<PAGE>

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                                 AGREEMENT OF

                            SETTLEMENT AND RELEASE


                                BY AND BETWEEN


                          FURR'S SUPERMARKETS, INC.


                                     AND


                           FLEMING COMPANIES, INC.






                        DATED AS OF OCTOBER 23, 1997

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<PAGE>
                             TABLE OF CONTENTS
                                                                           Page
                                                                           ----
ARTICLE I        DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . .  3
            1.1  Definitions . . . . . . . . . . . . . . . . . . . . . . .  3
    
ARTICLE II       THE SALE. . . . . . . . . . . . . . . . . . . . . . . . .  8
            2.1  The Investment Banker . . . . . . . . . . . . . . . . . .  8
            2.2  The Offering. . . . . . . . . . . . . . . . . . . . . . .  9
                 (a) With the El Paso PSC. . . . . . . . . . . . . . . . .  9
                 (b) Without the El Paso PSC . . . . . . . . . . . . . . .  9
                 (c) The El Paso PSC Costs and the Liquidation Costs . . . 10
                 (d) The Acquisition Agreement . . . . . . . . . . . . . . 10
                 (e) Representations and Covenants . . . . . . . . . . . . 10
            2.3  Minimum Bid Price . . . . . . . . . . . . . . . . . . . . 12
            2.4  Stockholders Bids . . . . . . . . . . . . . . . . . . . . 13
            2.5  Calculation of Amounts to be Paid to Holders of 
                 Issued Common Stock, Options, Warrants and SARs . . . . . 14

ARTICLE III      THE RELEASES. . . . . . . . . . . . . . . . . . . . . . . 14
            3.1  Furr's Release. . . . . . . . . . . . . . . . . . . . . . 14
            3.2  Fleming Release . . . . . . . . . . . . . . . . . . . . . 14
            3.3  Arbitration . . . . . . . . . . . . . . . . . . . . . . . 14
            3.4  Dissolution Action. . . . . . . . . . . . . . . . . . . . 15

ARTICLE IV       THE SUPPLY AGREEMENT AND FURR'S ELECTION. . . . . . . . . 15
            4.1  The Supply Agreement. . . . . . . . . . . . . . . . . . . 15
                 (a) Sale of Furr's. . . . . . . . . . . . . . . . . . . . 15
                 (b) No Sale . . . . . . . . . . . . . . . . . . . . . . . 16
            4.2  Furr's Election . . . . . . . . . . . . . . . . . . . . . 16
            4.3  Furr's Election to Purchase the El Paso PSC . . . . . . . 16
            4.4  Furr's Elects Not to Purchase the El Paso PSC . . . . . . 16
            4.5  Credit Policies . . . . . . . . . . . . . . . . . . . . . 17
            4.6  Other Indebtedness. . . . . . . . . . . . . . . . . . . . 17
            4.7  Payments. . . . . . . . . . . . . . . . . . . . . . . . . 17
            4.8  Reduction in Charges. . . . . . . . . . . . . . . . . . . 17
            4.9  Union Agreement . . . . . . . . . . . . . . . . . . . . . 19


ARTICLE V        THE STOCKHOLDERS AGREEMENT. . . . . . . . . . . . . . . . 20
            5.1  The Stockholders Agreement. . . . . . . . . . . . . . . . 20
            5.2  Standstill. . . . . . . . . . . . . . . . . . . . . . . . 22
        
ARTICLE VI       MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 22
            6.1  Other Conditions. . . . . . . . . . . . . . . . . . . . . 22

<PAGE>

    6.2  Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . 22
    6.3  Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
    6.4  Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 23
    6.5  Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . 23
    6.6  Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . 23
    6.7  Binding On Successors . . . . . . . . . . . . . . . . . . . . . . 23
    6.8  Entire Agreement; Assignment. . . . . . . . . . . . . . . . . . . 24
    6.9  Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
    6.10 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
    6.11 Modifications and Amendments. . . . . . . . . . . . . . . . . . . 24
    6.12 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 24


                                 EXHIBITS

Exhibit A     Definition of Minimum Bid Price
Exhibit B-1   Special Release (Furr's)
Exhibit B-2   Special Release (Windward Group)
Exhibit B-3   Special Release (Fleming)
Exhibit B-4   Special Release (Management) 
Exhibit B-5   Special Release (Officers and Employees)
Exhibit C     Dismissal With Prejudice - Action
Exhibit D-1   Dismissal With Prejudice - Delaware Litigation
Exhibit D-2   Dismissal With Prejudice - Texas Litigation
Exhibit E     Fleming EBITDA Report
Exhibit F     Form of Asset Purchase Agreement
Exhibit G     Form of Escrow Agreement
Exhibit H     Windward Waiver 


                                      -ii-
<PAGE>
                     AGREEMENT OF SETTLEMENT AND RELEASE
                                       

    THIS AGREEMENT OF SETTLEMENT AND RELEASE (this "Agreement"), entered into 
as of the 23rd day of October, 1997, by and between FURR'S SUPERMARKETS, 
INC., a Delaware corporation ("Furr's"), and FLEMING COMPANIES, INC., an 
Oklahoma corporation ("Fleming").  Fleming and Furr's are herein sometimes 
referred to as the "Parties".

                                W I T N E S S E T H :

    WHEREAS, Furr's has filed a lawsuit against Fleming, two of its officers 
(the "Officers") and two other present or former employees (the "Employees") 
styled FURR'S SUPERMARKETS, INC. V. FLEMING COMPANIES, INC., ET AL., Case No. 
CIV-97-0410 JC/RLP, United States District Court for the District of New 
Mexico seeking the termination of the ten (10) year supply agreement dated 
March 11, 1991 between Furr's and Fleming (as previously amended and as 
modified and amended in accordance with SECTION 4.8 hereof, the "Supply 
Agreement"), claiming that it was overcharged for products under the Supply 
Agreement, breach of contract, misrepresentation, fraud and violation of 
certain New Mexico trade practices statutes and other claims (the "Action"), 
and the Local Unions, on behalf of themselves and a class of former and 
present employees of Furr's moved to intervene in the Action against Fleming 
(the claims asserted in the motion to intervene, together with any related 
claims which could be asserted by the Local Unions in other actions, the 
"Union Claim"); and 

    WHEREAS, Furr's has petitioned the court to amend its complaint in the 
Action to describe allegations against Fleming and the Officers under the 
Racketeer Influenced Corruption and Organizations Act and other claims 
seeking damages in excess of $75 million; and

    WHEREAS, Fleming, in response to Furr's alleged competitive bid submitted 
under paragraph 2 of the Supply Agreement, has commenced the Arbitration 
Proceeding (as herein defined); and

    WHEREAS, Fleming (i) has filed a derivative lawsuit against Furr's, 
certain members of the Windward Group (as herein defined), members of the 
Board and members of Management (as herein defined) styled FLEMING COMPANIES, 
INC. V. GARY W. SWENSON, ET AL., In the Court of Chancery, State of Delaware, 
Case No. 15830 alleging conspiracy, mismanagement and waste (the "Delaware 
Litigation"), (ii) has advised Furr's it will file a complaint against Furr's 
for appointment of a receiver to effect corporate dissolution in the Court of 
Chancery, State of Delaware if the Action is not dismissed in accordance with 
this Agreement (the "Dissolution Action") and (iii) has filed an action 
styled FLEMING COMPANIES, INC. V. FURR'S SUPERMARKETS, INC., Case No. 3-97 CU 
2271-D in the United States District Court for the Northern District of Texas 
seeking indemnification from Furr's of its obligations with respect to the 
Union Claim (the "Texas Action"); and 

<PAGE>

    WHEREAS, Fleming and Furr's are desirous of settling the Action, the 
Delaware Litigation, the Texas Action and the Arbitration Proceeding and that 
the Dissolution Action not be pursued; and

    WHEREAS, the authorized capital stock of Furr's consists of 1,000 shares 
of preferred stock, $.01 par value, none of which is issued, 4,200,000 shares 
of Class A Common Stock, $.01 par value (the "Class A Common Stock"), of 
which 1,581,984 shares are issued and outstanding, and 50,000 shares of Class 
B Common Stock (non-voting), $.01 par value (the "Class B Common Stock"), of 
which 26,494 shares are issued and outstanding (the issued and outstanding 
Class A Common Stock and Class B Common Stock and the authorized but unissued 
Class A Common Stock issuable upon the exercise of the Options, Warrants and 
SARs are together referred to herein as the "Common Stock"); and

