other



                                       23
<PAGE>   27
similar low pressure weather disturbances, tornadoes, flooding, drought or
drought like conditions, earthquakes and variations in rainfall, temperatures or
winds that do not in and of themselves change the "norm") and/or "Acts of God";
it being understood and agreed that with respect to governmental laws, rules,
regulations, ordinances, permits and/or licenses, the nature of the industry in
which Carolina Farms and the Company operate is constantly changing and under
review and is expected to experience significant changes in the near future, and
that with respect to the other matters referenced and similar matters, the
Facilities and other improvements are located in areas prone to such occurrences
and/or such occurrences occur in the normal course of events.

                                   ARTICLE 4

                              Additional Agreements

         4.1 Employees. Except as set forth in Schedule 4.1, on or before the
Closing Date, the employment by Seller of all employees of Seller at Carolina
Farms shall terminate and except as specifically provided in the Employee
Services Agreement referred to below, such employees shall cease to participate
in any employee benefit plans maintained by or for the benefit of Seller
(provided, that upon such termination of employment, Seller shall fully vest all
such employees with respect to savings plans and pension benefits). On or before
the Closing Date, the Company shall offer comparable employment to all persons
whose employment was so terminated (all such persons who accept the Company's
offer of employment being referred to as the "CAROLINA FARMS EMPLOYEES"). For
purposes of this Section 4.1, "comparable" shall be defined as employment on
substantially the same terms and conditions (including location of employment),
with substantially the same duties and responsibilities, at substantially the
same rate of pay, and with substantially the same fringe benefits as in effect
on the Closing Date while such individuals were employed by Seller. Those
Carolina Farms Employees who accept employment with the Company shall become
employees of the Company effective as of the Closing Date. As soon as
practicable after the Closing Date, Seller and the Company shall execute an
Employee Services Agreement substantially in the form of the agreement attached
as Schedule 4.1(A) whereby Seller will administer the payroll and benefits for
the Carolina Farms Employees through December 31, 2000, subject to reimbursement
by the Company for payments made thereunder and costs and expenses incurred in
connection therewith.

         4.2 Severance Period. As soon as practicable after the Closing Date,
but effective as of the Closing and for at least one year thereafter (the
"SEVERANCE PERIOD"), Buyer shall cause the Company to adopt and maintain a
severance plan which provides identical benefits to each Carolina Farms Employee
as the Salaried Severance Plan and Hourly Employee Severance Practices (as
defined on Schedule 4.2); provided, however, that neither Buyer nor the Company
shall be obligated to pay severance benefits to those Carolina Farms Employees
who (i) voluntary terminate employment with the Company during the Severance
Period and (ii) thereafter immediately accept employment with Seller or any of
its Affiliates. From and after the Severance Period, Buyer shall cause the
Company to provide severance benefits to the Carolina Farms Employees consistent
with Buyer's own severance plans and policies. For purposes of computing
severance benefits for the Carolina Farms Employees from and after the Closing
Date, the employment of Carolina Farms Employees with Seller and/or the Company
prior to the



                                       24
<PAGE>   28
Closing Date together with employment with the Company after the Closing Date
shall be aggregated and treated as if it were employment with the Company.
Seller shall reimburse Buyer and the Company for severance benefits paid in
accordance with this Section 4.2 to the extent specified in Schedule 4.2(A).

         4.3 Warn Act. Buyer acknowledges that it has not informed Seller of any
planned or contemplated decisions or actions by Buyer that would require the
service of notice under the Warn Act. Buyer agrees that it shall not take any
action which causes the notice provisions of the Warn Act to be applicable to
the transactions contemplated by this Agreement.

         4.4 Employee Benefit Plans. Buyer shall cause the Company's employee
benefit plans which are welfare plans (as defined in Section 3(1) of ERISA) to
(i) provide that employment by Seller and/or the Company prior to the Closing
Date shall be treated as employment by the Company after the Closing Date for
purposes of determining eligibility for participation (including waiver of any
pre-existing conditions), and (ii) provide that any expenses incurred by
Carolina Farms Employees during 2000 on or before the Closing Date shall be
taken into account during the plan year of such welfare plans in which the
Closing Date occurs for purposes of satisfying deductible or coinsurance
requirements or satisfying maximum out-of-pocket thresholds to the same extent
as if such expenses had been incurred by such employees after the Closing Date.

         4.5 Vacation. Buyer shall cause the Company to honor the Seller's
existing policy and vacation entitlement of each Carolina Farms Employee through
March 31, 2001. Records maintained by the Seller with respect to earned, used
and available vacation for each Carolina Farms Employee shall be provided to
Buyer at Closing. In consideration of Buyer and the Company honoring the
existing vacation policy, Seller shall neither pay Carolina Farms Employees for
earned and unused vacation nor debit employees for used and unearned vacation.
Buyer and the Company assume the obligation for settlement of vacation by
employee in the event of separation from employment from and after Closing.

         4.6 Worker's Compensation Claims. Buyer and the Company shall be
responsible and liable for any claim arising under any state worker's
compensation or similar law which is based upon any occurrence on or after the
Closing Date.

         4.7 Further Assurances. Each of the parties shall execute such
documents and take such further action as may be reasonably requested to carry
out the provisions of this Agreement and the transactions contemplated herein.
Each party shall use reasonable efforts to fulfill or obtain the fulfillment of
the conditions to Closing set forth in Article 5 hereof.

