<PAGE>

                                                                EXHIBIT 10.43


                            REIMBURSEMENT AGREEMENT




                                   between




                             RYKOFF-SEXTON, INC.




                                      and





                      THE FIRST NATIONAL BANK OF CHICAGO




                         dated as of November 1, 1996





<PAGE>


                               TABLE OF CONTENTS
                               -----------------

Section                                                                     Page
-------                                                                    -----


                                  ARTICLE 1.
                                 DEFINITIONS . . . . . . . . . . . . . . . .   2
1.1   Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2

                                  ARTICLE 2.
                   AMOUNT AND TERMS OF THE LETTER OF CREDIT  . . . . . . . .  13

2.1   The Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . .  13
2.2   Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
2.3   Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
2.4   Increased Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
2.5   Bank Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
2.6   Payments and Computations. . . . . . . . . . . . . . . . . . . . . . .  18
2.7   Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . .  19
2.8   Participations; Confidentiality. . . . . . . . . . . . . . . . . . . .  19
2.9   Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
2.10  Extension of the Letter of Credit and Replacement. . . . . . . . . . .  21
2.11  Receipt of Certain Funds by the Bank . . . . . . . . . . . . . . . . .  22

                                  ARTICLE 3.
                            CONDITIONS OF ISSUANCE . . . . . . . . . . . . .  22
3.1   Conditions Precedent to Issuance of the Letter of Credit . . . . . . .  22
3.2   Additional Conditions Precedent to Issuance of the Letter of Credit. .  24

                                  ARTICLE 4.
                        REPRESENTATIONS AND WARRANTIES . . . . . . . . . . .  25
4.1   Representations and Warranties . . . . . . . . . . . . . . . . . . . .  25

                                  ARTICLE 5.
                           COVENANTS OF THE COMPANY  . . . . . . . . . . . .  31
5.1   Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . . .  31
5.2   Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . .  35
5.3   Compliance with ERISA  . . . . . . . . . . . . . . . . . . . . . . . .  37

                                  ARTICLE 6.
                              EVENTS OF DEFAULT  . . . . . . . . . . . . . .  38
6.1   Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . .  38
6.2   Upon an Event of Default . . . . . . . . . . . . . . . . . . . . . . .  39


                                       i


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Section                                                                     Page
-------                                                                    -----


                                  ARTICLE 7.
                                 MISCELLANEOUS . . . . . . . . . . . . . . .  40
7.1   Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . .  40
7.2   Notice, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40
7.3   No Waiver; Remedies  . . . . . . . . . . . . . . . . . . . . . . . . .  41
7.4   Accounting Terms; Change in Accounting Principles. . . . . . . . . . .  41
7.5   Indemnification of the Bank. . . . . . . . . . . . . . . . . . . . . .  41
7.6   Liability of the Bank. . . . . . . . . . . . . . . . . . . . . . . . .  43
7.7   Costs, Expenses and Taxes. . . . . . . . . . . . . . . . . . . . . . .  44
7.8   Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . .  44
7.9   Independence of Covenants. . . . . . . . . . . . . . . . . . . . . . .  44
7.10  Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  45
7.11  Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  45
7.12  Governing Law; Terms . . . . . . . . . . . . . . . . . . . . . . . . .  45
7.13  Consent to Jurisdiction and Service of Process . . . . . . . . . . . .  45
7.14  Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . .  45
7.15  Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  46


Exhibit A  -  Form of Irrevocable Letter of Credit
Exhibit B  -  Form of Pledge Agreement
Exhibit C  -  Form of Custody Agreement
Exhibit D  -  Form of Opinion of Jones, Day, Reavis & Pogue
Exhibit E  -  Description of Premises


Schedule I   -  Certain Existing Liens
Schedule II  -  Certain Indebtedness
Schedule III -  Certain Regulatory Matters
Schedule IV  -  Certain Environmental Matters
Schedule V   -  ERISA


Appendix I   -  Covenants and Disbursement Procedures Regarding Insurance or 
                Condemnation Proceeds



                                       ii




<PAGE>

                           REIMBURSEMENT AGREEMENT

          THIS REIMBURSEMENT AGREEMENT dated as of November 1, 1996, between 
RYKOFF-SEXTON, INC., a corporation duly organized under the laws of the State 
of Delaware (the "Company") and THE FIRST NATIONAL BANK OF CHICAGO (the 
"Bank"). Unless otherwise indicated, all capitalized terms used herein 
without definition shall have the meanings referred to or set forth in 
Article One hereof.

                                R E C I T A L S

         A.   The Company proposes to undertake the financing of the 
acquisition, construction, installation and equipping of a warehouse and 
distribution facility located in the City of La Mirada, California (the 
"Project").

         B.   The Company has requested the financial assistance of the La 
Mirada Industrial Development Authority (the "Issuer"), in connection with 
such financing.

         C.   The Issuer and Bankers Trust Company of California, N.A., as 
trustee (the "Trustee"), propose to enter into an Indenture of Trust dated as 
of November 1, 1996 (the "Indenture") pursuant to which the Issuer will issue 
and sell $25,900,000 in aggregate principal amount of its Taxable 
Variable/Fixed Rate Demand Industrial Development Revenue Bonds 
(Rykoff-Sexton, Inc. Project) Series 1996 (the "Bonds").

         D.   The Issuer, the Trustee and the Company propose to enter into a 
Loan Agreement dated as of November 1, 1996 (the "Loan Agreement") pursuant 
to which the Issuer will loan the Company the proceeds of the issuance and 
sale of the Bonds to finance the acquisition and construction of the Project 
and for other purposes.

         E.   The Company has requested the Bank to issue its irrevocable 
direct pay letter of credit in substantially the form of Exhibit A annexed 
hereto (such letter of credit and any successor letter of credit as provided 
in such letter of credit being the "Letter of Credit") in an amount not to 
exceed $26,250,000 to secure payment of amounts payable on the Bonds or for 
their purchase as provided in the Indenture, which amount is equal to the 
principal amount of the Bonds ($25,900,000) plus an amount equal to 41 days 
interest on the Bonds at a maximum rate of 12% ($350,000).

         NOW THEREFORE, in consideration of the premises and in order to 
induce the Bank to issue the Letter of Credit, the parties hereto agree as 
follows:


                                        1
<PAGE>


                                   ARTICLE 1.
                                  DEFINITIONS

         SECTION 1.1   DEFINITIONS. Unless otherwise indicated in this 
Agreement, the capitalized terms used herein without definition shall have 
the following meanings:

         "AFFECTED LOANS" has the meaning set forth in Section 2.2(g) of
     this Agreement.

         "AFFILIATE," as applied to any Person, means any other Person
     directly or indirectly controlling, controlled by, or under common
     control with, that Person. For purposes of this definition, "control"
     (including with correlative meaning, the terms "controlling,"
     "controlled by" and "under common control with"), as applied to any
     Person, means the possession, directly or indirectly, of the power
     to direct or cause the direction of the management and policies of
     that Person, whether through the ownership of voting securities or
     memberships or by contract or otherwise.

         "AGREEMENT" or "REIMBURSEMENT AGREEMENT" means this Reimbursement
     Agreement as it may be amended, supplemented or otherwise modified
     from time to time.

         "ALTERNATE CREDIT FACILITY" means an irrevocable letter of credit,
     bank bond purchase agreement, bond insurance policy, revolving credit
     agreement, surety bond or other agreement or instrument under which any
     Person (other than the Issuer or the Company) undertakes to make or
     provide to make payments of the principal and purchase price of and
     interest on the Bonds, as and when due and delivered pursuant to the
     Indenture in substitution for the Letter of Credit.

         "APPLICABLE MARGIN" has the meaning provided in the Bank Facility
     for loans then in effect on the date of any determination of Applicable
     Margin.

         "BANK" has the meaning set forth in the introductory paragraph of
     this Agreement.

         "BANK BONDS" has the meaning set forth in Section 2.5.

         "BANK FACILITY" means the Credit Agreement dated as of May 17, 1996
     among Rykoff-Sexton, Inc., Bank of America National Trust and Savings
     Association, as administrative agent, The Chase Manhattan Bank, N.A. as
     documentation agent, BA Securities, Inc., as co-arranger, Chase 
     Securities, Inc., as co-arranger and certain other financial institutions.

         "BANK INFORMATION" has the meaning set forth in Section 7.5(a)
     hereof.


                                        2
<PAGE>


         "BANK SECURITY DOCUMENTS" means, collectively, the Deed of Trust, the
     Security Agreement, the Financing Statement, the Pledge Agreement, the
     Custody Agreement and any other agreement or instrument which recites
     that it secures the obligation of the Company under this Agreement.

         "BASE RATE" means, for any day, the rate of interest per annum
     (calculated on a 360-day year basis for the actual number of days
     elapsed) equal to the greater of (a) the rate per annum equal to the
     corporate base rate of interest announced by the Bank from time to
     time (such rate not necessarily being the lowest rate which the Bank
     charges to a borrower or group of borrowers) in effect on such day
     or (b) (i) the rate on overnight Federal funds transactions with
     members of the Federal Reserve System arranged by Federal funds
     brokers, as published for such day (or, if such day is not a Business
     Day, the next succeeding Business Day) by the Federal Reserve Bank
     of New York, or (ii) if such rate is not so published for any day
     which is a Business Day, the average of the quotations for such day
     on such transactions received by the Bank from three Federal funds
     brokers of recognized standing selected by it plus in each case
     specified in (i) and (ii) 0.5% per annum, each change in the Base
     Rate to be effective as of the opening of business on the day such
     change occurs. If for any reason the Bank shall have determined that
     it is unable to ascertain the rate on overnight Federal funds
     transactions, including, without limitation, the inability or
     failure of the Bank to obtain sufficient bids or publications in
     accordance with the terms hereof, the Base Rate shall be the prime
     lending rate of the Bank until the circumstances giving rise to 
     such inability no longer exist.

         "BONDS" has the meaning set forth in Recital C of this Agreement.

         "BUSINESS DAY" means a day which is not (i) a Saturday, Sunday
     or day on which banking institutions in the State of Illinois or the
     State of New York or in any jurisdiction in which the principal office
     of the Tender Agent or the Trustee or the office of the Bank at which
     drawings under the Letter of Credit must be presented are authorized
     or required to be closed, or (ii) a day on which the New York Stock
     Exchange is authorized or required to be closed.

         "CODE" means the Internal Revenue Code of 1986, and the regulations
     promulgated thereunder and any amendment thereto or any successor
     statute and related regulations.

         "COMPANY" has the meaning set forth in the introductory paragraph of
     this Agreement.

         "CONTROLLED GROUP" means the Company and all Persons (whether or not
     incorporated) under common control or treated as a single employer with
     the Company pursuant to Section 414(b),(c),(m) or (o) of the Code.


                                        3



<PAGE>


         "CREDIT TERMINATION DATE" means the earliest of (i) the date on which
     the Final Drawing is honored by the Bank, (ii) the date on which the Bank
     is notified by the Trustee as the date on which there are no longer any
     Bonds Outstanding, (iii) the date on which any Alternate Credit Facility
     becomes effective, and (iv) the Stated Termination Date.

         "CUSTODY AGREEMENT" means the Custody Agreement dated as of November
     1, 1996 between Bank and the Trustee in form and substance satisfactory 
     to the Bank substantially in the form of Exhibit E hereto.

         "DEED OF TRUST" means the Deed of Trust, Assignment of Rents and 
     Fixture Filing with respect to the Project, dated of even date herewith,
     executed by the Company, as trustor, to the Chicago Title Company, as
     trustee, for the benefit of Bank, as beneficiary.

         "DEFAULT" means any condition or event which constitutes an Event of
     Default or which with the giving of notice or lapse of time or both 
     would, unless cured or waived, become an Event of Default.

         "DISBURSEMENT ACCOUNT" has the meaning set forth in Appendix I.

         "ENVIRONMENTAL ACTIVITIES" means the use, generation, transportation,
     treatment, storage or disposal of any Hazardous Materials at any time
     located on or present on or under the Premises.

         "ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity dated as
     of November 1, 1996, executed by the Company in favor of Bank.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
     amended from time to time, and regulations promulgated thereunder.

         "ERISA AFFILIATE" means any trade or business (whether or not
     incorporated) under common control with the Company within the meaning of
     Section 414(b), 414(c) or 414(m) of the Code.

         "ERISA EVENT" means (a) a Reportable Event with respect to a 
     Qualified Plan or a Multiemployer Plan subject to Title IV of ERISA;
     (b) a withdrawal by the Company or any ERISA Affiliate from a Qualified
     Plan subject to Section 4063 of ERISA during a plan year in which it
     was a substantial employer (as defined in Section 4001(a)(2) of ERISA);
     (c) a complete or partial withdrawal by the Company or any ERISA
     Affiliate from a Multiemployer Plan; (d) the filing of a notice of
     intent to terminate, the treatment of a plan amendment as a termination
     under Section 4041 or 4041A of ERISA or the commencement of proceedings
     by the PBGC to terminate a Qualified Plan or Multiemployer Plan
     subject to Title IV of ERISA; (e) a failure by the Company or any member
     of the


                                        4
<PAGE>


     Controlled Group to make required contributions to a Qualified Plan or
     Multiemployer Plan; (f) an event or condition which would constitute
     grounds under Section 4042 of ERISA for the termination of, or the
     appointment of a trustee to administer, any Qualified Plan or 
     Multiemployer Plan; (g) the imposition of any liability under Title IV
     of ERISA, other than PBGC premiums due but not delinquent under
     Section 4007 of ERISA, upon the Company or any ERISA Affiliate; (h) an
     application for a funding waiver or an extension of any amortization
     period pursuant to Section 412 of the Code with respect to any Plan;
     (i) a non-exempt prohibited transaction occurs with respect to any
     Plan for which the Company or any Subsidiary of the Company may be
     directly or indirectly liable; or (j) a violation of the applicable
     requirements of Section 404 or 405 of ERISA or the exclusive benefit
     rule under Section 401(a) of the Code by any fiduciary or disqualified
     person with respect to any Plan for which the Company or any member of
     the Controlled Group may be directly or indirectly liable.

         "EURODOLLAR RATE LOAN" has the meaning set forth in 2.2(b) of this
     Agreement.

         "EVENT OF DEFAULT" has the meaning set forth in Section 6.1 of this
     Agreement.

         "EXCLUDED COLLATERAL" has the meaning set forth in the Security
     Agreement.

         "FINAL DRAWING" has the meaning set forth in the Letter of Credit.

         "FINANCIAL COVENANT DEFAULT" means a Default or failure to satisfy
     any of the requirements set forth in Section 5.2(g) of this Agreement
     in any Fiscal Year.

         "FINANCING STATEMENT" means the UCC-1 financing statement executed
     by the Company, as debtor, pursuant to the Security Agreement, and
     naming Bank as the secured party.

         "FISCAL YEAR" means the period ending on the Saturday of each year
     closest to June 30 and beginning on the next day, or any other 12-month
     period hereafter selected and designated as the official fiscal year of
     the Company.

         "GAAP" means, subject to the provisions of Section 7.4, generally
     accepted accounting principles set forth in the opinions and 
     pronouncements of the Accounting Principles Board of the American
     Institute of Certified Public Accountants and statements and 
     pronouncements of the Financial Accounting Standards Board or in such
     other statements by such other entity as may be approved by a
     significant segment of the accounting profession, which are applicable
     to the circumstances as of the date of determination; PROVIDED, HOWEVER,
     that with respect to the use of the term GAAP in sections incorporated


                                        5
<PAGE>


     from the Bank Facility, GAAP shall have the meaning set forth in the
     Bank Facility.

         "GUARANTY", as applied to any Person, means all loan commitments of
     that Person and all obligations of that Person guaranteeing in any
     manner, whether directly or indirectly, any obligation of any other
     Person for the payment of principal or interest with respect to borrowed
     money.

         "HAZARDOUS MATERIALS" means (a) any oil, flammable substances,
     explosives, radioactive materials, hazardous wastes or substances, toxic
     wastes or substances or any other materials or pollutants which (i)
     pose a hazard to the Premises or to persons on or about the Premises or
     (ii) cause the Premises to be in violation of any Hazardous Materials
     Laws; (b) asbestos in any form which is or could become friable, urea
     formaldehyde foam insulation, transformers or other equipment which
     contain dielectric fluid containing levels of polychlorinated 
     biphenyls in excess of fifty (50) parts per million; (c) any chemical,
     material or substance defined as or included in the definition of
     "hazardous substances," hazardous wastes," "hazardous materials,"
     "extremely hazardous waste," "restricted hazardous waste," or "toxic
     substances" or words of similar import under any applicable local,
     state or federal law or under the regulations adopted or publications
     promulgated pursuant thereto, including, but not limited to, the
     Comprehensive Environmental Response, Compensation and Liability Act
     of 1980, as amended, 42 U.S.C. Section 9601, et seq.; the Hazardous
     Materials Transportation Act, as amended, 49 U.S.C. Section 1801,
     et seq.; the Resource Conservation and Recovery Act, as amended,
     42 U.S.C. Section 6901, et seq.; the Federal Water Pollution Control
     Act, as amended, 33 U.S.C. Section 1251, et seq.; Sections 25115,
     25117, 25122.7, 25140, 25281, 25316, and 25501 of the California
     Health and Safety Code; and Article 9 or Article 11 of Title 22 of
     the California Administrative Code, Division 4, Chapter 20; and (d)
     any other chemical, material or substance, exposure to which is
     prohibited, limited or regulated by any governmental authority or
     may or could pose a hazard to the health and safety of the occupants
     of the Premises or the owners and/or occupants of property
     adjacent to or surrounding the Premises.

     "HAZARDOUS MATERIALS LAWS" shall mean any federal, state or local laws, 
     ordinances, regulations, or policies relating to the environment, health 
     and safety, Environmental Activities and Hazardous Materials (including, 
     without limitation, the use, handling, transportation, production, 
     disposal, discharge or storage thereof) including, without limitation, 
     soil or ground water conditions.

     "INDEBTEDNESS", as applied to any Person, means (i) any Guaranty, 
     (ii) any indebtedness or obligation of that Person for the payment of 
     principal or interest with respect to borrowed moneys or which otherwise 
     constitutes indebtedness, as determined in accordance with GAAP, 
     including obligations under conditional sales contracts or other title 
     retention contracts and rental obligations under

                                       6
<PAGE>

     leases which are considered capital leases under GAAP, (iii) notes payable
     and drafts accepted representing extensions of credit to such Person 
     whether or not representing obligations for borrowed money, (iv) any 
     obligation owed by that Person for all or any part of the deferred purchase
     price of property or services which purchase price is due more than six 
     months from the date of incurrence of the obligation in respect thereof or 
     evidenced by a note or other instrument and (v) all indebtedness secured by
     a Lien on property of that Person, whether or not with recourse to that 
     person.

          "INDEMNITEE" has the meaning set forth in Section 7.5 of this 
     Agreement.

          "INDENTURE" means the Indenture of Trust dated as of November 1, 1996
     between the Issuer and the Trustee pursuant to which the Bonds are to be 
     executed and delivered.

          "INITIAL STATED AMOUNT" has the meaning set forth in Section 2.1 of 
     this Agreement.

          "INTEREST DRAWING" has the meaning set forth in the Letter of Credit.

          "INTEREST PERIOD" has the meaning set forth in Section 2.2(c) of this
     Agreement.

          "ISSUANCE DATE" means November 20, 1996.

          "ISSUER" has the meaning set forth in Recital B of this Agreement.

          "L/C DOCUMENTS" means this Agreement, the Bank Security Documents, and
     any and all other agreements, instruments, certificates, or other documents
     now or hereafter given by the Company to Bank pursuant thereto or in 
     connection therewith, or given to evidence, guaranty, or secure any of the 
     Company's obligations under the foregoing documents.

          "LETTER OF CREDIT" has the meaning set forth in Recital E of this 
     Agreement.

          "LETTER OF CREDIT FEE" has the meaning set forth in Section 2.3(b) of
     this Agreement.

          "LIBOR" means the rate of interest equal to:

          (a) the offered rate for deposits in United States Dollars which 
          appears on Telerate Page 3750 as of 11:00 a.m. London time, on the 
          second full Business Day next preceding the first of each date a 
          rate is set (unless such day is not a Business Day, in which event 
          the next succeeding Business Day will be used).

                                       7

<PAGE>

          (b) a number equal to 1.0 minus the aggregate (but without 
          duplication) of the rates (expressed as a decimal fraction) of reserve
          requirements than in effect on the day which is two (2) Business 
          Days prior to the beginning of such date a rate is set (including, 
          without limitation, basic, supplemental, marginal and emergency 
          reserves under any regulations of the Board of Directors of the 
          Federal Reserve System or other governmental authority having 
          jurisdiction with respect thereto, as now and from time to time in 
          effect) for Eurocurrency funding (currently referred to a 
          "Eurocurrency Liabilities" in Regulation D of such Board), which 
          are required to be maintained by a member bank of the Federal Reserve
          System.

          If such interest rates shall cease to be available from Telerate 
News Service, the LIBOR rate shall be determined from such financial service 
selected by the Company and acceptable to the Bank.

          "LIEN" means any lien, mortgage, deed of trust, pledge, security 
     interest, charge or encumbrance of any kind (including any conditional sale
     or other title retention agreement, any lease in nature thereof, and any 
     agreement to give any lien or security interest).

          "LIQUIDITY DRAWING" has the meaning set forth in the Letter of 
     Credit.

          "LIQUIDITY DRAWING PREMIUM" means a rate of interest per annum 
     with respect to a Liquidity Drawing equal to 0% for the first 180 days 
     after the Liquidity Drawing and 1.00% thereafter.

          "LIQUIDITY DRAWING REPAYMENT" means the amount to be paid by the 
     Company to the Bank in the event of (i) a payment made under the Letter 
     of Credit in respect of a Liquidity Drawing to pay all or any part of the
     principal portion of the purchase price of the Bonds tendered for purchase
     in accordance with Section 2.03(a) of the Indenture, which shall be equal 
     to the amount of such drawing or (ii) a payment made under the Letter of 
     Credit in respect of an Interest Drawing relating to a Liquidity Drawing 
     to pay accrued interest with respect to such Bonds, which shall be equal 
     to the amount of such drawing; PROVIDED, HOWEVER, that, at the Company's 
     option, payment of the amounts set forth in clause (i) related to the 
     principal amount of the Bonds above may be made on or prior to 18 months 
     after such drawing and payment of the amounts set forth in clause (ii) with
     respect to the interest portion of any such drawing shall be made on or 
     before the first calendar day of the next succeeding month (but in any 
     event not later than the Credit Termination Date) and on the Credit 
     Termination Date.

          "LOAN AGREEMENT" has the meaning set forth in Recital D of this 
     Agreement. 

                                       8

<PAGE>

          "MOODY'S" means Moody's Investors Service, a corporation organized 
     and existing under the laws of the State of Delaware, its successors and 
     assigns, or, if such corporation shall be dissolved or liquidated or shall 
     no longer perform the functions of a securities rating agency, any other 
     nationally recognized securities rating agency designated by the Issuer, 
     with the approval of the Company and the Bank.

          "MULTIEMPLOYER PLAN" means a "multiemployer plan" (within the 
     meaning of Section 4001(a)(3) of ERISA) and to which any member of the 
     Controlled Group makes, is making, or is obligated to make contributions 
     or, during the preceding six calendar years, has made, or been obligated 
     to make, contributions.

          "NOTICE OF CONVERSION/CONTINUATION" has the meaning set forth in 
     Section 2.2(f) of this Agreement.

          "OBLIGATIONS" means all obligations of the Company to the Bank of 
     every kind and description (whether or not evidenced by a note or other 
     instrument and whether or not for the payment of money), direct or 
     indirect, absolute or contingent, due or to become due, now existing or 
     hereafter arising pursuant to the terms of this Agreement and the other 
     Related Documents.

          "ORIGINATION FEE" has the meaning set forth in Section 2.3(a) of 
     this Agreement.

          "OUTSTANDING," when used as of any particular time in reference to 
     the Bonds, means all Bonds theretofore, or thereupon being, authenticated 
     and delivered by the Trustee under the Indenture except:

               (a)  Bonds theretofore canceled by the Trustee or surrendered 
     to the Trustee for cancellation;

               (b)  Bonds with respect to which all liability of the Issuer 
     shall have been discharged in accordance with Article VII of the Indenture;

               (c)  Bonds for the transfer or exchange of or in lieu of or in 
     substitution for which other Bonds shall have been authenticated and 
     delivered by the Trustee pursuant to the Indenture; and

               (d)  Bank Bonds.

          "PARTICIPANT" has the meaning set forth in Section 2.8 of this 
     Agreement.

          "PAYMENT DATE" means the date when interest and/or principal with 
     respect to the Bonds due, whether by scheduled payment, redemption or 
     acceleration and also means the date on which interest with respect to the
     Bonds is converted

                                       9

<PAGE>

to bear interest at a different rate than the rate at which the Bonds are 
then bearing interest.

     "PAYMENT REQUEST DOCUMENTS" has the meaning set forth in Section A.5(c) 
of Appendix I.

     "PBGC" means the Pension Benefit Guaranty Corporation or any entity 
succeeding to any of its principal functions under ERISA.

     "PENSION PLAN" means any Employee Benefit Plan, other than a 
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue 
Code or Section 302 or ERISA.

     "PERMITTED LIENS" means and includes: (1) Liens permitted pursuant to 
the Deed of Trust and the Bank Facility; (2) Liens existing as of the date of 
original delivery of the Bonds and which are identified on SCHEDULE I hereto; 
(3) Liens granted to Bank of America National Trust and Savings Association, 
as administrative agent, under the Bank Facility; and (4) any other Liens 
permitted in writing by the Bank.

     "PERSON" means an individual, a corporation, a partnership, an 
association, a trust or any other entity or organization, including a 
government or political subdivision or an agency or instrumentality thereof.

     "PLACEMENT AGREEMENT" means the Placement Agreement dated November 19, 
1996, among The First National Bank of Chicago, as placement agent, the 
Issuer and the Company.

     "PLAN" means an employee benefit plan (as defined in Section 3(3) of 
ERISA) which the Company or any member of the Controlled Group sponsors or 
maintains or to which the Company or any member of the Controlled Group 
makes, its making or is obligated to make contributions, and includes any 
Multiemployer Plan or Qualified Plan.

     "PLEDGE AGREEMENT" means the Pledge Agreement dated as of even date 
herewith between the Company and the Bank substantially in the form of 
Exhibit B to this Agreement.

     "PRELIMINARY PRIVATE PLACEMENT MEMORANDUM" has the meaning set forth in 
Section 4.1(i).

     "PREMISES" means the real property on which the Project is located in 
the City of La Mirada, County of Los Angeles as more particularly described 
in Exhibit E and all personal property located on or affixed to such real 
property or otherwise used in connection with the business of the Company 
conducted on such


                                      10
<PAGE>

real property; PROVIDE, HOWEVER, that the Premises shall not include the 
Excluded Collateral.

     "PRINCIPAL OFFICE" means the principal office of the Bank in Chicago, 
Illinois.

     "PRIVATE PLACEMENT MEMORANDUM" has the meaning set forth in 
Section 4.1(i) of this Agreement.

     "PROJECT" has the meaning set forth in Recital A of this Agreement.

     "QUALIFIED PLAN" means a pension plan (as defined in Section 3(2) of 
ERISA) intended to be tax-qualified under Section 401(a) of the Code and 
which any member of the Controlled Group sponsors, maintains, or to which it 
makes, is making or is obligated to make contributions, or in the case of a 
multiple employer plan (as described in Section 4064(a) of ERISA) has made 
contributions at any time during the immediately preceding period covering 
five (5) plan years, but excluding any Multiemployer Plan.

     "RATING AGENCIES" means Moody's and/or S&P.

     "RELATED DOCUMENTS" means the Indenture, the Loan Agreement, the Bonds, 
the Letter of Credit, this Agreement, the Bank Security Documents, the 
Placement Agreement, the Remarketing Agreement, the Environmental Indemnity, 
the Preliminary Private Placement Memorandum, the Private Placement 
Memorandum and any instrument, document or agreement relating thereto.

     "REMARKETING AGREEMENT" means the Remarketing Agreement dated as of 
November 1, 1996 among the Issuer, the Company and The First National Bank of 
Chicago, as remarketing agent.

     "SECURITY AGREEMENT" means the Security Agreement with respect to the 
Project dated as of November 1, 1996, executed by the Company, as debtor, in 
favor of Bank, as secured party.

     "S&P" means Standard & Poor's Ratings Services, a division of The 
McGraw-Hill Companies, Inc., a corporation organized and existing under the 
laws of the State of New York, its successors and assigns, or, if such 
corporation shall be dissolved or liquidated or shall no longer perform the 
functions of a securities rating agency, any other nationally recognized 
securities rating agency designated by the Issuer, with the approval of the 
Company and the Bank.

     "STATED TERMINATION DATE" has the meaning given thereto in the Letter of 
Credit or such later date as may be agreed upon in writing by the Bank and 
the Company in accordance with Section 2.10 hereof.


                                    11
<PAGE>

     "SUBSIDIARY" means any corporation, association, partnership or joint 
venture or other business entity of which more than 50% of the voting stock 
(other than equity interests in the case of Persons other than corporations) 
is owned or controlled, directly or indirectly, by any Person or one or more 
of the other Subsidiaries of that Person or a combination thereof.

     "TAX" or "TAXES" means any present or future tax, levy, impost, duty, 
charge, fee, deduction or withholding of any nature and whatever called, by 
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld 
or assessed. "Tax on overall net income" of a Person shall be construed as a 
reference to tax imposed by the jurisdiction in which its principal office 
(and/or, in the case of the Bank, its lending office) is located on all or 
part of the net income, profits or gains of that Person (whether worldwide, 
or only insofar as such income, profits or gains are considered to arise in 
or to relate to a particular jurisdiction, or otherwise).

     "TERMINATION DATE" means the date the Letter of Credit terminates.

     "TITLE COMPANY" means Chicago Title Insurance Company.

     "TITLE POLICY" means the title policy described below which shall not 
contain any survey exceptions or exceptions for rights of parties in 
possession, easements not of record, or unpaid installments of special 
assessments, or any other exceptions to coverage, except as expressly 
provided herein or as otherwise approved by Bank in writing:

          an ALTA Loan Policy - 1970 (without revision, modification or 
     amendment) issued by the Title Company and such direct access reinsurance 
     agreements as Bank may require, naming Bank as the insured, with liability 
     in the amount of the Initial Stated Amount, insuring the validity and 
     priority of the lien of the Deed of Trust subject only to such exceptions 
     as are approved in writing by Bank, and including CLTA endorsements 100 
     (unmodified), 103.1, 103.7, 104.6, 104.7, 111.5, 116 and such other 
     endorsements as Bank may require.

     "TRUSTEE" means Bankers Trust Company of California, N.A., and any 
successor thereto, as Trustee under the Indenture.

     "UNFUNDED PENSION LIABILITIES" means the excess of a Plan's benefit 
liabilities under Section 4001(a)(16) of ERISA, over the current value of 
that Plan's assets (exclusive of any contribution due), determined as of the 
most recent valuation date for which a valuation is available in accordance 
with the assumptions used by the Plan's actuaries for funding the Plan on an 
ongoing basis pursuant to Section 412 of ERISA for the applicable plan year.

                                      12

<PAGE>

          "USF" means US Foodservice, Inc., A Delaware corporation.

