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                                                                  EXHIBIT 10.42

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                                    LOAN AGREEMENT




                                   BY AND AMONG THE


                     LA MIRADA INDUSTRIAL DEVELOPMENT AUTHORITY, 



                      BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
                                      AS TRUSTEE


                                         AND


                                 RYKOFF-SEXTON, INC.,
                                A DELAWARE CORPORATION


                                   WITH RESPECT TO


                      LA MIRADA INDUSTRIAL DEVELOPMENT AUTHORITY
              TAXABLE VARIABLE/FIXED RATE DEMAND INDUSTRIAL DEVELOPMENT
                     REVENUE BONDS (RYKOFF-SEXTON, INC. PROJECT)
                                     SERIES 1996




                             DATED AS OF NOVEMBER 1, 1996


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                                  TABLE OF CONTENTS


                                      ARTICLE I

                             DEFINITIONS AND CONSTRUCTION

Section 1.1.  Definition of Terms. . . . . . . . . . . . . . . . . . . . . .2
Section 1.2.  Rules of Construction. . . . . . . . . . . . . . . . . . . . .2

                                      ARTICLE II

                        GENERAL REPRESENTATIONS AND AGREEMENTS

Section 2.1.  Representations and Agreements of the Issuer . . . . . . . . .3
Section 2.2.  Representations and Agreements of the Trustee. . . . . . . . .3
Section 2.3.  Representations and Agreements of the Company. . . . . . . . .3

                                     ARTICLE III

                   FINANCING OF THE PROJECT; ISSUANCE OF THE BONDS

Section 3.1.  Agreement to Issue Bonds . . . . . . . . . . . . . . . . . . .6
Section 3.2.  Disbursement From the Project Fund . . . . . . . . . . . . . .6
Section 3.3.  Investment of Moneys.. . . . . . . . . . . . . . . . . . . .  6

                                      ARTICLE IV

                         LOAN OF PROCEEDS; PAYMENT PROVISIONS

Section 4.1.  Loan of Bond Proceeds. . . . . . . . . . . . . . . . . . . . .7
Section 4.2.  Loan Repayment and Payment of Other Amounts. . . . . . . . . .7
Section 4.3.  Unconditional Obligation . . . . . . . . . . . . . . . . . . .8
Section 4.4.  Assignment of Issuer's Rights. . . . . . . . . . . . . . . . .8
Section 4.5.  Amounts Remaining in Funds and Accounts. . . . . . . . . . . .9
Section 4.6.  Additional Bonds . . . . . . . . . . . . . . . . . . . . . . .9

                                      ARTICLE V

                           SPECIAL COVENANTS AND AGREEMENTS

Section 5.1.  Right of Access to the Project and Records.. . . . . . . . . 10
Section 5.2.  Maintenance of Existence . . . . . . . . . . . . . . . . . . 10
Section 5.3.  Statement of Compliance. . . . . . . . . . . . . . . . . . . 11
Section 5.4.  Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.5.  Additional Instruments . . . . . . . . . . . . . . . . . . . 11
Section 5.6.  Environmental Matters. . . . . . . . . . . . . . . . . . . . 12
Section 5.7.  Letter of Credit . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.8.  Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.9.  Title to and Completion of the Project . . . . . . . . . . . 13
Section 5.10. Design of the Project. . . . . . . . . . . . . . . . . . . . 13
Section 5.11. No Untrue Statements . . . . . . . . . . . . . . . . . . . . 14
Section 5.12. Date of Construction . . . . . . . . . . . . . . . . . . . . 14
Section 5.13. Employment and Other Reports . . . . . . . . . . . . . . . . 14
Section 5.14. Prevailing Wage Clause . . . . . . . . . . . . . . . . . . . 14

                                      i
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Section 5.15. Continuing Disclosure. . . . . . . . . . . . . . . . . . . . 14