                                   ARTICLE 5

                              Conditions to Closing

         5.1 Conditions to Obligations of Each Party to Close. The respective
obligations of each party to enter into and complete the Closing shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:



                                       25
<PAGE>   29
                  (a) there shall have been no law, statute, rule or regulation,
         domestic or foreign, enacted or promulgated which would make
         consummation of the transactions contemplated by this Agreement
         illegal; and

                  (b) No injunction or other order entered by a United States
         (state or federal) court of competent jurisdiction shall have been
         issued and remain in effect which would prohibit the Buyer or the
         Seller from consummating the transactions contemplated hereby.

         5.2 Additional Conditions to the Buyer's Obligations. The obligations
of the Buyer to enter into and complete the Closing are subject to the
satisfaction of the following conditions on or before the Closing Date:

                  (a) The representations and warranties of the Seller contained
         in this Agreement , as qualified herein, will be true and correct in
         all material respects (provided that any representation and warranty
         that is subject to materiality, material adverse effect or similar
         qualification shall not be so qualified for determining the existence
         of any breach thereof under this provision) as of the date hereof and
         at and as of the Closing Date, as though then made and as though the
         Closing Date were substituted for the date of this Agreement throughout
         such representations and warranties;

                  (b) The Seller shall have performed each obligation and
         agreement and complied with each covenant to be performed and complied
         with by it under this Agreement prior to the Closing Date;

                  (c) All consents by third parties including, without
         limitation, any required consents of the landlords under any leases, or
         any consents by governmental or regulatory agencies that are reasonably
         required for the consummation of the transactions contemplated hereby,
         or that are reasonably required in order for the Buyer to own, operate
         or control the Carolina Farms will have been obtained and will be, in
         all material respects, in full force and effect;

                  (d) The Seller shall have obtained, at Buyer's cost and
         expense, from one or more nationally recognized title insurance
         companies reasonably satisfactory to Buyer a fee owner's title
         insurance policy, in each case in form and substance reasonably
         satisfactory to Buyer, together with endorsements reasonably requested
         by Buyer, including, without limitation, "extended coverage," access,
         zoning, non-imputation, comprehensive and contiguity endorsements, in
         an amount determined by Buyer, insuring Buyer, showing that the Company
         has good and marketable fee simple title to the Owned Real Property,
         free and clear of all Encumbrances other than Permitted Real Property
         Encumbrances. In connection therewith, Seller shall facilitate Buyer's
         dealing directly with the title insurance company and shall provide to
         the title insurance company such affidavits and indemnifications in
         customary form and substance as shall be required by the title
         insurance company.

                  (e) The Buyer shall have received a written opinion of its
         financial advisor dated not more than seven days before the Closing
         Date, in form and substance satisfactory to




                                       26
<PAGE>   30
         Buyer, to the effect that, based upon the information and procedures
         specified therein, the Purchase Price for the Carolina Farms is fair to
         the Buyer from a financial point of view.

                  (f) Each director and officer of the Company shall have
         submitted his or her resignation effective as of Closing.

                  (g) The Seller will have delivered to the Buyer the following:

                           (i) a certificate representing all of the Purchased
                  Shares, endorsed by the Seller in blank, or with stock
                  transfer powers executed by the Seller in blank attached;

                           (ii) a certificate executed on behalf of the Seller
                  by any of its executive vice presidents, stating that the
                  conditions set forth in Sections 5.2(a) through 5.2(c) hereof
                  have been satisfied;

                           (iii) certified copies of the resolutions duly
                  adopted by the Seller's board of directors approving the
                  execution, delivery, and performance of this Agreement;

                           (iv) a copy of the Company's certificate of
                  incorporation certified by the Secretary of State of the State
                  of Delaware;

                           (v) good standing certificates for the Company from
                  the jurisdiction of its organization and from every
                  jurisdiction in which it is required to qualify to do business
                  as a foreign corporation, dated not earlier than 10 days prior
                  to the Closing Date;

                           (vi) copies of all third party and governmental
                  consents (or other evidence satisfactory to the Buyer) that
                  Seller or the Company is required to obtain in order to effect
                  the transactions contemplated by this Agreement; and

                           (vii) such other documents as the Buyer may
                  reasonably request in connection with the transactions
                  contemplated hereby.

         5.3 Additional Conditions to the Seller's Obligations. The obligations
of the Seller to enter into and complete the Closing are subject to the
satisfaction of the following conditions on or before the Closing Date;

                  (a) The representations and warranties of Buyer set forth in
         this Agreement, as qualified herein, will be true and correct in all
         material respects (provided that any representation and warranty that
         is subject to materiality, material adverse effect or similar
         qualification shall not be so qualified for determining the existence
         of any breach thereof under this provision) as of the date hereof and
         at and as of the Closing Date, as though then made and as though the
         Closing Date were substituted for the date of this Agreement throughout
         such representations and warranties;



                                       27
<PAGE>   31
                  (b) The Buyer shall have performed each obligation and
         agreement and complied with each covenant required to be performed and
         complied with by them under this Agreement prior to the Closing Date;

                  (c) At Closing, the Buyer will have delivered to the Seller
         the following:

                           (i) a duly executed stock certificate representing
                  the Parent Common Shares and that portion of the purchase
                  price to be paid in cash;

                           (ii) a certificate executed on behalf of the Buyer by
                  its president or any vice president, stating that the
                  conditions set forth in Sections 5.3(a) and 5.3(b) hereof have
                  been satisfied;

                           (iii) certified copies of the resolutions duly
                  adopted by the Buyer's board of directors approving the
                  execution, delivery, and performance of this Agreement;

                           (iv) copies of all third party and governmental or
                  regulatory consents (or other evidence satisfactory to the
                  Seller) that the Buyer is required to obtain in order to
                  effect the transactions contemplated by this Agreement;

                           (v) such other documents as the Seller may reasonably
                  request in connection with the transactions contemplated
                  hereby.