                           ARTICLE 2.
             AMOUNT AND TERMS OF THE LETTER OF CREDIT


          SECTION 2.1     THE LETTER OF CREDIT. On the terms and conditions
hereinafter set forth, the Bank agrees, upon 24 hours' prior request of the 
Company and satisfaction of the conditions precedent set forth in Section 
3.1, to issue the Letter of Credit in an amount not exceeding $26,250,000 
(the "INITIAL STATED AMOUNT") and expiring on or before the Stated 
Termination Date.

          SECTION 2.2     REIMBURSEMENT.

          (a)  REIMBURSEMENT. The Company hereby agrees to pay to the Bank 
(i) immediately and without demand on the date that any amount is drawn 
under the Letter of Credit by the Trustee, other than with respect to a 
Liquidity Drawing or an Interest Drawing with respect to any Liquidity 
Drawing effected pursuant to Section 2.03(a) of the Indenture, a sum equal to 
such amount; (ii) the Liquidity Drawing Repayment at such times and in such 
amounts as shall be specified in the definition of such term; (iii) on 
demand, interest on any amounts unpaid by the Company when due under this 
Agreement other than as specified in clause (iv) of this Section 2.2, whether 
at maturity, by acceleration, on the date demanded or otherwise, including 
post-petition interest in any proceeding under the United States Bankruptcy 
Code or other applicable bankruptcy laws, from and including the date such 
amounts become due until payment in full, whether before or after judgment, at 
a fluctuating interest rate per annum equal to the interest rate then in 
effect under this Agreement plus 2.00%; PROVIDED that, in the case of a 
Eurodollar Rate Loan, upon the expiration of the Interest Period then in 
effect at the time any such increase in interest rate is effective such 
Eurodollar Rate Loan shall terminate and thereafter bear interest payable 
upon demand at the Base Rate plus Applicable Margin and Liquidity Drawing 
Premium then in effect plus 2.25%; (iv) interest on any and all unpaid 
amounts payable by the Company under clause (ii) of this Section 2.2, from 
and including the date of drawing on the Letter of Credit until payment in 
full, at a fluctuating interest rate per annum equal to the Base Rate or 
LIBOR (as provided in Section 2.2(b)) plus .25% and the Applicable Margin and 
the Liquidity Drawing Premium, if any, payable in arrears on the earlier of 
the date of repayment of such unpaid amounts or the first Business Day of 
each calendar month; and (v) on demand, any other amounts expressly payable 
by the Company to the Bank under this Agreement. Payment by the Company or 
acceptance by the Bank of interest provided for herein is not a permitted 
alternative to timely payment and shall not constitute a waiver of any Event 
of Default or otherwise prejudice or limit any rights or remedies of the Bank.

          (b)  EURODOLLAR RATE LOAN. At the option of the Company, subject to 
the provisions of subsection 2.2(c), unpaid amounts with respect to the 
principal portion

                                     13

<PAGE>

of a Liquidity Drawing shall bear interest at LIBOR plus .25% and the 
Applicable Margin and the Liquidity Drawing Premium payable in arrears on the 
earlier of the date of repayment of such unpaid amounts or the first Business 
Day of each calendar month (such selection is hereinafter referred to as a 
"EURODOLLAR RATE LOAN").

          (c)  INTEREST PERIODS FOR LIBOR RATE. In connection with each 
Eurodollar Rate Loan, the Company may, pursuant to the applicable Notice of 
Conversion/Continuation select an interest period (each an "INTEREST PERIOD") 
to be applicable to such Loan, which Interest Period shall be, at the 
Company's option, either a one, two, three or six month period; PROVIDED that:

               (i)   in the case of immediately successive Interest Periods 
     applicable to a Eurodollar Rate Loan continued as such pursuant to a 
     Notice of Conversion/Continuation, each successive Interest Period shall 
     commence on the day on which the next preceding Interest Period expires;

               (ii)  no Interest Period shall extend beyond the Stated 
     Termination Date;

               (iii) no Interest Period shall extend beyond a date on which 
     the Company is required to make repayment of the Liquidity Drawing 
     related to such Eurodollar Rate Loan;

               (iv)  if an Interest Period would otherwise expire on a day 
     that is not a Business Day, such Interest Period shall expire on the 
     next succeeding Business Day; PROVIDED that, if any Interest Period 
     would otherwise expire on a day that is not a Business Day but is a day 
     of the month after which no further Business Day occurs in such month, 
     such Interest Period shall expire on the next preceding Business Day;

               (v)   any Interest Period that begins on the last Business Day 
     of a calendar month (or on a day for which there is no numerically 
     corresponding day in the calendar month at the end of such Interest 
     Period) shall end on the last Business Day of the succeeding calendar 
     month; and

               (vi)  in the event the Company fails to specify an Interest 
     Period for any Eurodollar Rate Loan in the applicable Notice of 
     Conversion/Continuation, the Company shall be deemed to have selected an 
     Interest Period of one month.

          (d)  DETERMINATION OF LIBOR INTEREST RATE. As soon as practicable 
after 10:00 A.M. (Chicago time) on the date specified in the Notice of 
Conversion/Continuation, Bank shall determine the interest rate that 
shall apply to the Eurodollar Rate Loan for which an interest rate is 
then being determined for the applicable Interest

                                     14

<PAGE>

Period and shall promptly give notice thereof (in writing by facsimile or by 
telephone confirmed in writing by facsimile) to the Company.

          (e)  EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of an Event of Default, (i) the Company may not elect 
to have an unpaid Liquidity Drawing be maintained as, or converted to, a 
Eurodollar Rate Loan after the expiration of any Interest Period then in 
effect for such unpaid drawing and (ii) subject to the provisions of 
subsection (j), any Notice of Conversion/Continuation given by the Company 
with respect to a requested conversion/continuation that has not yet occurred 
shall be deemed to be rescinded by the Company.

          (f)  CONVERSION OR CONTINUATION. The Company shall deliver a notice 
regarding such conversion or continuation ( "NOTICE OF 
CONVERSION/CONTINUATION") to the Bank no later than 10:00 A.M. (Chicago time) 
at least three Business Days in advance of the proposed 
conversion/continuation date (in writing by facsimile or by telephone 
confirmed in writing by facsimile). A Notice of Conversion/Continuation shall 
specify (i) the proposed conversion/continuation date (which shall be a 
Business Day), (ii) the amount of the unpaid reimbursement relating to a 
Liquidity Drawing to be converted/continued, (iii) the requested Interest 
Period, and (iv) that no Event of Default has occurred and is continuing.

          (g)  ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In 
the event that on any date the Bank shall have determined that the making, 
maintaining or continuation of its Eurodollar Rate Loans (i) has become 
unlawful as a result of compliance by the Bank in good faith with any law, 
treaty, governmental rule, regulation, guideline or order (or would conflict 
with any such treaty, governmental rule, regulation, guideline or order not 
having the force of law even though the failure to comply therewith would not 
be unlawful) or (ii) has become impracticable, or would cause the Bank 
material hardship, as a result of contingencies occurring after the date of 
this Agreement which materially and adversely affect the London interbank 
market or the position of the Bank in that market, then, and in any such 
event, the Bank shall give notice (by telefacsimile or by telephone confirmed 
in writing) to the Company of such determination. Thereafter (a) the 
obligation of the Bank to convert to Eurodollar Rate Loans shall be suspended 
until such notice shall be withdrawn by the Bank, (b) to the extent such 
determination by the Bank relates to a Eurodollar Rate Loan then being 
requested by the Company pursuant to a Notice of Conversion/Continuation, 
such unpaid reimbursement shall bear interest as otherwise provided hereunder, 
(c) the Bank's obligation to maintain its outstanding Eurodollar Rate Loans 
(the "AFFECTED LOANS") shall be terminated at the earlier to occur of the 
expiration of the Interest Period then in effect with respect to the Affected 
Loans or when required by law, and (d) the Affected Loans shall automatically 
bear interest as provided under the Base Rate option on the date of such 
termination.

          (h)  COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST 
PERIODS. The Company shall compensate the Bank, upon written request by the 
Bank.

                                     15


<PAGE>

(which request shall set forth the basis for requesting such amounts), for 
all reasonable losses, expenses and liabilities (including any interest paid 
by the Bank to lenders of funds borrowed by it to make or carry its 
Eurodollar Rate Loans and any loss, expense or liability sustained by the 
Bank in connection with the liquidation or re-employment of such funds) which 
the Bank may sustain: (i) if for any reason (other than a default by the 
Bank) a conversion to or continuation of any Eurodollar Rate Loan does not 
occur on a date specified therefor in a Notice of Conversion/Continuation, 
(ii) if any repayment or other principal payment or any conversion of any of 
its Eurodollar Rate Loans occurs on a date prior to the last day of an 
Interest Period applicable to such loan, (iii) if any repayment of any of its 
Eurodollar Rate Loans is not made on any date specified in a notice of 
repayment given by the Company, or (iv) as a consequence of any other default 
by the Company in the repayment of its Eurodollar Rate Loans when required by 
the terms of this Agreement.

                   SECTION 2.3     FEES.

                   (a)  The Company hereby agrees to pay the Bank an 
origination fee  (the "ORIGINATION FEE") computed at the rate of one quarter 
of one percent (.25%) per annum, on the basis of a 360-day year for the 
actual number of days elapsed, of the amount available to be drawn under the 
Letter of Credit from and including the Issuance Date to but excluding the 
Termination Date, payable quarterly in arrears on the 15th day of each March, 
June, September and December thereafter commencing March 15, 1997.

                   (b)  The Company hereby agrees to pay to the Bank a letter 
of credit fee (the "LETTER OF CREDIT FEE"), computed at the rate of one and 
three-quarters percent (1.75%) per annum, on the basis of a 360-day year for 
the actual number of days elapsed, of the amount available to be drawn under 
the Letter of Credit from and including the Issuance Date to but excluding 
the Termination Date, payable quarterly in arrears on the 15th day of each 
March, June, September and December thereafter commencing March 15, 1997.

                   (c)  The Company hereby agrees to pay to the Bank, upon 
each drawing by the Trustee under the Letter of Credit, a drawing fee equal 
to $200 (not to exceed $400 per month). 

                   (d)  The Company hereby agrees to pay to the Bank a 
transfer fee equal to one-quarter of one percent (.25%) of the Stated Amount 
of the Letter of Credit transferred to any successor trustee under the 
Indenture, with a minimum fee of one hundred and fifty dollars ($150) and a 
maximum fee of eight thousand dollars ($8,000), per transfer payable upon 
transfer of the Letter of Credit in accordance with its terms to a successor 
trustee under the Indenture.
    
                                       16

<PAGE>

                   SECTION 2.3    INCREASED COSTS.

                   If the Bank determines (which determination shall, in the 
absence of demonstrable error, be final and conclusive and binding on all 
parties) that compliance with any law, rule or regulation, or any request or 
directive (whether or not having the force of law) of any governmental 
authority, court, central bank or comparable agency shall:

                   (A)  subject the Bank to any additional Tax with respect 
     to the Letter of Credit, or shall change the amounts due under this 
     Agreement or any of the Related Documents or its obligation to make any 
     payment under the Letter of Credit (except for changes in the rate of 
     Tax on the overall net income of the Bank imposed by the jurisdiction in 
     which the Bank's Principal Office is located); or

                   (B)  impose, modify or deem applicable any reserve, 
     capital adequacy, special deposit, insurance or similar requirement 
     (including, without limitation, any such requirement imposed by the 
     Board of Governors of the Federal Reserve System) against letters of 
     credit issued by or assets held by, deposits with or for the account of, 
     or credit extended by, the Bank or shall impose on the Bank any 
     condition with respect to the Agreement, the Letter of Credit or any of 
     the Related Documents;

and the result of any of the foregoing is to increase the cost to the Bank of 
the issuance or maintenance of the Letter of Credit, or to reduce the amount 
of any sum received or receivable by the Bank under this Agreement or under 
any of the Related Documents with respect thereto, by an amount deemed by the 
Bank to be material, or to reduce the rate of return on the Bank's capital as 
a consequence of it obligations hereunder to a level below which the Bank 
could have achieved, but for such compliance, taking into account the Bank's 
policies with respect to capital adequacy, then, within ten days after demand 
by the Bank, the Company shall pay for the Bank's account such additional 
amount or amounts as will compensate the Bank for such increased cost or 
reduction together with interest on each such amount at a rate equal to the 
Base Rate from the date of such demand by the Bank until payment is full 
thereof.  The Bank will promptly notify the Company of any event occurring 
after the date hereof of which the Bank has knowledge which will entitle the 
Bank to compensation pursuant to this Section.  A certificate of the Bank 
claiming compensation under this Section and setting forth in reasonable 
detail the calculation of the additional amount or amounts to be paid to it
hereunder and the basis therefor shall be conclusive in the absence of 
demonstrable error.  In determining such amount, the Bank may use any 
reasonable averaging and attribution methods.  The provisions of this Section 
shall apply equally to any Person acting as a Participant in the Letter of 
Credit, as if such Person were the Bank hereunder.

                                       17

<PAGE>

                   In the event any payment is due under this Section 2.4, 
the Company may, within 30 days after notice thereof from the Bank to the 
Company, give notice of seeking an Alternate Credit Facility and that such 
Alternate Credit Facility shall replace the Letter of Credit within 120 days 
after such demand from the Bank.  The election by this Company to seek an 
Alternate Credit Facility shall not release the Company from its obligation 
to make payments as provided in this Section 2.4.

                   SECTION 2.5  BANK BONDS.  As security for the payment of 
the Obligations the Company will pledge and grant to the Bank a security 
interest in, its right, title and interest in and to Bonds delivered to the 
Bank or its designated agent in connection with Liquidity Drawings and 
Interest Drawings related to Liquidity Drawings under the Letter of Credit 
pursuant to the Pledge Agreement ("Bank Bonds").  Upon failure to remarket 
Bonds purchased in accordance with Section 3.08 of the Indenture with funds 
derived from a Liquidity Drawing and an Interest Drawing related to such 
Liquidity Drawing under the Letter of Credit, such Bonds shall become Bank 
Bonds and shall accrue interest at a rate of 0%.  Any amounts from time to 
time owing to the Bank pursuant to clause (ii) of Section 2.2 may be paid (A) 
at any time by the Company stating the amount to be paid (which shall be an 
amount not less than $100,000), and (B) at any time on behalf of the Company 
on one Business Day's notice from the Company directing the Bank (or the 
custodian of the Bank Bonds under the Custody Agreement) to deliver a 
specified principal amount of Bank Bonds held by the Bank (or the custodian 
of the Bank Bonds under the Custody Agreement) to the Remarketing Agent for 
sale by it pursuant to the Indenture and the Remarketing Agreement.  Upon 
payment to the Bank of the amount to be paid pursuant to clause (A) or (B) 
above, together with accrued interest, as set forth in clause (iv) of Section 
2.2, to the date of such payment on the amount to be paid, the outstanding 
Obligations of the Company under clause (ii) of Section 2.2 shall be reduced 
by the amount of such payment, interest shall cease to accrue on the amount 
paid and the Bank or its desigated agent shall release to the Company, the 
Trustee, or the Remarketing Agent, as the case may be, for sale, from the 
pledge and security interest created by the Pledge Agreement a principal 
amount of Bank Bonds equal to the amount of such payment.

                   SECTION 2.6  PAYMENTS AND COMPUTATIONS.  All payments by 
the Company to the Bank hereunder shall be made in lawful currency of the 
United States and in immediately available funds at the Principal Office of 
the Bank or at such other address as the Bank may designate in writing to the 
Company.  Whenever any payment under this Agreement shall be due on a day 
which is not a Business Day, the date for payment thereof shall be extended 
to the next succeeding Business Day.  If the date for any payment of 
principal is extended by operation of law or otherwise, interest thereon 
shall be payable for such extended time.  Computations of interest hereunder 
shall be made by the Bank on the basis of a year of 360 days for the actual 
number of days elapsed (including the first day but excluding the last day) 
and shall be conclusive with respect to the amount of interest owed by the 
Company absent manifest error.  Any payments of principal or interest 
received by the Bank with respect to the Bank Bonds shall be credited against 
the amount payable by the Company from time to time

                                       18              
<PAGE>

pursuant to Section 2.2; PROVIDED that receipt and application of such 
payments shall not relieve the Company from its payment obligations under 
Section 2.2 to the extent of any deficiency in the amount so received by the 
Bank and the Company shall be obligated to make all of the payments required 
from time to time pursuant to Section 2.2 without deduction or offset except 
to the extent expressly permitted by the Bank in writing. The Company agrees 
that if any amount owing to the Bank under this Agreement is not paid when 
due, whether at maturity, by acceleration, on the date demanded or otherwise 
including, without limitation, any amount due under Section 2.2, 2.3, 2.4, 
7.5 or 7.7 hereof, such amount shall thereafter until paid in full (after as 
well as before judgment) bear interest payable on demand at a fluctuating 
rate per annum equal to the rate otherwise due under this Agreement plus 
2.00%.

          SECTION 2.7     OBLIGATIONS ABSOLUTE. The payment Obligations of 
the Company under this Agreement shall be absolute, unconditional and 
irrevocable, and shall be paid strictly in accordance with the terms of this 
Agreement under all circumstances whatsoever, including, without limitation, 
the following circumstances:

          (i)     any lack of validity or enforceability of the Letter of 
     Credit, this Agreement or any other Related Document except if the 
     Letter of Credit is not enforceable or the Bank has willfully refused 
     to make payments under the Letter of Credit, in which case this 
     Section 2.7 shall apply only to such amounts as have been actually 
     drawn under the Letter of Credit plus interest and fees accrued thereon 
     prior to the date of determination of unenforceability or willful refusal;

          (ii)    any amendment or waiver of or any consent to departure from 
     all or any of the Related Documents;

          (iii)   the existence of any claim, set-off, defense or other 
     rights which the Company or any other Person may have at any time 
     against the Trustee, any beneficiary or any transferee of the 
     Letter of Credit (or any Persons for whom the Trustee, any such 
     beneficiary or any such transferee may be acting), the Bank or 
     any other Person, whether in connection with this Agreement, 
     the transactions contemplated herein or in the Related Documents 
     or any unrelated transaction;

          (iv)    any statement or any other document presented under the 
     Letter of Credit proving to be forged, fraudulent, invalid or insufficient 
     in any respect or any statement therein being untrue or inaccurate in any 
     respect whatsoever;

          (v)     payment by the Bank under the Letter of Credit against 
     presentation of a draft or certificate which does not comply with the 
     terms of the Letter of Credit; or

          (vi)    any other circumstance or happening whatsoever, whether or 
     not similar to any of the foregoing.


                                      19

<PAGE>


          Notwithstanding anything to the contrary in this Section 2.7, the 
Company shall be entitled to bring a separate action against the Bank with 
respect to any claims it may have against the Bank arising out of or 
otherwise relating to this Agreement or the Letter of Credit.

          SECTION 2.8     PARTICIPATIONS: CONFIDENTIALITY. The Bank shall 
have the right to grant participation rights in this Agreement and the 
Security Documents and the Bank's obligations under the Letter of Credit at 
any time and from time to time to one or more financial institutions (each a 
"PARTICIPANT"); PROVIDED HOWEVER, that, except as provided to the contrary in 
this Agreement, such participation rights shall be obligations only of the 
Bank and shall not create any direct obligation of the Company to any such 
Participant under this Agreement or create any direct liability of any such 
Participant under the Letter of Credit. The grant of participation rights 
shall not affect or diminish the rights of the Bank to reimbursement or other 
payments under Article 2 of this Agreement, such reimbursement or payments to 
be calculated as if the Bank had not granted any such participation rights. 
The Company acknowledges and agrees that each Participant may be provided 
with the right to approve amendments, modifications or waivers affecting such 
Participant with respect to this Agreement, including, without limitation, any 
decrease in the fees payable hereunder, any change in the stated amount of 
the Letter of Credit (other than as set forth in the Letter of Credit), any 
change in the rate at which interest is payable on the Obligations hereunder, 
any extension of the Stated Termination Date and any release of any 
collateral securing the Obligations. The Bank and any Participant shall hold 
all non-public information obtained pursuant to the requirements of this 
Agreement which has been identified in writing as confidential by the Company 
in accordance with their respective customary procedures for handling 
confidential information of this nature and in accordance with safe and sound 
banking practices; PROVIDED that the Bank and any Participant in any event may 
disclose such information to any Participant in connection with its 
participation or as required or requested by any governmental agency or 
representative thereof or pursuant to legal process; PROVIDED FURTHER that in 
no event shall the Bank or a Participant be obligated or required to return 
any materials furnished by the Company.

           SECTION 2.9     TAXES. All sums payable by the Company under this 
Agreement and the Related Documents shall be paid (i) free of any restriction 
or condition, (ii) free and clear of and (except to the extent required by 
law) without any deduction or withholding on account of any Tax imposed, 
levied, collected, withheld or assessed by or within the United States of 
America or any political subdivision in or of the United States of America or 
any other jurisdiction from or to which a payment is made by or on behalf of 
the Company or by any federation or organization of which the United States 
of America or any such jurisdiction is a member at the time of payment and 
(iii) without deduction or withholding (except to the extent required by law) 
on account of any other amount, whether by way of set-off or otherwise.

          If the Company or any other Person making a payment to the Bank is 
required by law to make any deduction or withholding on account of any such 
Tax or


                                      20

<PAGE>

other amount as is referred to in the immediately preceding paragraph from 
any sum paid or payable by the Company to the Bank under this Agreement or 
the Related Documents:

          (i)     the Company shall notify the Bank of any such requirement 
     or any change in any such requirement as soon as the Company becomes 
     aware of it;

          (ii)    the Company shall pay any such tax or other amount before 
     the date on which penalties attach thereto, such payment to be made 
     (if the liability to pay is imposed on the Company) for its own account 
     or (if that liability is imposed on the Bank) on behalf of and in the 
     name of the Bank (it being understood that the Company shall not be 
     required to pay any such tax to both the Bank and a taxing authority);
                  
          (iii)   the sum payable by the Company in respect of which the 
     relevant deduction, withholding or payment is required shall be 
     increased to the extent necessary to ensure that, after the making 
     of that deduction, withholding or payment, the Bank or any other party 
     receives on the due date and retains (free from any liability in 
     respect of any such deduction, withholding or payment) a net sum equal 
     to what it would have received and so retained had no such deduction, 
     withholding or payment been required or made; and

          (iv)    within 30 days after paying any sum from which it is 
     required by law to make any deduction or withholding, and within 30 days 
     after the due date of payment of any Tax or other amount which it is 
     required by clause (ii) above to pay, the Company shall deliver to the 
     Bank evidence satisfactory to the Bank of such deduction, withholding 
     or payment and of the remittance thereof to the relevant taxing or 
     other authority;

PROVIDED that no such additional amount shall be required to be paid to the 
Bank under clause (iii) above except to the extent that any change after the 
date hereof in any such requirement for a deduction, withholding or payment as 
is mentioned therein shall result in an increase in the rate of such 
deduction, withholding or payment from that in effect at the date of this 
Agreement in respect of payments to the Bank.

          SECTION 2.10     EXTENSION OF THE LETTER OF CREDIT AND REPLACEMENT. 
At least 120 (but not more than 455) days before any Stated Termination Date 
(including any subsequent Stated Termination Date) the Company may request 
the Bank in writing (each such request being irrevocable and binding) to 
extend for a one or two year period the Stated Termination Date of the Letter 
of Credit. Each such request shall be accompanied or preceded by the 
financial statements, certificate and statement called for by Section 5.1(g) 
to the extent not previously provided by the Company on a timely basis and 
such other information as shall be requested by the Bank. No later than 90 
days from the date on which the Bank shall have received notice from the 
Company pursuant to the second preceding sentence, the Bank shall notify the 
Company in writing




                    21

<PAGE>

of its consent or nonconsent to such extension request (which consent or 
nonconsent shall be in the Bank's sole discretion), together with the terms 
and conditions, including the Letter of Credit Fee and the interest rate with 
respect to the unreimbursed drawings thereunder to be applicable to such 
extension required by the Bank in connection with the giving of its consent; 
provided that the failure of the Bank to so notify the Company of the Bank's 
consent or nonconsent shall be deemed to be a nonconsent. If the Bank shall 
have consented to such extension request, and the Company shall have agreed 
to the terms and conditions that the Bank may have required in connection 
with the giving of its consent, the Bank shall deliver to the Trustee an 
amendment of the Letter of Credit which extends the Stated Termination Date 
thereof for such one or two year period, as applicable. The Bank's consent 
shall be conditional upon the preparation, execution and delivery of legal 
documentation in form and substance satisfactory to the Bank and its counsel 
incorporating substantially the terms and conditions contained in the 
extension request and the Bank's consent thereto.

          SECTION 2.11  RECEIPT OF CERTAIN FUNDS BY THE BANK. The Trustee has 
agreed that it will transfer the moneys required to be transferred to the 
Bank pursuant to the Indenture. All such moneys received by the Bank shall be 
credited by the Bank against any Obligations of the Company to the Bank and 
any other amounts owing hereunder. The Bank shall also be entitled to retain 
all or a portion of such moneys received equal to an amount which it 
reasonably anticipates may be necessary to reimburse the Bank for the 
Obligations and any other amounts which may be incurred by the Bank in the 
future that are then due and payable by the Company. The Bank shall transfer 
all such moneys not required to be so credited or retained to the Company or 
to whomever may be lawfully entitled to receive the same.


                                  ARTICLE 3.
                            CONDITIONS OF ISSUANCE

         SECTION 3.1  CONDITIONS PRECEDENT TO ISSUANCE OF THE LETTER OF 
CREDIT. The obligation of the Bank to issue the Letter of Credit is subject 
to the condition precedent that the Bank shall have received on or before the 
Issuance Date all of the following, and, in the case of documents, each dated 
such day (or such other date as may be specified), in form and substance 
satisfactory to the Bank and its counsel:

          (a)   Copies of each resolution or similar instrument adopted by 
     the Board of Directors of the Company authorizing the execution, 
     delivery and performance of this Agreement and each of the other Related 
     Documents to which the Company is a party, the form and content of the 
     Letter of Credit and authorizing and approving the other matters 
     contemplated hereby, certified by the Secretary or an Assistant 
     Secretary of the Company (which certificate shall state that such 
     resolution or similar instrument is in full force and effect on the 
     Issuance Date).

                                      22
<PAGE>

          (b)  Copies, certified by the Secretary of the State of Delaware as 
     of a recent date, of the articles of incorporation of the Company 
     together with copies of the bylaws of the Company certified by the 
     Secretary or Assistant Secretary of the Company and good standing 
     certificates for the Company from the Secretary of State of the States 
     of Delaware, Illinois and California.

          (c)  A certificate of the Secretary or Assistant Secretary of the 
     Company certifying the names and true signatures of the officer or 
     officers of the Company authorized to sign this Agreement and the other 
     documents to be delivered by it hereunder.

          (d)  Opinions of Jones, Day, Reavis & Pogue and Maslon, Edelman, 
     Borman and Brand, a Professional Limited Liability Partnership, counsel 
     for the Company; in form and substance satisfactory to the Bank and its 
     counsel, substantially in the form attached as Exhibit G to this 
     Agreement, including written advice from such counsel that all 
     Participants may rely on such opinions.

          (e)  An executed copy of this Agreement and each Related Document 
     (other than the Letter of Credit).

          (f)  An opinion of Jones Hall Hill & White, a Professional 
     Corporation, Bond Counsel, in form and substance satisfactory to the 
     Bank, including written advice from such counsel that the Bank and all 
     Participants may rely on such opinion.

          (g)  An opinion of counsel for the Trustee, in form and substance 
     satisfactory to the Bank, including written advice from such counsel to 
     the Bank that the Bank and all Participants may rely on such opinion.

          (h)  Evidence satisfactory to the Bank of a search of the records 
     of the filing offices of the Secretary of State of the State of 
     California and the State of Illinois showing all financing statements 
     against the Company.

          (i)  Evidence satisfactory to the Bank of a search of the records 
     of the County of Los Angeles showing all Liens against the Premises and 
     the Project.

          (j)  Certificates or other writing acceptable in form and substance 
     to the Bank evidencing that the Company has complied with all of its 
     obligations to obtain and maintain the insurance required by Section 
     5.1(c) hereof.

          (k)  A commitment satisfactory to Bank that the Title Company is 
     prepared to issue the Title Policy;

                                      23
<PAGE>

          (l)  A certification from the Company that the Company has no 
     knowledge of any pending or threatened condemnation proceedings which 
     would impair in any way the full utilization of the Project;

          (m)  Evidence, which may be in the form of a letter from an 
     insurance broker or municipal engineer or a certificate from a civil 
     engineer set forth on a survey of the Premises, as to whether the 
     Premises is located in an area designated by the U.S. Department of 
     Housing and Urban Development as having special flood hazards;

          (n)  Certified copies of the resolution or resolutions of the 
     Issuer authorizing the execution and delivery of, and performance by the 
     Issuer under the Indenture, the Loan Agreement and the other Related 
     Documents to which the Issuer is a party.

          (o)  The results of the Bank's continuing financial and legal due 
     diligence investigations with respect to the Company, the issuance of 
     the Bonds, the issuance of the Letter of Credit and the other 
     transactions contemplated hereby shall be satisfactory in all respects 
     to the Bank, and any supplemental business or financial due diligence 
     that the Bank reasonably determines has become necessary shall not have 
     disclosed information not previously disclosed to the Bank which causes 
     the results of such diligence not to be satisfactory in all respects to 
     the Bank. The Bank shall also have received any information reasonably 
     necessary to conduct its due diligence.

          SECTION 3.2  ADDITIONAL CONDITIONS PRECEDENT TO ISSUANCE OF THE 
LETTER OF CREDIT. The obligation of the Bank to issue the Letter of Credit 
shall be subject to the further conditions precedent that on the Issuance 
Date:

          (a)  the following statements shall be true and the Bank shall have 
     received a certificate signed by a duly authorized officer of the 
     Company, dated the Issuance Date, stating that:

               (i)  The representations and warranties contained in Section 4.1
          of this Agreement and Section 8 of the Pledge Agreement are correct on
          and as of the Issuance Date as though made on and as of such date; and

               (ii) No event has occurred and is continuing, or would result
          from the issuance of the Letter of Credit, which constitutes a Default
          or an Event of Default;

          (b)  the definitive documentation evidencing the issuance and sale 
     of the Bonds shall have been executed and delivered in form and 
     substance satisfactory to the Bank;

                                      24
<PAGE>

          (c)  the Bank shall have received such other approvals, opinions or 
     documents as the Bank may reasonably request; and

          (d)  no legislation, rule, order or decree shall, in the opinion of 
     counsel for the Bank, prohibit or restrain the issuance of the Letter of 
     Credit as provided in this Agreement.

                                  ARTICLE 4.
                        REPRESENTATIONS AND WARRANTIES

     SECTION 4.1    REPRESENTATIONS AND WARRANTIES.  The Company represents 
and warrants as follows:

          (a)  The Company is a corporation duly organized and validly 
     existing under the laws of the State of Delaware; the Company has the 
     power and authority to own its properties and to carry on its business 
     as now conducted; the Company has the power and authority to execute, 
     deliver and perform its obligations under this Agreement and the Related 
     Documents to which it is a party; the Company is qualified as a foreign 
     corporation and in good standing under the laws of such jurisdictions 
     where the conduct of its present business and operations requires such 
     qualification, except in jurisdictions in which the failure to be in 
     good standing has and will have no material adverse effect on the
     operations, business, properties, condition (financial or otherwise) or
     prospects of the Company; the Company, by appropriate corporate action,
     has duly authorized the execution, delivery and performance of this
     Agreement and the Related Documents to which it is a party; the Company's
     chief executive office is located at 1050 Warrenville Road, Lisle, Illinois
     60532; the Company is not a "foreign corporation," "foreign 
     partnership," "foreign trust," or "foreign estate" as those terms are 
     defined in the Code; and the Company's United States employer 
     identification number is 95-2134693;

          (b)  The individual or individuals executing this Agreement and the 
     Related Documents to which the Company is a party are duly and properly 
     in office and fully authorized to execute the same on behalf of the 
     Company.