    WHEREAS, the Windward Group, Fleming, Management and certain directors of 
Furr's own the following shares of Common Stock: the Windward Group owns 
927,933 shares of Class A Common Stock (which does not include 14,493 shares 
beneficially owned by a Director Holder and held by the Windward Group) and 
26,494 shares of Class B Common Stock; Fleming owns 550,550 shares of Class A 
Common Stock; Management owns 60,240 shares of Class A Common Stock; and the 
Director Holders own 43,261 shares of Class A Common Stock  (which includes 
14,493 shares beneficially owned by a Director Holder and held by the 
Windward Group) (all such shares of issued and outstanding Common Stock are 
collectively referred to herein as the "Issued Common Stock"); and

    WHEREAS, the Windward Group owns warrants to purchase 496,667 shares of 
Class A Common Stock (which does not include the Morrow Warrants held by the 
Windward Group) at an exercise price of $.01 per share (the "Windward 
Warrants"), the Morrow Warrants are owned by a Director Holder and held by 
the Windward Group and Fleming owns warrants to purchase 182,176 shares of 
Class A Common Stock at an exercise price of $.01 per share (the "Fleming 
Warrants" and together with the Windward Warrants and the Morrow Warrants, 
the "Warrants"); and

    WHEREAS, Management and other employees of Furr's and the Director 
Holders, prior to consummation of the sale of Furr's in accordance with 
Article II hereof, will hold options (vested and unvested) to purchase shares 
of Class A Common Stock as follows: Management and other employees of Furr's 
hold options to purchase 251,764 shares of Class A Common Stock (and may be 
granted options to purchase up to an additional 27,985 shares of Class A 
Common Stock immediately prior to the execution or closing of the Acquisition 
Agreement); and the Director Holders hold options to purchase 17,000 shares 
of Class A Common Stock (and may be issued previously allocated options to 
purchase up to an additional 3,000 shares of Class A Common Stock immediately 
prior to the execution or closing of the Acquisition Agreement) (together, 
all such options are referred to herein as the "Options"); and 

    WHEREAS, Management holds 107,900 SARs (as herein defined); and

                                     -2-
<PAGE>

    WHEREAS, the Special Committee has engaged the services of the Banker (as 
herein defined) to assist it in exploring strategic alternatives available to 
Furr's.

    NOW, THEREFORE, for and in consideration of the premises, the mutual 
covenants, agreements, representations and warranties herein contained, and 
other good and valuable consideration, the receipt and adequacy of which are 
hereby acknowledged, the Parties agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

    1.1  DEFINITIONS.

         "ACTION" shall have the meaning set forth in the first "Whereas" 
clause.

         "ACQUISITION AGREEMENT" means that certain acquisition agreement by 
and between Furr's and the Purchaser substantially in the form approved by 
the Board which will provide for the acquisition of Furr's by the Purchaser 
in accordance with Article II hereof.

         "ADVISOR" shall mean Windward Capital Partners, L.P., a Delaware 
limited partnership.

         "AFFILIATE(S)" shall have the meaning as set forth in Rule 144(a)(1) 
of the Securities Act of 1933, as amended.

         "AGREEMENT" means this Agreement of Settlement and Release dated 
October 23, 1997, by and between Furr's and Fleming.

         "ARBITRATION PROCEEDING" shall mean that certain arbitration 
proceeding (Case No. 71 181 0010897) commenced by Fleming on March 28, 1997 
pursuant to paragraph 2(b) of the Supply Agreement.

         "ASSET PURCHASE AGREEMENT" shall mean an asset purchase agreement 
substantially in the form attached hereto as EXHIBIT F relating to the sale 
of the El Paso PSC to the Purchaser or Furr's, as applicable.

         "ASSET SALES PERIOD" shall have the meaning set forth in SECTION 4.3 
hereof.

         "BANKER" shall mean Merrill Lynch & Co.

                                     -3-
<PAGE>

         "BOARD" shall mean the duly elected board of directors of Furr's.

         "CLASS A COMMON STOCK" shall have the meaning set forth in the sixth 
"Whereas" clause.

         "CLASS B COMMON STOCK" shall have the meaning set forth in the sixth 
"Whereas" clause.

         "COMMON STOCK" shall have the meaning set forth in the sixth 
"Whereas" clause.

         "DELAWARE LITIGATION" shall have the meaning set forth in the fourth 
"Whereas" clause.

         "DIRECTOR HOLDERS" shall mean certain members of the Board who hold 
shares of Issued Common Stock and who are not employees of Furr's, Fleming or 
any member of the Windward Group.

         "DISSOLUTION ACTION" shall have the meaning set forth in the fourth 
"Whereas" clause.

         "DISTRIBUTION DATE" shall have the meaning set forth in SECTION 2.1 
hereof.

         "EBITDA" means the earnings before interest, taxes, depreciation and 
amortization for a twelve month period.

         "EL PASO PSC" means the assets of Fleming to be conveyed to Furr's 
or the Purchaser, as the case may be, pursuant to the Asset Purchase 
Agreement, as more fully described in such agreement including, without 
limitation, the Fleming product supply center located at 9820 Railroad Drive, 
El Paso, Texas, the El Paso PSC Leases, leasehold improvements, furniture, 
fixtures, equipment and Inventory.

         "EL PASO PSC COSTS" shall have the meaning set forth in SECTION 
2.2(a) hereof.

         "EL PASO PSC LEASES" means (i) the Furr's Warehouse El Paso Lease 
(9820 Railroad Drive, El Paso, Texas) dated March 1, 1973; (ii) the 
Refrigeration Lease; (iii) the Railroad Drive Warehouse Lease (9601 Railroad 
Drive, El Paso, Texas) dated June 15, 1996; and (iv) John Merrell Office 
Lease (9730 Railroad Drive, El Paso, Texas) dated November 1, 1996.

         "EMPLOYEES" shall have the meaning set forth in the first "Whereas" 
clause.

         "ESCROW AGREEMENT" shall mean an escrow agreement substantially in 
the form attached hereto as EXHIBIT G relating to the escrow of the 
Liquidation Costs.

                                     -4-
<PAGE>

         "EQUITY CONSIDERATION" shall mean the portion of the Purchase Price 
that remains after deducting (i) all amounts to repay indebtedness for 
borrowed money of Furr's, including subordinated debt, and (ii) payments to 
be made in respect of transaction fees, and adding the aggregate exercise 
price payable to Furr's by holders upon exercise of all Options, Warrants and 
SARs.

         "FINANCIAL ADVISORY SERVICES AGREEMENT" shall mean that certain 
Financial Advisory Services Agreement dated as of June 30, 1995, between 
Furr's and the Advisor.

         "FIRST PERIOD" shall have the meaning set forth in SECTION 4.1(a) 
hereof.

         "FLEMING" means Fleming Companies, Inc., an Oklahoma corporation.

         "FLEMING WARRANTS" shall have the meaning set forth in the eighth 
"Whereas" clause.

         "FMP" means the Fleming Flexible Marketing Plan under which FMP 
Products are being supplied to Furr's from the El Paso PSC and other 
distribution centers of Fleming.

         "FMP PRODUCTS" means all grocery, frozen and dairy products (other 
than Perishable Products) supplied to Furr's by Fleming under the Supply 
Agreement and the FMP.

         "FURR'S" means Furr's Supermarkets, Inc., a Delaware corporation.

         "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 
1976, as amended, and the regulations promulgated thereunder.

         "INVENTORY" shall have the meaning set forth in SECTION 4.3 hereof.

         "ISSUED COMMON STOCK" shall have the meaning set forth in the 
seventh "Whereas" clause.

         "LIQUIDATION COSTS" shall have the meaning set forth in SECTION 
2.2(b) hereof.

         "LOCAL NO. 745" shall mean the Teamsters Local No. 745, affiliated 
with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and 
Helpers of America.

         "LOCAL UNIONS" shall mean United Food and Commercial Workers Union, 
Local Number 1564 of New Mexico and Local Number 540.

         "LOWER ACCEPTABLE BID" shall have the meaning set forth in SECTION 
2.3 hereof.

                                     -5-
<PAGE>

         "MANAGEMENT" means Jan U. Friederich, Walter R. Doyle, Gene W. 
Denison and Richard M. Kaufman.

         "MARKETABLE SECURITIES" means any of the following: (i) if a 
security is an equity security, it must be freely tradable and (a) listed on 
the New York Stock Exchange ("NYSE"), or (b) listed on the National 
Association of Security Dealers Automated Quotations ("NASDAQ"), or (c) 
listed on the American Stock Exchange ("ASE"); or (ii) if a security is a 
debt security, it must be rated "BBB+" or better by Standard & Poor's 
Corporation and/or rated "Baa1" by Moody's and listed on the NYSE or the 
NASDAQ or the ASE.

         "MATCH NOTICE" shall have the meaning set forth in SECTION 2.3 
hereof.

         "MINIMUM BID PRICE - EL PASO PSC" shall have the meaning set forth 
in EXHIBIT A hereto.

         "MINIMUM BID PRICE - LIQUIDATION" shall have the meaning set forth 
in EXHIBIT A hereto.