                                   ARTICLE 6

                  Survival of Representations; Indemnification

         6.1 Survival of Representations. Except for the representations and
warranties set forth in (i) Section 3.3 (the "COMPANY CAPITALIZATION
REPRESENTATIONS") and Section 3.19 (the "ENVIRONMENTAL REPRESENTATIONS") with
respect to Seller and (ii) Section 2.2 and 2.5 (the "BUYER CAPITALIZATION
REPRESENTATIONS") with respect to Buyer, the representations and warranties
contained in this Agreement (including the Schedules hereto) and any certificate
or document delivered pursuant hereto shall terminate at Closing or upon
termination of this Agreement pursuant to Article V. All Environmental
Representations and Buyer Capitalization Representations shall survive the
Closing hereunder for a period of only 270 calendar days (the "CLAIMS PERIOD"),
the first day following Closing being the first day of said 270 day period. At
the end of the Claims Period, the Environmental Representations (to include,
without limitation, the Specified Conditions and/or any Asserted Liability or
Environmental Law Violation thereunder or in connection therewith) and the Buyer
Capitalization Representations shall terminate. Upon termination of the
representations and warranties contained in this Agreement (including the
Schedules hereto) and any certificate or document delivered pursuant hereto,
whether such termination occurs at Closing (as provided in the first sentence of
this Section) or at the end of the Claims Period with respect to Environmental
Representations and Buyer Capitalization Representations (as provided in the
third sentence of this Section), no demand, claim, cause of action,
counter-claim, third-party claim, Action, proceeding, writ, summons and/or
process, whether civil or criminal or at law, in equity or otherwise, can or
shall be




                                       28
<PAGE>   32
brought, made, advanced, prosecuted, instituted and/or issued with respect to
any of the representations and warranties contained in this Agreement (including
the Schedules hereto) and/or any certificate or document delivered pursuant
hereto, by or on behalf of any of the parties to this Agreement, or any
combination of them, and/or any other person or combination of persons,
including, without limitation, any successors or assigns of the parties hereto
and/or any of their respective subsidiaries, affiliates, partners, shareholders,
directors, officers, employees, agents, managers, contractors and/or creditors
or other debt holders, against any of the parties to this Agreement, or any
combination of them, including, without limitation, any successors or assigns of
the parties hereto and/or any of their respective subsidiaries, affiliates,
partners, shareholders, directors, officers, employees, agents, managers and/or
contractors; and no person or combination of persons shall be a third-party
beneficiary or other beneficiary, whether direct or indirect, of any of the
representations and warranties contained in this Agreement (including the
Schedules hereto) and/or any certificate or document delivered pursuant hereto.
Notwithstanding the foregoing, if prior to the close of business on the last day
of the Claims Period, an Indemnified Party shall have been properly notified of
a claim for indemnity hereunder and such claim shall not have been finally
resolved or disposed of at such date, such claim shall continue to survive and
shall remain a basis for indemnity hereunder until such claim is finally
resolved or disposed of in accordance with the terms hereof.

         6.2 Indemnifications by Seller and by Buyer and Parent.

                  (a) Subject to the limitations contained in this Article 6,
         including, without limitation, the Applicable Capitalization Cap,
         Seller will indemnify and hold harmless Buyer, its subsidiaries,
         affiliates, partners, directors, officers, employees and agents, and
         each of the heirs, executors, successors and assigns of the foregoing
         (collectively, the "BUYER INDEMNIFIED PARTIES") from and against, and
         pay, advance or reimburse the Buyer Indemnified Parties for, any and
         all Covered Liabilities based upon, arising out of or otherwise in
         respect of any inaccuracy contained in, omission from or breach of any
         of the Company Capitalization Representations.

                  (b) Subject to the limitations contained in this Article 6,
         including, without limitation, the Claims Period and the Applicable
         Environmental Cap, Seller will indemnify and hold harmless the Buyer
         Indemnified Parties from and against, and pay, advance or reimburse the
         Buyer Indemnified Parties for, any and all Covered Liabilities based
         upon, arising out of or otherwise in respect of:

                           (i) any inaccuracy contained in, omission from or
                  breach of any of the Environmental Representations; or

                           (ii) any matter or condition identified or described
                  on Schedule 6.2 attached hereto (the "SPECIFIED CONDITIONS")
                  (A) concerning which, any governmental entity or other Person
                  (other than Buyer or its controlled affiliates) has commenced
                  or threatened to commence a claim, written demand, notice or
                  order (an "ASSERTED LIABILITY") alleging that the Facilities
                  are in violation of an Environmental Law (a "ENVIRONMENTAL LAW
                  VIOLATION") or (B) that is




                                       29
<PAGE>   33
                  reasonably likely to give rise to an Asserted Liability or
                  Environmental Law Violation.