          (c)  This Agreement and each Related Document to which the Company 
     is a party are the legal, valid and binding operations of the Company, 
     enforceable against the Company in accordance with their respective 
     terms, subject, however, to the application by a court of general 
     principles of equity and to the effect of any applicable bankruptcy, 
     insolvency, reorganization, moratorium or similar laws affecting 
     creditors' rights generally.

          (d)  The execution, delivery and performance by the Company of this 
     Agreement and the Related Documents to which the Company is a party, the


                                       25

<PAGE>

     consummation of the transactions herein and therein contemplated and the 
     fulfillment of or compliance with the terms and conditions hereof and 
     thereof will not in any material respect conflict with or constitute a 
     violation or breach of or default (with due notice or the passage of time 
     or both) under the certificate of incorporation or bylaws of the Company 
     or any applicable law or administrative rule or regulation, or any 
     applicable court or administrative decree or order, or any trust 
     agreement, mortgage, deed or trust, loan agreement, lease, contract or 
     other agreement or instrument to which the Company is a party or by 
     which it or its properties are otherwise subject or bound, or result in 
     the creation or imposition of any Lien of any nature whatsoever, other 
     than a Permitted Lien, upon any of the property or assets of the Company.
     The Company is not in violation of or default under any of the foregoing 
     to the extent that any such violation or default would materially or 
     adversely affect the Company's ability to perform its obligations 
     hereunder, and no condition exists that would, with the giving of notice 
     or lapse of time or both, constitute such a violation or default.

          (e)  No consent or approval of any trustee, holder of any 
     indebtedness of the Company or any other Person, and no consent, 
     permission, authorization, order or license of, or filing or 
     registration with, any governmental authority, except for the recording
     and filings in connection with the Liens granted to the Bank hereunder and
     under the Bank Security Documents is necessary in connection with the 
     execution, delivery and performance of the Agreement or the Related 
     Documents, the consummation of any transaction herein or therein 
     contemplated, or the fulfillment of or compliance with the terms and 
     conditions hereof or thereof, except as have been obtained or made and as 
     are in full force and effect.

          (f)  There is no action, suit, proceeding, inquiry or investigation 
     before or by any court or federal, state, municipal or other governmental 
     authority or arbitrator or other Person, pending or, to the best knowledge
     of the Company after reasonable inquiry and investigation, threatened 
     against or affecting the Project, the Company or the assets, properties or
     operations of the Company which, if determined adversely to the Company or
     its respective interests, could have a material adverse effect upon the 
     Project or the consummation of the transactions contemplated by or the 
     fulfillment or compliance with the terms and conditions, or the legality,
     validity or enforceability, or this Agreement or the Related Documents, or
     upon the operations, business, properties, condition (financial or 
     otherwise) or prospects of the Company. The Company is not in in default 
     (and no event has occurred and is continuing which with the giving of 
     notice or the passage of time or both could constitute a default) with 
     respect to any order or decree of any court or any order, regulation or 
     demand of any federal, state, municipal or other governmental authority 
     or arbitrator or other Person, which default could have a material 
     adverse effect upon the Project or the consummation of the transactions 
     contemplated by or the fulfillment or compliance with the terms and 
     conditions, or the legality, validity or enforceability

                                      26

<PAGE>

     of this Agreement or the Related Documents, or upon the operations, 
     business, properties condition (financial or otherwise) or prospects of 
     the Company, or its respective properties. The Company is not in 
     violation of any applicable law, which violation materially adversely 
     affects or may materially adversely affect the operations, business, 
     properties, condition (financial or otherwise) or prospects of the 
     Company.

          (g)  The Company has filed all Federal and other material tax 
     returns and reports and has paid all Federal and other material taxes, 
     except such, if any, as are being actively contested by the Company in 
     good faith, for which adequate reserves in accordance with GAAP have 
     been made for the payment thereof, which reserves, if any, are reflected 
     in the financial statements described in subsection (h) of this Section.

          (h)  The audited consolidated balance sheets of each of (i) the 
     Company (other than USF) as at April 26, 1996, and (ii) USF as of December
     31, 1995, and, in each case, the related consolidated statements of 
     operations, shareholders' equity and cash flows, together with the notes 
     thereto (copies of which have been furnished to the Bank) present fairly 
     the consolidated financial position of the Company (other than USF) and
     USF as of the respective dates, and the consolidated results of 
     operations and changes in cash flow for the annual periods covered by such
     financial statements and ending on such date. Since June 29, 1996, the 
     date of the unaudited financial statements of the Company for the 
     transition period then ending and which are included in the Company's 
     Form 10-Q filed August 12, 1996 with the Securities and Exchange 
     Commission (the "FORM 10-Q"), there has been no material adverse change in
     the operations, business, properties, condition (financial or otherwise) 
     or prospects of the Company. Except as disclosed on Schedule II hereof, 
     the Form 10-Q or in the Bank Facility, the Company has no material 
     Guaranty or Indebtedness, contingent obligation, contingent liability or 
     liability for taxes, long term lease or unusual forward or long-term 
     commitment that is not reflected in the foregoing financial statements or 
     the notes thereto and that in any case is material in relation to the 
     operations, business, properties, condition (financial or otherwise) or 
     prospects of the Company, or which would materially and adversely affect 
     the Company's ability to perform fully and timely its obligations under 
     the L/C Documents.

          (i)  The information contained in the Private Placement Memorandum 
     (such Private Placement Memorandum together with the documents 
     incorporated therein by reference, being the "PRIVATE PLACEMENT 
     MEMORANDUM") relating to the Bonds is, and the information contained in 
     the Preliminary Private Placement Memorandum (such Preliminary Private 
     Placement Memorandum, together with the documents incorporated therein 
     by reference, being the "PRELIMINARY PRIVATE PLACEMENT MEMORANDUM") 
     relating to the Bonds as of their date of issue was, and any supplement
     or amendment to either thereof with respect to the Company, the use of 
     proceeds of the Bonds and the Company's obligations, covenants and 

                                      27







<PAGE>

agreements under the Loan Agreement and the Reimbursement Agreement and the 
descriptions of information contained in the Private Placement Memorandum and 
the Preliminary Private Placement Memorandum under the captions 
"INTRODUCTORY STATEMENT," "THE COMPANY," "THE PROJECT" and, to the extent 
applicable to the Company, "NO LITIGATION" shall on the date thereof be, 
accurate in all material respects for the purposes for which its use is, was 
or shall be, authorized and do not and shall not, contain any untrue 
statement of a material fact or omit to state any material fact necessary to 
make the statements made therein, in the light of the circumstances under 
which they are, were or shall be made, not misleading.

     (j)  (i)  SCHEDULE V hereto lists all Plans and separately identifies 
Plans intended to be Qualified Plans and Multiemployer Plans.

          (ii)  Except as disclosed in SCHEDULE V hereto, each Plan sponsored 
     or maintained by the Company or an ERISA Affiliate is in compliance in 
     all material respects with the applicable provisions of ERISA, the Code 
     and other Federal or state law, including all requirements under the 
     Code or ERISA for filing reports (which are true and correct in all 
     material respects as of the date filed), and benefits have been paid in 
     all material respects in accordance with the provisions of the Plan.

          (iii)  Each Qualified Plan sponsored or maintained by the Company 
     or an ERISA Affiliate has been determined by the Internal Revenue 
     Service to qualify under Section 401 of the Code, and the trusts created 
     thereunder have been determined to be exempt from tax under the 
     provisions of Section 501 of the Code, or an application for 
     determination of qualified status has been or will be made to the 
     Internal Revenue Service prior to the end of the remedial amendment 
     period under Section 401(b) of the Code, and to the best knowledge of 
     the Company nothing has occurred which would cause the loss of such 
     qualification or tax-exempt status.

          (iv)  Except as specifically disclosed in SCHEDULE V, no Plan 
     subject to Title IV of ERISA that is sponsored or maintained by the 
     Company or an ERISA Affiliate has any Unfunded Pension Liability.

          (v)  Except as specifically disclosed in SCHEDULE V, no member of 
     the Controlled Group has ever represented, promised or contracted 
     (whether in oral or written form) to any current or former employee 
     (either individually or to employees as a group) that such current or 
     former employee(s) would be provided, at any cost to any member of the 
     Controlled Group, with life insurance or employee welfare plan benefits 
     (within the meaning of section 3(1) of ERISA) following retirement or

                                      28

<PAGE>

     termination of employment. Except as specifically disclosed on SCHEDULE V, 
     to the extent that any member of the Controlled Group has made any such 
     representation, promise or contract, such member has expressly reserved 
     the right to amend or terminate such life insurance or employee welfare 
     plan benefits with respect to claims not yet incurred.

          (vi)  All members of the Controlled Group have complied in all 
     material respects with the notice and continuation coverage requirements 
     of Section 4980B of the Code.

          (vii)  Except as specifically disclosed in SCHEDULE V, no ERISA 
     Event has occurred or is reasonably expected by the Company or any ERISA 
     Affiliate to occur with respect to any Plan.

          (viii)  Except as specifically disclosed in SCHEDULE V, there are 
     no pending or, to the best knowledge of the Company, threatened claims, 
     actions or lawsuits, other than routine claims for benefits in the usual 
     and ordinary course, asserted or instituted against (i) any Plan 
     maintained or sponsored by the Company or its assets, (ii) any member of 
     the Controlled Group with respect to any Qualified Plan, or (iii) any 
     fiduciary with respect to any Plan for which the Company may be directly 
     or indirectly liable, through indemnification obligations or otherwise.

          (ix)  Except as specifically disclosed in SCHEDULE V, neither the 
     Company nor any ERISA Affiliate has incurred nor reasonably expects to 
     incur (i) any liability (and no event has occurred which, with the 
     giving of notice under Section 4219 of ERISA, would result in such 
     liability) under Section 4201 or 4243 of ERISA with respect to a 
     Multiemployer Plan or (ii) any liability under Title IV of ERISA (other 
     than premiums due and not delinquent under Section 4007 of ERISA) with 
     respect to a Plan.

          (x)  Except as specifically disclosed in SCHEDULE V, neither the 
     Company nor any ERISA Affiliate has transferred any Unfunded Pension 
     Liability to a Person other than the Company or an ERISA Affiliate or 
     otherwise engaged in a transaction that could be subject to Section 4069 
     or 4212(c) or ERISA.

          (xi)  To the best knowledge of the Company, no member of the 
     Controlled Group has engaged, directly or indirectly, in a non-exempt 
     prohibited transaction (as defined in Section 4975 of the Code or 
     Section 406 of ERISA) in connection with any Plan which could reasonably 
     be expected to have a material adverse effect on the operations, 
     business, properties, condition (financial or otherwise) or prospects of 
     the Company.

                                      29

<PAGE>

     (k)  Except as disclosed on Schedule III, the ongoing operations of the 
Company with respect solely to the Premises or the Project comply in all 
material respects with all statutes, regulations and other laws of all 
governmental authorities, including environmental laws and regulations, 
applicable to the Premises or the Project, the Company has obtained all 
governmental or regulatory orders, consents, permits, authorizations, 
approvals, variances for applicable zoning ordinances and easements or 
licenses with respect to the ownership, operation and use of the Project as 
contemplated in the Private Placement Memorandum and the Loan Agreement 
necessary to own and operate the Project.

     (l)  The Company is not subject to regulation under the Public Utility 
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce 
Act, the Investment Company Act of 1940 or any other federal or state statute 
or regulation that may render all or any portion of the Obligations 
unenforceable. The Company is not engaged principally, or as one of its 
important activities, in the business of extending credit for the purchase of 
stock or other securities.

     (m)  The Company possesses all necessary trade names and licenses that 
are reasonably necessary and material to conduct its business as now operated 
without any known conflict with the valid trademarks, tradenames, copyrights, 
patents, patent rights and licenses or other intangible property rights of 
others.

     (n)  The Company has good and marketable title to the fee interest of 
the Premises and the Project (other than the Excluded Collateral) free from 
any adverse Lien of any kind whatsoever, excepting only the Permitted Liens.

     (o)  Except as set forth on Schedule IV, neither the Company nor, to the 
best of the Company's knowledge, any previous owner, tenant, occupant or user 
of the Premises has engaged in any material Environmental Activities on, 
under, in or about the Premises in violation of any Hazardous Materials Laws. 
The Company shall not cause or knowingly permit any material Environmental 
Activities on, under, in or about the Premises in violation of any Hazardous 
Materials Laws.

     (p)  Except as set forth on Schedule IV, the Premises and its use comply 
in all material respects with all applicable laws and governmental 
regulations including, without limitation, all Hazardous Materials Laws, all 
applicable federal, state and local laws pertaining to air and water quality, 
hazardous waste, waste disposal and other environmental matters, including, 
but not limited to, the Clean Water, Clean Air, Federal Water Pollution 
Control, Solid Waste Disposal, Resource Conservation Recovery and 
Comprehensive Environmental Response Compensation and Liability Acts, and the 
California Environmental Quality Act, and the rules, regulations and 
ordinances of the County, the California Department of Health Services, the 
Regional Water Quality Control Board, the State Water Resources Control 
Board, the Environmental Protection Agency and


                                      30

<PAGE>

     all applicable federal, state and local agencies and bureaus. 
     Notwithstanding the foregoing, the possession by the Company or a tenant 
     of the Project of minor quantities of Hazardous Material, the presence 
     of which does not violate any Hazardous Materials Laws and the removal 
     of which is not mandated by such Hazardous Materials Laws, shall not be 
     a violation of this Section.

                                  ARTICLE 5.
                           COVENANTS OF THE COMPANY

          SECTION 5.1  AFFIRMATIVE COVENANTS. In consideration of the Bank 
entering into this Agreement, the Company agrees that, unless the Bank shall 
otherwise consent in writing, it will:

          (a)  MAINTENANCE OF EXISTENCE.  Except as otherwise permitted under 
     Section 5.2(a) or under the Bank Facility, maintain and preserve its 
     corporate existence and all rights, privileges, licenses, franchises and 
     other authority for the conduct of its business in an orderly manner 
     without voluntary interruption.

          (b)  COMPLIANCE WITH LAWS.  Comply in all material respects with 
     all applicable laws, rules, regulations and orders of any governmental 
     authority, the non-compliance with which would have a material and 
     adverse effect on the business, operations, properties, condition 
     (financial or otherwise) or prospects of the Company, except such as may 
     be contested in good faith or as to which a bona fide dispute may exist.

          (c)  MAINTENANCE OF INSURANCE.  The Company shall maintain, and 
     shall cause each of its Subsidiaries to maintain, with financially sound 
     and reputable independent insurers (or through self-insurance programs), 
     insurance with respect to its properties and business against loss or 
     damage of the kinds customarily insured against by Persons engaged in 
     the same or similar business, of such types and in such amounts as are 
     customarily carried under similar circumstances by such other Persons; 
     including workers' compensation insurance, general liability and 
     property and casualty insurance. All such insurance with respect to the 
     Premises and the Project (except for workers' compensation insurance) 
     shall name the Bank as loss payee/mortgagee and as additional insured 
     (in the case of general liability), for the benefit of itself and the 
     Participants, as their interests may appear. Upon request of the Bank, 
     the Company shall furnish the Bank, at reasonable intervals (but not 
     more than once per policy year), a certificate of an officer of the 
     Company (and, if requested by the Bank, any insurance broker of the 
     Company) setting forth the nature and extent of all insurance maintained 
     by the Company and its Subsidiaries in accordance with this Section or 
     any Bank Security Documents (and which, in the case of a certificate of 
     a broker, were placed through such broker).


                                       31


<PAGE>

          (d)  INSPECTION RIGHTS.  At any reasonable time and from time to 
     time during normal business hours, permit the Bank or any agents or 
     representatives thereof to examine and make copies of and abstracts from 
     the financial and operating records and books of account of, and visit 
     the properties of, the Company and to discuss the affairs, finances and 
     accounts of the Company with any of its officers or directors upon 
     reasonable advance written notice to the Company.

          (e)  KEEPING OF BOOKS.  Keep proper books of record and account, in 
     which entries shall be made of all financial transactions and matters 
     involving the assets and business of the Company, in accordance with 
     GAAP.

          (f)  MAINTENANCE OF PROPERTIES.  Maintain and preserve the Premises 
     and the Project in good working order and condition, ordinary wear and 
     tear excepted.

          (g)  REPORTING REQUIREMENTS.  Furnish to the Bank (and any 
     Participant requested in writing by the Bank) those reports and items 
     required by Sections 6.01, 6.02 and 6.03 of the Bank Facility and the 
     following:

               (i)  Concurrently with the delivery of the financial 
          statements referred to in subsection 6.01(a) of the Bank Facility, 
          a certificate of the independent certified public accountants 
          reporting on such financial statements stating that in making the 
          examination necessary therefor no knowledge was obtained of any 
          Default or Event of Default, except as specified in such 
          certificate;

               (ii) Concurrently with the delivery of the financial 
          statements referred to in subsections 6.01(a) of the Bank Facility, 
          a certificate of an officer of the Company (i) stating that, to the 
          best of such officer's knowledge, the Company, during such period, 
          has observed and performed all of its covenants and other 
          agreements, and satisfied every condition contained in this 
          Agreement and the other Related Documents to which the Company is a 
          party to be observed, performed or satisfied by it, and that such 
          officer has obtained no knowledge of any Default or Event of 
          Default except as specified (by applicable subsection reference) in 
          such certificate; (ii) setting forth in detail the calculations 
          supporting such statement in respect of Sections 5.2(g), and, 
          commencing with the fiscal year ended on or about June 30, 1997, 
          the calculation of "Excess Cash Flow" under the Bank Facility for 
          such year; and (iii) comparing, for the most recent fiscal quarter, 
          the actual results of such quarter with the budgeted forecast 
          figures for such quarter previously furnished to the Lenders (as 
          such term is defined in the Bank Facility), together with a 
          narrative discussion and analysis of the actual versus budgeted 
          forecast results;


                                       32


<PAGE>

               (iii) Promptly after the same are sent, copies of all 
          financial statements and reports which the Company sends to its 
          shareholders; and promptly after the same are filed, copies of all 
          financial statements, proxy statements and regular, periodical or 
          special reports which the Company may make to, or file with, the  
          Securities and Exchange Commission or any successor or similar 
          governmental authority;

               (iv) Forthwith upon the occurrence of any Default or Event of 
          Default (and in any event within 10 days after the chief financial 
          officer of the Company knows of the occurrence thereof), a 
          certificate of the chief financial officer of the Company setting 
          forth the details thereof and the action which the Company is 
          taking or proposes to take with respect thereto;

               (v)  To the extent requested by the Bank, simultaneously with 
          the delivery of all notices required to be sent by the Company to 
          the Trustee or the Issuer under the Indenture or the Loan 
          Agreement, a copy or copies of all such notices;

               (vi) Promptly, and in any event within 30 days after receipt 
          thereof, a copy of any notice, summons, citation, directive, letter 
          or other form of communication from any governmental authority or 
          court in any way concerning any action or omission on the part of 
          the Company in connection with any substance defined as toxic or 
          hazardous by any applicable federal, state or local law, rule, 
          regulation, order or directive or any waste or by-product thereof, 
          or concerning the filing of a Lien upon, against or in connection 
          with the Premises, in connection with a Hazardous Substance 
          Superfund as maintained pursuant to Section 9507 of the Code; and

               (vii) From time to time, such additional information regarding 
          the business, operations, properties, prospects or condition 
          (financial or otherwise) of the Company as the Bank may reasonably 
          request.

          (h)  PAYMENT OF TAXES.  Promptly pay all lawful taxes, governmental 
     charges and assessments at any time levied or assessed upon or against 
     it or the Project and the Premises; PROVIDED, HOWEVER, that it shall 
     have the right to contest in good faith and by appropriate proceedings 
     diligently pursued any such sums and pending such contest may delay or 
     defer payment thereof for which adequate reserves in accordance with 
     GAAP have been established.

          (i)  CLAIMS.  Promptly pay or otherwise satisfy and discharge all 
     of its material obligations and all material demands and claims against 
     it as and when the same become due and payable, other than any of the 
     foregoing whose validity, amount of collectibility is being contested in 
     good faith and by appropriate pro-


                                       33

<PAGE>

ceedings diligently pursued and for which adequate reserves in accordance 
with GAAP have been established; PROVIDED, HOWEVER, that no such contest 
shall forgive the requirement of prompt payment and fulfillment of all 
Obligations under this Agreement or pursuant to the Bonds or the other 
Related Documents.

   (j) LICENSES. Procure and maintain all necessary licenses and permits 
necessary or advisable in connection with the Company's business.

   (k) ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE IV not engage 
in any activity in any part of the Premises or the Project, and shall use 
best efforts to prevent others from engaging in any activity therein, which 
will result in the Premises or the Project, or any part thereof, containing 
any of the following in concentrations or under conditions in violation of 
Hazardous Materials Laws: (a) any oil, or Hazardous Materials (excepting only 
minor quantities of household and cleaning materials customarily used in the 
ordinary course of prudent household or business purposes, as applicable, 
and maintained in accordance with all applicable Hazardous Materials Laws); 
(b) asbestos in any form which is or could become friable; (c) urea 
formaldehyde foam insulation; (d) transformers or other equipment which 
contain dielectric fluid containing levels of polychlorinated biphenyls in 
excess of fifty (50) parts per million. Notwithstanding the foregoing, the 
possession by the Company of minor quantities of a Hazardous Material, the 
presence of which does not violate any Hazardous Materials Laws and the 
removal of which is not mandated by such Hazardous Materials Laws shall not 
be a violation of this Subsection (k). If at any time it is determined that 
the provisions of this Subsection (k) have been violated, then unless the 
Company provides a Hazardous Materials Report (as hereinafter defined) 
certifying that the Project does not contain Hazardous Materials in 
quantities which require removal or remediation under any Hazardous Materials 
Laws, the Company shall be solely responsible for and shall pay for all costs 
incurred in connection with the removal of said equipment and/or substances, 
and the reasonable cost thereof shall be deemed to be an operating expense. 
If Bank reasonably believes that the value of its security interest in the 
Premises or the Project has been or may be impaired by the presence, use, 
generation, treatment, storage or disposal of any Hazardous Material(s) on, 
under or about all or a portion of the Premises in violation of any Hazardous 
Materials Laws, then Bank may request and the Company agrees to submit, if 
requested by Bank, a report (the "Hazardous Materials Report"), satisfactory 
to Bank in its sole and absolute discretion, prepared by a consultant 
approved by Bank, certifying that the Project does not contain any Hazardous 
Materials in quantities which require removal or remediation under any 
Hazardous Materials Laws nor is any part of the Project currently being used 
for any Environmental Activities. The expense of the Hazardous Materials 
Report shall be deemed to be an operating expense of the Company. Upon the 
discovery by the Company or Bank that any part of the Project contains any 
Hazardous Materials in quantities which require removal or remediation under 
any Hazardous Materials Laws or is being used to conduct Environmental 
Activities, 

                                  34

<PAGE>

Bank may, in its sole and absolute discretion and at the Company's expense, 
retain an independent professional consultant to review any Hazardous 
Materials Report prepared by the Company and/or to conduct its own 
investigation of the Premises and/or the Project, and the reasonable expense 
thereof shall be deemed to be an operating expense of the Company. The 
Company hereby grants to Bank, its agents, employees, consultants and 
contractors the right to enter upon the Project, during normal business hours 
after notice and in a manner that will not unreasonably disturb the use and 
enjoyment of the Project, and to perform such tests on the Premises and the 
Project as are reasonably necessary to conduct such a review and/or 
investigation. Any liability of the Company arising out of this Subsection 
(k) shall survive the Company's satisfaction of the Obligations or the 
exercise by Bank of any of its remedies under any of the Related Documents, 
including, without limitation, a transfer of the Premises or any portion 
thereof, by foreclosure, by deed in lieu of foreclosure or otherwise.

   (l) FURTHER ASSURANCES. From time to time, execute (in a recordable form) 
acknowledge, deliver, record, register and file all such notices, statements 
and other documents and take such other steps, including, but not limited to, 
such permitted amendments of the Related Documents and any instruments 
perfecting interests thereunder, as may be necessary or advisable to render 
fully valid and enforceable under all applicable laws the rights, Liens and 
priorities of the Bank with respect to all security from time to time 
furnished under this Agreement or the Security Documents or intended to be so 
furnished, in each case in such form and at such times as shall be 
satisfactory to the Bank and pay all reasonable fees and expenses (including 
reasonable attorneys' fees and expenses) incident to compliance with this 
paragraph.

   (m) NOTICES. Deliver to Bank notice and a copy of any amendment, consent 
or waiver to the Bank Facility.

   (n) CONVERSION. Not initiate an interest rate conversion with respect to 
the Bonds without prior written consent of Bank.

   (o) APPENDIX. Duly, timely and diligently comply with each and every term, 
condition and covenant set forth in Appendix I.

   SECTION 5.2  NEGATIVE COVENANTS. In consideration of the Bank entering 
into this Agreement, the Company agrees that, without the written consent of 
the Bank, it will not:

   (a) SALES, ASSETS, MERGERS, ETC. Except to a wholly-owned Subsidiary, 
sell, lease, transfer or otherwise dispose of (or pledge or otherwise 
encumber) all or substantially all of its assets or merge with or into or 
consolidate with or into any other corporation or entity, unless (i) 
immediately after giving effect thereto, no event shall occur or shall have 
occurred and be continuing which constitutes a 

                                  35

<PAGE>

Default or an Event of Default, (ii) the surviving, resulting, or transferee 
Person shall be the Company or a wholly-owned Subsidiary of the Company which 
has assumed the Obligations of the Company, and (iii) such sale, 
lease, transfer, disposition merger or consolidation shall not result in an 
event of default hereunder or under any of the Related Documents or the Bank 
Facility.

   (b) AMENDMENT OF RELATED DOCUMENTS. Enter into or consent to any amendment 
of this Agreement or any Related Document without prior written consent of 
the Bank.

   (c) REQUISITIONS. Fail to satisfy any condition precedent to a 
disbursement set forth in Appendix I to the Bank's satisfaction for more than 
[60] days after notice from Bank.

   (d) LIENS AND ENCUMBRANCES. Create, incur, assume or permit to exist any 
Lien upon any of the Premises or the Project or any other collateral subject 
to the Bank Security Documents other than Permitted Liens.

   (e) TRANSFER OF PREMISES. Cause nor permit any "transfer" (as that term is 
defined in SECTION 1.19 of the Deed of Trust) of all or any portion of the 
Premises or the Project or any other property granted under the Deed of Trust 
(collectively, the "TRUST ESTATE") without the prior written consent of Bank. 
Consent by the Bank to one such transaction shall not be deemed to be a 
waiver of the Bank's right to require its separate written consent to future 
or successive transactions. The Bank may grant or deny such consent in its 
sole discretion, and if such consent is given, any such transferee shall 
assume all of the obligations of the transferor under this Agreement and the 
other Related Documents and agree to be bound by all provisions contained in 
all such documents, and the Company and such transferee shall comply in all 
other respects with any requirements set forth in the Related Documents 
relating to such transfer. Such assumption shall not, however, release the 
transferor or any other party from any liability to the Bank under this 
Agreement or any other Related Documents except as otherwise expressly agreed 
in writing by the Bank.

   (f) RELATED DOCUMENT COVENANTS. Violate any of the covenants of the 
Company contained in any Related Document; PROVIDED, HOWEVER that the 
covenants of the Company contained herein shall be controlling to the extent 
that they apply to the same subject matter as, and are more restrictive than, 
any of the covenants contained in any Related Document.

                                  36

<PAGE>

           (g)  FINANCIAL COVENANTS. Violate Sections 7.14, 7.15, 7.16 or 
     7.17 (the "Financial Covenants") of the Bank Facility, as the same may 
     be amended from time to time; PROVIDED, HOWEVER that if the Bank 
     Facility terminates, the Company shall give the Bank notice of such 
     termination and the Financial Covenants as in effect immediately before 
     such termination shall be incorporated herein by reference unless the 
     Bank and Caisse Nationale De Credit Agricole are participating in any 
     senior bank facility replacing the Bank Facility in which case the 
     financial covenants comparable to the Financial Covenants contained in 
     such facility shall be incorporated herein by reference; PROVIDED, 
     FURTHER, that with the written consent of the Bank, if the Bank Facility 
     is replaced by another senior bank credit facility to which the Bank and 
     Caisse Nationale De Credit Agricole are not a party, the financial 
     covenants comparable to the Financial Covenants contained in such 
     facility shall replace the Financial Covenants and shall be incorporated 
     herein by reference.

          (h)   LIMITATION ON OPTIONAL REDEMPTION OF BONDS. Permit or cause 
     the Bonds to be redeemed at the option of the Company pursuant to 
     Article III of the Indenture except to the extent that the redemption 
     price for any Bonds so redeemed is paid by the Trustee and moneys that 
     are not derived from drawings under the Letter of Credit which can be 
     applied under the terms of the Indenture for such redemption.

          (i)   ALTERNATE CREDIT FACILITY. In the event an Alternate Credit 
     Facility is obtained and the Letter of Credit shall be returned to the 
     Bank prior to the Termination Date for cancellation by the Bank, the 
     Company shall immediately pay to the Bank all amounts owing or to become 
     due and payable hereunder through the date of such cancellation.

          SECTION 5.3   COMPLIANCE WITH ERISA. The Company shall not, and 
shall not suffer or permit any of its Subsidiaries to, (i) terminate any Plan 
subject to Title IV of ERISA so as to result in any material liability to the 
Company or any ERISA Affiliate, (ii) permit to exist any ERISA Event or any 
other event or condition with respect to a Plan, which presents the risk of a 
material liability to any member of the Controlled Group, (iii) make a 
complete or partial withdrawal (within the meaning of ERISA Section 4201) 
from any Multiemployer Plan so as to result in any material liability to the 
Company or any ERISA Affiliate, (iv) enter into any new Plan or modify any 
existing Plan so as to increase its obligations thereunder which could result 
in any material liability to any member of the Controlled Group, or (v) 
permit the excess (if any) of (x) the present value of all liabilities 
(determined by using the actuarial assumptions utilized by the PBGC upon 
termination of a single employer plan) under any Plan sponsored or maintained 
by the Company or any of its Subsidiaries that is subject to Title IV of 
ERISA OVER (y) the fair market value of Plan assets allocable to such benefit 
liabilities, to exceed an aggregate amount of $10,000,000 for all such Plans 
of the Company and its Subsidiaries, all determined as of the most recent 
valuation date for each such Plan for which a valuation is available.