         "MORROW WARRANTS" shall mean 14,307 warrants to purchase 14,307 
shares of Class A Common Stock beneficially owned by David Morrow, a Director 
Holder and held by the Windward Group.

         "OFFER NOTICE" shall have the meaning set forth in SECTION 2.3 
hereof.

         "OFFERING MEMORANDUM" shall have the meaning set forth in SECTION 
2.1 hereof.

         "OFFICERS" shall have the meaning set forth in the first "Whereas" 
clause.

         "OPTIONS" shall have the meaning set forth in the ninth "Whereas" 
clause.

         "PARTIES" shall have the meaning set forth in the first paragraph of 
this Agreement.

         "PAYMENT AMOUNT" means the cash refund to be made to Furr's by 
Fleming in accordance with the provisions of SECTION 4.8 hereof.

         "PERIOD" means one of thirteen (13) four (4) week periods of time in 
any fiscal year as established by Fleming for accounting purposes.

         "PERISHABLE PRODUCTS" shall mean produce, meat, bakery and deli 
products sold to Furr's by Fleming from the El Paso PSC or other distribution 
centers of Fleming.

         "PLAN" means that certain Furr's Supermarkets, Inc. 1993 Phantom 
Stock Plan, as amended.

                                     -6-
<PAGE>

         "PRODUCT SUPPLY DOCUMENTS" shall have the meaning set forth in 
SECTION 4.8(d) hereof.

         "PURCHASE PRICE" shall mean the aggregate value of the consideration 
(cash and/or Marketable Securities) offered or paid, as applicable, by a bona 
fide bidder in connection with the sale of Furr's consisting of (i) all 
amounts to repay indebtedness for borrowed money of Furr's, including 
subordinated debt, (ii) all amounts in respect of the Issued Common Stock, 
(iii) all amounts in respect of cancellation of SARs, Warrants and Options 
equal to the excess of the Share Price over the respective exercise prices 
thereof, and (iv) payments to be made in respect of transaction fees but 
excluding payments in respect of El Paso PSC Costs or Liquidation Costs, 
which is accepted by the Board in accordance with Article II of this 
Agreement.

         "PURCHASER" means the entity who is the successful bidder for Furr's 
in accordance with Article II of this Agreement.

         "PURCHASER TRANSITION PERIOD" shall mean an approximate nine (9) 
month period, subject to adjustment by the Purchaser in accordance with 
SECTION 4.1(a) hereof, commencing on the day of the consummation of the 
transactions contemplated by the Acquisition Agreement if the Purchaser 
elects to purchase Furr's without the El Paso PSC.

         "REFRIGERATION LEASE" shall mean the El Paso Outside Refrigeration 
Warehouse Lease (10500 Railroad Drive, El Paso, Texas) dated July 15, 1995.

         "SALE OFFER" shall have the meaning set forth in SECTION 2.3 hereof.

         "SALES PERIOD" shall have the meaning set forth in SECTION 2.2 
hereof.

         "SARS" means those stock appreciation rights granted under the Plan.

         "SECOND PERIOD" shall have the meaning set forth in SECTION 4.1(a) 
hereof.

         "SHARE PRICE" shall mean the per share dollar figure obtained by 
dividing (i) the Equity Consideration, by (ii) the sum of (A) the number of 
shares of Issued Common Stock, and (B) the number of shares of Common Stock 
that would be issued if all Options, Warrants and SARs were exercised.

         "SPECIAL COMMITTEE" shall have the meaning set forth in SECTION 2.3 
hereof.

         "STOCKHOLDERS" means collectively the Windward Group, Fleming, 
Director Holders and Management.

         "STOCKHOLDERS AGREEMENT" means the Stockholders Agreement dated June 
30, 1995, by and among Furr's and the Stockholders.

                                     -7-
<PAGE>

         "SUPPLY AGREEMENT" shall have the meaning set forth in the first 
"Whereas" clause.

         "TEXAS ACTION" shall have the meaning set forth in the fourth 
"Whereas" clause.

         "TRANSITION PERIOD" shall mean an approximate nine (9) month period 
commencing on the day following Furr's' election of the option described in 
SECTION 4.2(b) hereof if Furr's is not sold under the provisions of Article 
II hereof.

         "TRANSPORTATION AGREEMENT" shall mean that certain Transportation 
Services Agreement (Dedicated Contract Carrier) made and executed on November 
7, 1994, by and between Fleming Companies, Inc. and TNT Dedicated Services, 
Inc., as amended.

         "UNION AGREEMENT" shall mean that certain Agreement dated January 
28, 1996 by and between Fleming Companies, Inc. and Local No. 745.

         "UNION AGREEMENT AMENDMENT" shall have the meaning set forth in 
SECTION 4.9 hereof.

         "UNION CLAIM" shall have the meaning set forth in the first 
"Whereas" clause.

         "WARRANTS" shall have the meaning set forth in the eighth "Whereas" 
clause.

         "WINDWARD GROUP" shall mean WINDWARD CAPITAL ASSOCIATES, L.P., a 
Delaware limited partnership, WINDWARD/MERCHANT, L.P., a Delaware limited 
partnership, WINDWARD/PARK FSI, L.L.C., a Delaware limited liability company, 
WINDWARD/NORTHWEST, L.P., a Delaware limited partnership and WINDWARD/MERBAN, 
L.P., a Delaware limited partnership.

         "WINDWARD WAIVER" shall have the meaning set forth in SECTION 5.1(b) 
hereof.

         "WINDWARD WARRANTS" shall have the meaning set forth in the eighth 
"Whereas" clause.

                                      ARTICLE II

                                       THE SALE

    2.1  THE INVESTMENT BANKER.  The Special Committee has engaged the 
services of the Banker for the purpose of advising the Special Committee in 
the possible sale of Furr's. The Banker, Furr's and the Special Committee, in 
conjunction with the Advisor and Fleming, have cooperated in the preparation 
of an offering circular or memorandum (the "Offering Memorandum") to be sent 
to prospective bidders and to be used in conducting a sale of Furr's to the 
bidder which, based on the recommendation of the Special Committee (subject 
to the provisions and 

                                     -8-
<PAGE>

limitations of SECTION 2.3 below), presents the best available alternative to 
Stockholders in accordance with the terms and provisions of this Agreement.  
The Parties agree that they shall continue to use reasonable commercial 
efforts to complete the Offering Memorandum and that the Offering Memorandum 
shall begin to be distributed to prospective bidders upon the earlier to 
occur of the completion of the Offering Memorandum or ten business days 
following the date hereof (the date of such initial distribution, the 
"Distribution Date"). Additionally, in accordance with the terms of the 
Financial Advisory Services Agreement, Furr's shall continue to pay to the 
Advisor fees and expenses payable to the Advisor in accordance with the terms 
thereof.  Except as provided in this Agreement and for consideration payable 
to Stockholders in consideration for the sale or transfer of Common Stock, 
Options, Warrants or SARs pursuant to the Acquisition Agreement, none of the 
Stockholders nor any of their respective Affiliates shall be entitled to 
receive any fees or other compensation as a result of the sale of Furr's.

    2.2  THE OFFERING.  Furr's covenants and agrees to use its reasonable 
commercial efforts to market Furr's for a period of six (6) months from the 
Distribution Date (herein the "Sales Period") all in accordance with the 
terms of this Article II.  Furr's shall be marketed and the Offering 
Memorandum shall describe that prospective bidders may bid for Furr's in the 
alternative, i.e., with the purchase of the El Paso PSC or without the El 
Paso PSC.

         (a)  WITH THE EL PASO PSC.  A potential purchaser may offer to 
purchase Furr's with the El Paso PSC.  In the event of a sale of Furr's under 
such circumstances, Fleming agrees to transfer the El Paso PSC to the 
Purchaser or to Furr's (as the Purchaser shall request) in accordance with 
SECTION 4.1(a) hereof, and the Parties agree that Fleming shall receive the 
El Paso PSC Costs in consideration for such transfer, payable in accordance 
with SECTION 2.2(c) below.  For purposes of this Agreement, the "El Paso PSC 
Costs" shall mean an amount equal to the sum of (i) $6,586,000, (ii) $300,000 
if, but only if, the obligations under the Refrigeration Lease are not 
assumed by the Purchaser or Furr's, and (iii) the value of the Inventory, 
valued in accordance with SECTION 4.3 hereof; PROVIDED, however that the El 
Paso PSC Costs shall be increased by an amount equal to the cost of any 
capital expenditures relating to purchasing new assets other than Inventory 
made by Fleming after the date hereof which were approved by Furr's (which 
approval shall not be unreasonably withheld) prior to the commitment by 
Fleming to such capital expenditure having been made.