                                      ARTICLE VI

                        DAMAGE, DESTRUCTION AND CONDEMNATION;
                                   USE OF PROCEEDS

Section 6.1.  Obligation to Continue Payments. . . . . . . . . . . . . . . 15
Section 6.2.  Application of Net Proceeds. . . . . . . . . . . . . . . . . 15
Section 6.3.  Insufficiency of Net Proceeds. . . . . . . . . . . . . . . . 15

                                     ARTICLE VII

                            EVENTS OF DEFAULT AND REMEDIES

Section 7.1.  Events of Default. . . . . . . . . . . . . . . . . . . . . . 16
Section 7.2.  Remedies on Default. . . . . . . . . . . . . . . . . . . . . 16
Section 7.3.  Agreement to Pay Attorneys' Fees and Expenses. . . . . . . . 18
Section 7.4.  No Remedy Exclusive. . . . . . . . . . . . . . . . . . . . . 18
Section 7.5.  No Additional Waiver Implied by One Waiver . . . . . . . . . 18

                                     ARTICLE VIII

                                      PREPAYMENT

Section 8.1.  Prepayment of Loan . . . . . . . . . . . . . . . . . . . . . 19
Section 8.2.  Redemption of Bonds Upon Prepayment. . . . . . . . . . . . . 19
Section 8.3.  Amount of Prepayment.. . . . . . . . . . . . . . . . . . . . 19

                                      ARTICLE IX

                          LIMITATION ON LIABILITY OF ISSUER;
                              EXPENSES; INDEMNIFICATION

Section 9.1.  Limitation on Liability of Issuer. . . . . . . . . . . . . . 20
Section 9.2.  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.3.  Indemnification. . . . . . . . . . . . . . . . . . . . . . . 20

                                      ARTICLE X

                                    MISCELLANEOUS

Section 10.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.2. Severability . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.3. Execution of Counterparts. . . . . . . . . . . . . . . . . . 22
Section 10.4. Amendments, Changes and Modifications. . . . . . . . . . . . 22
Section 10.5. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.6. Authorized Representatives . . . . . . . . . . . . . . . . . 22
Section 10.7. Term of the Agreement. . . . . . . . . . . . . . . . . . . . 22
Section 10.8. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . 23
Section 10.9. Capacity of Trustee. . . . . . . . . . . . . . . . . . . . . 23

EXHIBIT A - FORM OF FUNDING REQUISITION
EXHIBIT B - FACILITIES FINANCED FROM BOND PROCEEDS

                                      ii
<PAGE>

                                    LOAN AGREEMENT


     THIS LOAN AGREEMENT, dated as of November 1, 1996, by and among the LA 
MIRADA INDUSTRIAL DEVELOPMENT AUTHORITY, a public body, corporate and 
politic, organized and existing under the laws of the State of California 
(the "Issuer"), BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a national banking 
association organized and existing under the laws of the United States of 
America, as trustee under that certain Indenture of Trust, dated as of 
November 1, 1996 (the "Indenture"), by and between the Issuer and said 
trustee (the "Trustee"), and RYKOFF-SEXTON, INC., a corporation organized and 
existing under the laws of the State of Delaware (the "Company").


                            W I T N E S S E T H :


     WHEREAS, the Issuer is organized and existing under the laws of the 
State (capitalized terms used herein and not otherwise defined shall have the 
meanings given such terms pursuant to Section 1.1) and is empowered under the 
provisions of the Act to make and execute contracts and other instruments and 
documents necessary or convenient for the purpose of facilitating the 
financing of certain capital projects consisting of industrial facilities; and

     WHEREAS, the Issuer is further authorized to issue its bonds for the 
purpose of paying all or any part of the costs of a project, and for any 
other authorized purpose; to acquire and hold property, including funds, 
project agreements and other obligations of any kind, and pledge, encumber or 
assign the same, or the revenues therefrom or any portion of such revenues, 
or other rights, whether then owned or possessed, or thereafter acquired, for 
the benefit of the owners, and as security or additional security for any 
bonds or the performance of obligations under an indenture; to provide for 
the advance of bond proceeds and other funds pursuant to project agreements 
as necessary to pay or reimburse for project costs and to enter into loan 
agreements; and