                                       37
<PAGE>

                                    ARTICLE 6.
                                EVENTS OF DEFAULT

          SECTION 6.1   EVENTS OF DEFAULT

          The occurrence of any of the following events shall be an "EVENT OF 
DEFAULT:"

          (i)   The Company shall fail to pay any amount payable hereunder 
     when due; or 

          (ii)  Any representation or warranty made by the Company herein, or 
     by the Company in connection with this Agreement or any Related Document 
     shall prove to have been incorrect in any material respect when made; or

          (iii) The Company shall fail to perform or observe any material 
     terms, covenants or agreements contained in Sections 5.1(a) or 5.2 
     hereof; or

          (iv)  The Company shall fail to perform or observe any other 
     material term, covenant or agreement contained in this Agreement or any 
     Bank Security Document and any such failure shall remain unremedied for 
     30 days after written notice thereof shall have been given to the 
     Company by the Bank; or 

          (v)   Any material provision of this Agreement shall at any time 
     for any reason cease to be in full force and effect or shall be declared 
     to be null and void, or the validity or enforceability thereof shall be 
     contested by the Company or any government agency or authority, or the 
     Company shall deny that it has any or further liability or obligation 
     under this Agreement; or 

          (vi)  The Company shall (A) fail to pay when due (whether by 
     scheduled maturity, required prepayment, acceleration, demand or 
     otherwise) any payment of any Indebtedness in an individual principal 
     amount of $5,000,000 and such failure shall continue after the 
     applicable grace period, if any, specified in such agreements or 
     instruments relating to such Indebtedness, or (B) fail to perform or 
     observe any other term, covenant or condition on its part to be 
     performed or observed under any agreement or instrument relating to any 
     Indebtedness when required to be performed or observed, and such failure 
     shall continue after the applicable grace period, if any, specified in 
     such agreement or instrument, if the effect of such failure to perform 
     or observe is to accelerate, or to permit the acceleration of, the 
     maturity of such Indebtedness, the unpaid principal amount of which then 
     equals or exceeds $5,000,000; or

                                       38
<PAGE>

          (vii)  The Company shall (A) apply for or consent to the appointment 
     of a receiver, trustee, liquidator or custodian or the like of itself or 
     of its property, (B) admit in writing its inability to pay its debts 
     generally as they become due, (C) make a general assignment for the 
     benefit of creditors, (D) be adjudicated a bankrupt or insolvent, or (E) 
     commence a voluntary case under the federal bankruptcy laws of the 
     United States of America or file a voluntary petition or answer seeking 
     reorganization, an arrangement with creditors or an order for relief or 
     seeking to take advantage of any insolvency law or file an answer 
     admitting the material allegations of a petition filed against it in any 
     bankruptcy, reorganization or insolvency proceeding; or corporate action 
     shall be taken by it for the purpose of effecting any of the foregoing; 
     or if without the application, approval or consent of the Company, a 
     proceeding shall be instituted in any court of competent jurisdiction, 
     seeking in respect of the Company, an adjudication in bankruptcy, 
     reorganization, dissolution, winding up, liquidation, a composition or 
     arrangement with creditors, a readjustment of debts, the appointment of 
     a trustee, receiver, liquidator or custodian or the like of the Company, 
     or of all or any substantial part of the assets of the Company, or other 
     like relief in respect thereof under any bankruptcy, insolvency or 
     similar law, and, if such proceeding is being contested by the Company, 
     in good faith, the same shall (1) result in the entry of an order for 
     relief of any such adjudication or appointment or (2) continue 
     undismissed, or pending and unstayed, for any period of 60 consecutive 
     days; or 

          (viii) Any event of default or event which, with the passage of 
     time or giving of notice or both, would constitute an event of default 
     with respect to the Company shall occur under any Related Document or 
     the Bank Facility (except as such event of default has been waived or 
     modified); or

          (ix)   (A) On and after the date hereof, a judgment creditor of the 
     Company shall obtain possession of any material amount of the collateral 
     by any lawful means under any of the Bank Security Documents by any 
     means, including, but without limitation, levy, distraint, replevin or 
     self-help; or (B) on and after the Issuance Date, any of the Bank 
     Security Documents shall cease for any reason to be in full force and 
     effect, or any party thereto (other than the Bank) shall purport to 
     disavow its obligations thereunder or shall declare that it does not 
     have any further obligation thereunder or shall contest the validity or 
     enforceability thereof; or (C) on and after the Issuance Date, the 
     security interest created in favor of the Bank on any portion of the 
     collateral under any of the Bank Security Documents shall become 
     otherwise impaired or unenforceable.

          SECTION 6.2   UPON AN EVENT OF DEFAULT.

          (a)    If an Event of Default described under Section 6.1(vii) 
     occurs, any and all Obligations then owing or which would become owing 
     upon a drawing of the full amount available under the Letter of Credit 
     shall automatically become 

                                       39
<PAGE>

         due and payable (which sum, upon receipt thereof by the Bank, shall 
         be held by the Bank as collateral security for the reimbursement of 
         drawings under the Letter of Credit and the payment of any other 
         amounts due and payable hereunder and under any of the other L/C 
         Documents) and the commitment of the Bank to issue the Letter of 
         Credit (or any execution or replacement thereof) shall be 
         automatically terminated.

              (b) If any Event of Default shall have occurred and be 
         continuing (including under Section 6.1(vii) with respect to clauses 
         (ii), (iv) and (v) below), the Bank may, in its sole discretion, but 
         shall not be obligated to, (i) by notice to the Company, declare the 
         commitment of the Bank to issue the Letter of Credit to be 
         terminated, whereupon the same shall forthwith terminate, or (ii) if 
         the Letter of Credit shall have been issued, give written notice to 
         the Trustee pursuant to Section 2.03(b)(e) of the Indenture 
         directing the Trustee to effect a mandatory tender of the Bonds or 
         pursuant to Section 3.01(d) of the Indenture directing the Trustee 
         to effect a mandatory redemption, or (iii) exercise the remedies 
         available to it under the Bank Security Documents, or (iv) exercise 
         any other remedy available to it at law, in equity or otherwise.

                                     ARTICLE 7.
                                   MISCELLANEOUS

              SECTION 7.1  AMENDMENTS, ETC. No amendment or waiver of any 
provision of this Agreement, nor consent to any departure by the Company 
therefrom, shall in any event be effective unless the same shall be in 
writing and signed by the Bank and the Company and then such waiver or 
consent shall be effective only in the specific instance and for the specific 
purpose for which given.

              SECTION 7.2  NOTICE, ETC. All notices, demands and other 
communications provided for hereunder shall, unless otherwise stated herein, 
be in writing (including telex or facsimile notice with telephonic 
confirmation) and mailed, sent or delivered, if to the Company at 1050 
Warrenville Road, Lisle, Illinois 60532, to the attention of the Chief 
Financial Officer, in the case of telecopy to telecopy no.: (630) 964-0355; 
if to the Bank, in the case of deliveries or mailings, at its address at 777 
South Figueroa Street, 4th Floor, Los Angeles, California 90071, in the case 
of telecopy, to telecopy no.: (213) 683-4999, in each case Attention: Jim 
Moore; and if to the Trustee, at its address at 3 Park Plaza, Sixteenth 
Floor, Irvine, California 92714, with a copy to: Bankers Trust Company of 
California, N.A. 4 Albany Street, 4th Floor, New York, New York 10006, and in 
the case of telecopy, to telecopy no.: (212) 250-6727, in each case 
Attention: Corporate Trust Department or, as to each party, to such other 
Person and/or at such other address or number as shall be designated by such 
party in a written notice to each other party. All such notices and 
communications shall be effective when mailed or sent, addressed as 
aforesaid, except that notices to the Bank pursuant to the provisions of 
Article 2 shall not be effective until received by the Bank,

                                   40

<PAGE>

and any notice to the Trustee pursuant to Section 6.2 shall not be effective 
until received by the Trustee. Notices of any Default shall be sent by the 
Company to the Bank by telex or telecopy (with immediate telephonic 
confirmation).

              SECTION 7.3  NO WAIVER; REMEDIES. No failure or delay on the 
part of Bank in the exercise of any power, right or privilege hereunder shall 
impair such power, right or privilege or be construed to be a waiver of any 
default or acquiescence therein, nor shall any single or partial exercise of 
any such power, right or privilege preclude any other or further exercise 
thereof or of any other power, right or privilege. All rights and remedies 
existing under this Agreement are cumulative to, and not exclusive of, any 
rights or remedies otherwise available.

              SECTION 7.4  ACCOUNTING TERMS; CHANGE IN ACCOUNTING PRINCIPLES. 
All accounting terms not specifically defined herein shall be construed in 
accordance with GAAP consistently applied, except as otherwise stated herein. 
If (i) any changes in accounting principles from those used in the 
preparation of the financial statements referred to in Section 4.1(h) 
hereafter occasioned by the promulgation of rules, regulations, 
pronouncements and opinions by or required by the Financial Accounting 
Standards Board of the American Institute of Certified Public Accountants (or 
successors thereto or agencies with similar functions) result in a change in 
the standards or terms found herein or (ii) there is any change in the 
Company's fiscal quarter or the Fiscal Year, the parties hereto agree to 
enter into negotiations in order to amend this Agreement so as to equitably 
reflect such changes with the desired result that the criteria for evaluating 
the Company's financial condition shall be the same after such changes as if 
such changes had not been made.

              SECTION 7.5  INDEMNIFICATION OF THE BANK. The Company hereby 
indemnifies and holds the Bank and  the officers, directors, employees, 
agents and Affiliates of Bank (the "INDEMNITEES") harmless from and against 
any and all claims, damages, losses, liabilities, costs or expenses 
(including reasonable attorneys' fees and expenses) which the Indemnitees may 
incur or which may be claimed against the Indemnitees by any Person:

              (a)  by reason of any inaccuracy, or any untrue statement or 
         alleged untrue statement of any material fact, contained in the 
         Preliminary Private Placement Memorandum or the Private Placement 
         Memorandum or any amendment or supplement thereto, or by reason of 
         the omission or alleged omission to state therein a material fact 
         necessary to make such statements, in the light of the circumstances 
         under which they were made, not misleading; PROVIDED, HOWEVER, that, 
         in the case of any action or proceeding alleging an inaccuracy, or 
         an untrue statement, with respect to information supplied by and 
         describing the Bank in the Preliminary Private Placement Memorandum 
         or the Private Placement Memorandum (the "BANK INFORMATION"), or an 
         omission or alleged omission to state therein a material fact 
         necessary to make the statements in the Bank Information, in the 
         light of the circumstances under which they were made,

                                        41

<PAGE>

         not misleading, (i) indemnification by the Company pursuant to this 
         Section shall be limited to the costs and expenses of the 
         Indemnitees (including reasonable fees and expenses of the 
         Indemnitees' counsel) of defending itself against such allegation, 
         (ii) if in any such action or proceeding it is finally determined 
         that the Bank Information contained a material inaccuracy or an 
         untrue statement of a material fact or omitted to state therein a 
         material fact necessary to make the statements contained therein, in 
         the light of the circumstances under which they were made, not 
         misleading, then the Company shall not be required to indemnify the 
         Indemnitees pursuant to this Section for any claims, damages, 
         losses, liabilities, costs or expenses to the extent caused by such 
         inaccuracy, untrue statement or omission, and (iii) if any such 
         action or proceeding shall be settled by the Indemnitees without 
         there being a final determination to the effect described in the 
         preceding clause (ii), then the Company shall be required to 
         indemnify the Indemnitees pursuant to this Section only if such 
         action or proceeding is settled with the Company's express written 
         consent; provided that such consent shall not be unreasonably 
         withheld and no consent shall be required if an Event of Default has 
         occurred and is continuing hereunder; or 

              (b)  by reason of or in connection with the execution, 
         delivery, performance, restructuring, renegotiation or enforcement 
         of this Agreement or any Related Document, or any transaction 
         contemplated herein or therein (including the issuance of the Letter 
         of Credit); PROVIDED, HOWEVER, that the Company shall not be liable 
         under this Section to indemnify the Indemnitees for any claims, 
         damages, losses, liabilities, costs or expenses resulting solely 
         from the Bank's gross negligence or willful misconduct or from other 
         contracts, agreements or instruments to which the Bank is a party, 
         not related to this Agreement; or

              (c)  by reason of or in connection with the execution and 
         delivery or transfer of, or payment or failure to make lawful 
         payment under, the Letter of Credit; PROVIDED, HOWEVER, that the 
         Company shall not be required to indemnify the Indemnitees pursuant 
         to this Section for any claims, damages, losses, liabilities, costs 
         or expenses to the extent, but only to the extent, caused by (i) the 
         willful misconduct or gross negligence of the Bank in determining 
         whether a draft or certificate presented under the Letter of Credit 
         complied with the terms of the Letter of Credit or (ii) the Bank's 
         willful failure to make lawful payment under the Letter of Credit 
         after the presentation to it by the Trustee or a successor trustee 
         under the Indenture of a draft and certificate strictly complying 
         with the terms and conditions of the Letter of Credit; or

              (d)  the failure of the Bank to honor a drawing under the 
         Letter of Credit as a result of any act or omission, whether 
         rightful or wrongful, of any present or future de jure or de facto 
         government or governmental authority (all such acts or omissions 
         herein called "GOVERNMENTAL ACTS").

                                        42


<PAGE>

Nothing in this Section is intended to limit the other Obligations of the 
Company hereunder. Without prejudice to the survival of any other Obligation 
hereunder, the Obligations contained in this Section shall survive the 
payment in full of all amounts payable pursuant to Article 2 and the 
termination of the Letter of Credit and this Agreement.

          SECTION 7.6  LIABILITY OF THE BANK. Except as otherwise expressly 
set forth in this Agreement, the Company assumes all risks of the acts or 
omissions of the Trustee and any beneficiary or transferee of the Letter of 
Credit with respect to its use of the Letter of Credit. Neither the Bank nor 
any of its officers or directors shall be liable or responsible for:

          (a) the use or misuse which may be made of the Letter of Credit or 
    any acts or omissions of the Trustee and any beneficiary or transferee in 
    connection therewith;

          (b) the validity, accuracy, sufficiency or genuineness of 
    documents, or of any endorsement thereon, even if such documents shall 
    prove to be in any or all respects invalid, inaccurate, insufficient, 
    fraudulent or forged;

          (c) payment by the Bank against presentation of documents which do 
    not comply with the terms of the Letter of Credit, including failure of any 
    documents to bear any reference or adequate reference to the Letter of 
    Credit; or

          (d) failure of the beneficiary of the Letter of Credit to comply 
    fully with conditions required in order to draw upon the Letter of Credit; 
    or 

          (e) omissions, interruptions or delays in transmission or delivery 
    of any messages, by mail, cable telegraph, telex or otherwise, whether or 
    not they be in cipher; or

          (f) errors in interpretation of technical terms; or

          (g) any loss or delay in the transmission or otherwise of any 
    document required in order to make a drawing under the Letter of Credit or 
    of the proceeds thereof; or

          (h) the misapplication by the beneficiary of the Letter of Credit 
    of the proceeds of any drawing thereunder; or

          (i) any consequences arising from causes beyond the control of the 
    Bank, including, without limitation, any Governmental Acts (as defined in 
    Section 7.6); or


                                       43
<PAGE>

          (j) any other circumstances whatsoever in making or failing to make 
    payment under the Letter of Credit, EXCEPT that the Company shall have a 
    claim against the Bank, and the Bank shall be liable to the Company to 
    the extent of any direct, as opposed to consequential, damages suffered 
    by the Company which the Company proves were caused by the willful 
    misconduct or gross negligence of the Bank in determining whether a draft 
    or certificate presented under the Letter of Credit complied with the 
    terms of the Letter of Credit.

In furtherance and not in limitation of the foregoing, the Bank may accept 
documents that appear on their face to be in order, without responsibility 
for further investigation, regardless of any notice or information to the 
contrary.

          SECTION 7.7  COSTS, EXPENSES AND TAXES. The Company hereby agrees 
to pay on demand all reasonable costs and expenses incurred in connection 
with the preparation, execution, delivery, filing, recording, administration 
of this Agreement and the other Related Documents, including, without 
limitation, the reasonable fees and expenses of counsel for the Bank, with 
respect to advising the Bank as to its rights and responsibilities under this 
Agreement whether or not the Letter of Credit is issued (unless failure to 
issue the Letter of Credit is solely the fault of the Bank). The Company also 
agrees to pay all reasonable costs and expenses (including reasonable counsel 
fees and expenses) incurred in connection with (i) the enforcement, 
restructuring or amendment of this Agreement or any Related Document or any 
insolvency or bankruptcy proceeding, or (ii) any action or proceeding 
relating to a court order, injunction or other process or decree restraining 
or seeking to restrain the Bank from paying any amount under the Letter of 
Credit. In addition, the Company shall pay any and all stamp and other taxes 
and fees payable or determined to be payable in connection with the 
execution, delivery, filing and recording of this Agreement and Related 
Documents (except as otherwise provided herein), and agrees to save the Bank 
harmless from and against any and all liabilities with respect to or 
resulting from any delay in paying or omitting to pay such taxes and fees, 
except to the extent that such liability results from the gross negligence or 
willful misconduct of the Bank.

          SECTION 7.8  BINDING EFFECT. This Agreement shall become effective 
when it shall have been executed by the Company and the Bank and thereafter 
shall be binding upon and inure to the benefit of the Company and the Bank 
and their respective successors and assigns, except that the Company shall 
not have the right to assign its rights hereunder or any interest herein to 
any Person (other than by operation of law or as part of a transaction 
permitted under Section 5.2(a)) without the prior written consent of the 
Bank. The Bank may assign to any Participant all or any part of, or any 
interest (undivided or divided) in, the Bank's rights and benefits under this 
Agreement in accordance with Section 2.8.

          SECTION 7.9  INDEPENDENCE OF COVENANTS. All covenants hereunder 
shall be given independent effect so that if a particular action or condition 
is not permitted by any of such covenants, the fact that it would be 
permitted by an exception


                                       44
<PAGE>

to, or would otherwise be within the limitations of, another covenant should 
not avoid the occurrence of a Default or Event of Default if such action is 
taken or condition exists.

          SECTION 7.10 SEVERABILITY. In case any provision in or obligation 
under this Agreement shall be invalid, illegal or unenforceable in any 
jurisdiction, the validity, legality and enforceability of the remaining 
provisions or obligations, or of such provision or obligation in any other 
jurisdiction, shall not in any way be affected or impaired thereby.

          SECTION 7.11 HEADINGS. Section and subsection headings in this 
Agreement are included herein for convenience of reference only and shall not 
constitute a part of this Agreement for any other purpose or be given any 
substantive effect.

          SECTION 7.12 GOVERNING LAW: TERMS. THIS AGREEMENT AND THE RIGHTS 
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE 
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF 
CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

          SECTION 7.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL 
JUDICIAL PROCEEDINGS BROUGHT AGAINST THE COMPANY ARISING OUT OF OR RELATING 
TO THIS AGREEMENT MAY BE BROUGHT IN ANY FEDERAL OR STATE COURT OF COMPETENT 
JURISDICTION IN THE STATE OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF 
THIS AGREEMENT, THE COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS 
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF 
THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND 
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION 
WITH THIS AGREEMENT. The Company hereby agrees that service of all process in 
any such proceeding in any such court may be made by registered or certified 
mail, return receipt requested, to the Company at its address provided in 
Section 7.2, such service being hereby acknowledged by the company to be 
sufficient for personal jurisdiction in any action against the Company in any 
such court and to be otherwise effective and binding service in every 
respect. Nothing herein shall affect the right to serve process in any other 
manner permitted by law or shall limit the right of the Bank to bring 
proceedings against the Company in the courts of any other jurisdiction.

          SECTION 7.14 WAIVER OF JURY TRIAL. THE COMPANY AND THE BANK HEREBY 
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE 
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT.  The scope of this 
waiver is intended to be all-encompassing of any and all disputes that may be 
filed in any court and that relate to the subject matter of this transaction, 
including without limitation contract claims, tort claims, breach of

                                    45



<PAGE>

duty claims, and all other common law and statutory claims. The Company and 
the Bank each acknowledge that this waiver is a material inducement for the 
Company and the Bank to enter into a business relationship, that the Company 
and the Bank have already relied on this waiver in entering into this 
Agreement and that each will continue to rely on this waiver in their related 
future dealings. The Company and the Bank further warrant and represent that 
each has reviewed this waiver with its legal counsel, and that each knowingly 
and voluntarily waives its jury trial rights following consultation with 
legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE 
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER 
SPECIFICALLY REFERRING TO THIS SECTION 7.14 AND EXECUTED BY EACH OF THE 
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, 
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of 
litigation, this Agreement may be filed as a written consent to a trial by 
the court.

     SECTION 7.15  COUNTERPARTS. This Agreement may be executed in one or 
more counterparts and by different parties hereto in separate counterparts, 
each of which when so executed and delivered shall be deemed an original, but 
all such counterparts together shall constitute but one and the same 
instrument; signature pages may be detached from multiple separate 
counterparts and attached to a single counterpart so that all signature pages 
are physically attached to the same document.


               [Remainder of page intentionally left blank]




                                      46

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 
duly executed and delivered by their respective officers thereunto duly 
authorized as of the date first above written.


                                       RYKOFF-SEXTON, INC.

                                       By: /s/ Richard J. Martin
                                          ---------------------------------
                                       Title: Chief Financial Officer
                                             ------------------------------

                                       THE FIRST NATIONAL BANK OF CHICAGO

                                       By: /s/ L. Gene Beuhn
                                          ---------------------------------
                                       Title: Senior Vice President
                                             ------------------------------



                                     S-1

<PAGE>

                                 EXHIBIT A
                        TO REIMBURSEMENT AGREEMENT
              FORM OF IRREVOCABLE DIRECT PAY LETTER OF CREDIT


                                                        Date: November 20, 1996
                                                        **U.S. $26,250,000.00**
                                                            Credit No. 00320293


Bankers Trust Company of California, N.A.,
  as Trustee (the "Trustee")
  under the Indenture of Trust dated
  as of November 1, 1996, between
  La Mirada Industrial Development
  Financing Authority and the Trustee.

Attention: Corporate Trust Department

Ladies and Gentlemen:

     We hereby establish in your favor as Trustee for the benefit of the 
holders of the Bonds (as hereinafter defined), our irrevocable Letter of 
Credit No. 00320293 for the account of Rykoff-Sexton, Inc. (the "Company"), 
in the amount of $26,250,000, whereby we hereby irrevocably authorize you to 
draw on us from time to time, from and after the date hereof to and including 
the earliest to occur of:

     (i)   our close of business in Chicago, Illinois on December 1, 1999 (the 
  "Stated Termination Date"), or

     (ii)  our close of business in Chicago, Illinois on the date which is 
  five Business Days following receipt from you of a certificate in the form 
  set forth as Annex A hereto, or

     (iii) the date on which an Acceleration Drawing is honored by us, or

     (iv)  our close of business in Chicago, Illinois on the date which is 
  ten (10) days after your receipt of written notice from us specifying the 
  occurrence of an Event of Default under the Reimbursement Agreement (the 
  "Reimbursement Agreement") dated as of November 1, 1996 between the Company 
  and us and directing a mandatory tender or redemption of the Bonds,


                                      A-1
<PAGE>

(the "Expiration Date"), a maximum aggregate amount not exceeding Twenty-Six 
Million Two Hundred and Fifty Thousand Dollars (U.S. $26,250,000.00) the 
"Initial Stated Amount"), which amount is equal to the sum of (x) the 
principal amount of the Bonds ($25,900,000) and (ii) 41 days interest at a 
rate of 12% ($350,000), to pay principal of and accrued interest on, or the 
purchase price of, the $25,900,000 Taxable Variable/Fixed Rate Demand 
Industrial Development Revenue Bonds (Rykoff-Sexton, Inc. Project) Series 
1996 (the "Bonds"), which Bonds were issued pursuant to the Indenture of 
Trust dated as of November 1, 1996 (the "Indenture") between you and the 
Company, in accordance with the terms hereof. Payments hereunder are 
available against the following documents (the "Payment Documents") presented 
to The First National Bank of Chicago (the "Bank") at our Chicago offices at 
One First National Plaza, Suite 0236, Chicago, Illinois 60670, telecopier: 
(312) 954-1963 (or such other place as we may from time to time specify), 
attention: Global Trade Services (or such other person as we may from time to 
time specify):

                 A certificate (i) in the form attached as Annex B 
            hereto to pay accrued interest on the Bonds as provided 
            for under Section 2.02 and 2.03 of the Indenture (an 
            "Interest Drawing"), (ii) in the form attached as Annex 
            C hereto to pay the principal amount of and, in the 
            event the redemption date does not coincide with the 
            regularly scheduled Interest Payment Date, accrued 
            interest on the Bonds in respect of any redemption of 
            the Bonds as provided for in Section 3.01 of the 
            Indenture (a "Redemption Drawing"), (iii) in the form 
            attached as Annex D hereto, to pay the tender price of 
            Bonds for which you have not received notice that the 
            Remarketing Agent has delivered the proceeds of the 
            remarketing therefor by 9:30 a.m., Chicago time, on the 
            tender date, as the case may be, as provided for in 
            Section 2.03 of the Indenture (a "Liquidity Drawing"), 
            (iv) in the form attached as Annex E hereto, to pay the 
            principal of and accrued interest in respect of any 
            Bonds the payment of which has been accelerated 
            pursuant to Section 8.02 of the Indenture (an 
            "Acceleration Drawing"), or (v) in the form attached 
            as Annex F hereto to pay the principal amount of the 
            Bonds on the date specified in such Bonds as the date 
            on which the principal of such Bonds is due and payable 
            as provided for under Article II of the Indenture (a 
            "Stated Maturity Drawing");

each such certificate to state therein that it is given by your duly 
authorized officer and dated the date such certificate is presented hereunder.

            No drawings shall be made under this Letter of Credit for the 
purpose of making payments on Bank Bonds (as such terms are defined in the 
Reimbursement Agreement).


                                      A-2


<PAGE>

            All drawings made by you shall be made by tested telex, 
telecopier or other facsimile telecommunication without further need of 
documentation, including the original of this Letter of Credit, it being 
understood that each Payment Document submitted via such telex, telecopier or 
other facsimile telecommunications is to be the sole operative instrument of 
drawing.

            We agree to honor and pay the amount of any Interest, Redemption, 
Liquidity, Acceleration or Stated Maturity Drawing if presented in compliance 
with all of the terms of this Letter of Credit. If such drawing is presented 
at or prior to 11:00 A.m., Chicago time, on a Business Day, payment shall be 
made of the amount specified, in immediately available funds, before 2:00 
p.m., Chicago time, on the same Business Day. If any drawing is presented 
after 11:00 a.m., Chicago time, on a Business Day, payment shall be made of 
the amount specified, in immediately available funds, by 11:00 a.m., Chicago 
time, of the following Business Day. "Business Day" means a day which is not 
(a) a Saturday or Sunday, (b) a day on which banking institutions in Chicago 
Illinois or the State of New York or in any other city where the principal 
corporate trust office of the Trustee, or the Chicago office of the Bank is 
located are required or authorized by law (including executive order) to be 
closed or on which the principal corporate trust office of the Trustee, or the 
Chicago office of the Bank is closed for a reason not related to financial 
condition, or (c) a day on which the New York Stock Exchange is closed.

            The Available Amount of this Letter of Credit will be reduced 
automatically by the amount of any drawing hereunder: PROVIDED, HOWEVER, that 
the amount of any Interest Drawing hereunder shall be automatically 
reinstated effective the 6th calendar day from the date of such drawing 
unless you shall have received written notice from the Bank by tested telex 
within five (5) calendar days of the date of any Interest Drawing that the 
Letter of Credit will not be so reinstated; and PROVIDED FURTHER, however, 
that the portion of any Interest Drawing (as indicated on the related 
certificate in the form of Annex B) effected to pay interest on Bonds being 
concurrently redeemed through a Redemption Drawing shall not be reinstated; 
and PROVIDED FURTHER that the Available  Amount of this Letter of Credit will 
be reduced upon receipt of a Reduction Certificate in the form of Annex G. 
Also, to the extent the Available Amount is reduced as contemplated in the 
preceding sentence due to payment by us of a Liquidity Drawing, the 
obligation of the Bank to honor drawings hereunder will be automatically 
reinstated, concurrently with the receipt by the Bank of the purchase price 
of Bonds (or portions thereof) previously purchased with the proceeds of a 
Liquidity Drawing and which have been resold, by an amount equal to the 
Original Purchase Price of such Bonds (or portions thereof) as have been 
resold. "Original Purchase Price" shall mean the principal amount of any Bond 
purchased with the proceeds of a Liquidity Drawing plus the amount of accrued 
interest thereon paid upon the purchase of such Bond with the proceeds of any 
such Drawing.

            Upon receipt by us of a certificate of the Trustee in the form of 
Annex G hereto, the Bank will automatically and permanently reduce the amount 
available to be drawn hereunder by the amount specified in such certificate. 
Such reduction shall be

                                      A-3

<PAGE>

effective as of the second Business Day following the date of delivery of 
such certificate. Also, upon receipt by us of a certificate of the Trustee in 
the form of Annex C to this Letter of Credit in connection with a Redemption 
Drawing, the Bank will automatically and permanently reduce the amount 
available to be drawn hereunder by the amount (if any) specified in such 
certificate as a decline in the amount of necessary excess interest coverage 
resulting from the partial redemption of Bonds affected through such 
Redemption Drawing (and taking into account the nonreinstatement, as provided 
in the immediately preceding paragraph, of that portion of any Interest 
Drawing which may have been effected to pay interest on Bonds being redeemed 
through such Redemption Drawing).

            Upon any permanent reduction of the amounts available to be 
drawn under this Letter of Credit, as provided herein, we may deliver to you 
a new Letter of Credit in exchange for this Letter of Credit or an amendment 
to this Letter of Credit substantially in the form of Annex H hereto to 
reflect any such reduction. The "Stated Amount" of this Letter of Credit 
shall be its Initial Stated Amount as such amount may from time to time be 
reduced by the Trustee. The "Available  Amount" shall mean the Initial Stated 
Amount (i) less the amount of all prior  reductions pursuant to Interest, 
Redemption, Purchase, Acceleration or Stated Maturity Drawings, (ii) less 
any reduction in the Stated Amount pursuant to a reduction certificate in the 
form of Annex G hereto to the extent such reduction is not already accounted 
for by a reduction in the Available Amount pursuant to clause (i) above, 
(iii) plus the amount of all reinstatements as above provided.

            Prior to the Expiration Date, we may extend the Stated 
Termination Date from time to time at the request of the Company for a 
period of one or two years (or such greater period as we may agree with the 
Company) by delivering to you an amendment to this Letter of Credit in the 
form of Annex I hereto designating the date to which the Stated Termination 
Date is being extended. Each such extension of the Stated Termination Date 
shall  become  effective on the Business Day following delivery of such 
notice to you and thereafter all references in this Letter of Credit to the 
Stated Termination Date shall be deemed to be references  to the date 
designated as such in such notice. Any date to which the Stated Termination 
Date has been extended as herein provided may be extended in a like manner.

            Upon the Expiration Date this Letter of Credit shall 
automatically terminate and you agree to promptly deliver the same to the 
Bank for cancellation.

            This Letter of Credit is transferable in whole only to your 
successor as Trustee. Any such transfer (including any successive transfer) 
shall be effective upon receipt by us of a signed copy of the instrument 
effecting each such transfer signed by the transferor and by the transferee in 
the form of Annex J hereto (which shall be conclusive evidence of such 
transfer) and, in such case, the transferee instead of the transferor shall, 
without the necessity of further action, be entitled to all the benefits of 
and rights under this Letter of Credit in the transferor's place, provided 
that, in such



                                      A-4

<PAGE>

case, any certificates of the Trustee to be provided hereunder shall be 
signed by one who states therein that he is a duly authorized officer or 
agent of the transferee.

     Communications with respect to this Letter of Credit shall be addressed 
to us at The First National Bank of Chicago, One First National Plaza, Suite 
0236, Chicago, Illinois  60670, attention: Global Trade Services, 
specifically referring to the number of this Letter of Credit.