                  (c) Subject to the limitations contained in this Article 6,
         including, without limitation the Claims Period and the Applicable
         Buyer Cap, Buyer and Parent, jointly and severally, will indemnify and
         hold harmless Seller, its subsidiaries, affiliates, partners,
         directors, officers, employees and agents, and each of the heirs,
         executors, successors and assigns of any of the foregoing
         (collectively, the "SELLER INDEMNIFIED PARTIES") from and against, and
         pay, advance or reimburse the Seller Indemnified Parties for, any and
         all Covered Liabilities based upon, arising out of or otherwise in
         respect of any inaccuracy contained in, omission from or breach of any
         of the Buyer Capitalization Representations.

                  (d) The term "COVERED LIABILITIES" used in this Article 6
         shall mean losses, liabilities, claims, fines, damages, Actions,
         obligations, payments (including those arising out of any demand,
         assessment, settlement, judgment or compromise relating to any Action),
         costs (including costs of mitigation) and expenses (including interest
         and penalties due and payable with respect thereto and reasonable
         attorneys' and accountants' fees and any other out-of-pocket expenses
         incurred in investigating, preparing, defending, avoiding or settling
         any Action or in investigating, preserving or enforcing another party's
         obligations hereunder).

                  (e) The claims for indemnity by Buyer Indemnified Parties
         pursuant to this Section 6.2 are referred to as "BUYER CLAIMS" and the
         claims for indemnity by Seller Indemnified Parties pursuant to this
         Section 6.2 are referred to as "SELLER CLAIMS." The indemnities
         provided for in this Section 6.2 are not limited to matters asserted by
         third parties against any Indemnified Party, but includes Covered
         Liabilities actually incurred or sustained by any Indemnified Party in
         the absence of third party claims.

         6.3 Notice and Defense of Claims.

                  (a) Whenever a claim shall arise for indemnification hereunder
         (a "CLAIM"), the party seeking indemnification (an "INDEMNIFIED PARTY")
         shall give reasonably prompt notice to the party from whom
         indemnification is sought (an "INDEMNIFYING PARTY") of such Claim and
         the facts, in reasonable detail, constituting the basis for such claim
         (a "CLAIM NOTICE"); provided that failure of an Indemnified Party to
         give prompt written notice of any Claim shall not release, waive or
         otherwise affect an Indemnifying Party's obligations with respect
         thereto except to the extent that the Indemnifying Party is adversely
         affected in its ability to defend against such Claim or is otherwise
         prejudiced thereby.

                  (b) In the case of a Claim involving the assertion of a claim
         by a third party (whether pursuant to an Action or otherwise, a
         "THIRD-PARTY CLAIM"), if the Indemnifying Party shall acknowledge in
         writing to the Indemnified Party that the Indemnifying Party shall be
         obligated to indemnify the Indemnified Party under the terms of its
         indemnity hereunder in connection with such Third-Party Claim, then (i)
         the Indemnifying Party shall be entitled and, if it so elects, shall be
         obligated at its own cost,




                                       30
<PAGE>   34
         risk and expense, (A) to take control of the defense and investigation
         of such Third-Party Claim and (B) to pursue the defense thereof in good
         faith by appropriate actions or proceedings promptly taken or
         instituted and diligently pursued, including to employ and engage
         attorneys of its own choice reasonably acceptable to the Indemnified
         Party to handle and defend the same, and (ii) the Indemnifying Party
         shall be entitled (but not obligated), if it so elects, to compromise
         or settle such Third-Party Claim, which compromise or settlement shall
         be made only with the written consent of the Indemnified Party, such
         consent not to be unreasonably withheld. In the event the Indemnifying
         Party elects to assume control of the defense and investigation of such
         lawsuit or other legal action in accordance with this Section 6.3(b),
         the Indemnified Party may, at its own cost and expense, participate in
         the investigation, trial and defense of such Third-Party Claim;
         provided that, if the named persons to an Action include both the
         Indemnifying Party and the Indemnified Party and the Indemnified Party
         has been advised in writing by counsel that there may be one or more
         legal defenses available to such Indemnified Party that are different
         from or additional to those available to the Indemnifying Party, the
         Indemnified Party shall be entitled, at the Indemnifying Party's cost,
         risk and expense, to separate counsel of its own choosing. If the
         Indemnifying Party fails to assume the defense of such Third-Party
         Claim or fails to acknowledge to the Indemnified Party that it is
         obligated to indemnify the Indemnified Party in accordance with this
         Section 6.3(b) within 10 calendar days after receipt of the notice of
         such Third Party Claim, the Indemnified Party against which such
         Third-Party Claim has been asserted shall (upon delivering notice to
         such effect to the indemnifying party) have the right to undertake, at
         the Indemnifying Party's cost, risk and expense, the defense,
         compromise and settlement of such Third-Party Claim on behalf of and
         for the account of the Indemnifying Party if the Indemnifying Party is
         held liable therefor; provided that such Third-Party Claim shall not be
         compromised or settled without the written consent of the Indemnifying
         Party, which consent shall not be unreasonably withheld. In the event
         the Indemnifying Party assumes the defense of the Third Party Claim,
         the Indemnifying Party shall keep the Indemnified Party reasonably
         informed of the progress of any such defense, compromise or settlement,
         and in the event the Indemnified Party assumes the defense of the Third
         Party Claim, the Indemnified Party shall keep the Indemnifying Party
         reasonably informed of the progress of any such defense, compromise or
         settlement. If the Indemnifying Party is held liable for the
         Third-Party Claim, the Indemnifying Party shall be liable for any
         settlement of any Third-Party Claim effected pursuant to and in
         accordance with this Section 6.3(b) and for any final judgment (subject
         to any right of appeal), and the Indemnifying Party agrees to indemnify
         and hold harmless each Indemnified Party from and against any and all
         Covered Liabilities by reason of such settlement or judgment.