         (b)  WITHOUT THE EL PASO PSC.  A potential purchaser may also offer 
to purchase Furr's without the El Paso PSC.  In the event of a sale of Furr's 
under such circumstances, the Parties agree that Fleming shall be paid 
$9,994,000, by Furr's or the Purchaser, as the case may be, in order to 
defray the cost of Fleming's liquidation and disposition of the El Paso PSC 
(the "Liquidation Costs"), with such amount payable in accordance with 
SECTION 2.2(c) below; PROVIDED, however that in the event that neither the 
Purchaser nor Furr's, as the case may be, assumes the rights and obligations 
of Fleming pursuant to the Transportation Agreement, the Liquidation Costs 
shall be $10,794,000.

                                     -9-
<PAGE>

         (c)  THE EL PASO PSC COSTS AND THE LIQUIDATION COSTS.  The Parties 
agree that Fleming shall be paid (i) the El Paso PSC Costs, if the Purchaser 
or if Furr's, as the case may be, has elected to acquire the El Paso PSC, 
upon consummation of the sale of the El Paso PSC to the Purchaser or to 
Furr's, as the case may be, in accordance with the terms of the Asset 
Purchase Agreement; or (ii) the Liquidation Costs, if the Purchaser elects to 
purchase Furr's without the El Paso PSC or if Furr's elects to continue to 
purchase products from Fleming during the Transition Period and terminate the 
Supply Agreement in accordance with SECTION 4.2(b) hereof, in either case, on 
the first day following the end of the Purchaser Transition Period or the 
Transition Period, as applicable.  In the event of a sale of Furr's without 
the El Paso PSC in accordance with this Article II, the Acquisition Agreement 
shall provide that an amount received from the Purchaser equal to the 
Liquidation Costs shall be placed into escrow in accordance with the Escrow 
Agreement attached hereto as EXHIBIT G in order that Furr's or the Purchaser, 
as the case may be, may pay the Liquidation Costs when payable in accordance 
with the foregoing clause (ii), which amount shall be escrowed before the 
Stockholders receive their proportionate share of the net proceeds of the 
sale in accordance with the Acquisition Agreement.

         (d)  THE ACQUISITION AGREEMENT.  Furr's shall require and the 
Offering Memorandum shall reflect that the Purchaser and Furr's will be 
required to enter into the Acquisition Agreement during the Sales Period and 
to close the acquisition of Furr's within one hundred twenty (120) days from 
the acceptance of any prospective purchaser's bid by Furr's; PROVIDED, that 
such one-hundred twenty (120) day period shall be extended such that all 
waiting periods, if any, applicable to the transactions contemplated by the 
Acquisition Agreement under the HSR Act shall have expired or been 
terminated; PROVIDED, further that in the event any order, decree, ruling, 
injunction or other action shall have been entered, promulgated, threatened 
or enforced by any court or governmental authority of competent jurisdiction 
which prohibits or restricts (or threatens to prohibit or restrict) such 
transaction, such one hundred twenty (120) day period shall be extended until 
such time as such order, decree, ruling, injunction or other action shall 
become final and non-appealable.  In the event of the failure of the 
Purchaser to consummate the transactions contemplated by the Acquisition 
Agreement, for purposes of this Agreement a sale of Furr's shall be deemed to 
have been unsuccessful and Furr's shall be entitled to make an election in 
accordance with SECTION 4.2 hereof.  Furr's shall provide Fleming a 
reasonable opportunity to review and comment on the form of the Acquisition 
Agreement prior to its distribution to potential bidders; PROVIDED, however 
that Furr's shall be under no obligation to revise such draft Acquisition 
Agreement in any manner based on any such comments other than in respect to 
agreements, covenants, representations and warranties of Fleming, contained 
therein, if any, and to conform such draft to the provisions of this 
Agreement.

         (e)  REPRESENTATIONS AND COVENANTS.

              (i)  FLEMING REPRESENTATION AND COVENANT.  Fleming represents 
that (i) the Supply Agreement EBITDA for the twelve months ended July 12, 
1997 was in excess of $17 million and (ii) under the Supply Agreement, 
approximately 98% of product is supplied from the El Paso PSC  and 
approximately 2% of product is supplied from the Fleming product supply 

                                     -10-
<PAGE>

center located in Lubbock, Texas. Fleming covenants with Furr's, with the 
exception of the El Paso PSC Costs and the Liquidation Costs, that (i) it 
will negotiate in good faith during the Sales Period with any potential 
purchaser of Furr's the Asset Purchase Agreement, as provided in SECTION 
4.1(a) hereof, in the case the Purchaser elects to purchase the El Paso PSC 
or the termination or continuation of the Supply Agreement if the Purchaser 
elects not to purchase the El Paso PSC, (ii) it will use its reasonable 
commercial efforts to assist Furr's in the collection of accounts receivable 
owing to Furr's from Fleming's vendors but only with respect to transactions 
as to which Fleming was the supplier or otherwise a party and to assist 
Furr's in researching and collecting amounts owing to Furr's from Topco 
Associates, Inc. (iii) it will use its reasonable commercial efforts to 
assist Furr's, the Banker and the Special Committee to market Furr's during 
the Sales Period in accordance with this Article II, (iv) it will, during the 
Transition Period or the Purchaser Transition Period, if any, use its 
reasonable commercial efforts to cooperate with and assist Furr's in Furr's' 
conversion to a new information technology system from that used by Fleming 
but only to the extent permitted in accordance with applicable law and by 
existing agreements governing the use of Fleming's existing information 
technology system, and (v) it will use its reasonable commercial efforts to 
maintain the operation of the El Paso PSC in the ordinary and usual course 
consistent with past practice (other than the anticipated depletion and 
replenishment of Inventory and as otherwise provided herein) through the 
Purchaser Transition Period or the Transition Period, if any, or through the 
sale of the El Paso PSC, if applicable, including, without limitation, 
through the maintenance of the necessary workforce required to operate the El 
Paso PSC other than any reduction in employees associated with the depletion 
in Inventory and reduction of services and the sale of the El Paso PSC or its 
liquidation, as the case may be, in accordance with this Agreement. In no 
event shall Fleming be under any obligation or duty to agree to, modify or 
amend the purchase price or any other significant term or condition with 
respect to the sale of the El Paso PSC which would be less beneficial to 
Fleming than those contained herein or in the Asset Purchase Agreement and is 
under no duty to act other than in the best interest of Fleming and its 
stockholders, it being understood and agreed to by the Parties that the 
actions in accordance with this Agreement, including without limitation, the 
rights, obligations and agreements of Fleming hereunder, are in the best 
interest of Fleming and its stockholders.

              (ii) FURR'S COVENANTS.  Furr's covenants with Fleming that it 
will negotiate in good faith during the Sales Period with any potential 
purchaser of Furr's the Acquisition Agreement, as provided in SECTION 2.2(d) 
hereof.  In no event shall Furr's be under any obligation or duty to agree 
to, modify or amend the purchase price any other significant term or 
condition with respect to the sale of Furr's which would be less beneficial 
to Furr's than those contained herein or in the Acquisition Agreement and is 
under no duty to act other than in the best interest of Furr's and its 
stockholders, it being understood and agreed to by the Parties that the 
actions in accordance with this Agreement, including, without limitation, the 
rights, obligations and agreements of Furr's hereunder, are in the best 
interest of Furr's and its stockholders. Furr's covenants and agrees that, 
subject to the caveat set forth in SECTION 2.4, it will require the Special 
Committee to make interim reports to the Board with respect to the progress 
of the sales process and to provide all Stockholders with such information.  
Furr's further covenants and agrees that during the Sales Period and, upon 
execution of the Acquisition Agreement, if applicable, through 

                                     -11-
<PAGE>

and until the consummation of the acquisition transactions contemplated 
thereby or the termination thereof, it shall not issue any capital stock or 
any securities convertible into capital stock (including, without limitation, 
any additional shares of Common Stock, Options, Warrants or SARs) except as 
set forth in the ninth "Whereas" clause hereof or as otherwise contemplated 
by this Agreement.

    2.3  MINIMUM BID PRICE.  The Parties agree if a bona fide bid is received 
as a result of the sale process described in this Article II that equals or 
exceeds (a) the Minimum Bid Price - El Paso PSC, in case the Purchaser's bid 
includes the El Paso PSC, or (b) the Minimum Bid Price - Liquidation, in case 
the Purchaser's bid excludes the El Paso PSC, in either case, the Board, 
based on the recommendation of the Special Committee, shall accept the bid 
which it considers, in its sole judgment, to be the best available 
alternative for maximizing shareholder value (without being required to take 
into account any impact of the inclusion or exclusion of the El Paso PSC in 
such a transaction with respect to calculating such shareholder value) so 
long as the bid accepted qualifies as a Minimum Bid Price - El Paso PSC or 
Minimum Bid Price -Liquidation.  The Parties further agree that if only one 
bid is received by Furr's under the provisions of Article II hereof that 
qualifies, the Board shall accept such qualified bid.  If neither a Minimum 
Bid Price - El Paso PSC nor a Minimum Bid Price -Liquidation is attained 
through the sale process as herein provided, the sale process shall be 
terminated at the end of the Sales Period; PROVIDED, however, if there is a 
bona fide bid of less than the Minimum Bid Price - El Paso PSC or the Minimum 
Bid Price - Liquidation, the Board, in its sole judgement, based on the 
recommendation of the Special Committee, may elect to accept such bid (a 
"Lower Acceptable Bid"); PROVIDED further, however, that prior to the 
acceptance of such bid, Furr's shall have complied with the provisions of the 
following paragraph.