     WHEREAS, in furtherance of the purposes of the Act and in order to 
protect the health, welfare and safety of the citizens of the State, the 
Issuer proposes to finance the acquisition, construction or equipping of the 
Project to be owned by the Company; and

     WHEREAS, pursuant to and in accordance with the provisions of the Act, 
and pursuant to a resolution duly adopted by the Issuer, the Issuer has 
authorized and undertaken the issuance of its industrial development revenue 
bonds (the "Bonds") in the aggregate principal amount of not to exceed 
$45,000,000 to provide funds to pay the cost of the Project; and

     WHEREAS, the Issuer proposes to loan the proceeds of the Bonds to the 
Company, and the Company desires to borrow the proceeds of the Bonds upon the 
terms and conditions set forth herein; and

     WHEREAS, the loan repayments payable by the Company and the purchase 
price of the Bonds as set forth herein will be secured by an irrevocable 
letter of credit issued by the Credit Bank pursuant to the Reimbursement 
Agreement;

     NOW THEREFORE, for and in consideration of the promises and the mutual 
covenants hereinafter contained, for good and other valuable consideration, 
the receipt and sufficiency of which are hereby mutually acknowledged, the 
parties hereto agree as follows:

                                       1
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                                  ARTICLE I

                         DEFINITIONS AND CONSTRUCTION


     Section 1.1. DEFINITION OF TERMS.  Unless the context otherwise 
requires, the capitalized terms used in this Agreement shall have the 
meanings specified in Section 1.01 of the Indenture , as such Indenture is 
originally executed or as it may from time to time be supplemented or amended 
as provided therein.

     Section 1.2. RULES OF CONSTRUCTION.

             (a)  The singular form of any word used herein, including the 
     terms defined in Section 1.01 of the Indenture, shall include the plural,
     and vice versa.  The use herein of a word of any gender shall include
     correlative words of all genders.

             (b)  Unless otherwise specified, references to Articles, Sections
     and other subdivisions of this Agreement are to the designated Articles,
     Sections and other subdivisions of this Agreement as originally executed.
     The words "hereof," "herein," "hereunder" and words of similar import
     refer to this Agreement as a whole.

             (c)  The headings or titles of the several articles and sections,
     and the table of contents appended to copies hereof, shall be solely for
     convenience of reference and shall not affect the meaning, construction or
     effect of the provisions hereof.

                                       2
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                                  ARTICLE II

                    GENERAL REPRESENTATIONS AND AGREEMENTS


     Section 2.1. REPRESENTATIONS AND AGREEMENTS OF THE ISSUER.  The Issuer 
makes the following representations and agreements as the basis for its 
undertakings herein contained:

             (a)  The Issuer is a public body, corporate and politic, duly
     organized and existing under the laws of the State.  By proper action, the
     Issuer has authorized the execution, delivery and due performance by it of
     this Agreement.

             (b)  To finance the Project, the Issuer will issue the Bonds, which
     will mature, bear interest and be subject to redemption as set forth in the
     Indenture.

             (c)  The Bonds will be issued under and secured by the Indenture,
     pursuant to which the Issuer's interest in this Agreement (except certain
     rights of the Issuer to payment for fees, expenses and indemnification and
     certain rights of enforcement) will be pledged to the Trustee as security
     for payment of the principal of, premium, if any, and interest on the
     Bonds.

             (d)  The Issuer has not pledged and will not pledge its interest in
     this Agreement for any purpose other than to secure the Bonds under the
     Indenture.

             (e)  The Issuer is not in default under any of the provisions of
     the laws of the State which default would affect its existence or its
     powers referred to in this Section 2.1.

             (f)  No officer or other official of the Issuer has any interest
     whatsoever in the Project or the Company or in the transactions
     contemplated by this Agreement.