                  (c) Any Covered Liabilities for which an Indemnifying Party is
         responsible shall, subject to the provisions of Section 6.5 hereof, be
         paid directly by the Indemnifying Party. Upon Final Determination (as
         defined below) of the amount of a claim for indemnification, the
         Indemnifying Party shall pay the amount of such claim within 20 days
         after the date of such Final Determination together with interest at
         the prime rate of The Chase Manhattan Bank from time to time, from (and
         including) the later of (i) the date of delivery of the Claim Notice or
         (ii) the date such Covered Liability was paid or




                                       31
<PAGE>   35
         incurred, to (and including) the date immediately preceding the date of
         payment; provided that no such interest shall be paid if such Claim is
         paid to a Third Party.

                  (d) If the Claim involves a matter other than a Third Party
         Claim, the Indemnifying Party shall have thirty (30) days from the date
         of receipt of notice of the Claim to object to such Claim by delivery
         of a written notice of such objection to such Indemnified Party
         specifying in reasonable detail the basis for such objection. Failure
         to timely so object shall constitute a final and binding acceptance of
         the Claim by the Indemnifying Party, and the Claim shall be paid in
         accordance with the further provisions hereof. If an objection is
         timely interposed by the Indemnifying Party, then the Indemnified Party
         and the Indemnifying Party shall negotiate in good faith for a period
         of thirty (30) business days from the date the Indemnified Party
         receives such objection prior to commencing any arbitration, formal
         legal action, suit or proceeding with respect to such Claim for
         indemnification. Upon Final Determination (as defined below) of the
         amount of a Claim for indemnification, the Indemnifying Party shall pay
         the amount of such Claim within thirty (30) days of the date of such
         Final Determination.

                  (e) A "FINAL DETERMINATION" of a Claim shall be (i) a judgment
         of any court determining the validity of a disputed Claim, if no appeal
         is pending from such judgment or if the time to appeal therefrom has
         elapsed (it being understood that the Indemnified Party shall have no
         obligation to appeal); or (ii) an award of any arbitrator or
         arbitration panel determining the validity of such disputed Claim, if
         the arbitration is binding and there is not pending any motion to set
         aside such award or if the time within which to move to set aside such
         award has elapsed; or (iii) a written termination of the dispute with
         respect to such Claim signed by all of the parties thereto or their
         attorneys; or (iv) a written acknowledgment of the Indemnifying Party
         that it no longer disputes the validity of such Claim; (v) settlement
         of the Claim reached and reduced to writing pursuant to negotiation of
         the parties or (vi) such other evidence of final determination of a
         disputed Claim as shall be reasonably acceptable to the parties.

                  6.4 Calculation of Covered Liabilities; Insurance Proceeds. To
         the extent that any Buyer Claim or Seller Claim is covered by insurance
         held by such Buyer Indemnified Party or Seller Indemnified Party, such
         Indemnified Party shall be entitled to indemnification pursuant to
         Section 6.2 only with respect to the amount of the Covered Liabilities
         that are in excess of the cash proceeds received by such Indemnified
         Party pursuant to such insurance. If such Indemnified Party receives
         such cash insurance proceeds prior to the time such Claim is paid, then
         the amount payable by the Indemnifying Party pursuant to such Claim
         shall be reduced by the amount of such proceeds. If such Indemnified
         Party receives such cash insurance proceeds after such Claim has been
         paid, then upon the receipt by the Indemnified Party of any cash
         proceeds pursuant to such insurance up to the amount of Covered
         Liabilities incurred by such Indemnified Party with respect to such
         Claim, such Indemnified Party shall promptly repay any portion of such
         amount which was previously paid by the Indemnifying Party to such
         Indemnified Party in satisfaction of such Claim. Buyer and Seller shall
         each secure from their respective insurance carriers waiver of
         subrogation agreements under which such insurance carriers waive the
         right of subrogation against the respective parties hereto.



                                       32
<PAGE>   36
         6.5 Limitation on Indemnification.

                  (a) Notwithstanding anything to the contrary contained in this
         Agreement in any of the Schedules attached hereto and/or in any of the
         certificates or documents delivered in connection herewith, and except
         as provided in Section 6.5(b) and (d), Seller's total obligation and
         liability under this Agreement, including, without limitation, its
         indemnification obligation and liability under this Article 6, to
         either and/or both of the other parties to this Agreement and/or any
         successors or assigns of the other parties hereto and/or any of their
         respective subsidiaries, affiliates, partners, shareholders, directors,
         officers, employees or agents on account of or as a result of any of
         the Environmental Representations, including, without limitation, any
         Specified Conditions and/or any Asserted Liability or Environmental Law
         Violation thereunder or in connection therewith, shall not exceed under
         any circumstances, individually or in the aggregate, the sum of ONE
         MILLION AND NO/100 DOLLARS ($1,000,000) (the "APPLICABLE ENVIRONMENTAL
         CAP").

                  (b) Notwithstanding anything to the contrary contained in this
         Agreement, in any of the Schedules attached hereto and/or in any of the
         certificates or documents delivered in connection herewith, and except
         as provided in Section 6.5(a) and (d), Seller's total obligation and
         liability under this Agreement, including, without limitation, its
         indemnification obligation and liability under this Article 6, to
         either and/or both of the other parties to this Agreement and/or any
         successors or assigns of the other parties hereto and/or any of their
         respective subsidiaries, affiliates, partners, shareholders, directors,
         officers, employees or agents on account of or as a result of any of
         the Company Capitalization Representations shall not exceed under any
         circumstances, individually or in the aggregate, the sum of SIXTEEN
         MILLION ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($16,150,000)
         (the "APPLICABLE CAPITALIZATION CAP").