         Prior to the Board's acceptance, based on the recommendation of the 
Special Committee, of a Lower Acceptable Bid, Furr's shall notify Fleming in 
writing of its intent to accept a Lower Acceptable Bid (the "Offer Notice") 
and offer (the "Sale Offer") to sell Furr's to Fleming at a per share price 
and on such terms and conditions as are specified in such Offer Notice.  
Fleming shall have fifteen (15) days following the delivery to Fleming of 
such Offer Notice in which to accept in writing the Sale Offer.  If Fleming 
does accept the Sale Offer, Fleming and Furr's shall enter into a binding 
agreement in the form of the acquisition agreement representing the Lower 
Acceptable Bid.  If Fleming does not accept the Sale Offer, the Board shall 
be free to accept, but shall not be obligated to accept, a Lower Acceptable 
Bid at any price and on any terms and conditions for the remainder of the 
Sales Period; PROVIDED, however that in the event a Lower Acceptable Bid 
includes a per share price that is less than ninety percent (90%) of the per 
share price previously set forth in the Offer Notice, Fleming shall have a 
right of first refusal with respect to such Lower Acceptable Bid pursuant to 
which, if Fleming desires to purchase Furr's at the same price and on the 
same terms and conditions as offered in such Lower Acceptable Bid, Fleming 
would have ten (10) days following notification to it by Furr's (the "Match 
Notice") that the Board has made such election in which to notify Furr's of 
its exercise of its right of first offer and of its binding acceptance of the 
terms set forth in the Match Notice, in which case the Parties shall enter 
into an agreement in the form of the Acquisition 

                                     -12-
<PAGE>

Agreement and thereafter close such transaction within a reasonable period.  
If Fleming does not exercise such right of first refusal within such ten (10) 
day period, the Board shall be free to accept, but shall not be obligated to 
accept, such Lower Acceptable Bid for the remainder of the Sales Period but 
only at the per share price and on the terms and conditions set forth in the 
Match Notice.

         The Board has designated a special committee of the Board (the 
"Special Committee") consisting of the following members: Benjamin F. 
Montoya, David W. Morrow, Lewis G. Schaeneman, Jr., Thomas J. Sikorski, Gary 
L. Swenson and Arthur G. Typermass.  The Special Committee will work with the 
Banker and such other legal and financial advisors as it elects to utilize in 
connection with the sale process set forth in this Article II in order to set 
the procedures to be followed by parties participating in the process, to 
identify and contact potential purchasers, to conduct negotiations with 
potential purchasers, to make decisions relating to the sale process and to 
such negotiations during the Sales Period (including with respect to the 
terms and conditions of any particular transaction and the agreements 
relating thereto) and to make a determination as to the best available 
alternative for maximizing shareholder value.  In making any such 
determination, the Special Committee shall be free to consider any and all 
factors reasonably relevant to such determination including without 
limitation the value of consideration offered, provided that the Special 
Committee may only value such consideration that is in cash and/or Marketable 
Securities irrespective of whether non-Marketable Securities are offered by a 
prospective purchaser as such consideration; any regulatory and governmental 
approvals required; financing terms and financial credibility of bidders; the 
bona fide nature of a particular bid or bidder; and any risks associated with 
a particular bid.  The Parties acknowledge and agree that the decisions of 
the Special Committee will be final, determinative and binding on the Parties 
with respect to the transactions contemplated by this Agreement, so long as 
such decisions are consistent with the terms and provisions of this 
Agreement.  The Special Committee shall recommend to the Board the 
transaction, if any, which it determines to be the best available alternative 
for maximizing shareholder value (without taking into account any impact of 
the inclusion or exclusion of the El Paso PSC in such a transaction with 
respect to calculating such shareholder value), so long as such decisions are 
consistent with the terms and provisions of this Agreement.  The Parties 
hereby agree and covenant that Furr's and all of the members of the Board and 
the Special Committee shall be released of all claims that could be asserted 
in connection with the sale process contemplated hereby including without 
limitation any claim relating to its selection of the best available 
alternative in the sale process or any determinations regarding valuation of 
various alternative proposals (including whether a selected transaction had a 
higher or lower shareholder value than any other alternative) and the 
benefits and risks associated therewith, so long as such decisions are 
consistent with the terms and provisions of this Agreement.

    2.4  STOCKHOLDERS BIDS.  Nothing herein contained shall restrict the 
Stockholders from bidding for Furr's in accordance with the sale process set 
forth in this Article II; PROVIDED, that in the event a Stockholder elects to 
participate in the bidding process, such Stockholder and its representatives 
(including without limitation, any employee, agent or designee of such 
Stockholder 

                                     -13-
<PAGE>

to the Board (a "Designee")) shall not be provided any information by the 
Banker, the Special Committee or Furr's regarding the sale process or any 
other participants in the sale process (including without limitation any 
information regarding the identity of participants, terms of any offer 
(including price) and status of negotiations); PROVIDED, however the Parties 
recognize that Management will be involved in the sales process at the 
direction of, and to the extent required by, the Special Committee, the Board 
and the Banker.  At such time, however, that a Stockholder who has indicated 
to Furr's of its (his) intention to bid and has consequently been excluded 
from the receipt of information regarding the sales process in accordance 
with the foregoing sentence, either notifies Furr's in writing of its (his) 
agreement to refrain from bidding or, having bid, irrevocably withdraws its 
(his) bid, such Stockholder shall thereafter be entitled to all such 
information regarding the sales process provided to other Stockholders and 
such Stockholder's Designees shall thereafter be entitled to all such 
information provided to the members of the Board by the Special Committee.  
The Special Committee shall not include any member of the Board who is an 
employee, agent or designee of any Stockholder who has indicated to Furr's 
its intention to bid.

    2.5  CALCULATION OF AMOUNTS TO BE PAID TO HOLDERS OF ISSUED COMMON STOCK, 
OPTIONS, WARRANTS AND SARS.  Upon consummation of the sale of Furr's in 
accordance with the terms and provisions of this Article II, as of the date 
of the closing of the transactions contemplated by the Acquisition Agreement, 
the Acquisition Agreement shall provide that (i) holders of Issued Common 
Stock shall be entitled to receive the Share Price for each share of Common 
Stock they own, and (ii) holders of Options, Warrants and SARs shall be 
entitled to receive the Share Price less the applicable exercise price for 
each share of Common Stock they would have owned had they exercised their 
right to obtain Common Stock.  Furr's shall be entitled to deduct from the 
amounts payable holders of Options, Warrants and SARs any amounts that Furr's 
is required to withhold and to pay over such deductions to the appropriate 
federal or state, local or other tax authorities under applicable law with 
respect to such amounts.

                                 ARTICLE III

                                THE RELEASES

    3.1  FURR'S RELEASE.  Concurrent with the Parties' execution of this 
Agreement, Furr's shall execute and deliver to Fleming and the Windward Group 
the Special Release (Furr's) in the form attached hereto as EXHIBIT B-1 and 
Furr's and Fleming shall cause the dismissal with prejudice of the Action in 
substantially the form attached hereto as EXHIBIT C to be filed within five 
(5) business days.

    3.2  FLEMING RELEASE.  Concurrent with the Parties' execution of this 
Agreement, Fleming shall execute and deliver to Furr's, the Windward Group 
and Management the Special Release (Fleming) in the form attached hereto as 
EXHIBIT B-3 and Fleming and Furr's shall cause the dismissal with prejudice 
of the Delaware Litigation in substantially the form attached hereto 

                                     -14-
<PAGE>

as EXHIBIT D-1 and the Texas Action in substantially the form attached hereto 
as EXHIBIT D-2 to be filed within five (5) business days.

    3.3  ARBITRATION.  Concurrent with the Parties' execution of this 
Agreement, Fleming and Furr's shall dismiss the Arbitration Proceeding.  
During the Sales Period, and either the Purchaser Transition Period or the 
Transition Period, if any, Furr's waives any and all rights to resubmit a 
competitive bid pursuant to paragraph 2(b) of the Supply Agreement.