     To the extent not inconsistent with the express terms hereof, this 
Letter of Credit shall be governed by, and construed in accordance with, the 
terms of the Uniform Customs and Practice for Documentary Credits (1993 
Revision), International Chamber of Commerce Publication No. 500 (the 
"Uniform Customs") which terms are incorporated herein; that this Letter of 
Credit will not terminate because of a failure to make a permitted drawing 
hereunder as provided in Article 44; and for purposes of Article 48(g), this 
Letter of Credit may be transferred in accordance with its terms more than 
once.  As to matters not governed by the Uniform Customs, this Letter of 
Credit shall be governed by and construed in accordance with the laws of the 
State of Illinois.

     All payments made by us hereunder shall be made from our funds; in no 
event shall such payment be made with funds obtained from the Company.

     This Letter of Credit sets forth in full the terms of our undertaking, 
and such undertaking shall not in any way be modified or amended by reference 
to any other document whatsoever.

                                             THE FIRST NATIONAL BANK OF CHICAGO

                                                    By
                                                       ------------------------

                                                     Title 
                                                           --------------------


                                     A-5

<PAGE>

                                                                        ANNEX A
                                                                             to
                                             THE FIRST NATIONAL BANK OF CHICAGO
                                                               LETTER OF CREDIT


                                                              ___________, 19__
                                                            Credit No. 00320293


                            NOTICE OF TERMINATION

The First National Bank of Chicago
One First National Plaza, Suite 0236
Chicago, Illinois  60670
Attention:  Global Trade Services

Dear Sirs:

     Reference is hereby made to that certain Irrevocable Letter of Credit 
No. 00320293 dated November 20, 1996 (the "Letter of Credit"), which has been 
established for the account of Rykoff-Sexton, Inc.

     Each of the undersigned hereby certify and confirm that [(i) no Bonds (as 
defined in the Letter of Credit) remain Outstanding within the meaning of the 
Indenture (as defined in said Letter of Credit) or (ii) an Alternate Credit 
Facility (as such term is defined in the Indenture) has been delivered to the 
Trustee to replace the Letter of Credit in accordance with the Indenture]* 
and, accordingly, said Letter of Credit shall be terminated in accordance 
with its terms.

                                              RYKOFF-SEXTON, INC.

                                              By
                                                -------------------------------
                                                 [Title of Authorized Officer]


                                              BANKERS TRUST COMPANY OF 
                                              CALIFORNIA, N.A.
                                                   as Trustee



                                                -------------------------------
                                                 [Title of Authorized Officer]


-----------------------------------
*insert appropriate statement

                                    A-A-1

<PAGE>

                                                                        ANNEX B
                                                                             to
                                             THE FIRST NATIONAL BANK OF CHICAGO
                                                               LETTER OF CREDIT


                                                              ___________, 19__
                                                            Credit No. 00320293

                         INTEREST DRAWING CERTIFICATE

     The undersigned individual, a duly authorized officer of Bankers Trust 
Company of California, N.A. (the "Beneficiary") hereby CERTIFIES on behalf of 
the Beneficiary as follows with respect to (i) that certain Letter of Credit 
No. 00320293 dated November 20, 1996 (the "Letter of Credit"), issued by The 
First National Bank of Chicago in favor of the Beneficiary; (ii) those 
certain Bonds (as defined in the Letter of Credit); and (iii) that certain 
Indenture (as defined in the Letter of Credit):

     1.   The Beneficiary is the Trustee under the Indenture.

     2.   The Beneficiary is entitled to make this drawing in the amount of 
$________ under the Letter of Credit pursuant to the Indenture with respect 
to the payment of interest due on all Bonds outstanding on the Interest 
Payment Date occurring on [insert applicable date] (the "Payment Date") other 
than Bank Bonds (as such terms are defined in the Letter of Credit).

     3.   The amount of the drawing is equal to the amount required to be 
drawn by the Trustee pursuant to Section 2.02, 2.03, and 3.01 of the 
Indenture.

     4.   The amount of the drawing made by this Certificate was computed in 
compliance with the terms of the Indenture and, when added to the amount of 
any other drawing under the Letter of Credit made simultaneously herewith, 
does not exceed the Available Amount of the Letter of Credit as presently in 
effect.

     5.   $________ of the amount of the drawing made by this Certificate is 
to be applied to the payment of interest due on a portion of the outstanding 
Bonds being redeemed pursuant to a concurrent Redemption Drawing, the 
redemption date of which coincides with the Interest Payment Date referred to 
in paragraph (2) above and attached hereto is our reduction certificate.*


-------------------------------------------------------------------------------
*To be included in Certificate only if applicable in the circumstances 
described.


                                    A-B-1

<PAGE>

     In WITNESS WHEREOF, this Certificate has been executed this ___________ 
day of _______________, 19__.


                                              BANKERS TRUST COMPANY OF 
                                              CALIFORNIA, N.A.,
                                                   as Trustee


                                              By
                                                -------------------------------
                                                 [Title of Authorized Officer]


                                    A-B-2


<PAGE>


                                                                        Annex C
                                                                             to
                                             THE FIRST NATIONAL BANK OF CHICAGO
                                                               LETTER OF CREDIT

                                                                         , 19
                                                                ---------    --
                                                            Credit No. 00320293


                           REDEMPTION DRAWING CERTIFICATE

    The undersigned individual, a duly authorized officer of Bankers Trust 
Company of California, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf 
of the Beneficiary as follows with respect to (i) that certain Letter of 
Credit No. 00320293 dated November 20, 1996 (the "Letter of Credit"), issued 
by The First National Bank of Chicago in favor of the Beneficiary; (ii) those 
certain Bonds (as defined in the Letter of Credit); and (iii) that certain 
Indenture (as defined in the Letter of Credit):

    1. The Beneficiary is the Trustee under the Indenture.

    2. The Beneficiary is entitled to make this drawing in the amount of 
$________under the Letter of Credit pursuant to Section 3.01 of the Indenture.

    3. (a) The amount of this drawing is equal to (i) the principal amount of 
Bonds other than Bank Bonds (as such terms are defined in the Letter of 
Credit) to be redeemed by the Company (as defined in the Letter of Credit)
pursuant to Section [insert applicable section] of the Indenture on [INSERT
APPLICABLE DATE] (the "Redemption Date"), plus (ii) in the event such 
Redemption Date does not coincide with a regularly scheduled Interest Payment 
Date, interest accrued on such Bonds from the immediately preceding Interest 
Payment Date (as defined in the Indenture) to the Redemption Date.

       (b) Of the amount stated in paragraph 2 above:

       (i) $_________is demanded in respect of the principal amount of the 
Bonds referred to in subparagraph (a) above; and

       (ii) $_________is demanded in respect of accrued interest on such 
Bonds.

    4.  The amount of the drawing made by this Certificate was computed in 
compliance with the terms and conditions of the Indenture and, when added to 
the amount of any other drawing under the Letter of Credit made 
simultaneously herewith, does not exceed the Available Amount of the Letter 
of Credit as presently in effect.

    5.  Attached hereto is a reduction certificate.






                                   A-C-1
<PAGE>


    In WITNESS WHEREOF, this Certificate has been executed this______________day
of____________, 19___.

                                                 BANKERS TRUST COMPANY OF
                                                 CALIFORNIA, N.A.,
                                                       as Trustee

                                                 By
                                                   -----------------------------
                                                   [Title of Authorized Officer]



                                    A-C-2

<PAGE>

        (i) $______is demanded in respect of the principal portion of the 
        purchase price of the Bonds referred to in subparagraph (2) above; and

        (ii) $______is demanded in respect of payment of the interest portion
        of the purchase price of such Bonds.

    (4) The amount of the drawing made by this Certificate was computed 
        in compliance with the terms and conditions of the Indenture and, when 
        added to the amount of any other drawing under the Letter of Credit made
        simultaneously herewith, does not exceed the Available Amount of the 
        Letter of Credit as presently in effect.

    (5) The Beneficiary will register or cause to be registered in the name 
        of the Company (as defined in the Letter of Credit), but with the Bank 
        registered as pledgee, upon payment of the amount drawn hereunder, Bonds
        in the principal amount of the Bonds being purchased with the amounts 
        drawn hereunder and will deliver such Bonds to the Custodian (as defined
        in the Custody Agreement dated as of November 1, 1996 between Trustee 
        and Bank) or as the Bank may otherwise direct; PROVIDED, HOWEVER, if DTC
        (as such term is defined in the Indenture) or its nominee is the 
        registered owner of all Bonds, the Beneficiary acknowledges that it will
        cause the security interest of the Bank to be recorded by DTC or its
        nominee on its books.

    IN WITNESS WHEREOF, this Certificate has been executed this______________day
of___________, 19___.


                                            BANKERS TRUST COMPANY OF
                                            CALIFORNIA, N.A.,
                                                 as Trustee


                                            By:
                                               -------------------------------
                                                [Title of Authorized Officer]

                                    A-D-2

<PAGE>


                                                                         Annex E
                                                                              to
                                              THE FIRST NATIONAL BANK OF CHICAGO
                                                                LETTER OF CREDIT


                                                                          , 19
                                                             -------------    --
                                                             Credit No. 00320293


                       ACCELERATION DRAWING CERTIFICATE

    The undersigned individual, a duly authorize officer of Bankers Trust 
Company of California, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf 
of the Beneficiary as follows with respect to (i) that certain Letter of 
Credit No. 00320293 dated November 20, 1996 (the "Letter of Credit"), issued 
by The First National Bank of Chicago in favor of the Beneficiary; (ii) those 
certain Bonds (as defined in the Letter of Credit); and (iii) that certain 
Indenture (as defined in the Letter of Credit):

    1.  The Beneficiary is the Trustee under the Indenture.

    2.  An Event of Default has occurred under subsection [INSERT SUBSECTION]
of the Indenture and the Trustee has declared the principal of and accrued 
interest on all Bonds then outstanding immediately due and payable. The 
Beneficiary is entitled to make this drawing in the amount of $_________under 
the Letter of Credit pursuant to Section 8.02 of the Indenture.

    3.  (a) The amount of this drawing is equal to (i) the principal amount 
of Bonds, other than Bank Bonds (as such terms are defined in the Letter of 
Credit), outstanding on [INSERT DATE OF ACCELERATION] (the "Acceleration 
Date") plus (ii) interest on such Bonds accrued from the immediately 
preceding Interest Payment Date to the Acceleration Date.

        (b)   Of the amount stated in paragraph 2 above:

        (i)   $___________is demanded in respect of the principal of the Bonds 
referred to in subparagraph (a) above; and

        (ii)  $___________is demanded in respect of accrued interest on such 
Bonds.



                                  A-E-1
<PAGE>

    IN WITNESS WHEREOF, this Certificate has been executed this______________day
of________________,19__ .

                                              BANKERS TRUST COMPANY OF
                                              CALIFORNIA, N.A.,
                                                   as Trustee



                                              By:
                                                 -------------------------------
                                                  [Title of Authorized Officer]



                                     A-E-2

<PAGE>

                                                                         Annex F
                                                                              to
                                              THE FIRST NATIONAL BANK OF CHICAGO
                                                                LETTER OF CREDIT

                                                                           ,19
                                                             --------------   --
                                                             Credit No. 00320293


                      STATED MATURITY DRAWING CERTIFICATE

    The undersigned individual, a duly authorized officer of Bankers Trust 
Company of California, N.A. (the "Beneficiary"), hereby CERTIFIES on behalf 
of the Beneficiary as follows with respect to (i) that certain Letter of 
Credit No. 00320293 dated November 20, 1996 (the "Letter of Credit"), issued 
by The First National Bank of Chicago in favor of the Beneficiary; (ii) those 
certain Bonds (as defined in the Letter of Credit); and (iii) that certain 
Indenture (as defined in the Letter of Credit):

    1.  The Beneficiary is the Trustee under the Indenture.

    2.  The Beneficiary is entitled to make this drawing in the amount of 
$______________under the Letter of Credit pursuant to Article II of the 
Indenture. The amount of this drawing is equal to the principal amount of 
Bonds with a stated maturity on [INSERT DATE], other than Bank Bonds (as such 
terms are defined in the Letter of Credit).

    3.  The amount of the drawing made by this Certificate was computed in 
compliance with the terms and conditions of the Indenture and, when added to 
the amount of any other drawing under the Letter of Credit made 
simultaneously herewith, does not exceed the Available Amount of the Letter 
of Credit as presently in effect.

    4.  Attached hereto is a reduction certificate.

    In WITNESS WHEREOF, this Certificate has been executed this______________day
of________________ , 19__ .

                                              BANKERS TRUST COMPANY OF
                                              CALIFORNIA, N.A.,
                                                   as Trustee

                                              By:
                                                 -------------------------------
                                                  [Title of Authorized Officer]


                                   A-F-1

<PAGE>

                                                                         Annex G
                                                                              to
                                              THE FIRST NATIONAL BANK OF CHICAGO
                                                                LETTER OF CREDIT

                                                                          , 19
                                                             -------------    --
                                                             Credit No. 00320293


                           REDUCTION CERTIFICATE

    Each of the undersigned hereby certifies as follows with respect to (i) 
that certain Letter of Credit No. 00320293 dated November 20, 1996 (the 
"Letter of Credit"), issued by The First National Bank of Chicago in favor of 
the Beneficiary; (ii) those certain Bonds (as defined in the Letter of 
Credit); and (iii) that certain Indenture (as defined in the Letter of 
Credit):

    1.  The Beneficiary is the Trustee under the Indenture.

    2.  Upon receipt by the Bank of this Certificate, the Stated Amount (as 
defined in the Letter of Credit) shall be reduced by $____________(effective 
the second Business Day following the date of delivery of this Certificate) 
and the Stated Amount shall thereupon equal $_____________, all in accordance 
with the provisions of the Indenture.

    In WITNESS WHEREOF, this Certificate has been executed this______________day
of__________________, 19__ .

                                              BANKERS TRUST COMPANY OF
                                              CALIFORNIA, N.A.,
                                                  as Trustee

                                              By:
                                                 -------------------------------
                                                  [Title of Authorized Officer]



                                    A-G-1

<PAGE>

                                                                         Annex H
                                                                              to
                                              THE FIRST NATIONAL BANK OF CHICAGO
                                                                LETTER OF CREDIT

                                                                         , 19
                                                             ------------    --
                                                             Credit No. 00320293


                             NOTICE OF AMENDMENT

Bankers Trust Company of 
  California, N.A.

Attention: Corporate Trust Department

Dear Sirs:

    Reference is hereby made to that certain Irrevocable Letter of Credit No. 
00320293 dated November 20, 1996 (the "Letter of Credit"), established by us 
in your favor as Beneficiary. We hereby notify you that, in accordance with 
the terms of the Letter of Credit and that certain Reimbursement Agreement 
dated as of November 1, 1996, between Rykoff-Sexton, Inc. and us, the Stated 
Amount of the Letter of Credit has been reduced to $____________________.

    This letter should be attached to the Letter of Credit and made a part 
thereof.

                                        The First National Bank of Chicago


                                               By
                                                 -------------------------------
                                                  [Title of Authorized Officer]



                                    A-H-1
<PAGE>

                                                                         Annex I
                                                                              to
                                              THE FIRST NATIONAL BANK OF CHICAGO
                                                                LETTER OF CREDIT

                                                                         , 19
                                                             ------------    --
                                                             Credit No. 00320293


                             NOTICE OF AMENDMENT

Bankers Trust Company of
  California, N.A.

Attention: Corporate Trust Department

Dear Sirs:

    Reference is hereby made to that certain irrevocable Letter of Credit No. 
00320293 dated November 20, 1996 (the "Letter of Credit"), established by us 
in your favor as Beneficiary. We hereby notify you that, in accordance with 
the terms of the Letter of Credit and that certain Reimbursement Agreement 
dated as of November 1, 1996, between Rykoff-Sexton, Inc. and us, the Stated 
Termination Date of the Letter of Credit has been extended to______________,
_____.

    This letter should be attached to the Letter of Credit and made a part 
thereof.

                                              THE FIRST NATIONAL BANK OF 
                                              CHICAGO


                                              By:
                                                 ------------------------------
                                                  [Title of Authorized Officer]




                                      A-I-1
<PAGE>

                                                                       Annex J
                                                                            to
                                            THE FIRST NATIONAL BANK OF CHICAGO
                                                              LETTER OF CREDIT

                                                                        ,19
                                                             -----------    --
                                                           Credit No. 00320293


                             TRANSFER CERTIFICATE


The First National Bank of Chicago
One First National Plaza, Suite 0236
Chicago, Illinois 60670
Attention:  Global Trade Services

Dear Sirs:

            Reference is made to that certain irrevocable Letter of Credit 
No. 00320293 dated November 20, 1996 which has been established by you in 
favor of Bankers Trust Company of California, N.A.

            The undersigned [Name of Transferor] has transferred and assigned 
(and hereby confirms to you said transfer and assignment) all of it rights in 
and under said Letter of Credit to [Name of Transferee] and confirms that 
[Name of Transferor] no longer has any rights under or interest in said 
Letter of Credit.

            Transferor and Transferee have indicated on the face of said 
Letter of Credit that it has been transferred and assigned to Transferee.


                                  A-J-1

<PAGE>

           Transferee hereby certifies that it is a duly authorized 
Transferee under the terms of said Letter of Credit and is accordingly 
entitled, upon presentation of the documents called for therein, to receive 
payment thereunder.


                                                ------------------------------
                                                     Name of Transferor


                                              By
                                                ------------------------------
                                                [Name and Title of Authorized 
                                                 Officer of Transferor]


                                                ------------------------------
                                                     Name of Transferee


                                                ------------------------------
                                                [Name and Title of Authorized 
                                                 Officer of Transferee]


                                   A-J-2


<PAGE>

                              Exhibit B


<PAGE>

                              PLEDGE AGREEMENT

           THIS PLEDGE AGREEMENT (this "Pledge Agreement") is dated as of 
November 1, 1996, and is entered into by and among Rykoff-Sexton, Inc., a 
Delaware corporation, as pledgor (the "Pledgor") and The First National Bank 
of Chicago, as pledgee (the "Pledgee").

                           W I T N E S S E T H:

           WHEREAS, the La Mirada Industrial Development Authority (the 
"Issuer") has entered into the Loan Agreement with the Pledgor pursuant to 
which the Issuer has agreed to make certain loans to the Pledgor as provided 
therein, and the Issuer and Bankers Trust Company of California, N.A. (the 
"Trustee") have entered into the Indenture of Trust dated as of November 1, 
1996 (the "Indenture") pursuant to which the Issuer's Taxable Variable/Fixed 
Rate Demand Industrial Development Revenue Bonds (Rykoff-Sexton, Inc. 
Project) Series 1996 (the "Bonds") will be executed and delivered;

           WHEREAS, The Indenture requires the Pledgor to purchase or arrange 
for the purchase of, from the owners thereof, Bonds tendered or required to 
be tendered for purchase in certain circumstances set forth in the Indenture 
(the "Purchased Bonds"), and the Remarketing Agent named in the Indenture (or 
successor remarking agent appointed in accordance with the provisions of the 
Indenture), as remarketing agent under the Indenture (the "Remarketing 
Agent") has agreed to use its best efforts to remarket such Purchased Bonds 
under specified terms and conditions;

           WHEREAS, in connection with the issuance of the Bonds, the Pledgor 
has agreed to enter into the Reimbursement Agreement dated as of November 1, 
1996 with the Pledgee (the "Reimbursement Agreement") in order to cause the 
Pledgee to issue a letter of credit thereunder (the "Letter of Credit") which 
may be used, INTER ALIA, to pay the purchase price of the Purchased Bonds);

           WHEREAS, the Bonds will be issued initially in a book-entry only 
system with 100% of the Bonds held by The Depository Trust Company ("DTC") in 
the name of Cede & Co.; and, when the Bonds are in DTC book-entry systems, it 
is intended that transfers of the Purchased Bonds to the account of the Pledgee 
as Bank Bonds (being collateral security for the payment of amounts due to 
the Pledgee under the Reimbursement Agreement) will be shown as such on the 
books and records of the Trustee in its capacity as a participant in DTC's 
central depository system; and

           WHEREAS, it is a condition precedent to the obligation of the 
Pledgee to enter into the Reimbursement Agreement that the parties hereto 
shall have executed and delivered this Pledge Agreement,

                                    1


<PAGE>

     NOW, THEREFORE, in consideration of the premises and in order to induce 
the Pledgee to enter into the Reimbursement Agreement and issue the Letter of 
Credit thereunder and for other good and valuable consideration, receipt of 
which is hereby acknowledged, the parties hereby agree as follows:

     1. DEFINED TERMS. Unless otherwise defined herein, terms defined in the 
Reimbursement Agreement shall have such defined meanings when used herein.

     2. PLEDGE OF THE BONDS. The Pledgor hereby pledges, assigns, 
hypothecates, transfers, and delivers to the Pledgee the following: all its 
right, title and interest to the Bank Bonds as the same may be from time to 
time held (i) by the Trustee for the benefit of the Pledgee or for the 
account of the Pledgor subject to the Pledgee's rights hereunder, or (ii) in 
the event 100% of the Bonds are held by a depository in a book-entry only 
system, held by the depository for the benefit of the Trustee on whose books 
and records such Bank Bonds are being held for the benefit of the Pledgee or 
for the account of the Pledgor, subject to the Pledgee's rights hereunder. The 
Pledgor hereby grants to the Pledgee, a first lien on, and security interest 
in, its right, title and interest in and to the Bank Bonds, the interest 
thereon and all proceeds thereof, as collateral security for the prompt and 
complete payment when due of all amounts owning from the Pledgor to the 
Pledgee under the Reimbursement Agreement, including interest on such amounts 
as set forth therein (all the foregoing being hereinafter called the 
"Obligations").

     3. INTEREST ON THE BANK BONDS. If, while this Pledge Agreement is in 
effect, the Pledgor shall become entitled to receive or shall receive any 
interest payment in respect of the Bank Bonds, the Pledgor agrees to accept 
the same as Pledgee's agent and to hold the same in trust on behalf of the 
Pledgee and to deliver the same forthwith to the Pledgee to be applied in 
accordance with Section 7 below. All sums of money so paid in respect of the 
Bank Bonds which are received by the Pledgor and paid to the Pledgee shall be 
credited against the obligation of the Pledgor to pay interest to the Pledgee 
as set forth in the Reimbursement Agreement.

     4. COLLATERAL. All property at any time pledged to the Banks hereunder 
and all income therefrom and proceeds thereof, are herein collectively 
sometimes called the "Collateral."

     5. RELEASE OF BANK BONDS. If the Pledgor makes or causes to be made to 
the Pledgee a repayment in respect of its reimbursement obligation under 
Section 2.2(ii) of the Reimbursement Agreement pursuant to Section 2.5 
thereof, then the Pledgee shall release from the lien of this Pledge 
Agreement the principal amount of the Bank Bonds which is equal to either the 
principal component of the drawing made under the Letter of Credit, as 
provided in Section 2.5 of the Reimbursement Agreement; PROVIDED, HOWEVER, 
that the Bank Bonds shall not be delivered or released from the lien of this 
Pledge Agreement prior to the receipt of written notice by the holder of such 
Bank Bonds of reinstatement by the Pledgee of its obligations to honor 
drawing under the Letter of Credit with respect to such Bank Bonds.

                                      2

<PAGE>

     6. RIGHTS OF THE PLEDGEE. The Pledgee shall not be liable for failure to 
collect or realize upon the Collateral or any collateral security or guaranty 
therefor, or any part thereof, or for any delay in so doing nor shall the 
Pledgee be under any obligation to take any action whatsoever with regard 
thereto. If an Event of Default has occurred and is continuing under the 
Reimbursement Agreement, the Pledgee may, with any notice by the Pledgee as 
provided for in the Reimbursement Agreement, exercise all rights, privileges 
or options pertaining to any Bank Bonds as if it were the absolute owner 
thereof, upon such terms and conditions as it may determine, all without 
liability except to account for property actually received by it, but the 
Pledgee shall have no duty to exercise any of the aforesaid rights, 
privileges or options and shall not be responsible for any failure to do so 
or delay in so doing.

     7. REMEDIES. In the event that any portion of the Obligations has been 
declared due and payable pursuant to the Reimbursement Agreement as the 
result of an Event of Default under the Reimbursement Agreement, the Pledgee, 
without demand of performance or other demand, advertisement or notice of any 
kind (except the notice specified below of time and place of public or 
private sale) to or upon the Pledgor or any other person (all and each of 
which demands, advertisements and/or notices are hereby expressly waived), 
may forthwith collect, receive, appropriate and realize upon the Collateral, 
or any part thereof, and/or may forthwith sell, assign, give options or 
options to purchase, contract to sell or otherwise dispose of and deliver 
said Collateral, or any part thereof, in one or more parcels at public or 
private sale or sales, at any exchange, broker's board or at the Pledgee's 
office or elsewhere upon such terms and conditions as it may deem advisable 
and at such prices as it may deem commercially reasonable, for cash or on 
credit or for future delivery without assumption of any credit risk, with the 
right to the Pledgee, upon any such sale or sales, public or private, to 
purchase the whole or any part of said Collateral so sold, free of any right 
or equity of redemption in the Pledgor, which right or equity is hereby 
expressly waived or released. The Pledgee shall apply the net proceeds of any 
such collection, recovery, receipt, appropriation, realization or sale, after 
deducting all reasonable costs and expenses of every kind incurred therein or 
incidental to the care, safekeeping or otherwise of any and all of the 
Collateral or in any way relating to the rights of the Pledgee hereunder, 
including reasonable attorneys fees and legal expenses, to the payment in 
whole or in part of the Obligations, the Pledgor remaining liable for any 
deficiency remaining unpaid after such application, and only after so 
applying such net proceeds and after the payment by the Pledgee of any other 
amount required to be paid by any provision of law, including, without 
limitation Section 9504(1)(c) of the California Uniform Commercial Code, need 
the Pledgee account for the surplus, if any, to the Pledgor. The Pledgor 
agrees that the Pledgee need not give more than ten days' notice of the time 
and place of any public sale or of the time after which a private sale or 
other intended disposition is to take place and that such notice is 
reasonable notification of such matters. No notification need be given to the 
Pledgor if it has signed after default a statement renouncing or modifying 
any right to notification of sale or other intended disposition. In addition 
to the rights and remedies granted to it in this Pledge Agreement and in any 
other instrument or agreement securing, evidencing or relating to any of the 
Obligations, the Pledgee shall have all the rights and remedies of a secured

                                      3

<PAGE>

party under the Uniform Commercial Code of the State of California. The 
Pledgor further agrees to waive and agrees not to assert any rights or 
privileges which it may acquire under Section 9112 of the Uniform Commercial 
Code and the Pledgor shall be liable for the deficiency if the proceeds of 
any sale or other disposition of the Collateral are insufficient to pay all 
amounts to which the Pledgee is entitled, and the fees of any attorneys 
employed by the Banks to collect such deficiency. Notwithstanding anything to 
the contrary in this Section 7, the Pledgee shall not sell or otherwise 
dispose of Bank Bonds pursuant to this Section 7 for a purchase price which 
is less than the par value of such Bank Bonds without obtaining the prior 
consent of the Pledgor.

     8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR. The Pledgor 
represents and warrants that (a)(i) on the date of delivery to the Pledgee, 
or to the Trustee for the account of the Pledgee, of any Bank Bonds or (ii) 
in the event 100% of the Bonds are held by a depository in a book-entry only 
system, on the date of transfer by the Trustee or the depository to the 
account of the Pledgee or to the account of the Pledgor, expressly subject to 
the rights of the Pledgee hereunder, of any Bank Bonds, none of the Issuer, 
the Remarketing Agent or the Trustee will have any right, title or interest 
in or to the Bank Bonds which would adversely affect the Pledgee; (b) on the 
date of delivery to the Pledgee or to the Trustee for the account of the 
Pledgee of any Bank Bonds or, in the event of 100% of the Bonds are held by a 
depository in a book-entry only system, on the date of transfer by the 
Trustee or the depository to the account of the Pledgee or the Pledgor, 
expressly subject to the rights of the Pledgee hereunder, of any Bank Bonds, 
it will have full power, authority and legal right to pledge all of its 
right, title and interest in and to the Bank Bonds pursuant to this Pledge 
Agreement; (c) this Pledge Agreement has been duly authorized, executed and 
delivered by the Pledgor and constitutes a legal, valid and binding 
obligation of the Pledgor, enforceable in accordance with its terms except as 
such enforceability may be limited by insolvency, reorganization, moratorium 
or other similar laws relating to or limiting creditor's rights; (d) no 
consent of any other party (including, without limitation, creditors of the 
Pledgor) and no consent, license, permit, approval or authorization of, 
exemption by, notice or report to, or registration, filing or declaration 
with, any governmental authority, domestic or foreign, is required to be 
obtained by the Pledgor in connection with the execution, delivery or 
performance of this Pledge Agreement; (e) the execution, delivery and 
performance of this Pledge Agreement will not violate any provision of any 
applicable law or regulation or of any order, judgment, writ, award or decree 
of any court, arbitrator or governmental authority, domestic or foreign, or 
of any material mortgage, indenture, lease, contract, or other agreement, 
instrument or undertaking to which the Pledgor is a party or which purports 
to be binding upon the Pledgor or upon its assets and will not result in the 
creation or imposition of any lien, charge or encumbrance on or security 
interest in any of the assets of the Pledgor except as contemplated by this 
Pledge Agreement; and (f) the pledge, assignment and delivery of such Bank 
Bonds pursuant to this Pledge Agreement will create a valid first lien on and 
a security interest in, all right, title or interest of the Pledgor in or to 
such Bank Bonds, and the proceeds thereof, subject to no prior pledge, lien, 
mortgage, hypothecation, security interest, charge, option or encumbrance or 
to any agreement purporting to grant to any third party a security interest 
in the property or assets of the 

                                      4

<PAGE>

Pledgor which would include the Bank Bonds. The Pledgor covenants and agrees 
that it will defend the Pledgee's right, title and security interest in and 
to the Bank Bonds and the proceeds thereof against the claims and demands of 
all persons whomsoever; and covenants and agrees that it will have like title 
to and right to pledge any other property at any time hereafter pledged to 
the Pledgee as Collateral hereunder and will likewise defend the Bank's right 
thereto and security interest therein.

    9. NO DISPOSITION, ETC.  Without the prior written consent of the 
Pledgee, the Pledgor agrees that it will not sell, assign, transfer, exchange 
or otherwise dispose of, or grant any option with respect to, the Collateral, 
nor will it create, incur or permit to exist any pledge, lien, mortgage, 
hypothecation, security interest, charge, option or any other encumbrance 
with respect to any of the Collateral, or any interest therein, or any 
proceeds thereof, except for the lien and security interest provided for by 
this Pledge Agreement.

    10. SALE OF COLLATERAL. (a) The Pledgor recognizes that the the Pledgee 
may be unable to effect a public sale of any or all of the Bank Bonds by 
reason of certain prohibitions contained in the Securities Act of 1933, as 
amended (the "Securities Act"), and applicable state securities laws, but may 
be compelled to resort to one or more private sales thereof to a restricted 
group of purchasers who will be obliged to agree, among other things, to 
acquire such securities for their own account for investment and not with a 
view to the distribution or resale thereof. The Pledgor acknowledges and 
agrees that any such private sale may result in prices and other terms less 
favorable to the seller than if such sale were a public sale and, 
notwithstanding such circumstances, agrees that any such private sale shall 
be deemed to have been made in a commercially reasonable manner. The Pledgee 
shall be under no obligation to delay a sale of any of the Bank Bonds for the 
period of time necessary to permit the issuer of such securities to 
register such securities for public sale under the Securities Act, or under 
applicable state securities laws, even if the issuer would agree to do so.