                  (c) Notwithstanding anything to the contrary contained in this
         Agreement, in any of the Schedules attached hereto and/or in any of the
         certificates or documents delivered in connection herewith, Buyer's and
         Parent's total obligation and liability under this Agreement,
         including, without limitation, its indemnification obligation and
         liability under this Article 6, to Seller and/or any successors or
         assigns of Seller and/or any of its subsidiaries, affiliates, partners,
         shareholders, directors, officers, employees or agents on account of or
         as a result of any of the Buyer Capitalization Representations, shall
         not exceed under any circumstances, individually or in the aggregate,
         the sum of ONE MILLION AND NO/100 DOLLARS ($1,000,000) (the "APPLICABLE
         BUYER CAP").

                  (d) Notwithstanding anything to the contrary contained in this
         Agreement, the obligation of Seller to indemnify Buyer pursuant to
         Sections 6.2(a), and its liability with respect thereto, shall not be
         limited in any way by the Claims Period.

         6.6 Exclusive Remedy following Closing. Except for any covenants to be
performed after the Closing ("POST-CLOSING COVENANTS") and actions grounded in
fraud, the parties hereto acknowledge and agree that in the event the Closing
occurs, the indemnification



                                       33
<PAGE>   37
provisions in this Article 6 shall be the exclusive remedy of Buyer and Seller
with respect to the transactions contemplated by this Agreement. With respect to
Post-Closing Covenants and actions grounded in fraud, (i) the right of a party
to be indemnified and held harmless pursuant to the indemnification provisions
in this Agreement, if any, shall be in addition to and cumulative of any other
remedy of such party at law or in equity and (ii) no such party shall, by
exercising any remedy available to it under this Article 6, if any, be deemed to
have elected such remedy exclusively or to have waived any other remedy, whether
at law or in equity, available to it.

                                   ARTICLE 7

                               General Provisions

         7.1 Public Statements. Except as required by applicable law, neither
the Buyer, on the one hand, nor the Seller, on the other hand, shall make any
public announcement or statement with respect to this Agreement without the
approval of the Seller or the Buyer, respectively. Moreover, the parties hereto
agree to consult with each other prior to issuing each public announcement or
statement with respect to this Agreement.

         7.2 Mediation. The parties agree to submit any claim, controversy or
dispute arising out of or relating to this Agreement or the transactions
contemplated hereby to non-binding mediation prior to bringing such claim,
controversy or dispute to arbitration or to a court. The mediation shall be
conducted either through an individual mediator or a mediator appointed by a
mediation services organization or body, experienced in the mediation of
disputes of similar type, agreed upon by the parties and, failing such agreement
within a reasonable period of time after either party has notified the other of
its desire to seek mediation of any claim, controversy or dispute (not to exceed
fifteen (15) days) through the American Arbitration Association in accordance
with its rules governing mediation, at a location in Chicago, Illinois chosen by
the party seeking mediation. The costs and expenses of mediation, including
compensation of the mediator, shall be borne by the parties equally. If the
parties are unable to resolve the claim, controversy or dispute within ninety
(90) days after conferring with the mediator, then either party may submit such
claim, controversy or dispute to a court in accordance with the terms of this
Agreement.

         7.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
sent by telex, telecopy, facsimile or overnight courier, or mailed by registered
or certified mail (postage prepaid and return receipt requested), to the party
to whom the same is so delivered, sent or mailed at the following addresses (or
at such other address for a party as shall be specified by like notice):



                                       34
<PAGE>   38
                  (a) if to the Buyer or Parent:

                           Premium Standard Farms, Inc.
                           423 West 8th Street
                           Suite 200
                           Kansas City, Missouri 64105
                           Attention:  John Meyer
                           Telecopy:  (816) 472-5837

                           with a copy to:

                           Jeffrey T. Haughey
                           Blackwell Sanders Peper Martin LLP
                           2300 Main Street
                           Suite 1000
                           Kansas City, Missouri 64108
                           Telecopy:  (816) 983-8080

                  (b) if to the Seller:

                           ContiGroup Companies, Inc.
                           277 Park Avenue
                           New York, New York  10172
                           Attention:  Vart Adjemian
                           Telecopy:  (212) 207-5043

                           with copies to:

                           William S. Cherry, Jr.
                           Poyner & Spruill LLP
                           3600 Glenwood Avenue
                           Raleigh, North Carolina 27612
                           Telecopy:  (919) 783-1075

                           and

                           ContiBeef LLC
                           5408 Idylwild Trail
                           Boulder, Colorado  80301
                           Attention:  Suzanne Griffin
                           Telecopy:  (303) 516-5928

Notices delivered personally or by telex, telecopy or facsimile shall be deemed
delivered as of actual receipt, mailed notices shall be deemed delivered three
days after mailing and overnight courier notices shall be deemed delivered one
day after the date of sending.



                                       35
<PAGE>   39
         7.4 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.

         7.5 Amendment. This Agreement may not be amended except by an
instrument signed by each of the parties hereto.

         7.6 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants, and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify the Agreement to preserve such party's anticipated
benefits under the Agreement.