    3.4  DISSOLUTION ACTION.  Fleming hereby agrees that it will not pursue 
the Dissolution Action or take any action related thereto or in connection 
therewith (including, without limitation, any similar proceeding regarding 
the dissolution, liquidation or winding up of the affairs of Furr's, either 
in the state of Delaware or otherwise) from and after the date hereof based 
on any action occurring prior to the date hereof.

                                 ARTICLE IV

                  THE SUPPLY AGREEMENT AND FURR'S ELECTION

    4.1  THE SUPPLY AGREEMENT.  

         (a)  SALE OF FURR'S.  (i)  In the event of the sale of Furr's to a 
Purchaser who has elected to purchase the El Paso PSC, Fleming and Furr's (or 
the Purchaser, as the case may be) shall enter into an asset purchase 
agreement covering the El Paso PSC substantially in the form of the Asset 
Purchase Agreement with such changes the parties thereto may agree, which 
transaction shall be closed within one hundred twenty (120) days from the 
acceptance of the Purchaser's bid by Furr's subject to the terms and 
conditions set forth in the Asset Purchase Agreement, which agreement, among 
other terms and conditions as therein contained, shall require Purchaser to 
agree to the El Paso PSC Costs as the purchase price of the El Paso PSC.  The 
Supply Agreement shall terminate on the closing of the Asset Purchase 
Agreement.  Pending such closing, Fleming will sell food and related products 
to the Purchaser or Furr's, as the case may be, and the Purchaser or Furr's 
shall purchase from Fleming food and related products as the case may be, in 
accordance with the Supply Agreement 

              (ii)  Upon the sale of Furr's to a Purchaser who has elected 
NOT to purchase the El Paso PSC, unless Fleming and the Purchaser have 
previously mutually agreed otherwise, Fleming shall continue the sale and 
delivery of food and related products to Furr's under the terms and 
provisions and for the fees set forth in the Supply Agreement for the 
duration of the Purchaser Transition Period.  During the first seven (7) 
months of the Purchaser Transition Period (the "First Period"), Furr's shall 
continue to maintain an annualized volume of purchases pursuant to the Supply 
Agreement of at least $435 million; PROVIDED, however that the Purchaser may 
elect, in its sole discretion to shorten the First Period or to avoid the 
First Period completely and proceed directly to the Second Period by 
providing written notice to Fleming at least 5 days prior to the closing of 
the sale of Furr's to such Purchaser.  During the last two (2) months of the 

                                     -15-
<PAGE>

Purchaser Transition Period (the "Second Period"), Furr's and Fleming shall 
phase down the purchase of products under the Supply Agreement; PROVIDED, 
however, Fleming will sell food and related products to Furr's during the 
Purchaser Transition Period in accordance with the Supply Agreement. 
Following the Purchaser Transition Period, Purchaser or Furr's shall pay to 
Fleming the Liquidation Costs in accordance with the provisions of the Escrow 
Agreement as set forth in SECTION 2.2(c) hereof. 

         (b)  NO SALE.  In the event Furr's and the Banker are unsuccessful 
in the sale of Furr's as provided in Article II hereof, the Supply Agreement 
shall terminate in accordance with the provisions of either SECTION 4.3 or 
SECTION 4.4, as the case may be.

    4.2  FURR'S ELECTION.  If there is no sale of Furr's as provided in 
Article II hereof, Furr's shall elect, by delivery of written notice to 
Fleming within thirty (30) days following the end of the Sales Period, to 
either (a) purchase the El Paso PSC at the El Paso PSC Costs (in which case 
the Supply Agreement shall terminate on the closing of such purchase) as 
provided in SECTION 4.3 below or (b) continue to purchase products from 
Fleming during the Transition Period and pay Fleming the Liquidation Costs at 
the end of the Transition Period (at which time the Supply Agreement shall 
terminate) as provided in SECTION 4.4 below.

    4.3  FURR'S ELECTION TO PURCHASE THE EL PASO PSC.  If Furr's elects to 
purchase the El Paso PSC, as provided by the election set forth in SECTION 
4.2(a) hereof, such sale shall be consummated in accordance with an asset 
purchase agreement covering the El Paso PSC substantially in the form of the 
Asset Purchase Agreement with such changes the parties thereto may agree, 
which transaction shall be closed within one hundred twenty (120) days 
following delivery of notice regarding such sale subject to the terms and 
conditions set forth in the Asset Purchase Agreement, which agreement, among 
other terms and conditions, shall require Furr's to agree to the El Paso PSC 
Costs as the purchase price of the El Paso PSC.  The period of time from the 
end of the Sales Period and the closing of the sale of the El Paso PSC to 
Furr's shall be known as the "Asset Sales Period."  The Supply Agreement 
shall terminate on the closing of the Asset Purchase Agreement.  During the 
Asset Sales Period, Fleming shall provide food and related products to Furr's 
in accordance with the Supply Agreement.

         With respect to the Inventory (as defined in the Asset Purchase 
Agreement) located in the El Paso PSC, Furr's agrees to purchase such 
Inventory under and in accordance with the inventory terms attached as 
Exhibit A to and made a part of the Asset Purchase Agreement.  The Asset 
Purchase Agreement shall describe the Purchased Assets, the Assumed 
Liabilities and the Excluded Assets (each as defined in the Asset Purchase 
Agreement).  Furr's shall not be entitled to the business of any other 
customer of the El Paso PSC who shall be transferred to another Fleming 
product supply center.

    4.4  FURR'S ELECTS NOT TO PURCHASE THE EL PASO PSC.  If Furr's elects the 
option set forth in SECTION 4.2(b) hereof, Fleming shall continue the sale 
and delivery of food and related products to Furr's under the terms and 
provisions and for the fees set forth in the Supply Agreement for 

                                     -16-
<PAGE>

the duration of the Transition Period.  During the first seven (7) months of 
the Transition Period, Furr's shall continue to maintain an annualized volume 
of purchases pursuant to the Supply Agreement of at least $435 million.  
During the last two (2) months of the Transition Period, Furr's and Fleming 
shall phase down the purchase of products under the Supply Agreement, each 
using its best efforts working together to minimize the amount of Inventory 
in the El Paso PSC at the end of the Transition Period.  All Inventory 
remaining in the El Paso PSC at the end of the Transition Period in excess of 
$500,000 (except for Inventory held for sale to customers of Fleming other 
than Furr's) shall be transferred to Furr's at Furr's sole cost and expense 
which amount shall be paid for in accordance with the terms of the Supply 
Agreement within ten (10) days from the end of the Transition Period.  Within 
such ten (10) day period, Furr's shall also pay to Fleming the Liquidation 
Costs in accordance with the provisions of the Escrow Agreement as set forth 
in SECTION 2.2(c) hereof.

         Nothing herein contained shall require Fleming to sell food and 
related products to Furr's under the Supply Agreement or otherwise following 
the end of the Transition Period.
    
    4.5  CREDIT POLICIES.  Furr's and Fleming recognize and agree that as 
long as the Supply Agreement shall remain in effect, Fleming shall extend to 
Furr's the normal trade credit it has heretofore extended; PROVIDED, however, 
if Furr's fails to make timely payment in readily available funds for 
inventory and fees under, or otherwise breaches, the Supply Agreement, or 
fails to make timely payment in readily available funds for general 
merchandise products purchased from any Fleming GMD facility and fees in 
connection therewith, Fleming shall have the right in its sole and exclusive 
determination to establish stricter credit policies, including, but not 
limited to, a policy of C.O.D.  For calendar year 1997, Fleming's extension 
to Furr's of normal trade credits includes, without limitation, a credit 
policy for holiday turkeys as set forth in that certain Letter Agreement 
between Furr's and Fleming dated October 7, 1997.  For calendar years after 
1997, Fleming will consider credit extensions for holiday turkeys based on 
the then credit of Furr's.  In addition and notwithstanding such credit 
policies, Furr's recognizes and agrees that Fleming has the right in its sole 
discretion to refrain from supplying food, grocery and related food products 
or general merchandise products if, for any reason, Furr's fails to make 
timely payment for such products under Fleming's credit policies established 
by it from time to time.

    4.6  OTHER INDEBTEDNESS.  Upon the termination of the Supply Agreement 
and as a condition to such termination, Furr's shall pay Fleming any and all 
other indebtedness owed to it under the Supply Agreement, evidenced by 
promissory note(s), open account or otherwise.

    4.7  PAYMENTS.  All payments to be made by Furr's to Fleming under this 
Agreement shall be made by wire transfer in readily available funds to an 
account to be designated by Fleming to Furr's at least three days prior to 
such payment.  Payments under the Supply Agreement shall continue to be made 
in accordance with the provisions of the Supply Agreement.