    (b) The Pledgor further agrees to do or cause to be done all such other 
acts and things as may be necessary to make such sale or sales of any portion 
or all of the Bank Bonds valid and binding and in compliance with any and all 
applicable laws, regulations, orders, writs, injuctions, decrees or awards of 
any and all courts, arbitrators or governmental instrumentalities, domestic 
or foreign, having jurisdiction over any such sale or sales, all at the 
Pledgor's expense. The Pledgor further agrees that a  breach of any of the 
covenants contained in this paragraph 10 will cause irreparable injury to the 
Pledgee, that the Pledgee has no adequate remedy at law in respect of such 
breach and, as a consequence, agrees that each and every covenant contained 
in this paragraph shall be specifically enforceable against the Pledgor, and 
the Pledgor hereby waives and agrees not to assert any defenses against an 
action for specific performance of such covenants except for a defense that 
no Event of Default has occurred under the Reimbursement Agreement. The 
Pledgor further acknowledges the impossibility of ascertaining the amount of 
damages which would be suffered by the Pledgee by reason of a breach of any of 
such covenants and, consequently, agrees that, if the Pledgee shall sue for 
damages for breach, the Pledgor shall pay, as liquidated damages and not as a 
penalty, an amount

                                       5

<PAGE>

equal to the par value plus accrued premium, if any, and accrued interest on 
the Bank Bonds and all amounts payable pursuant to the Reimbursement 
Agreement on the date the Pledgee shall demand compliance with this paragraph.

    11. TRUSTEE AS AGENT. The parties hereto acknowledge that the Pledgee may 
designate the Trustee, or any successor trustee under the Indenture, its agent 
for the purpose of holding the Bank Bonds on behalf of the Pledgee and with 
such authority for taking actions with respect to the Bank Bonds as may be 
directed by, and on behalf of, the Pledgee.

    12. FURTHER ASSURANCES. The Pledgor agrees that at any time and from time 
to time upon the written request of the Pledgee, the Pledgor will execute and 
deliver such further documents and do such further acts and things as the 
Pledgee may reasonably request in order to effect the purposes of this Pledge 
Agreement.

    13. AMENDMENTS: ETC. No amendment, modification, termination or waiver 
of any provision of this Pledge Agreement, and no consent to any departure by 
Pledgor therefrom, shall in any event be effective unless the same shall be 
in writing and signed by the Pledgee and, in the case of any such amendment 
or modification, by Pledgor. Any such waiver or consent shall be effective 
only in the specific instance and for the specific purpose for which it was 
given.

    14. NOTICES. All notices and other communications provided for in 
hereunder shall be made and delivered as set forth in Section 7.2 of the 
Reimbursement Agreement.

    15. FAILURE OR INDULGENCE NOT WAIVER: REMEDIES CUMULATIVE. No failure or 
delay on the part of the Pledgee in the exercise of any power, right or 
privilege hereunder shall impair such power, right or privilege or be 
construed to be a waiver of any default or acquiescence therein, nor shall any 
single or partial exercise of any such power, right or privilege preclude 
any other or further exercise thereof or of any other power, right or 
privilege. All rights and remedies existing under this Pledge Agreement are 
cumulative to, and not exclusive of, any rights or remedies otherwise 
available.

    16. SEVERABILITY. In case any provision in or obligation under this 
Pledge Agreement shall be invalid, illegal or unenforceable in any 
jurisdiction, the validity, legality and enforceability of the remaining 
provisions or obligations, or of such provision or obligation in any other 
jurisdiction, shall not in any way be affected or impaired thereby.

    17. HEADINGS. Section and subsection headings in this Pledge Agreement 
are included herein for convenience of reference only and shall not 
constitute a part of this Pledge Agreement for any other purpose or be given 
any substantive effect.

    18. GOVERNING LAW: TERMS. THIS PLEDGE AGREEMENT AND THE RIGHTS AND 
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE

                                       6
<PAGE>

GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE 
INTERNAL LAWS OF THE STATE OF CALIFORNIA. WITHOUT REGARD TO CONFLICTS OF LAWS 
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION 
OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY 
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN 
THE STATE OF CALIFORNIA. Unless otherwise defined herein or in the 
Reimbursement Agreement, terms used in Article 8 and 9 of the Uniform 
Commercial Code in the State of California are used herein as therein defined.

    19. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL 
PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO THIS PLEDGE 
AGREEMENT MAY BE BROUGHT IN ANY FEDERAL OR STATE COURT OF COMPETENT 
JURISDICTION IN THE STATE OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF 
THIS PLEDGE AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS 
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF 
THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND 
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGEMENT RENDERED THEREBY IN 
CONNECTION WITH THIS PLEDGE AGREEMENT. The Pledgor hereby agrees that service 
of all process in any such proceeding in any such court may be made by 
registered or certified mail, return receipt requested, to the Pledgor at its 
address provided in Section 7.2 of the Reimbursement Agreement, such service 
being hereby acknowledged by the Pledgor to be sufficient for personal 
jurisdiction in any action against the Pledgor in any such court and to be 
otherwise effective and binding service in every respect. Nothing herein 
shall affect the right to serve process in any other manner permitted by law 
or shall limit the right of the Pledgee to bring proceedings against the 
Pledgor in the courts of any other jurisdiction.

    20. WAIVER OF JURY TRIAL. THE PLEDGOR AND THE PLEDGEE HEREBY AGREE TO 
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION 
BASED UPON OR ARISING OUT OF THIS PLEDGE AGREEMENT. The scope of this waiver 
is intended to be all-encompassing of any and all disputes that may be filed 
in any court and that relate to the subject matter of this transaction, 
including without limitation contract claims, tort claims, breach of duty 
claims, and all other common law and statutory claims. The Pledgor and the 
Pledgee each acknowledge that this waiver is a material inducement for the 
Pledgor and the Pledgee to enter into a business relationship, that the 
Pledgor and the Pledgee have already relied on this waiver in entering into 
this Pledge Agreement and that each will continue to rely on this waiver in 
their related future dealings. The Pledgor and the Pledgee further warrant 
and represent that each has reviewed this waiver with its legal counsel, and 
that each knowingly and voluntarily waive its jury trial rights following 
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT 
IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING.

                                       7


<PAGE>


(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS 
SECTION 20 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL 
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO 
THIS PLEDGE AGREEMENT. In the event of litigation, this Pledge Agreement may 
be filed as a written consent to a trial by the court.

      21.  COUNTERPARTS.  This Pledge Agreement may be executed in one or 
more counterparts and by different parties hereto in separate counterparts, 
each of which when so executed and delivered shall be deemed an original, but 
all such counterparts together shall constitute but one and the same 
instrument; signature pages may be detached from multiple separate 
counterparts and attached to a single counterpart so that all signature 
pages are physically attached to the same document.



                [remainder of page intentionally left blank]



                                   8


<PAGE>



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



PLEDGOR:                    RYKOFF-SEXTON, INC.
                            as Pledgor



                            By: 
                                ---------------------------
                                 Title:

PLEDGEE:                   THE FIRST NATIONAL BANK OF
                           CHICAGO, as Pledgee



                            By: 
                                ---------------------------
                                 Title:





                           S-1

<PAGE>


                               Exhibit C



<PAGE>



                            CUSTODY AGREEMENT

      This CUSTODY AGREEMENT is made as of this 1st day of November, 1996, by 
and among Bankers Trust Company of California, N.A. (the "Custodian") and The 
First National Bank of Chicago ("FNBC").

                               RECITALS

      Pursuant to the terms and conditions set forth in the Reimbursement 
Agreement dated as of November 1, 1996 (the "Reimbursement Agreement") 
between FNBC and Rykoff-Sexton, Inc. (the "Company"), FNBC has agreed to 
issue its irrevocable Letter of Credit (as defined in the Reimbursement 
Agreement) for the account of the Company in connection with the La Mirada 
Industrial Development Authority's Taxable Variable Rate Demand Industrial 
Development Revenue Bonds (Rykoff-Sexton, Inc. Project) Series 1996 (the 
"Bonds"). All other terms used herein which are defined in the  Reimbursement 
Agreement and not defined herein shall have the same meanings assigned them in 
the Reimbursement Agreement unless the context otherwise requires.

      As security for payment of the obligations of the Company owed to the 
FNBC under the Reimbursement Agreement, including those in respect of 
Purchase Drawings, the Corporation has agreed to pledge to FNBC and grant to 
FNBC a security interest in, its right, title and interest in and to Bonds 
delivered to or held for the account of FNBC in connection with such drawings 
(the "Bank Bonds") pursuant to the Pledge Agreement dated as of November 1, 
1996 among the Company and the FNBC (the "Pledge Agreement").

      FNBC wishes to appoint the Custodian as its agent to take possession 
and hold the Bank Bonds on behalf of and for the benefit of FNBC, on the 
terms and under the conditions set forth in this Custody Agreement and the 
Custodian is willing to do so.

      Therefore, in consideration of mutual covenants recited herein, it is 
hereby agreed as follows:

      1.  FNBC hereby appoints the Custodian as its agent and bailee for the 
   purpose of receiving Bank Bonds from Bankers Trust Company of California, 
   N.A., as Trustee and holding such Bank Bonds for and on behalf of FNBC. The
   Custodian hereby agrees to hold the Bank Bonds for such purpose, as the 
   FNBC's agent and bailee.

      2.  Except at the written direction of FNBC, the Custodian shall not 
   pledge, hypothecate, transfer or release possession of any Bank Bonds held by
   the Custodian on behalf of FNBC to any person or in any manner not in 
   accordance

                                 1

<PAGE> 


   with this Custody Agreement and shall not enter into any other agreement 
   regarding possession of the Bank Bonds without the prior written consent of
   FNBC.

      3.  This Custody Agreement cannot be amended or modified except in a 
   writing signed by FNBC and the Custodian.

      4.  This Custody Agreement shall inure to the benefit of and shall be 
   binding upon the Custodian and FNBC and their respective successors and 
   assigns.

      5.  Upon written notice to FNBC and release to FNBC or its designee of 
   any Bank Bonds then held by the Custodian pursuant to this Custody Agreement
   the Custodian shall have the right to terminate its obligations under this 
   Custody Agreement. 

      6.  In acting under this Custody Agreement, the Custodian shall not be 
   liable to the Banks except for negligence or willful misconduct in the 
   performance of its obligations hereunder.

      7.  In acting under this Custody Agreement, the Custodian shall have no 
   duties or obligations other than as specifically set forth herein.

                
                  (Remainder of page intentionally left blank)


                                     2



<PAGE>

    IN WITNESS WHEREOF, the parties have hereto set their hands by their 
authorized representatives, all as of the date first above written.

                                       BANKERS TRUST COMPANY OF
                                       CALIFORNIA, N.A., as Custodian

                                       By:
                                          ---------------------------

                                       THE FIRST NATIONAL BANK OF
                                       CHICAGO

                                       By:
                                          ---------------------------





                                      S-1 

<PAGE>

                                   Exhibit D

<PAGE>

                                 [LETTERHEAD]

                               November 20, 1996

The First National Bank of Chicago,
  as issuer under the Reimbursement
  Agreement referred to below
One First National Plaza
Chicago, Illinois 60670

    Re:  Reimbursement Agreement between Rykoff-Sexton, Inc. and
         The First National Bank and Trust Company of Chicago
         -------------------------------------------------------

Ladies and Gentlemen:

         We have acted as special counsel to Rykoff-Sexton, Inc., a Delaware 
corporation (the "Company"), in connection with the Reimbursement Agreement 
dated as of November 1, 1996 (the "Reimbursement Agreement"), between the 
Company and The First National Bank of Chicago (the "Bank"). This opinion is 
delivered to you under Section 3.1(d) of the Reimbursement Agreement. 
Capitalized terms used in this opinion and not otherwise defined have the 
meanings assigned to such terms in the Reimbursement Agreement; PROVIDED, 
HOWEVER, that the term "Trust Estate" has the meaning assigned to such term 
in the Deed of Trust (as defined below).

         With your permission, all assumptions and statements of reliance in 
this opinion have been made without any independent investigation or 
verification on our part except to the extent otherwise expressly stated, and 
we express no opinion with respect to the subject matter or accuracy of such 
assumptions or items upon which we have relied; PROVIDED, HOWEVER, that 
although we have made no independent investigation or inquiry, we have no 
reason to believe that any of such assumption is untrue or that such reliance 
is unfounded.

         In connection with the opinions expressed below, we have (i) 
investigated such questions of law, (ii) examined originals or certified, 
conformed or reproduction copies of such corporate agreements, instruments, 
documents and records of the Company, such certificates of public officials 
and such other documents as we have deemed necessary or appropriate for the 
purposes of this opinion and (iii) obtained such information from officers 
and representatives of the Company as we have deemed necessary or appropriate 
for the purposes of this opinion. We

<PAGE>

November 20, 1996
Page 2

advise you that this opinion is based upon a consideration of legal principles 
that would be applicable in judicial proceedings. We have examined, among 
other documents, the following:

         (A) an executed copy of the Reimbursement Agreement;

         (B) an executed copy of the Pledge Agreement dated as of November 1, 
    1996, made by the Company in favor of the Bank;

         (C) an executed copy of the Deed of Trust, Assignment of Rents and 
    Fixture Filing dated as of November 1, 1996 (the "Deed of Trust"), made 
    by the Company in favor of the Bank;

         (D) an executed copy of the Security Agreement dated as of November 
    1, 1996, made by the Company in favor of the Bank;

         (E) an executed copy of the Environmental Indemnity dated as of 
    November 1, 1996, made by the Company in favor of the Bank;

         (F) the Officer's Certificate of the Company delivered to us in 
    connection with this opinion, a copy of which is attached as Annex A (the 
    "Officer's Certificate"); and

         (G) unfiled copies of the financing statements naming the Company as 
    debtor and the Bank as secured party (collectively, the "Financing 
    Statements"), which Financing Statements we understand will be filed in 
    the filing offices of the Secretary of State for the States of 
    California, Delaware and Illinois.

The documents referred to in items (B) through (D) above are referred to in 
this opinion collectively as the "Collateral Documents" and the documents 
referred to in items (A) through (E) above are referred to individually as a 
"Reviewed Document" and collectively as the "Reviewed Documents".

         In all such examinations, we have assumed the legal capacity of all 
natural persons executing documents, the genuineness of all signatures, the 
authenticity of original and certified documents and the conformity to 
original or certified copies of all copies submitted to us as conformed or 
reproduction copies. As to various questions of fact relevant to the opinions 
expressed in this opinion, we have relied upon, and assume the


<PAGE>
November 20, 1996
Page 3



accuracy of, representations and warranties contained in the Reviewed 
Documents and certificates and written statements and other information of or 
from representatives of the Company and others and assume compliance on the 
part of all parties to the Reviewed Documents with their covenants and 
agreements contained in the Reviewed Documents. With respect to the opinions 
expressed in clause (iii) (A) of paragraph 2 below, our opinions are limited 
to our review of only those laws and regulations that, in our experience, 
could reasonably be expected to be applicable to transactions of the type 
contemplated by the Reviewed Documents.

          To the extent it may be relevant to the opinions expressed in this 
opinion, we have assumed that the parties to the Reviewed Documents other 
than the Company have the power to enter into and perform such documents and 
to consummate the transactions contemplated by the Reviewed Documents and 
that such documents have been duly authorized, executed and delivered by, and 
constitute legal, valid and binding obligations of, such parties.

          Based upon the foregoing, and subject to the limitations, 
qualifications and assumptions set forth in this opinion, we are of the 
opinion that:

          1.  The Company has executed and delivered each Reviewed Document 
to which it is a party and the Financing Statements. Each Reviewed Document 
constitutes an enforceable obligation of the Company.

          2.  The execution and delivery by the Company of each of the 
Reviewed Documents to which it is a party, the performance by the Company of 
its obligations under such Reviewed Documents and the granting by the Company 
of the security interests to be granted by it under the Collateral Documents 
(i) have been authorized by all necessary corporate action by the Company 
(including the execution and delivery of the Financing Statements), (ii) do 
not contravene any provision of the certificate of incorporation or by-laws 
of the Company and (iii) do not violate (A) any present law or present 
regulation of any governmental agency or authority applicable to the Company 
or its property, (B) any material agreement binding upon the Company or its 
property (this opinion being limited to those agreements that have been 
identified to us as material in the Officer's Certificate and being further 
limited in that we express no opinion with respect to any violation arising 
under or based upon any covenant of a financial or numerical nature or 
requiring computation) or (C) any judicial or arbitral decree or order of a

<PAGE>
November 20, 1996
Page 4



material nature binding upon the Company or its property (this opinion being 
limited to those decrees and orders that have been identified to us in the 
Officer's Certificate).

          3.  The execution and delivery by the Company of each of the 
Reviewed Documents to which it is a party, the performance by the Company of 
its obligations under such Reviewed Documents and the granting by the Company 
of the security interests to be granted by it under the Collateral Documents 
do not require under present law any filing or registration by the Company 
with, or approval or consent of, any governmental agency or authority of the 
State of California or of the United States of America that has not been made 
or obtained except (i) those required in the ordinary course of business in 
connection with the performance by the Company of its obligations under 
certain covenants contained in the Reviewed Documents to which it is a party, 
(ii) to perfect the security interests granted under the Collateral Documents 
and (iii) under securities and other laws that may be applicable to the 
disposition of any collateral subject to such laws.

          4.  The Deed of Trust, when accepted for recordation by the Los 
Angeles County Recorder's Office, creates a valid transfer of the Trust 
Estate described in the Deed of Trust that constitutes real property or 
fixtures under California law in favor of the trustee named in the Deed of 
Trust for the benefit of the Bank to secure the obligations described in the 
Deed of Trust.

          The opinions set forth above are subject to the following 
qualifications:

          (A)  Our opinions above as to enforceability are subject to:

          (i)  applicable bankruptcy, insolvency, reorganization, voidable 
     preference, fraudulent transfer, moratorium or similar laws, and related 
     judicial doctrines, affecting creditors' rights and remedies generally, 
     as in effect from time to time;

          (ii)  general principles of equity (including, without limitation, 
     standards of materiality, good faith, fair dealing and reasonableness, 
     equitable defenses and limits on the availability of equitable remedies, 
     including, without limitation, the remedies of specific performance and 
     nonjudicial foreclosure), whether such principles are considered in a 
     proceeding at law or in equity; and

<PAGE>
November 20, 1996
Page 5



          (iii)  the qualification that certain provisions of the Reviewed 
     Documents may be invalid, not binding or unenforceable in whole or in 
     part under the laws (including judicial decisions) of the State of 
     California or the United States of America, but the inclusion of such 
     provisions does not affect the validity, binding effect or 
     enforceability as against the Company of the Reviewed Documents as a 
     whole, and the Reviewed Documents contain provisions adequate to permit 
     enforcement of the obligations created thereby, subject to the other 
     qualifications contained in this letter.

          (B)  We express no opinion as to the enforceability of any 
provision in the Reviewed Documents:

          (i)  permitting the Bank or any other person or entity to sell or 
     otherwise dispose of, or purchase, any collateral subject thereto, or 
     enforce any other right or remedy thereunder (including without 
     limitation any self-help or taking-possession remedy), except in 
     compliance with the Uniform Commercial Code of the State of California 
     ("UCC") and other applicable federal, state, local and foreign laws;

          (ii) establishing standards for the performance of the obligations 
     of good faith, diligence, reasonableness and care prescribed by the UCC 
     or of any of the obligations referred to in Section 9501(3) of the UCC;

          (iii)  establishing standards for compliance with the requirements 
     of Section 9501(4) of the UCC;

          (iv)  relating to indemnification, contribution or exculpation in 
     connection with violations of securities laws or statutory duties or 
     public policy;

          (v)  purporting to, either directly or indirectly, indemnify 
     against the consequences of willful, reckless or unlawful acts or gross 
     negligence of the indemnified party;

          (vi)  relating to exculpation of any party in connection with its 
     own negligence that a court would determine in the circumstances under 
     applicable law to be unfair or insufficiently explicit;

          (vii)  providing that the Bank or any other person or entity may 
     exercise set-off rights other than in accordance with and pursuant to 
     applicable law;
<PAGE>

November 20, 1996
Page 6

          (viii) relating to forum selection to the extent the forum is a 
     federal court;

          (ix) relating to choice of governing law;

          (x)  relating to forum selection to the extent that any relevant 
     action or proceeding does not arise out of or relate to such Reviewed 
     Document or to the extent that the enforceability of any such provision 
     is to be determined by any court other than a court of the State of 
     California or to the extent such choice of law may be limited or 
     affected by receivership, conservatorship or other similar laws and 
     regulations applicable to federally insured depository institutions;

          (xi) waiving any rights to trial by jury;

          (xii) requiring or relating to payment of interest (or discount or 
     equivalent amounts) or any premium or "make whole" payment at a rate or 
     in an amount, after the maturity or after or upon acceleration of the 
     respective liabilities evidenced or secured thereby, or upon prepayment, 
     that a court would determine in the circumstances under applicable law 
     to be commercially unreasonable or a penalty or a forfeiture;

          (xiii) creating a trust or other fiduciary relationship;

          (xiv) specifying that provisions of such Reviewed Documents may be 
     waived only in writing, to the extent that an oral agreement or an 
     implied agreement by trade practice or course of conduct has been 
     created that modifies any provision of such Reviewed Documents;

          (xv) giving any person or entity the power to accelerate 
     obligations without any notice to the obligor;

          (xvi) limiting the ability of the Company or any other person or 
     entity to transfer voluntarily or involuntarily (by way of sale, 
     creation of a security interest, attachment, levy, garnishment or other 
     judicial process) its right, title or interest in or to any collateral 
     subject thereto or other property, except to the extent such provisions 
     are made enforceable pursuant to the Garn-St. Germain Depository 
     Institutions Act of 1982 (12 U.S.C. Section 1701j-3);


<PAGE>

November 20, 1996
Page 7

          (xvii) waiving any statute of limitations;

          (xviii) relating to the enforceability of any provision or 
     accumulation of provisions that may be deemed to be unconscionable;

          (xix)  relating to any tax laws;

          (xx)  establishing evidentiary standards; or

          (xxi) restricting the Company's access to legal or equitable 
     remedies.

          (C)  Our opinions as to enforceability are subject to the effect of 
generally applicable rules of law that:

          (i)  provide that forum selection clauses in contracts are not 
     necessarily binding on the court(s) in the forum selected;

          (ii) limit the availability of a remedy under certain circumstances 
     when another remedy has been elected;

          (iii) may, where less than all of a contract may be invalid, not 
     binding or unenforceable, limit the validity, binding effect and 
     enforceability of the balance of the contract to circumstances in which 
     the invalid, not binding or unenforceable portion is not an essential 
     part of the agreed exchange;

          (iv) govern and afford judicial discretion regarding the 
     determination of damages and entitlement to attorneys' fees and other 
     costs; and

          (v)  may permit a party that has materially failed to render or 
     offer performance required by the contract to cure that failure unless 
     (a) permitting a cure would unreasonably hinder the aggrieved party from 
     making substitute arrangements for performance or (b) it was important 
     in the circumstances to the aggrieved party that performance occur by 
     the date stated in the contract.

          (D)  We express no opinion as to the validity, binding effect or 
enforceability of any purported waiver, release, variation, disclaimer, 
consent or other agreement to similar effect (all of the foregoing, 
collectively, a "Waiver") by the Company under any of the Reviewed Documents 
to the extent limited by Sections 1102(3) or 9501(3) of the UCC or other 
provisions of



<PAGE>

November 20, 1996
Page 8

applicable law (including judicial decisions), or to the extent that such a 
Waiver applies to a right, claim, duty, defense or ground for discharge 
otherwise existing or occurring as a matter of law (including judicial 
decisions), except to the extent that such a Waiver is effective under and is 
not prohibited by or void, invalid or unenforceable under the UCC or other 
provisions of applicable law (including judicial decisions).

          (E)  We express no opinion as to the perfection of the security 
interests granted under the Reviewed Documents.

          (F)  Our security interest opinions are subject to the effect of 
Sections 9307, 9308, 9309, 9314 and 9315 of the UCC on such opinions and do 
not apply to any collateral constituting "consumer goods" or "farm products."

          (G)  We have assumed, with your permission, that the Bank is either 
(i) a foreign (other nation) bank or a foreign (other state) bank which meets 
the requirements of Section 1716 of the California Financial Code or (ii) a 
bank created and operating under and pursuant to the laws of the State of 
California or of the United States of America within the meaning of Section 1 
of Article XV of the Constitution of the State of California.

          (H)  We express no opinion as to (i) the sufficiency or accuracy of 
the descriptions of the property described in the Collateral Documents, (ii) 
the state of title to any real or personal property which may be the subject 
of the Collateral Documents (rather, we assume title for the purpose of the 
opinion expressed in paragraph 4 above) or (iii) the priority or the 
perfection of any lien or security interest created, or purported to be 
created, by the Collateral Documents.

          (I)  We have not been requested to express and with your permission 
we do not express an opinion as to the application of, and our opinions above 
are subject to the effect, if any, of, any applicable fraudulent conveyance, 
fraudulent transfer, fraudulent obligation or preferential transfer law and 
any law governing the liquidation or dissolution of, or the distribution of 
assets of, any person or entity.

          (J)  We express no opinion with respect to whether or not the 
property subject to the Deed of Trust (a) is zoned for any particular use, 
(b) complies with applicable law pertaining to environmental and land use 
regulation (including, without limitation, the California Environmental 
Quality Act, as amended) or (c) complies with laws pertaining to land 
division (including,


<PAGE>


November 20, 1996
Page 9


without limitation, the California Subdivision Map Act), and we qualify our 
opinions above to the extent of non-compliance with any of the same.

          (K)   We express no opinion with respect to the validity, binding 
effect or enforceability of any environmental indemnity except to the extent 
such indemnity, and the enforcement of such indemnity, conforms with Sections 
726.5 and 736 of the Civil Code of California, subject to the qualifications 
set forth in this opinion.

          (L)   We assume the Deed of Trust is not granted for purposes of 
construction of improvements on the real property described in the Deed of 
Trust.

          (M)   We assume the Bank in the enforcement of any of their security 
interests will conform with the applicable requirements of California law 
including, without limitation, the obligations to exercise good faith, fair 
dealing and commercial reasonableness.

          (N)   The opinions expressed above are subject to the assumption 
that (i) the Company is a corporation duly incorporated, validly existing 
and in good standing under the laws of its state of incorporation and (ii) the 
Company has the corporate power and authority to execute, deliver and perform 
its obligations under the Reviewed Documents.

          (O)   The opinions expressed in this opinion are limited to the 
federal laws of the United States of America and the laws of the State of 
California.

          (P)   We note (and you should be aware) that any obligation secured 
in whole or in part by California real property is subject to application of 
various statutes protecting the interests of mortgagors and restricting the 
procedures and means of enforcement employed by mortgagees which enforce such 
obligations. In particular:

          (i)   The exercise of the power of sale in a deed of trust is a 
matter of contract and, as such, may be enforced by the parties in accordance 
with its terms, subject to applicable law. If there is a dispute over the 
existence of a default or the amount due and payable which results in the 
issuance of a temporary restraining order or preliminary injunction, or if 
the default involves a breach of a non-monetary obligation, you may have no 
practical alternative other than to pursue a judicial action for foreclosure.

<PAGE>


November 20, 1996
Page 10


          (ii)  Section 726 of the California Code of Civil Procedure 
("Section 726") and Subdivision 9501(4) of the California Uniform Commercial 
Code contain provisions relating to the enforcement of obligations secured by 
real or real and personal property, including provisions that relate to and 
specify the procedures for the sale of encumbered property, the application 
of proceeds, the calculation, availability and procedures pertaining to the 
rendition in certain cases of a deficiency judgment and other related 
matters. We advise you that in an action or proceeding to recover on a debt 
or other obligation secured by real or real and personal property, the debtor 
may require the creditor to exhaust all of its security before a personal 
judgment may be obtained against the debtor for a deficiency. We also advise 
you that failure to comply with those provisions (including any attempt to 
exercise any statutory, equitable or contractual right of set-off with 
respect to any funds or other property of the Company that may be deposited 
with the Bank from time to time with respect to the obligations secured by 
the Deed of Trust) may result in the loss of the collateral encumbered by a 
deed of trust or mortgage on real property. SEE, e.g. WALKER v. COMMUNITY 
BANK, 10 Cal. 3d 729, 111 Cal. Rptr. 897 (1974); BANK OF AMERICA v. DAILY, 
152 Cal. App. 3d 767, 199 Cal. Rptr. 557 (1984) IN RE KRISTAL, 37 B.R. 659 ( 
Bankr. App. 1984), aff'd, 758 F.2d 454 (9th Cir. 1985); SECURITY PACIFIC 
NATIONAL BANK v. WOZAB, 51 Cal. 3d 991, 275 Cal. Rptr 201 (1990);  O'NEIL v. 
GENERAL SECURITY CORP., 4 Cal. App. 4th 587, 5 Cal. Rptr. 2d 712 (1992); SHIN 
v. SUPERIOR COURT, 26 Cal. App. 4th 542, 31 Cal. Rptr. 2d 587, modified, 
reh'g denied 26 Cal. App. 4th 1788a (1994). We further advise you that 
although no California court, to our knowledge, has so far expressly held 
that violation of Section 726 would result in extinguishment of the secured 
obligation, several decisions have raised the possibility that following a 
violation of  Section 726 the secured obligation itself may not be 
enforceable. SEE , E.G., WOZAB (last paragraph of majority opinion) and the 
result in DAILY.

          (iii) Section 580d of the California Code of Civil Procedure 
provides that no deficiency judgment shall be rendered under California law 
upon an obligation secured by a deed of trust or mortgage on real property 
after sale of the real property under the power of sale contained in such 
deed of trust or mortgage.

          (iv)  The provisions of Sections 726, 580a and 580d of the 
California Code of Civil Procedure and Section 2924 of

<PAGE>


November 20, 1996
Page 11


the California Civil Code have been held by courts in California to be imbued 
with various public purposes. Devices that have the substantive effect of 
circumventing such public purposes may be held to be invalid as against 
public policy notwithstanding attempted express or implied waivers obtained 
from a borrower contemporaneously with the making of or renewing a loan.

          (v)   Section 2924c of the California Civil Code provides that 
whenever the maturity of an obligation secured by a deed of trust or mortgage 
on real property is accelerated by reason of a default in the payment of 
interest or in the payment of any installment of principal or other sums 
secured thereby, or by reason of failure of the trustor or mortgagor to pay 
taxes, assessments, or insurance premiums, the trustor or mortgagor and 
certain other entitled persons have the right, to be exercised at any time 
within the reinstatement period described in such Section, to cure such 
default by paying the entire amount then due (including certain reasonable 
costs and expenses incurred in enforcing such obligations but excluding any 
principal amount that would not then be due had no default occurred) and 
thereby cure the default and reinstate such deed of trust or mortgage and the 
obligations secured thereby to the same effect as if no such acceleration had 
occurred. If the power of sale in the deed of trust or mortgage is not to be 
exercised, such reinstatement right may be exercised at any time prior to 
entry of the decree of foreclosure.