         7.7 Miscellaneous. This Agreement (together with all other agreements,
documents and instruments referred to herein): (a) constitute the entire
agreement and supersede all other prior agreements and undertakings, both
written and oral, among the parties with respect to the subject matter hereof;
(b) are not intended to confer upon any other Person any rights or remedies
hereunder; (c) shall not be assigned by operation of law or otherwise, except
that the Buyer may assign all or any portion of its rights under this Agreement
(i) to any wholly-owned subsidiary, but no such assignment shall relieve the
Buyer of its obligations hereunder and (ii) by operation of law or otherwise to
any of their respective successors; and (d) shall be governed in all respects,
including validity, interpretation and effect, by the internal laws of the State
of Delaware, without giving effect to the principles of conflict of laws
thereof.

         7.8 Counterparts. This Agreement may be executed via facsimile or
otherwise in one or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument.

         7.9 Cumulative Remedies. All rights and remedies of either Party hereto
are cumulative of each other and of every other right or remedy such Party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.

         7.10 Attorneys' Fees. If any Party to this Agreement brings an action
to enforce its rights under this Agreement, the prevailing Party shall be
entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees, incurred in connection with such action, including
any appeal of such action, which shall be set by the judge and not a jury.

         7.11 Construction. The language used in this Agreement shall be deemed
to be the language chosen by the parties to express their mutual intent and no
rule of strict construction shall be applied against any Party. The use of the
word "including" in this Agreement means "including without limitation" and is
intended by the parties to be by way of example rather than limitation.



                                       36
<PAGE>   40
         7.12 Brokers, etc. Seller and Buyer each covenant with the other that
no brokers have been involved in this transaction and that no brokerage fee,
finder's fee or other similar fee is due and owing to any person on account of
this transaction. Buyer and Seller each agree to indemnify the other for any
claims made with respect to broker's, finder's or other similar fees owing on
account of this transaction.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]



                                       37
<PAGE>   41
         IN WITNESS WHEREOF, the Buyer and the Seller have caused this Agreement
to be executed on the date first written above by their respective officers
thereunder duly authorized.



                                       PREMIUM STANDARD FARMS, INC.



                                       By: /s/ Stephen Lightstone
                                       Name:  Stephen A. Lightstone
                                       Title:  Executive Vice President

                                       PSF GROUP HOLDINGS, INC.



                                       By: /s/ Stephen Lightstone
                                       Name:  Stephen A. Lightstone
                                       Title:  Executive Vice President

                                       CONTIGROUP COMPANIES, INC.



                                       By: /s/ Mark Baker
                                       Name:  Mark R. Baker
                                       Title:  Executive Vice President






                                       38
<PAGE>   42
                                    APPENDIX

         "Actions" has the meaning assigned to such term in Section 3.16.

         "Agreement" has the meaning assigned to such term in the preamble to
this Agreement.

         "Asserted Liability" has the meaning assigned to such term in Section
6.2(a)(ii).

         "Applicable Buyer Cap" has the meaning assigned to such term in Section
6.5.

         "Applicable Capitalization Cap" has the meaning assigned to such term
in Section 6.5.

         "Applicable Environmental Cap" has the meaning assigned to such term in
Section 6.5.

         "Balance Sheet Date" has the meaning assigned to such term in Section
3.4.

         "Benefit Plan" means any employee benefit plan, arrangement, policy or
commitment (whether or not an employee benefit plan within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended), including any employment, consulting or deferred compensation
agreement, executive compensation, bonus, incentive, pension, profit-sharing,
savings, retirement, stock option, stock purchase or severance pay plan, any
life, health, disability or accident insurance plan or any holiday or vacation
practice as to which Seller or any commonly controlled entity has or in the
future could have any direct or indirect, actual or contingent liability.

         "Buyer" has the meaning assigned to such term in the preamble to this
Agreement.

         "Buyer Capitalization Representations" has the meaning assigned to such
term in Section 6.1.

         "Buyer Claims" has the meaning assigned to such term in Section 6.2(e)

         "Buyer Indemnified Parties" has the meaning assigned to such term in
Section 6.2(a).

         "Carolina Farms" has the meaning assigned to such term in the Recitals.

         "Carolina Farms Employees" has the meaning assigned to such term in
Section 4.1.

         "CERCLA" has the meaning assigned to such term in Section 3.19(a).

         "Claim" has the meaning assigned to such term in Section 6.3.

         "Claim Notice" has the meaning assigned to such term in Section 6.3(a).

         "Claims Period" has the meaning assigned to such term in Section 6.1.

         "Class A Stock" has the meaning assigned to such term in Section 2.2.


                                       i
<PAGE>   43
         "Class B Stock" has the meaning assigned to such term in Section 2.2.

         "Closing" has the meaning assigned to such term in Section 1.3.

         "Closing Date" shall mean the date on which the Closing takes place.

         "Commonly Controlled Entity" means any entity which is under common
control with the Seller within the meaning of Code section 414(b), (c), (m), (o)
or (t).

         "Company" has the meaning assigned to such term in the preamble to this
Agreement.

         "Company Capitalization Representations" has the meaning assigned to
such term in Section 6.1.

         "Contract" has the meaning assigned to such term in Section 3.15(a).

         "Covered Liabilities" has the meaning assigned to such term in Section
6.2(c).

         "Environmental Law" has the meaning assigned to such term in Section
3.19(a).

         "Environmental Permit" has the meaning assigned to such term in Section
3.19(c).