                                     -17-
<PAGE>

    4.8  REDUCTION IN CHARGES.  Fleming and Furr's agree, commencing as of 
the date hereof, that the Supply Agreement shall be amended and modified as 
follows:

         (a)  PAYMENT AMOUNT.  For purposes of settling the Action and the 
delivery of the releases pursuant to Article III hereof, Fleming will refund 
to Furr's $738,500 per Period (equivalent to $800,000 per month) of its fees 
and charges for the balance of the term of the Supply Agreement as modified 
by the terms of this Agreement, except with respect to the last two (2) 
months of the Transition Period and the Second Period, if either shall be 
applicable, during which Fleming will refund to Furr's $369,250 per Period 
(equivalent to $400,000 per month) of its fees and charges, herein referred 
to as the "Payment Amount."

         (b)  PAYMENT.  Fleming will pay Furr's the Payment Amount by wire 
transfer within three business days of the end of each Period for the 
previous Period (or portion thereof).

         (c)  EFFECTIVE DATE.  The Payment Amount will be effective upon 
signing of this Agreement and if this Agreement is executed in the middle of 
a Period, the modification will be pro rated and be effective for that 
portion of the Period from the date of signing hereof.

         (d)  COST OF GOODS.  The costs of goods, fees and all other charges 
to be paid by Furr's and charged by Fleming under the Supply Agreement, the 
Sell Plan attached to the Supply Agreement for Perishable Products, and FMP 
for FMP Products (collectively, the "Product Supply Documents"), shall be 
determined, calculated and charged in accordance with Fleming's past 
practices.  Furr's ratifies and agrees that Fleming's past practices are 
consistent with the Product Supply Documents and agrees those practices will 
be employed for the remaining term of the Supply Agreement; PROVIDED, 
however, Fleming will do nothing to:

              (i)  directly or indirectly increase the cost of goods purchased
    under the Supply Agreement, except to pass on any actual net increases in
    costs charged by vendors; or

              (ii) directly or indirectly increase the fees it charges to
    Furr's under the Supply Agreement and the Product Supply Documents,
    including without limitation (a) "upcharge" fees, (b) storage, base
    handling, or transportation fees, (c) corporate staff service charges, or
    (d) IT service charges; or

              (iii) otherwise manipulate or alter the cost of goods or the
    fee structure in such a way as to reduce the benefit of the Payment Amount.

Fleming and Furr's agree that FMP as introduced to Furr's in August 1995 and 
as amended to the date of this Agreement will be used to price and sell FMP 
Products to Furr's.

         (e)  FURR'S VOLUME OF PURCHASES.  Furr's will continue to purchase 
substantially the same amount of all categories and mix of products it has 
purchased from Fleming during the 

                                     -18-
<PAGE>

trailing 12 months from July 12, 1997, at a Teamwork Score as defined in the 
Supply Agreement of at least 60%; PROVIDED, HOWEVER, Furr's shall be under no 
obligation to discontinue buying goods from existing alternative suppliers.  
Furr's agrees to make maximum use of Fleming's "bill-through" program.

         (f)  FLEMING PERIOD RESULTS.  Fleming agrees that during the 
remaining term of the Supply Agreement, as modified by this Agreement, it 
will provide Furr's within ten business days after the end of each Period (or 
portion thereof) commencing with the first Period (or portion of a Period) 
following the execution of this Agreement, with a report of Fleming's 
operational results evidencing the EBITDA Fleming realized from Furr's 
business in the form reflected for the trailing 12 months from July 12, 1997 
and set forth as EXHIBIT E attached hereto.

         (g)  FURR'S MANAGEMENT OF THE PAYMENT AMOUNT.  Furr's and Fleming 
recognize and agree that it is Furr's sole responsibility to manage the 
disposition of the Payment Amount and if such amount fails to appear as net 
income to Furr's it shall not be the responsibility of Fleming.

         (h)  PRODUCT SUPPLY DOCUMENTS.  Except as modified herein, the 
Product Supply Documents and each of the terms and conditions contained 
therein shall remain in full force and effect for the balance of the term of 
the Supply Agreement, as herein provided.

         (i)  SUPPLY AGREEMENT.  The Parties recognize and agree that a 
portion of the El Paso PSC Costs payable to Fleming in the event of the sale 
of the El Paso PSC and a portion of the Liquidation Costs payable to Fleming 
in the event El Paso PSC is not sold includes an amount representing a 
portion of Fleming's unamortized cost of acquiring the right to supply Furr's 
under the Supply Agreement.

    4.9  UNION AGREEMENT.  In the event Furr's or the Purchaser, as the case 
may be, elects to purchase the El Paso PSC, Furr's or the Purchaser, as the 
case may be, shall negotiate with Local No. 745 an amendment, modification, 
or replacement of the Union Agreement (the "Union Agreement Amendment"); 
which shall provide, inter alia, that Fleming's liability and obligation 
under the Union Agreement will terminate and that Fleming will no longer be 
liable for any prospective obligations with respect to the Union Agreement 
accruing following the date hereof or otherwise accruing in connection with 
the transactions contemplated by this Agreement or the Asset Purchase 
Agreement, except as follows:

         (a)  in the event Furr's, the Purchaser or Fleming, as the case may 
be, pays severance to any union members that will not be hired by Furr's or 
the Purchaser, Fleming shall be liable for the first $200,000 of such 
severance obligation, and Furr's or the Purchaser, as the case may be, shall 
be liable for any additional amount; and

         (b)  Furr's or the Purchaser, as the case may be, shall pay Fleming 
$500,000 in cash at the closing of the Acquisition Agreement, and Fleming 
shall be solely responsible for, 

                                     -19-
<PAGE>

and shall indemnify Furr's or the Purchaser, as the case may be, against, any 
and all liability with respect to any multiemployer pension plans which cover 
the employees of the El Paso PSC arising as of or prior to the closing of the 
Asset Purchase Agreement.

    Fleming agrees that it is solely responsible for any and all severance 
obligations to managerial and other employees who are not covered under the 
Union Agreement.

                                  ARTICLE V

                         THE STOCKHOLDERS AGREEMENT

    5.1  THE STOCKHOLDERS AGREEMENT.  (a) With the exception of the rights 
provided by and the terms and provisions of Article II of the Stockholders 
Agreement, Fleming hereby covenants and agrees that it will take no action or 
otherwise exercise any right pursuant to the Stockholders Agreement from and 
after the date hereof until the date following the expiration of the Sales 
Period.  Fleming further covenants and agrees that, upon execution of the 
Acquisition Agreement, if applicable, through and until the closing of the 
acquisition transactions contemplated by such agreement or the termination 
thereof, it hereby waives its rights under the Stockholders Agreement:

         (1)  in connection with the transactions contemplated thereby as 
follows:

              (i)  the provisions of Section 3.2 of the Stockholders 
Agreement regarding the right of first refusal with respect to a transfer of 
Common Stock, including the notice provisions relating thereto;

              (ii) the provisions of Section 5.3 of the Stockholders 
Agreement requiring that in the event of the sale of assets of Furr's, the 
applicable purchase agreement shall provide that the purchaser will assume 
any supply agreement between Fleming and Furr's then in effect;

              (iii) the provisions of clause (f) of Section 5.4 of the 
Stockholders Agreement with respect to notice to Fleming regarding the terms, 
provisions and documents relating to a transaction involving Furr's;

              (iv) the provisions of Section 5.7 of the Stockholders 
Agreement regarding the right of first offer with respect to a transfer of 
Common Stock, including the notice provisions relating thereto; and
              
              (v)  the provisions of Section 6.1 of the Stockholders 
Agreement regarding preemptive rights; or

                                     -20-
<PAGE>


         (2)  which are inconsistent with the provisions of this Agreement 
(or the other agreements contemplated hereby), including but not limited to 
the provisions of Article III (Restrictions on Transfer; Rights of First 
Refusal), Article IV (Tag-Along Rights); Article V (Right to Compel Sale or 
IPO Event); Article VI (Preemptive Rights); and Article VII (Put and Call 
Rights on Management Stock).