          (vi)  Our opinions are subject to the effect of provisions of 
California law that grant certain redemption rights during certain times to 
persons having an interest in property subject to a lien and which prevent the 
parties to the contract from restraining the right of redemption from a lien, 
including, without limitation, California Civil Code Sections 2889 and 2903 
through 2905 and California Code of Civil Procedure Sections 729.010 through 
729.090.

          (vii) You should be aware that a California court may not strictly 
enforce certain covenants contained in the Deed of Trust if a determination 
is made that the security therefor has not been impaired, that the Bank has 
violated the implied covenant of good faith and fair dealing or that 
enforcement or acceleration would otherwise be unreasonable under the then 
existing circumstances. In addition, our opinion that the Reviewed Documents 
are enforceable does not mean that any particular legal or equitable remedy 
(such as
<PAGE>

November 20, 1996
Page 12

    specific enforcement, etc.) would necessarily be available or precluded, 
    even if specifically stated in such agreement to be available, or precluded,
    as the case may be. We do believe, however, that notwithstanding the 
    limitations expressed in the preceding sentence (but subject to the other 
    assumptions, qualifications and limitations set forth in this opinion), 
    (a) the laws and judicial decisions referred to in this paragraph do not 
    render the Reviewed Documents invalid, not binding or unenforceable as a 
    whole and (b) enforcement or acceleration of the liens and the security 
    interests evidenced by the Reviewed Documents would be available if an 
    event of default occurs as a result of a material breach of any obligation
    secured by the Reviewed Documents, which breach results in a material 
    impairment of the Bank's security interests, provided such enforcement or 
    acceleration is accomplished in accordance with California law.

          (viii)  We express no opinion as to the effect of any of the 
    foregoing on any existing obligation in favor of the Bank which may be 
    held to be also secured by the real property encumbered by virtue of the 
    Reviewed Documents.

    (Q)   The opinions expressed above are limited to the matters expressly 
set forth in this opinion, and no opinion is implied or may be inferred 
beyond the matters expressly stated in this opinion. The opinions expressed 
above are rendered as of the date of this letter and do not take into account 
any event, action, interpretation, change of law or similar item that occurs 
after the date of this letter; and we disclaim any undertaking to advise you 
of any changes which may be brought to our attention subsequent to the date 
of this letter.

    (R)   We express no opinion as to the enforceability of any provision in 
the Reviewed Documents relating to the appointment of a receiver, to the 
extent the appointment of a receiver is governed  by applicable statutory 
requirements, and to the extent such provision may not be in compliance with 
said statutory requirements.

    You understand that the scope of our representation does not include 
providing legal services with regard to the statutory and regulatory 
requirements and restrictions (including, without limitation, the policies, 
procedures, guidelines or practices of any federal or state regulator with 
respect thereto) applicable to or actually applied to financial institutions 
or, in their capacities as such, financial institution-affiliated parties. We 
express no opinion regarding

<PAGE>

November 20, 1996
Page 13


the compliance by the addressees of this opinion or the transactions 
contemplated by the Reviewed Documents with any such financial institutions 
regulatory matters.

    The opinions expressed in this opinion are solely for the benefit of the 
Bank and Caisse Nationale De Credit Agricole and may not be relied on in any 
manner or for any purpose by any other person or entity. The Bank is 
authorized to provide this opinion to a Participant; provided that such 
Participant is not entitled to rely on this opinion, even as of the date of 
this opinion, without our prior written consent.

                                       Very truly yours,



                                       /s/ Jones, Day, Reavis & Pogue
                                       -------------------------------
                                       JONES, DAY, REAVIS & POGUE

<PAGE>



                                     ANNEX A

                               RYKOFF-SEXTON, INC.
                              OFFICER'S CERTIFICATE

    Reference is made to the opinion letter of Jones, Day, Reavis & Pogue 
(the "Opinion") delivered in connection with the Reimbursement Agreement 
dated as of November 1, 1996 (the "Reimbursement Agreement"), between the 
Company and The First National Bank of Chicago. Capitalized terms used in 
this opinion and not otherwise defined have the meanings assigned such terms 
in the Opinion.

    The undersigned officer of the Company certifies, in connection with the 
Company's execution, delivery and performance of the Placement Agreement, 
that attached as SCHEDULE I to this certificate is a list of (i) material 
agreements binding upon the Company or its property and (ii) any judicial or 
arbitral decree or order of a material nature binding upon the Company or its 
property. A true and complete copy of each of the above material agreements, 
decrees and orders has previously been furnished to Jones, Day, Reavis & 
Pogue. No default or event of default or violation of any such agreements, 
decrees or orders exists or, immediately after giving effect to entry into the 
Reviewed Documents or consummation of any of the transactions contemplated by 
the Reviewed Documents, will exist. The agreements, decrees and orders listed 
on the attached SCHEDULE I and the agreements listed on Exhibit A to the 
opinion letter of Maslon Edelman Borman & Brand issued in connection with the 
Reimbursement Agreement constitute all material agreements binding upon the 
Company or its property.

    IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of 
November, 1996.

                                       RYKOFF-SEXTON, INC.


 
                                       By:  /s/ Thomas F. Flanagan
                                          --------------------------------
                                          Thomas F. Flanagan
                                          Assistant Secretary

<PAGE>

                                   EXHIBIT E












<PAGE> 

                            TO COME FROM JONES DAY



<PAGE>

                                    SCHEDULE I

1.   Rights Agreement dated as of December 8, 1986, between Chemical Bank, as 
     successor Rights Agent, and the Company, as amended by First Amendment 
     thereto dated as of October 5, 1989, Second Amendment thereto dated as 
     of December 4, 1995, and Third Amendment thereto dated as of January 31, 
     1996.

2.   Indenture dated as of November 1, 1993, between the Company and Norwest 
     Bank Minnesota, N.A., as trustee, [XXXXXXXXXX] the Company's 
     $130,000,000 8-7/8% Senior Subordinated [XXXXXXXXXX] due 2003, as 
     supplemented. 

3.   Stock Purchase Agreement dated September 8, [XXXXXXXXXX] Company, Tone 
     Brothers, Inc. and Burns Philp Food Inc.

4.   Agreement Not to Compete dated as of October [XXXXXXXXXX] between the 
     Company and Burns Philp Food Inc.

5.   Supply Agreement dated October 27, 1994, between the Company and Tone 
     Brothers, Inc.

6.   Supply Agreement dated October 27, 1994, between the Company and Burns 
     Philp Food Inc.

7.   Standstill Agreement among the Company and Merrill Lynch Capital 
     Partners, Inc., Merrill Lynch Capital Appreciation Partnership No. 
     B-XVIII, L.P.,Merrill Lynch Kecalp, L.P. 1994, ML Offshore Partnership 
     No. B-XVIII, ML IBK Positions, Inc., MLCP Associates L.P. No. II, MLCP 
     Associates L.P. No. IV, Merrill Lynch Kecalp L.P. 1991,, Merrill Lynch 
     Capital Appreciation Partnership No. XIII, L.P., ML Offshore Partnership 
     No. XIII, ML Employees LBO Partnership No. I, L.P., Merrill Lynch 
     Kecalp, L.P. 1987 and Merchant Banking L.P. No. II (collectively, the 
     "ML Entities").

8.   Registration Rights Agreement dated as of May 17, 1996, among the 
     Company, the ML Entities (other than Merrill Lynch Capital Partners, 
     Inc.), The Equitable Life Assurance Society of the United States, 
     Equitable Deal Flow Fund, L.P., Equitable Variable Life Insurance 
     Company and Frank H. Bevevino.

9.   The Agreement and Plan of Merger dated February 2, 1996, among the      
     Company, US Foodservice Inc., f/k/a USF Acquisition Corporation      
     ("USF"), and US Foodservice Inc. (predecessor corporation of USF).

10.  Tax Agreement among the Company and certain stockholders.

11.  Credit Agreement dated as of May 17, 1996, among the Company, Bank of 
     America National Trust and Savings Association, as administrative agent 
     (in such capacity, the "Administrative Agent"), The Chase Manhattan 
     Bank, N.A., as 

<PAGE>

     documentation agent, BA Securities, Inc., as co-arranger, Chase 
     Securities, Inc., as co-arranger, and the other financial institutions 
     party thereto, as lenders.

12.  Company Security Agreement dated as of May 17, 1996, made by the Company 
     in favor of the Administrative Agent.

13.  Company Note and Stock Pledge Agreement dated as of May 17, 1996, made 
     by the Company in favor of the Administrative Agent.

14.  Receivables Sale Agreement dated as of May 16, 1996, among the Company, 
     John Sexton & Co. ("Sexton"), Rykoff-Sexton Funding Corporation ("RSFC") 
     and the Company, as servicer.

15.  Pooling Agreement dated as of May 16, 1996, among RSFC, the Company, as 
     servicer, and Chemical Bank, as trustee (the "Trustee"), as supplemented 
     by Series 1996-1 Supplement to Pooling Agreement dated as of May 16, 
     1996.

16.  Servicing Agreement dated as of May 16, 1996, among RSFC, the Company, 
     as servicer, certain wholly-owned subsidiaries of the Company parties 
     thereto, as subservicers, and the Trustee.

17.  Security Agreement dated as of May 16, 1996, among the Company, Sexton 
     and RSFC.

18.  Receivables Sale Agreement dated as of November 15, 1996, among the 
     Company, Sexton, Biggers Brothers, Inc., White Swan, Inc., F.H. Bevevino 
     & Company, Inc., Roanoke Restaurant Service, Inc., King's Foodservice, 
     Inc., US Foodservice of Florida, Inc., US Foodservice of Atlanta, RS 
     Funding Inc. and US Foodservice Inc., as servicer.

19.  Common Stock Purchase Warrant dated May 17, 1996, issued by the 
     Company to Dresder Bank AG, New York Branch//Grand Cayman Branch.

20.  Common Stock Purchase Warrant dated May 17, 1996, issued by the Company to 
     The Nippon Credit Bank, Ltd.

21.  Common Stock Purchase Warrant dated as of May 17, 1996, issued by the 
     Company to Teachers Insurance and Annuity Association of America.

<PAGE>

                                  SCHEDULE I

                            CERTAIN EXISTING LIENS

Liens granted under the Receivables Sale Agreement dated as of November 15, 
1996, among the Company, Sexton, Biggers Brothers, Inc., White Swan, Inc., 
F.H. Bevevino & Company, Inc., Roanoke Restaurant Service, Inc., King's 
Foodservice, Inc., US Foodservice of Florida, Inc., US Foodservice of 
Atlanta, RS Funding Inc. and US Foodservice Inc., as servicer.

Those exceptions to title listed on Schedule B of Chicago Title Insurance 
Company's Commitment No. 006135273-x55 dated October 24, 1996 as items AG, G, 
I, J, K, L, M, N, O, P, Q, R and S.

<PAGE>

                                 SCHEDULE II

                            CERTAIN INDEBTEDNESS

Receivables Sale Agreement dated as of November 15, 1996, among the Company, 
Sexton, Biggers Brothers, Inc., White Swan, Inc., F.H. Bevevino & Company, 
Inc., Roanoke Restaurant Service, Inc., King's Foodservice, Inc., US 
Foodservice of Florida, Inc., US Foodservice of Atlanta, RS Funding Inc. and 
US Foodservice Inc., as servicer.

Under a guaranty dated as of October 30, 1996, the Company guaranteed the 
obligations of Biggers Brothers, Inc. under the Master Lease dated September 
1994, between Biggers Brothers, Inc. and First Fleet Corporation.

<PAGE>

                                 SCHEDULE III

                          CERTAIN REGULATORY MATTERS

                                     None.
<PAGE>

                                  SCHEDULE IV

(k) ENVIRONMENTAL MATTERS:

     (a) oils, or Hazardous Materials:

          (i)   Ongoing soil and ground water remediation at the Premises 
          due to the previous use of the site by Ford Motor Company as a 
          distribution facility for Ford automobiles. By letter dated 
          May 3, 1994 at the Los Angeles County Public Works, Waste Management
          Division, Ford Motor Company accepted financial responsibility for 
          such remediation. Pursuant to the Hazardous Materials Agreement 
          between the Catellus Development Corporation, Predelivery Service 
          Corporation (collectively, the "Seller") and the Company, dated 
          December 25, 1993, Seller has accepted the obligation to remove and 
          remediate all hazardous materials from the Premises and has agreed 
          to indemnify the Company for any and all liability relating to such 
          contamination.

          (ii)  Four underground storage tanks (containing diesel, new oil, 
          waste oil, and empty but used as neutralizing tank), five clarifiers,
          seven aboveground storage tanks (containing ammonia (3), diesel (2) 
          and water) and many containers of Hazardous Materials are located on 
          the Premises, most of which are associated with the on-site 
          maintenance and fueling of a fleet of trucks, and others which are 
          routine, janitorial and maintenance supplies, refrigeration, battery
          storage and charging. The operations of all appear to be in 
          compliance with Hazardous Materials Laws.

          (iii) During the normal course of the Company's business it 
          distributes products such as detergents and other cleaning materials
          used in restaurants, institutions, schools, colleges and the like 
          that are deemed to be Hazardous Materials and so labelled.

     (b) asbestos: Suspect asbestos-containing materials have been observed 
     in the roofing and flooring at the Premises. All are in good condition.

     (c) urea formaldehyde foam insulation: none.

     (d) pcbs: Based upon the age of the Project, the utility owned 
     transformers, lighting ballasts, hydraulic elevator and three hydraulic 
     trash compactors are not likely to contain polychlorinated biphenyls.



<PAGE>


                                  SCHEDULE V

               TO REIMBURSEMENT AGREEMENT OF RYKOFF-SEXTON, INC.

                                     ERISA

A.   LIST OF QUALIFIED PLANS REQUIRED BY SECTION 4.1(j)(i):

     1.   QUALIFIED PLANS SPONSORED ONLY BY THE COMPANY AND/OR JOHN 
          SEXTON & CO.:

          Rykoff-Sexton Value Plan (a savings plan and trust).

          Rykoff-Sexton, Inc. Pension Plan (a defined benefit pension plan 
          and trust).

          John Sexton & Co. Union Employee Pension Plan (a defined benefit 
          pension plan and trust).

          Rykoff-Sexton, Inc. U.S. Lace Paperworks Division Pension Plan (a 
          money purchase pension plan and trust, which has been terminated and
          liquidated in 1996).

     2.   QUALIFIED PLANS SPONSORED ONLY BY USF AND/OR ITS SUBSIDIARIES:

          US Foodservice Inc. 401(k) Retirement Savings Plan (a savings plan 
          and trust).

          Retirement Plan for White Swan, Inc. (a defined benefit pension 
          plan and trust "frozen" since 1993, without further accrual of 
          increased benefits)

          Liquidating Trust of Retirement Plan for Employees of Biggers 
          Brothers, Inc. (The related Plan was terminated more than five 
          years ago and all benefits were paid to participants. The few 
          remaining assets are not liquid, their proceeds will likely be 
          needed to pay expenses, and any net proceeds will revert to the 
          sponsoring employer.)

B.   LIST OF MULTIEMPLOYER PLANS REQUIRED BY SECTION 4.1(j)(i):

     1.   MULTIEMPLOYER PLANS TO WHICH THE COMPANY AND/OR JOHN SEXTON & CO. 
          CONTRIBUTE:

          Central States Southeast and Southwest Areas Pension Fund

          New York State Teamsters Conference Pension Fund

          Southern States Conference of Teamsters Pension Fund

          Western States Conference of Teamsters Pension Trust Fund

          O.P.E.I.U. Local 153 Pension Fund (Englewood, NJ)

<PAGE>

         I.B.T. Local 202 Pension Fund (Englewood, NJ)

         I.B.T. Local 282 Pension Fund (Englewood, NJ)

         I.B.T. Local 852 Pension Fund (Englewood, NJ)

         I.B.T. Local 705 Pension Trust (Glendale Heights, IL)

         I.B.T. Local 738 Pension Fund (Glendale Heights, IL)

         I.B.T. Local 745 Pension Fund (Dallas, TX)

         I.B.T. Local 829 Pension Fund (Norwood, MA)

         Teamsters Pension Trust of Philadelphia

         Warehouse Employees Union Local 169 and Employers Joint Pension Fund 
         (Philadelphia, PA)

         Western Pennsylvania Teamsters and Employers Pension Fund 
         (Pittsburgh, PA)

         Retail, Wholesale and Department Store International Union and 
         Industry Pension Fund (Indianapolis, Indiana)

         Industrial Employers and Distributors Association and Warehouse 
         Union Locals 6 and 17 I.L.W.U. Pension Trust (Sacramento, CA)

         Central States Southeast and Southwest Areas Health and Welfare Fund

         Northern California General Teamsters Security Trust Fund, Plan A

         Teamsters and Food Employers Security Trust Fund

         I.B.T. Local 202 Union Welfare Plan (Englewood, NJ)

         I.B.T. Local 738 Welfare Fund (Glendale Heights, IL)

         I.B.T. Local 738 Special Clinic Trust Fund (Glendale Heights, IL)

         Teamsters Health and Welfare Plan (Local 705) (Glendale Heights, IL)

         Teamsters Health and Welfare Plan 5 (Local 781) (Glendale Heights, IL)

                                       -2-

<PAGE>

         Teamsters Health and Welfare Fund of Philadelphia, PA and Vicinity 
         (Philadelphia, PA)

         Western Pennsylvania Teamsters and Motor Carriers Welfare Fund 
         (Pittsburgh, PA)

         Michigan Conference of Teamsters Welfare Fund (Detroit, MI)

         Minnesota Local 544 Health and Welfare Fund (Minneapolis, MN)

         I.B.T. Local No. 638 Joint Administered Fund (Olfisco Division at 
         Minneapolis, MN)

         Southwestern Teamsters Security Fund Plan 4 (Phoenix, AZ)

         Oregon Teamsters Employers Trust Plan F-W (Portland, OR)

         Teamsters Local 533 Health and Welfare Trust Fund (Reno, NV)

         ILWU Warehousemen's Welfare Fund (Sacramento, CA)

         Western Teamsters Welfare Trust (Salinas, CA)

         Teamsters and Employers Trust (San Francisco, CA)

         San Francisco Local 85 Drayage Drivers and Helpers Security Fund 
         (San Francisco, CA)

         Local 856 Health and Welfare Trust Fund (San Francisco, CA)

         Washington Teamsters Welfare Trust (Seattle, WA)

         North Coast Trust Fund Plan #9 (Sonoma Co., CA)

         Inland Empire Teamsters Trust (Spokane, WA)

         Southwest Areas Health and Welfare Fund (St. Louis, MO)

    2.   MULTIEMPLOYER PLANS TO WHICH USF AND/OR ITS SUBSIDIARIES CONTRIBUTE:

         Central States Southeast and Southwest Areas Health and Welfare Fund

C.  LIST OF "PENSION PLANS" AS DEFINED IN ERISA SECTION 3(2) THAT ARE NEITHER 
QUALIFIED PLANS NOR MULTIEMPLOYER PLANS AS REQUIRED BY SECTION 4.1(j)(i):

                                         -3-

<PAGE>

1.  "PENSION PLANS" AS DEFINED IN ERISA SECTION 3(2), THAT ARE NEITHER 
    QUALIFIED PLANS NOR MULTIEMPLOYER PLANS AND ARE SPONSORED ONLY BY THE 
    COMPANY AND/OR JOHN SEXTON & CO.:

    Rykoff-Sexton, Inc., makes specified contributions to union employees' 
    individual retirement accounts pursuant to contract at Sacramento, 
    California (no plan document has been located, other than the collective 
    bargaining agreement)

    Rykoff-Sexton, Inc. Deferred Compensation Plan (an unfunded executive 
    savings plan, which is funded in part by a grantor trust held by a bank 
    trustee, hereinafter referred to as the "grantor trust").

    Rykoff-Sexton, Inc. Supplemental Executive Retirement Plan (an unfunded 
    executive pension plan, which is included in the grantor trust and 
    provides for individual agreements with certain executives).

    Rykoff-Sexton, Inc. Supplemental Excess Retirement Plan (an unfunded 
    executive pension plan, which is also funded in part by the grantor 
    trust).

    John Sexton & Co. Supplemental Executive Retirement Plan (an unfunded 
    executive pension plan, which is not funded by the grantor trust).

    Other Supplemental Executive Retirement Agreements for certain officers 
    of the Company and John Sexton & Co. (unfunded executive pension 
    arrangements, some of which are included in the grantor trust).

2.  "PENSION PLANS," AS DEFINED IN ERISA SECTION 3(2), THAT ARE NEITHER 
    QUALIFIED PLANS NOR MULTIEMPLOYER PLANS AND ARE SPONSORED ONLY BY USF 
    AND/OR ITS SUBSIDIARIES:

    The following arrangements may contain provisions constituting such plans:

    US Foodservice Executive Management Bonus Plan

    Severance Agreement for Royce Ellison

    Employment Agreements for the following employees:

         Harvey Frank
         Robert Zahler
         Joseph Bendix
         Richard Rogers
         Frank Brigman
         James Crenshaw

                                    -4-
<PAGE>

         Miscellaneous Employee Bonus Plans applicable to employees of USF
         Subsidiaries

D.  LIST OF "WELFARE PLANS" AS DEFINED IN ERISA SECTION 3(1) AS REQUIRED BY 
    SECTION 4.1(j)(i):

    1.   "WELFARE PLANS." AS DEFINED ERISA SECTION 3(1), THAT ARE SPONSORED ONLY
         BY THE COMPANY AND/OR JOHN SEXTON & CO.:

         Rykoff-Sexton Health and Dental Benefits Plan and Trust (including its
         own trust and a pre-tax salary reduction premium contribution
         arrangement under Internal Revenue Code 125).

         John Sexton & Co. Retiree Health and Dental Benefits Plan (included in
         the trust last identified above).

         Rykoff-Sexton Employee Vacation Plan and Trust (including its own
         trust).

         S. E. Rykoff & Co. Group Life Insurance Plan

         S. E. Rykoff & Co. Long Term Disability Insurance Program

         S. E. Rykoff & Co. Accidental Death & Dismemberment Plan

         S. E. Rykoff & Co. Group Travel Accident Plan

         John Sexton & Co. Group Life and Long Term Disability Plan

         John Sexton & Co. Accidental Death & Dismemberment Plan

         John Sexton & Co. Travel Accident Plan

         Rykoff-Sexton Short Term Disability Plan

         Discretionary Severance Pay Policy

    2.   "WELFARE PLANS" AS DEFINED IN ERISA SECTION 3(1), THAT ARE SPONSORED
         ONLY BY USF AND/OR ITS SUBSIDIARIES:

         Employee Benefit Plan (including major medical benefits, dental
         benefits, short term disability benefits and a prescription program).

         Business Travel Accident Plan

         Long Term Disability Insurance Plan

                                      -5-
<PAGE>

         Group Basic and Supplemental Life and AD&D and Dependent Life Insurance
         Plan

         Flex Spending Plan (including medical and dependent care spending
         account options).

         White Swan, Inc. Employee Injury Benefit Plan

         Certain divisions and Subsidiaries of USF have provided limited
         employee assistance benefits and severance benefits, which may be
         treated as welfare plans under ERISA (the "Ancillary Benefits")

    3.   "WELFARE PLANS" AS DEFINED ERISA SECTION 3(1), THAT ARE SPONSORED BY
         BOTH THE COMPANY AND USF:

         Individual Life and Disability Insurance Policy Program for Executive 
         Management Committee members.

E.  EXCEPTIONS TO REPRESENTATIONS IN SECTION 4.1(j)(ii):

    1.   Each of the following Plans (as defined for this Agreement) are being 
         administered pursuant to an unsigned plan document or amendment, which
         is described below after the name of the respective Plan or Trust:

         (a)   Rykoff & Sexton Pension Plans Master Trust - A restated draft
               Trust Agreement, as last submitted to the Internal Revenue 
               Service on April 3, 1995. A prior Trust Agreement, First 
               Amendment and Schedule A thereto were signed.

         (b)   The Retirement Plan for White Swan, Inc. - A proposed restated
               plan document submitted to the Internal Revenue Service for a
               determination letter on June 30, 1995.

         (c)   The Company and/or John Sexton & Co. are currently obligated to 
               contribute to the Multiemployer Plans identified as such in the
               list of Plans set forth above. However, the provision for pension
               contributions to the I.B.T. Local 282 Pension Fund was 
               inadvertently left out of the last collective bargaining 
               agreement; and a letter of agreement confirming contributions to 
               that fund is being obtained.

         (d)   John Sexton & Co. Supplemental Executive Retirement Plan -
               A draft Plan document was last revised on September 6, 1990.

          (e)  Rykoff-Sexton Employee Vacation Plan and Trust - Employees have 
               received notice of a vacation plan change that has not been 
               formally reflected in the

                                      -6-
<PAGE>

               Plan document

         (f)   Rykoff-Sexton "Cafeteria" Plan under Code Section 125 - The
               premium conversion arrangement document has not been located. The
               Forms 5500 filed for the Rykoff-Sexton Health and Dental Benefits
               Plan and Trust did not include Schedule F describing the premium
               conversion arrangement.

         (g)   Because USF is not sure whether the Ancillary Benefits described
               above have been provided as part of an welfare plan under ERISA,
               such Ancillary Benefits may not be set forth in plan documents or
               summary plan descriptions, nor have any annual reports been filed
               with respect to such Ancillary Benefits.

    2.   The summary plan description ("SPD") of each of the following Plans (as
         defined for this Agreement) does not reflect the plan document that is 
         currently used for plan administration:

         (a)   Rykoff-Sexton, Inc. Pension Plan (A restated SPD was prepared in
               draft form as of July 11, 1995; and has been revised in draft
               form as of October 18, 1996).

         (b)   John Sexton & Co. Union Employee Pension Plan (A restated SPD was
               prepared in draft form as of July 11, 1995, and has been revised
               in draft form as of April 11, 1996).

         (c)   Rykoff-Sexton Value Plan (A restated SPD was prepared in draft
               form as of July 11, 1995, and has been revised in draft form as
               of April 19, 1996).

         (d)   John Sexton & Co. Retiree Health and Dental Benefits Plan (A
               current SPD exists, but may not have been distributed to
               employees or filed with DOL).

F.  EXCEPTIONS TO REPRESENTATIONS IN SECTION 4.1(j)(iv):

    The John Sexton & Co. Union Employee Pension Plan has an "Unfunded Pension 
    Liability" amounting to $4,147 as of May 1, 1995.

    The Retirement Plan for White Swan, Inc. had an "Unfunded Pension Liability"
    amounting to $2,266,937 as of December 31, 1995; and its actuary estimates 
    that such amount has decreased to approximately $1,650,000 as of July 1,
    1996.

G.  EXCEPTIONS TO REPRESENTATIONS IN SECTION 4.1(j)(v):

    John Sexton & Co., a Subsidiary of the Company, maintains the John Sexton & 
    Co. Retiree Health and Dental Benefits Plan, which provides health and
    dental benefits to a limited group

                                      -7-
<PAGE>

     of employees of that Subsidiary who meet certain eligibility 
     requirements for this Plan and retire under the Rykoff-Sexton, Inc. 
     Pension Plan (formerly the John Sexton & Co. Pension Plan).

     The S. E. Rykoff & Co. Group Life Insurance Plan and the John Sexton & 
     Co. Group Life and Long Term Disability Plan include limited 
     post-retirement life insurance benefits.

     The Employment Agreement of Mark Van Stekelenburg provides for health 
     and other welfare benefits after his employment termination.
     
     Approximately 52 employees of Biggers Brothers, Inc. who retired prior 
     to November 1, 1990, are entitled to participate in the US Foodservice 
     Employee Medical Plan.

H.   EXCEPTIONS TO REPRESENTATIONS IN SECTIONS 4.1(j)(vii) AND (ix):

     As a result of the merger with USF, most or all of the locations with 
     union employees covered by the John Sexton & Co. Union Employee Pension 
     Plan will be shut down and the employees terminated.  These actions are 
     expected to result in the full vesting of affected participants, a 
     partial termination of that plan and, if all participants are 
     terminated, the "freezing" of future benefit accruals or termination of 
     that plan.  The plan's actuary estimates that a plan termination would 
     require a final cash contribution of between $300,000 and $400,000.

I.   EXCEPTION TO REPRESENTATIONS IN SECTION 4.1(j)(viii):

     As of January 1, 1990, the John Sexton & Co. Savings Plan was merged 
     into the S. E. Rykoff & Co. Profit Sharing Plan, both of which had 
     previously been operated under the same Master Trust Agreement.  The 
     merged Plan and Trust was then designated the Rykoff-Sexton Value Plan.  
     By letter received by the Company on March 24, 1995, the Pension and 
     Welfare Administration of the U.S. Department of Labor (the "DOL") made 
     an inquiry with respect to the John Sexton & Co. Savings Plan.  The 
     Company responded to the inquiry by letters dated July 26, 1995, and 
     March 28, 1996, each of which transmitted certain documents to DOL.  
     Since the date of the Company's last response, the Company has not 
     received any additional inquiries from DOL with respect to this matter.

J.   EXCEPTION TO REPRESENTATIONS IN SECTION 4.1(j)(x):

     The Company owned all of the capital stock of Tone Brothers, Inc. 
     ("Tone") during the period from April 11, 1989 through October 27, 1994; 
     and sold that stock on the latter date to Burns Philp Food Inc. for a 
     cash price of $96,000,000, subject to certain post-closing adjustments.
     During that entire period and at the time of the sale, Tone maintained a 
     Qualified Plan that was a defined benefit pension plan subject
     to Title IV of ERISA (the


                                     -8-

<PAGE>

     "Tone Plan").  Based on the Actuarial Valuation Report for the Tone 
     Plan, which was prepared by Principal Mutual Life Insurance Company as 
     of September 1, 1994 (the last valuation date before the sale), the 
     Company's actuarial consultant estimates that Tone's unfunded pension 
     liability (on a plan termination basis) with respect to the Tone Plan 
     was then approximately $400,000.


                                     -9-

<PAGE>

                                  APPENDIX I
                                      to
                            Reimbursement Agreement
                                 dated as of
                               November 1, 1996
                                   between
                      THE FIRST NATIONAL BANK OF CHICAGO
                                     and
                              RYKOFF-SEXTON, INC.
                              A DELAWARE COMPANY

          COVENANTS AND DISBURSEMENT PROCEDURES REGARDING INSURANCE
                           OR CONDEMNATION PROCEEDS

     This APPENDIX I (Covenants and Disbursement Procedures regarding 
Insurance of Condemnation Proceeds) is attached to and forms an integral part 
of that certain Reimbursement Agreement dated as of November 1, 1996 between 
RYKOFF-SEXTON, INC., a Delaware Corporation and THE FIRST NATIONAL BANK OF 
CHICAGO (the "Reimbursement Agreement").  All terms defined in such 
Reimbursement Agreement shall have the same meanings when used in this 
APPENDIX I.

     Part A:     DISBURSEMENTS

     A.1   INSURANCE OR CONDEMNATION PROCEEDS.

     (a)   CONDITIONS.  Disbursement of Cash Proceeds (as hereinafter 
defined) for restoration of the Project shall be made pursuant to the 
following procedures and conditions:

          (i)   In the event of a casualty or a condemnation which results in 
     damage to the Project in excess of $1,000,000, as determined by or on 
     behalf of the Company and reasonably approved by Bank:

                (1)   Within sixty (60) days following the date of such 
          casualty or condemnation (the "Election Period"), the Company shall 
          notify Bank in writing of the Company's election either (x) to 
          redeem the Bonds in whole pursuant to the provisions of the 
          Indenture and the Reimbursement Agreement, or (y) to restore the 
          Project to a condition substantially the same as the condition of 
          the Project immediately prior to such casualty or condemnation (the 
          "Prior Condition").