         "Environmental Representations" has the meaning assigned to such term
in Section 6.1.

         "Environmental Law Violation" has the meaning assigned to such term in
Section 6.2(a)(ii).

         "Facilities" has the meaning assigned to such term in Section 3.19(b).

         "Final Determination" has the meaning assigned to such term in Section
6.3(e).

         "Financial Statements" has the meaning assigned to such term in Section
3.4.

         "GAAP" has the meaning assigned to such term in Section 2.5.

         "Hazardous Materials" has the meaning assigned to such term in Section
3.19(d).

         "HMTA" has the meaning assigned to such term in Section 3.19(a).

         "Indemnified Party" has the meaning assigned such term in Section
6.3(a).

         "Indemnifying Party" has the meaning assigned such term in Section
6.3(a).

         "Inventory" has the meaning assigned to such term in Section 3.14(a).

         "Land Use Approvals" has the meaning assigned to such term in Section
3.19(o).

         "Land Use Requirements" has the meaning assigned to such term in
Section 3.19(o).

                                       ii
<PAGE>   44
         "Laws" means all applicable statutes, laws, rules, regulations,
permits, decrees, injunctions, judgments, orders, rulings, determinations,
writs, decrees and awards.

         "Leased Real Property" has the meaning assigned to such term in Section
3.10(a).

         "Owned Real Property" has the meaning assigned to such term in Section
3.11.

         "Parent" has the meaning assigned to such term in the preamble to this
Agreement.

         "Parent Common Shares" has the meaning assigned to such term in Section
1.5(b).

         "Parent Financial Statements" has the meaning assigned to such term in
Section 2.5.

         "Permits" has the meaning assigned to such term in Section 3.18(b).

         "Permitted Owned Real Property Encumbrances" has the meaning assigned
to such term in Section 3.11.

         "Person" has the meaning assigned to such term in the preamble to
Article 3.

         "Post-Closing Covenants" has the meaning assigned to such term in
Section 6.6.

         "Preferred Stock" has the meaning assigned to such term in Section 2.2.

         "Pro Forma Balance Sheet" has the meaning assigned to such term in
Section 3.4.

         "Purchase Price" has the meaning assigned to such term in Section 1.2.

         "Purchased Shares" has the meaning assigned to such term in the
preamble to this Agreement.

         "RCRA" has the meaning assigned to such term in Section 3.19(a).

         "Release" has the meaning assigned to such term in Section 3.19(e).

         "Schedules" has the meaning assigned to such term in the preamble to
Article 3.

         "Securities Act" has the meaning assigned to such term in Section 3.21.

         "Seller" has the meaning assigned to such term in the preamble to this
Agreement.

         "Seller Claims" has the meaning assigned to such term in Section
6.2(e).

         "Seller Indemnified Parties" has the meaning assigned to such term in
Section 6.2(b).

         "Seller Products" has the meaning assigned to such term in Section
3.20.

                                      iii
<PAGE>   45
         "Seller's Operating Manager" has the meaning assigned to such term in
the preamble to Article 3.

         "Severance Period" has the meaning assigned to such term in Section
4.2.

         "Specified Conditions" has the meaning assigned to such term in Section
6.2(a)(ii).

         "SWDA" has the meaning assigned to such term in Section 3.19(a).

         "Tangible Personal Property Assets" has the meaning assigned to such
term in Section 3.13(a).

         "Tax" has the meaning assigned to such term in Section 3.9(a).

         "Third-Party Claim" has the meaning assigned to such term in Section
6.3(b).


                                       iv
<PAGE>   46
                                LIST OF SCHEDULES



Schedule 2.2 - Parent Capitalization


Schedule 2.3 - Buyer and Parent Authority


Schedule 3.1 - Seller Jurisdictions Authorized to do Business re Carolina Farms


Schedule 3.2  - Agreements Breached by this Transaction


Schedule 3.4 - Pro Forma Balance Sheet


Schedule 3.5 - Accounts Receivables greater than or equal to $50,000


Schedule 3.6 - New Developments since Balance Sheet Date


Schedule 3.7 - Undisclosed Liabilities


Schedule 3.9 - Transferee Tax Liability


Schedule 3.10 - Leased Real Property and Exceptions


Schedule 3.11 - Owned Real Property


Schedule 3.12 - Compliance: Owned and Leased Real Property


Schedule 3.13 - Encumbrances on Personal Property


Schedule 3.14 - Livestock Inventory


Schedule 3.15 - Contracts and Commitments


Schedule 3.16 - Litigation


Schedule 3.17 - Compliance with Laws


Schedule 3.19(b) - Facilities


Schedule 3.19(f) - Environmental Compliance


Schedule 3.19(g) - Environmental Liability


Schedule 3.19(h) - Environmental Permits


Schedule 3.19(i) - Underground Storage Tanks and Unmitigated Releases


Schedule 3.19(j) - Waste Disposal Sites


                                       i
<PAGE>   47
Schedule 3.19(k) - Environmental Indemnifications


Schedule 3.19(l) - Environmental Orders


Schedule 3.19(n) - Landfills and Debris Located at Facilities


Schedule 3.19(o) - Change in Land Use Approvals or Requirements


Schedule 3.20 - Product Liability


Schedule 4.1 - Employees


Schedule 4.1(A) - Employee Services Agreement


Schedule 4.2 - Severance Plans


Schedule 4.2(A) - Seller Reimbursement


Schedule 6.2 - Specified Conditions


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