         (b)  Concurrently with the Parties' execution of this Agreement, 
each of the members of the Windward Group shall have executed and delivered 
to Fleming and Furr's a waiver, in form attached hereto as EXHIBIT H (the 
'Windward Waiver"), by the terms and provisions of which each member of the 
Windward Group, with the exception of the rights provided by and the terms 
and provisions of Article II of the Stockholders Agreement, shall covenant 
and agree to take no action or otherwise exercise any right pursuant to the 
Stockholders Agreement from and after the date of this Agreement until the 
date following the expiration of the Sales Period.  The waiver shall also 
provide and each member of the Windward Group shall further covenant and 
agree that, upon the execution of the Acquisition Agreement, if applicable, 
through and until the closing of the acquisition transactions contemplated 
thereby or the termination thereof, each of them shall waive their respective 
rights under the Stockholders Agreement:  

         (1)  in connection with the transactions contemplated thereby as 
follows:

              (i)   the provisions of Section 3.2 of the Stockholders 
Agreement regarding the right of first refusal with respect to a transfer of 
Common Stock, including the notice provisions relating thereto;

              (ii)  the provisions of Section 5.1 of the Stockholders 
Agreement regarding the right to compel sale generally; 

              (iii) the provisions of Section 5.2 of the Stockholders 
Agreement regarding the right of compelled sale pursuant to a sale of the 
Common Stock;

              (iv)  the provisions of Section 5.3 of the Stockholders 
Agreement regarding the right of compelled sale other than pursuant to a sale 
of Common Stock; 

              (v)   the provisions of Section 5.4 of the Stockholders 
Agreement regarding the cooperation of each Stockholder;

              (vi)  the provisions of Section 5.6 of the Stockholders 
Agreement relating to the rights to compel an IPO Event, as defined in the 
Stockholders Agreement; and

              (vii) the provisions of Section 6.1 of the Stockholders 
Agreement regarding preemptive rights; or

                                     -21-
<PAGE>

         (2)  which are inconsistent with the provisions of this Agreement 
(or the other agreements contemplated hereby), including but not limited to 
the provisions of Article III (Restrictions on Transfer; Rights of First 
Refusal), Article IV (Tag-Along Rights); Article V (Right to Compel Sale or 
IPO Event); Article VI (Preemptive Rights); and Article VII (Put and Call 
Rights on Management Stock).
    
The waiver described herein shall also provide that each member of the 
Windward Group agrees that it will not transfer, pledge or in any manner 
hypothecate or dispose of its Common Stock during the Sales Period except (i) 
as provided in this Agreement or (ii) to a Permitted Transferee (as defined 
in the Stockholders Agreement) who agrees to take such Common Stock subject 
to the provisions of this Agreement applicable to the Windward Group.

    5.2  STANDSTILL.  Fleming agrees that it will not transfer, pledge or in 
any manner hypothecate or dispose of its Common Stock during the Sales Period 
except (i) as provided in this Agreement or (ii) to a Permitted Transferee 
who agrees to take such Common Stock subject to the provisions of this 
Agreement applicable to Fleming.  Furr's covenants and agrees that, upon the 
execution of the Acquisition Agreement, if applicable, through and until the 
closing of the acquisition transactions contemplated thereby or the 
termination thereof, it hereby waives any and all rights it may have under 
Section 3.2 of the Stockholders Agreement.
                                       
                                  ARTICLE VI

                                 MISCELLANEOUS

    6.1  OTHER CONDITIONS.  Concurrently with the Parties' execution of this 
Agreement (i) each member of the Windward Group shall have executed and 
delivered (A) to Fleming and Management the Special Release (Windward Group) 
in the form attached hereto as EXHIBIT B-2 and the Windward Waiver, and (B) 
to Furr's an acknowledgment that Furr's shall be sold in accordance with the 
provisions of Article II hereof, including without limitation the minimum bid 
price provisions of, and the designation of the Special Committee's authority 
contained in, SECTION 2.3 hereof as set forth in the Windward Waiver, (ii) 
each of Management shall have executed and delivered to Fleming, the Windward 
Group and Furr's the Special Release (Management) in the form attached hereto 
as EXHIBIT B-4, and (iii) each of the Officers and Employees shall have 
executed and delivered to Furr's, the Windward Group, Fleming and Management 
the Special Release (Officers and Employees) in the form attached hereto as 
EXHIBIT B-5.

    6.2  CONFIDENTIALITY.  Except as otherwise required by law, the Parties 
shall not disclose any information regarding the terms and provisions of this 
Agreement, the Offering Memorandum and the transactions contemplated hereby 
except as specifically contemplated hereby or as mutually agreed to by the 
Parties.  

    6.3  NOTICES.  All notices that are required or may be given pursuant to 
this Agreement must be in writing and delivered personally, by a recognized 
courier service, by a recognized

                                     -22-
<PAGE>

overnight delivery service, by telecopy or by registered or certified mail, 
postage prepaid, to the Parties at the following addresses (or to the 
attention of such other person or such other address as any party may provide 
to the other parties by notice in accordance with this SECTION 6.3):

if to Furr's:                     with copies to:

Furr's Supermarkets, Inc.         Jacobvitz, Thuma & Matthews
1730 Montano Road, N.W.           500 Marquette N.W., Suite 650
Albuquerque, NM  87107            Albuquerque, NM  87102
Attn: Jan U. Friederich           Attn:  David T. Thuma, Esq.
Telecopy:  (505) 344-0810         Telecopy:  (505) 766-9287

with copies to:

Windward Capital Partners, L.P.   Skadden, Arps, Slate, Meagher & Flom LLP
Americas Tower, 42nd floor        919 Third Avenue
1177 Avenue of the Americas    
  New York, NY 10022
New York, NY 10036                Attn:  Eileen Nugent Simon, Esq.
Attn:  Thomas J. Sikorski         Telecopy: (212) 735-2000
Telecopy: (212) 382-6534               

if to Fleming:                    with copies to:

Fleming Companies, Inc.           McAfee & Taft
6301 Waterford Blvd.              Two Leadership Square
Oklahoma City, OK  73126          Tenth Floor
Attn:  William J. Dowd            Oklahoma City, OK  73102
       President and Chief        Attn:  John M. Mee, Esq.
       Operating Officer          Telecopy:  (405) 235-0439
Telecopy:  (405) 840-7226         
                             
    6.4  GOVERNING LAW.  This Agreement and the attached releases shall be
governed by the law of the State of Delaware.

    6.5  ATTORNEYS' FEES.  In the event of any litigation, arbitration or other
adjudicative proceeding arising out of or relating to this Agreement, or either
of the attached releases, the prevailing party shall recover its attorneys' fees
and costs against the other party or parties.

    6.6  FURTHER ASSURANCES.  Each of the Parties shall use reasonable and
diligent efforts to proceed promptly with the transactions contemplated herein,
to fulfill the conditions precedent, and to execute such further documents and
perform such further acts as may be reasonably required or appropriate to
effectuate the purpose and intent of this Agreement.

                                      -23-
<PAGE>

    6.7  BINDING ON SUCCESSORS.  This Agreement shall inure to the benefit of 
and be binding upon the Parties hereto and their respective partners, 
officers, directors, shareholders, employees, agents, independent contractors 
and the affiliates, successors, assigns, heirs, executors, administrators and 
representatives of each of the foregoing.

    6.8  ENTIRE AGREEMENT; ASSIGNMENT.  This Agreement constitutes and is 
intended to constitute the entire agreement of the Parties concerning the 
subject matter hereof.  No covenants, agreements, representations or 
warranties of any kind whatsoever have been made by any party hereto, except 
as specifically set forth herein.  All prior discussions and negotiations 
with respect to the subject matter hereof are superseded by this Agreement.  
The Parties agree that the Purchaser or Furr's, as the case may be, may 
assign its rights pursuant to SECTION 4.1(a) or SECTION 4.3, as applicable, 
to purchase the El Paso PSC to a third party in connection with a sale of 
Furr's in accordance with Article II hereof or pursuant to SECTION 4.2(a).

    6.9  CONSTRUCTION.  The Parties hereby acknowledge that they are 
sophisticated commercial entities or business people.  The Parties also 
acknowledge that each of them has been represented by independent counsel of 
their own choice throughout all negotiations preceding the execution of this 
Agreement, and that they have executed the same upon the advice of their 
independent counsel.  The Parties and their respective counsel cooperated in 
the drafting and preparation of this Agreement such that it shall be deemed 
their joint work product and may not be construed against any of the Parties 
by reasons of its preparation.

    6.10 SEVERABILITY.  If any provision of this Agreement is determined by a 
court of competent jurisdiction to be invalid or unenforceable, in whole or 
in part, the remaining provisions, and any partially invalid or unenforceable 
provisions, to the extent valid and enforceable, shall nevertheless be 
binding and valid and enforceable.

    6.11 MODIFICATIONS AND AMENDMENTS.  This Agreement may not be modified or 
terminated orally and no modification, termination or waiver shall be valid 
unless in writing and signed by all of the Parties.
    
    6.12 COUNTERPARTS.  This Agreement may be executed in two or more 
counterparts, each of which shall be deemed an original, but all of which 
together shall constitute one and the same instrument.

                                     -24-
<PAGE>

         IN WITNESS WHEREOF, the Parties hereto have executed this Agreement 
the day and year first above written.

FURR'S:                 FURR'S SUPERMARKETS, INC., a Delaware corporation 

    
                        By                          
                           --------------------------------
                           Jan U. Friederich
                           Chief Executive Officer and Chairman of 
                           the Board 



FLEMING:                FLEMING COMPANIES, INC., an Oklahoma corporation


                        By                  
                           --------------------------------
                           William J. Dowd
                           President





                                    -25-