                     (2)   Within thirty (30) days after the expiration of 
          the Election Period, the Company shall deliver to Bank collateral, 
          in the form of cash


                                     I-1


<PAGE>

and/or an irrevocable, clean "sight draft" standby letter of credit issued by 
a financial institution and otherwise in form and substance reasonably 
satisfactory to Bank (any such letter of credit, together with any amendments 
thereto or substitutions thereof approved by Bank, shall be a "Collateral 
Letter of Credit" hereunder) in an aggregate sum equal to the difference (if 
a positive number) between (x) the lesser of: (I) the Initial Stated Amount 
or (II) the total costs of restoring the Project to the Prior Condition, as 
determined by or on behalf of the Company and reasonably approved by Bank; 
PROVIDED, HOWEVER, that in the event the Company has elected to redeem the 
Bonds in whole in accordance with SUBPARAGRAPH A.1(a)(i)(1) above, the 
Initial Stated Amount shall be used regardless of whether or not such Amount 
is higher or lower than the total costs of restoring the Project to the Prior 
Condition; AND (y) the amount of insurance or condemnation proceeds actually 
delivered to Bank as a result of such casualty or condemnation, or, if 
acceptable to Bank in its sole discretion, the amount of insurance or 
condemnation proceeds reasonably anticipated by the Company to be delivered 
to Bank as a result of such casualty or condemnation.

          (3)  If the Company has elected to restore the Project to the Prior 
Condition in accordance with SUBPARAGRAPH A.1(a)(i)(1) above, then, within 
thirty (30) days after the expiration of the Election Period, the Company 
shall deliver to Bank (x) an estimated budget of all costs of restoring the 
Project to the Prior Condition (which budget, together with any modifications 
thereto thereafter reasonably approved by Bank in accordance with PARAGRAPH 
B.2 hereof, shall be the "Restoration Budget" hereunder) and (y) a 
construction time line (which construction time line, together with any 
modifications thereto thereafter reasonably approved by Bank, shall be the 
"Construction Schedule" hereunder) setting forth, among other things, the 
dates upon which each of the following will occur: the plans and 
specifications for the restoration of the Project will be completed, a 
construction contract, in form and substance reasonably acceptable to Bank, 
will be executed, all necessary governmental approvals will be obtained and 
phases of construction will be commenced and completed. The initial 
Reconstruction Budget and Construction Schedule shall be subject to Bank's 
approval, which approval shall not be unreasonably withheld or delayed.

          (4)  If the Company has elected to restore the Project to the Prior 
Condition in accordance with SUBPARAGRAPH A.1(a)(i)(1) above, all costs of 
restoring the Project to the Prior Condition in excess of the sum of cash 
delivered to Bank in accordance with SUBPARAGRAPH A.1(a)(i)(2) above 
(collectively, the "Cash Proceeds") shall be paid by the Company with its own 
funds first before any Cash Proceeds are disbursed for payment or 
reimbursement of any such costs.


                                      I-2

<PAGE>

          (5)  Any failure by the Company to satisfy in a timely manner the 
conditions to disbursement set forth in this SUBPARAGRAPH A.1(a)(i) shall, 
after the expiration of any applicable notice and/or cure period set forth in 
the Reimbursement Agreement, constitute an Event of Default under the 
Reimbursement Agreement. Upon the occurrence of an Event of Default under the 
Reimbursement Agreement, Bank may, at its option, draw upon any Collateral 
Letter of Credit and deposit such proceeds into the Disbursement Account (as 
hereinafter defined). In such case, the term "Cash Proceeds" as used herein 
shall include the proceeds that are drawn from any Collateral Letter of 
Credit and are deposited into the Disbursement Account.

     (ii)  In the event of a casualty or a condemnation which results in 
damage to the Project of $1,000,000 or less, as determined by or on behalf of 
the Company and reasonably approved by Bank:

          (1)  Bank will promptly release to the Company the insurance or 
     condemnation proceeds delivered to Bank as a result of such casualty or 
     condemnation so long as, within (60) days following the date of such 
     casualty or condemnation, the Company delivers to Bank a certificate, 
     signed by a responsible officer of the Company, which states either (x) 
     that the Company will restore the Project to the Prior Condition, or (y) 
     that the portion of the Project damaged by such casualty or 
     condemnation will have no significant adverse impact upon the use and 
     operation of the Project; in which case the Bank shall have the right, at 
     the Bank's sole discretion but at the Company's sole cost and expense, 
     to cause an appraisal of the Project to be prepared and, if the Bank 
     determines, in its sole discretion, that the value of the Project has 
     been materially and adversely impacted as a result of such casualty or 
     condemnation (such appraisal to be based upon the value of the Project 
     immediately prior to such casualty or condemnation versus the value of 
     the Project immediately after such casualty or condemnation (such 
     difference to be referred to as the "Reduced Value")), the Company shall 
     either (I) deliver to Bank additional collateral, in form and substance 
     and pursuant to documentation reasonably acceptable to Bank, to secure 
     the performance by the Company of the Obligations in an amount equal to 
     the Reduced Value or (II) partially redeem the Bonds in an amount equal 
     to the Reduced Value. In the event that the Company elects to partially 
     redeem the Bonds, the Stated Amount (as defined in the Letter of Credit) 
     of the Letter of Credit shall be reduced by the amount set forth in the 
     reduction certificate delivered in connection with such partial 
     redemption and the condition set forth in CLAUSE (II) of this 
     SUBPARAGRAPH A.1(a)(ii)(1)(y) shall not be satisfied until the Company 
     has reimbursed Bank for the amount of the draw on the Letter of Credit 
     in connection with such partial redemption in accordance with the 
     provisions of the Reimbursement Agreement.


                                      I-3

<PAGE>

          (2)  If the Company has elected to restore the Project to the Prior 
     Condition in accordance with SUBPARAGRAPH A.1(a)(ii)(1)(x) above, then 
     the Company shall promptly commence and thereafter diligently continue 
     to pursue such restoration to completion.

          (3)  Any failure by the Company to satisfy in a timely manner the 
     conditions to disbursement set forth in this SUBPARAGRAPH A.1(a)(ii) 
     shall, after the expiration of any applicable notice and/or cure period 
     set forth in the Reimbursement Agreement, constitute an Event of Default 
     under the Reimbursement Agreement.

     (b)  Any Cash Proceeds delivered by or on behalf of the Company to Bank  
shall be deposited in an account with Bank or another financial institution 
acceptable to Bank (the "Disbursement Account") for disbursement as hereafter 
provided. Any funds on deposit in the Disbursement Account may, with the 
prior written consent of the Bank be invested, from time to time, in 
investments approved by Bank in writing. Any and all earnings on such 
investments shall, so long as no Event of Default exists under the 
Reimbursement Agreement, be disbursed to the Company at the Company's request 
not more frequently than once per calendar month. 

     A.2  BANK'S CONSENT TO DISBURSEMENTS. The Company shall complete, 
execute, and forward to Bank its funding requisition for each requested 
disbursement of Cash Proceeds, together with a complete set of Payment 
Request Documents (as hereinafter defined) with respect thereto, as described 
in PARAGRAPH A.5 of this APPENDIX I. Bank's approval of a funding requisition 
shall not be construed as representation by Bank that it has reviewed, 
considered, approved or joined in any of the representations of the Company 
contained therein. Bank shall not be required to give its consent to more 
than two disbursements during each calendar month.

     A.3  DISBURSEMENT METHOD.  Each disbursement of Cash Proceeds for the 
payment of restoration costs shall be made by the Bank or, following the 
occurrence of an Event of Default, in such manner as Bank may direct. Upon 
satisfaction by the Company of the conditions to disbursement set forth in 
PARAGRAPH A.5, Bank shall promptly authorize disbursement of such funds for 
the payment of the restoration costs described in the approved Payment 
Request Documents for such disbursement, or to reimburse the Company 
therefor; PROVIDED, HOWEVER, upon the occurrence of an Event of Default Bank, 
at its sole option, may make disbursements directly to any contractors, 
subcontractors, laborers, materialmen, or other persons providing services or 
materials to the Project (collectively, "Claimants") by issuing and 
delivering to the Company cashier's checks payable to such Claimants, in 
accordance with a "Request for Cashier's Checks" which shall be submitted by 
the Company and approved by Bank as part of the Payment Request Documents 
for such disbursement. The Company agrees to cause all payments or 
reimbursements from the Disbursement Account to be made by checks drawn upon 
such account.


                                      I-4

<PAGE>

          A.4   BALANCING. (a) As a material condition to Bank's consent to any 
     disbursement of Cash Proceeds, the Company hereby agrees to provide 
     sufficient funds for the payment of restoration costs so that, in Bank's 
     reasonable judgment, the aggregate sum of (i) the undisbursed portion of 
     the Cash Proceeds available to the Company for the payment or 
     reimbursement of restoration costs, PLUS (ii) the undrawn portion of any 
     Collateral Letter of Credit available for the payment or reimbursement of 
     restoration costs, PLUS (iii) any undisbursed amounts deposited pursuant 
     to SUBPARAGRAPH A.4(b), is at least equal to the amount that will need to 
     be expended in order to complete the restoration work in accordance with 
     the plans therefor approved by Bank. Categories listed as "contingencies" 
     on the Reconstruction Budget shall be deemed to be actual restoration 
     costs for the purposes of balancing.

          (b)   The determination as to whether sufficient funds are or will be 
     available to complete the restoration work may be made by Bank at any 
     time, including in connection with any request for Bank's consent to a 
     disbursement. Within ten (10) days following notice from Bank that 
     insufficient funds exist, the Company shall deliver to Bank for deposit in 
     the Disbursement Account cash or other security reasonably acceptable to 
     Bank (including another Collateral Letter of Credit) in such amount as 
     Bank deems necessary to complete the restoration work in accordance with 
     the plans approved by Bank. Any such amounts delivered to Bank for deposit 
     in the Disbursement Account shall be the next funds authorized for 
     disbursement by Bank hereunder, subject to the terms and conditions of 
     this Agreement.

          A.5   CONDITIONS TO DISBURSEMENTS. Bank's consent to any disbursement 
     of Cash Proceeds shall be subject to satisfaction of each of the following 
     conditions precedent:

          (a)   REPRESENTATIONS AND WARRANTS CORRECT: NO DEFAULT. As of the 
     date of such disbursement, the representations and warranties of the 
     Company contained in the Reimbursement Agreement and Related Documents 
     shall be correct as though made on and as of that date, no Event of 
     Default shall have occurred and no Default shall exist on such date.

          (b)   BALANCING. As of the date of such disbursement, in Bank's 
     reasonable judgment, the Company shall be in compliance with the 
     provisions of PARAGRAPH A.4 of this APPENDIX I, and the making of the 
     disbursement in question would not cause the Company to be out of 
     compliance therewith immediately following such disbursement.

          (c)   PAYMENT REQUEST DOCUMENTS. The Company shall have submitted to 
     Bank, and Bank shall have approved, the following documents (collectively, 
     the "PAYMENT REQUEST DOCUMENTS") with request to such disbursement, each 
     of which shall be in form and substance satisfactory to Bank and duly 
     executed by the appropriate parties:


                                      I-5

<PAGE>

               (i)   a certificate, signed by a responsible officer of the 
          Company, confirming the satisfaction of each of the conditions set 
          forth in SUBPARAGRAPH A.5(a) of this APPENDIX I;

               (ii)  a "PAYMENT REQUEST," in duplicate, in such form as Bank 
          shall from time to time require, together with a report, certified as 
          true and correct by a responsible officer of the Company, setting 
          forth such details concerning the progress of the reconstruction work 
          as Bank may require, including without limitation: (A) a detailed 
          breakdown of all restoration costs covered by the Reconstruction 
          Budget, including an itemization of (1) all costs accrued as of the 
          date of such Payment Request, (2) all costs accrued and unpaid as of 
          such date, (3) all costs projected to be necessary to complete the 
          restoration work, and (4) the application of all past disbursements; 
          (B) a current Construction Schedule (any revisions shown thereon from 
          the previous Construction Schedule shall be subject to Bank's 
          reasonable approval); and (C) all changes from the previous report 
          which are known or reasonably anticipated by the Company;

               (iii) evidence of proper application of all past disbursements, 
          including without limitation the following: an unconditional partial 
          waiver of lien from each contractor and subcontractor, in form and 
          substance satisfactory to Bank, covering the full amount of all past 
          disbursements for direct construction costs through the date of the 
          most recent disbursement; and an unconditional final waiver of lien, 
          in form and substance satisfactory to Bank, from each contractor and 
          each subcontractor who, as of the most recent disbursement, had 
          completed the work covered by its contract or subcontract, covering 
          the full amount due each such contractor or subcontractor;

               (iv)  if Bank, upon the occurrence of an Event of Default, is 
          requiring that Disbursements to Claimants be made by the cashier's 
          check, a completed "Request for Cashier's Checks," in form and 
          substance acceptable to Bank;

               (v)   specific assignments to Bank of all agreements, permits 
          and licenses issued in connection with or required for the 
          restoration work for which such specific assignments shall not have 
          previously been delivered to Bank, together with signed consents to 
          such assignments where deemed appropriate by Bank;

               (vi)  if any part of the disbursement is for site preparation 
          and grading, a certificate from a soils engineer acceptable to Bank 
          that such work and all grading and site preparation then in process 
          or completed are in compliance with the recommendations specified in 
          such soils engineer's soils test report;

               (vii) such title insurance endorsements to the Title Policy as 
          Bank may require, including, without limitation, endorsements 
          reflecting the date and the amount of the requested disbursement and 
          insuring the continued priority of the


                                      I-6

<PAGE>

          liens of the Deed of Trust over mechanics' and other liens, subject 
          to no exceptions to title other than those which have been approved 
          by Bank; and

               (ix)  such other documents and information as Bank may 
          reasonably require, including, without limitation, invoices, purchase 
          orders and lien releases from all Claimants covering the amount of 
          each disbursement thereto.

          (d)   INSPECTION BY BANK. With respect to disbursements for direct 
     reconstruction costs, the work of reconstruction shall be progressing or 
     shall have been completed to Bank's satisfaction, based on the inspection 
     and findings of Bank's inspector.

          (e)   TECH. Each disbursement for direct construction costs of the 
     reconstruction work shall be subject to a holdback (the "TECH") of ten 
     percent (10%) of the amount of all direct construction costs incurred 
     through the date of such disbursement; PROVIDED, HOWEVER, that no Tech 
     shall be required for (i) contracts or subcontracts of less than $10,000, 
     or (ii) for materials and supplies purchased directly from vendors and 
     suppliers. The amount of such Tech shall be disbursed by Bank to the 
     Disbursement Account upon Bank's determination that each of the following 
     additional conditions has been satisfied:

               (i)   The renovation work shall have been completed in 
          accordance with the plans approved by Bank and all legal 
          requirements, and the Company shall have furnished to Bank, at the 
          Company's expense, a standard AIA form of Certificate of Project 
          Completion, signed by the contractor and Company's architect, 
          certifying that the renovation work has been completed in a good and 
          workmanlike manner and in accordance with such plans;

               (ii)  A valid notice of completion shall have been recorded and 
          the applicable lien periods shall have expired, or, in lieu thereof, 
          Bank shall have received and approved final lien waivers and 
          releases, in form and substance satisfactory to Bank, from all 
          contractors, subcontractors, laborers and materialmen employed or 
          furnishing materials in connection with the reconstruction work;

               (iii) All claims of lien and stop notices that may have been 
          recorded or notice thereof served on Bank, the Issuer or the Trustee 
          shall have either been paid in full and released or the Company shall 
          have posted a surety bond sufficient to discharge the same;

               (iv)  The Company shall have delivered or caused to be delivered 
          to Bank a complete set of "as built" working drawings for the 
          restoration work;

               (v)   Bank shall have received satisfactory evidence that no 
          Uniform Commercial Code financing statements or fixture filings are 
          recorded or filed in the Office of the California Secretary of State 
          (or in the Office of the Secretary of


                                      I-7

<PAGE>
          
          State of the state in which the Company's principal business office 
          is located, if other than California), or in the Official Records 
          of Los Angeles County, against the Company's interest in the 
          Premises of the Project, or which purport to cover any collateral 
          described in the Bank Security Documents, except those which may 
          have been filed in favor of Bank in connection herewith and with 
          the Related Documents and except those previously approved by Bank 
          in writing;
          
               (vi)    Bank shall have received appropriate approvals from (A) 
          all governmental authorities regarding completion of the 
          reconstruction work, which approvals shall be evidenced by an 
          irrevocable  certificate for the permanent occupancy thereof to the 
          extent such approval is a condition to the lawful use and occupancy 
          of the Project; (B) the local board of fire underwriters or its 
          equivalent; and (C) all other governmental authorities having 
          jurisdiction over the contemplated uses, operation and occupancy of 
          the Project; and
          
               (vii)   The Company shall have submitted to Bank copies of all 
          agreements, permits and licenses issued in connection with or 
          required for the restoration work, and all insurance policies or 
          certificates required under the Reimbursement Agreement, to the 
          extent not previously delivered to Bank. 

               (f)     STORED MATERIALS. Bank shall have the right, in its 
sole discretion, to withhold its consent to any disbursement for materials 
(other than lumber or drywall in reasonable quantities as determined by Bank) 
purchased or to be purchased but not yet installed or incorporated into the 
Project ("STORED MATERIALS"). Without limiting the generality of the 
foregoing, Bank, as a condition to its consent to any requested disbursement 
relating to Stored Materials (including, but not limited to, such lumber and 
drywall), may require that the Company supply Bank with the following:

               (i)     Evidence satisfactory to Bank that the Stored 
          Materials requested are included within the coverage of the 
          insurance policies required by SECTION 5.1 (c) of the Reimbursement 
          Agreement;
          
               (ii)    A certificate satisfactory to Bank from the seller or 
          fabricator of the Stored Materials that upon payment, ownership of 
          the Stored Materials will vest in the Company free of liens and 
          claims of third parties; and
          
               (iii)   Evidence satisfactory to Bank that the Stored 
          Materials are stored on the Premises and adequately protected from 
          theft and damage, or, if not so stored, (A) evidence that the 
          Stored Materials are stored in a bonded warehouse or storage yard 
          approved by Bank, which warehouse or yard has been notified that 
          the Trustee and Bank have a security interest in said Stored 
          Materials, and (B) the original warehouse receipt.



                                     I-8

<PAGE>

          PART B:     RECONSTRUCTION OF THE IMPROVEMENTS

          B.1   RECONSTRUCTION PERIOD.

         The Company shall commence construction of the renovation work and 
shall cause such construction to continue with diligence and continuity in 
compliance with the plans and the Construction Schedule approved by Bank in 
order that the renovation work shall be completed on or before the completion 
date approved by Bank based upon the approved Construction Schedule (the 
"Required Completion Date"); PROVIDED HOWEVER, that the Required Completion 
Date may be extended for a period equal to proven delays caused by fire, 
earthquake or other acts of God, acts of public enemies, riot, insurrection, 
governmental regulation of the sale of materials and supplies or the 
transportation thereof, strikes directly affecting the work of construction 
or shortages of material or labor resulting directly from governmental 
control or diversion (collectively, "Force Majeure Events"). If the Required 
Completion Date is extended by ninety (90) days or more as a result of the 
occurrence of one or more Force Majeure Events, the Company shall deliver to 
Bank a revised Reconstruction Budget every ninety (90) days that the 
Required Completion Date is extended and Bank shall have the right to approve 
such Reconstruction Budget in accordance with SUBPARAGRAPH B.2(b) hereof.

           B.2  APPROVAL OF CHANGES IN PROJECT AGREEMENTS AND RECONSTRUCTION 
                BUDGET.

          (a)   The Company shall strictly enforce all contracts and 
agreements entered into in connection with the renovation work and shall not 
agree to any material change order or any changes in the Reconstruction 
Budget, except pursuant to a written change order and in accordance with this 
PARAGRAPH B.2. Each change order shall be submitted to Bank for its prior 
written approval if such change order (i) would result in a material change 
in plans and specifications  previously approved by Bank, the Construction 
Schedule or the general contract; (ii) would increase or decrease the 
Reconstruction Budget by more than the amount specified by Bank in connection 
with its approval of the Reconstruction Budget in the case of an individual 
change order, or (iii) would cause the aggregate of all change orders 
(whether proposed or executed) to exceed the amount specified by Bank in 
connection with its approval of the Reconstruction Budget.

          (b)   If any change order would increase the Reconstruction Budget, 
Bank may, in its sole discretion, condition its approval upon the Company 
depositing with Bank, pursuant to PARAGRAPH A.4 of this APPENDIX I. such  
amount as Bank may reasonably require in order to provide sufficient funds 
for the payment of the restoration costs.

          (c)   The Company acknowledges that the process of obtaining the 
information and confirmations needed to put Bank in a position to approve 
change orders may cause delays, and the Company consents to such delays and 
agrees to

                                      I-9


<PAGE>

cooperate diligently with Bank in the gathering of the information required. 
In addition, the Company acknowledges and agrees that Bank is under no duty 
to review, advise or inform the Company of, and Bank's approval or 
disapproval shall not constitute a warranty or representation about, the 
quality or suitability of the plans or any modification, amendment or 
supplement thereto. All contracts relating to the renovation work shall, to 
the extent reasonably possible, contain provisions implementing the 
provisions of this PARAGRAPH B.2.

          B.3   PURCHASE OF MATERIALS UNDER CONDITIONAL SALES CONTRACT. 
Except as expressly authorized by Bank in writing, no materials, equipment, 
fixtures for the renovation work, or articles of personal property placed in 
the Project, shall be purchased, installed or affixed under any security 
agreement or other arrangements however denominated whereby the right is 
reserved or accrues to anyone to remove or to repossess any such item or to 
consider them personal property after their incorporation in the work of 
construction or whereby any person other than Bank reserves, acquires or 
creates a lien upon or security interest in such items, except as expressly 
authorized by Bank in writing; PROVIDED, HOWEVER, that the Company may utilize 
leased construction equipment in connection with the reconstruction of the 
Project.

          B.4   INSPECTION

          (a)   During the construction period, Bank and its agents and 
representatives shall have the right: (i) of free entry and access to the 
Project and to all sites away from the Project where materials that are to be 
incorporated into the Project are stored; (ii) at the Company's expense, to 
inspect all work done, labor performed and materials furnished for use in the 
Project; (iii) if Company does not provide satisfactory information, to 
contact directly or otherwise communicate with any contractor, subcontractor 
and other Claimant to verify any matters disclosed in any Payment Request 
Documents submitted to Bank; and (iv) to examine, copy and make extracts of, 
all books, records, accounting data, subcontracts and other documents 
pertaining to the Company or the Project and all contractors and 
subcontractors supplying goods or services in connection with the 
construction of the Project. The Company shall cooperate with and shall use 
commercially reasonable efforts to cause all contractors and all 
subcontractors to cooperate with Bank and its agents and representatives. 
Said books, records, accounting data, subcontracts and documents shall be 
made available to Bank promptly upon written demand therefor. The Company 
shall require or cause its contractors to require that all contracts relating 
to the Project contain an acknowledgement of the foregoing inspection rights, 
except where such rights have been waived by Bank in writing.

          (b)   The Company acknowledges that Bank is under no duty to 
supervise or to inspect the work of construction, the labor performed 
therefor, the materials used therein or any books and records. The Company 
agrees that any inspections by Bank are for the sole purpose of preserving 
Bank's  rights hereunder that the Company is

                                      I-10
<PAGE>


not entitled to rely upon the same with respect to materials, workmanship, 
compliance with the approved plans or otherwise. The Company intends and 
agrees to conduct its own investigations and inspections of the construction, 
the labor performed and materials supplied to determine that the quality of 
the Project and all other requirements of the construction are being 
performed in a manner satisfactory to the Company. The Company agrees to 
immediately notify Bank, in writing, should the same be in any manner 
unsatisfactory. A failure to inspect the construction of the Project, any part 
thereof or any books and records relating thereto, shall not constitute a 
waiver of any of Bank's rights hereunder. Inspection not followed by notice 
of default shall not constitute a waiver of any default then existing; nor 
shall it constitute an acknowledgment that there has been or will be 
compliance with the plans and specifications approved by Bank or that the 
construction is free from defective materials or workmanship.

      B.5  PROTECTION AGAINST CLAIMS

      (a)  The Company shall promptly discharge or cause to be discharged any 
mechanics' or materialmen's liens or claims of lien filed or otherwise 
asserted against the Premises, the Project or any funds due any contractor 
and any proceedings for the enforcement thereof and shall promptly discharge 
or cause to be discharged any stop notices received by Bank, the Issuer, or 
the Trustee; PROVIDED, HOWEVER, that so long as no proceedings shall have 
been commenced for the enforcement of such claims or liens, the Company shall 
have the right to contest in good faith and with reasonable diligence the 
validity of any such liens or claims upon furnishing to the Title Company 
such security or indemnity as the latter may require to induce it to issue 
the Title Policy, or an interim endorsement thereto, insuring against all 
such claims or liens and, provided further, that Bank will not be required to 
consent to any further disbursements until all such mechanics' or 
materialmen's liens or claims of lien have been so insured against by the 
Title Company to Bank's satisfaction. In the case of stop notices, the 
Company shall have the right to contest, in good faith and with reasonable 
diligence, the validity of any stop notice, provided that the Company shall 
immediately file with Bank and the Trustee a bond in the form and amount 
required by law in order to release such stop notice. Bank shall have no 
obligation to consent to any further disbursements until all stop notices 
have been fully released, bonded or discharged.

      (b)  If (i) the Company fails promptly to discharge or contest liens, 
claims of lien or stop notices and provided the security or indemnity in the 
manner provided in CLAUSE (a) above, or (ii) after having complied with the 
provisions of CLAUSE (a) above there is an adverse conclusion to any such 
contest and the Company does not cause any final judgment or decree to be 
immediately satisfied and the lien or stop notice to be discharged, then Bank 
may, but shall not be required to, procure the release and discharge of any 
such lien or stop notice and any judgment or decree thereon, and in 
furtherance thereof may, in its sole discretion, effect any settlement or 
compromise or furnish any security or indemnity as may be required by the 
Title Company. All amounts expended by Bank in connection with the provisions 
of this SUBPARAGRAPH B.5(b), together with interest thereon at the Bank Rate 
from the date of such expenditure until

                                I-11
<PAGE>

Bank has been repaid and, until paid, said sums shall be secured by the Bank 
Security Documents. In settling, compromising or arranging for the discharge 
of any liens or stop notices under this SUBPARAGRAPH B.5(b), Bank shall not 
be required to establish or confirm the validity or amount of the lien to 
stop notice.

      (c)  The Company will designate Bank as the "Construction Lender" on 
any application for building permits for reconstruction work affecting the 
Project in accordance with California Civil Code Section 3097(i).

      B.6  CONFORMITY WITH APPROVED PLANS. The Company agrees to perform all 
renovation work in conformity in all material respects with the plans 
approved by Bank and, if applicable, the recommendations contained in the 
soils report made in connection with such renovation work. If any portion of 
the renovation work is not in conformity with the approved plans and such 
recommendations in any material respect, or if any materials or workmanship 
on the renovation work shall appear to Bank to be defective, or in the event 
of any encroachment to which Bank shall not have previously consented, Bank, 
in addition to its other rights and remedies, shall have the right (a) to 
direct that the Company stop the work (or such portion thereof as Bank deems 
necessary) and repair, reconstruct or correct such matter in accordance with 
the approved plans and such recommendations, and (b) to withhold its consent 
to all further disbursements until the work is in satisfactory compliance 
with the approved plans and such recommendations, and any such defect or 
encroachment is eliminated. After the issuance of any such direction by Bank, 
no further renovation work shall be done on the Project without the prior 
written consent of Bank until the work is in satisfactory compliance with the 
approved plans and such recommendations. Upon notice from Bank to the 
Company, or the Company's discovery irrespective of such notice, that the 
work is not in conformity with the approved plans and such recommendations, 
the Company shall commence correcting the deviation, as promptly as is 
practicable and in any event within five days after the notice, and shall 
prosecute such work diligently to completion, which in no event shall be 
later than thirty (30) days after such notice or discovery unless the Company 
shall provide written notice to Bank that the correction shall take longer 
and Bank shall reasonably consent thereto. If corrective action satisfactory 
to Bank is not commenced and thereafter diligently pursued in accordance with 
the provisions of the immediately preceding sentence, Bank shall have the 
right (but not the obligation or the duty) to undertake such action at the 
Company's expense and such expense shall be deemed to be included in the 
Approved Budget. Furthermore, if Bank determines that the corrective work is 
not proceeding satisfactorily, Bank shall have the right (but not the 
obligation or the duty), upon not less than five (5) days' notice to the 
Company, to take over such corrective work itself and prosecute it to 
completion at the Company's expense and such expense shall be deemed to be 
included in the Approved Budget.

      B.7  ENCROACHMENTS. Except for off-site improvements designated in the 
approved plans, the Company agrees that the reconstructed improvements shall 
be constructed entirely within the lot lines of the Premises and will not 
encroach upon any

                                 I-12
<PAGE>

easements, right of way, any other real estate, building lines or set-back 
requirements. The Company will furnish, from time to time upon demand, 
satisfactory evidence of compliance with the requirements of this PARAGRAPH 
B.7.

      B.8  WARRANTIES. Upon request of Bank, the Company shall furnish or 
otherwise make available to Bank copies of all warranties and guaranties 
received from any laborer or supplier furnishing labor, materials, equipment, 
fixtures or furnishings in connection with the renovation work.

      B.9  AUTHORITY TO FILE NOTICES. The Company irrevocably appoints, 
designates, and authorizes Bank as its agent (said agency being coupled with 
an interest) to file for record any notice of completion, cessation of labor, 
or any other notice that Bank deems necessary or desirable to protect its 
rights and interests hereunder or under any of the other Related Documents.

      B.10 THIRD-PARTY CONSULTANTS. Bank may hire such third party 
consultants as it deems necessary, the reasonable costs of which prior to the 
occurrence of an Event of Default and the costs of which after an Event of 
Default, in either case, shall be paid by the Company in accordance with the 
Reimbursement Agreement, to provide the following services: (a) to review the 
reconstruction plans; (b) to review the final construction cost breakdown 
and the construction schedule; (c) to conduct compliance inspections with 
respect to the progress of construction of the renovated improvements and to 
review each element of any request for disbursement submitted by the Company; 
and (d) to perform such other services as may from time to time, be required 
by Bank in connection with the administration of the transactions 
contemplated hereby.

      B.11 DISCLAIMER BY BANK. Bank shall not be liable to any contractor, 
subcontractor, supplier, laborer, architect, engineer, or any other person 
for services performed or materials supplied in connection with the Project, 
or for any debts or claims accruing in favor of any such person against the 
Company or others or against the Premises or the Project. The Company is not 
and shall not be an agent of Bank for any purpose. Bank is not a joint 
venture partner with the Company in any manner whatsoever. Prior to default 
by the Company under this Agreement and the exercise by Bank of the remedies 
granted herein, Bank shall not be deemed to be in privity of contract with any 
contractor, subcontractor, or provider of services to the Project, nor shall 
any payment of funds directly to any such person be deemed to create any 
third party beneficiary status or recognition of same by Bank. Approvals 
granted by Bank for any matter covered by this Agreement shall be narrowly 
construed to cover only the parties and facts identified in any written 
approval, and shall be solely for the benefit of the Company.

                             I-13