     Section 2.2. REPRESENTATIONS AND AGREEMENTS OF THE TRUSTEE.  The Trustee
makes the following representations and agreements as the basis for its
undertakings herein contained:

             (a)  The Trustee has been duly organized under the laws of the
     United States of America and is validly existing as a national banking
     association under the laws governing its creation and is qualified under
     9.07 of the Indenture.

             (b)  This Agreement has been duly authorized, executed and
     delivered by the Trustee and when duly executed and delivered by the
     Company and the Issuer, will constitute the legal, valid and binding
     obligation of the Trustee enforceable in accordance with its terms except
     as enforcement may be limited by bankruptcy, insolvency, reorganization, or
     other laws or equitable principles limiting creditors' rights generally.
     The Trustee makes no representation as to the availability of specific
     performance or other equitable remedies.

     Section 2.3. REPRESENTATIONS AND AGREEMENTS OF THE COMPANY.  The Company 
makes the following representations and agreements as the basis for its 
undertakings herein contained:

             (a)  The Company is a corporation duly organized under the laws of
     the State of Delaware, is qualified as a foreign corporation and in good
     standing in the State of California, has the power and authority to own its
     properties and assets and to carry on its business as now conducted and as
     contemplated to be conducted hereunder and has the power to execute and
     deliver and has duly authorized, by proper action, the

                                       3
<PAGE>

     execution and delivery of this Agreement and all other documents
     contemplated hereby to be executed by the Company.

             (b)  Neither the execution and delivery of this Agreement or the
     consummation of the transactions contemplated hereby, nor the fulfillment
     of or compliance with the terms and conditions hereof, conflict with or
     result in a breach of any of the terms, conditions or provisions of any
     agreement or instrument to which the Company is now a party or by which the
     Company is bound, or constitute a default (with due notice or the passage
     of time or both) under any of the foregoing, or results in the creation or
     imposition of any prohibited lien, charge or encumbrance whatsoever upon
     any of the property or assets of the Company under the terms of any
     instrument or agreement to which the Company is now a party or by which it
     is bound.

             (c)  The Project is located wholly within the geographic boundaries
     of the City of La Mirada, California.

             (d)  The Company has title to the Project sufficient to carry out
     the purposes of this Agreement and the acquisition and construction of the
     portions of the Project to be financed with the proceeds of Bonds has been
     fully completed in accordance with the plans and specifications therefor.

             (e)  There is no action, suit or proceeding at law or in equity or
     by or before any governmental instrumentality or other agency now pending,
     or, to the best knowledge of the Company threatened against or affecting
     the Company or any of its properties or rights, which, if adversely
     determined, would materially impair its right to carry on business
     substantially as now conducted or as now contemplated to be conducted, or
     would materially adversely affect its financial condition.  After
     consummation of the financing transaction, the Company  will not be in
     material default in the performance, observance or fulfillment of any of
     the obligations, covenants or conditions contained in any material
     agreement or instrument to which the Company is a party.

             (f)  The operation of the Project in the manner presently
     contemplated and as described herein, to the best knowledge of the Company,
     does not conflict with any zoning, water or air pollution, hazardous waste,
     water disposal or other environmental matters or other ordinance, order,
     law or regulation applicable thereto.  The Company has caused the Project
     to be designed and built in accordance with all applicable federal, state
     and local laws or ordinances (including rules and regulations) relating to
     zoning, building, safety and environmental quality.

             (g)  The Company has filed or caused to be filed all federal, state
     and local tax returns which are required to be filed, and has paid or
     caused to be paid all taxes as shown on said returns or on any assessment
     received by it, to the extent that such taxes have become due, except such,
     if any, as are being actively contested by the Company in good faith or for
     which adequate reserves in accordance with generally accepted accounting
     principles have been set aside for the payment thereof.

             (h)  No officer or other official of the Issuer has any interest
     whatsoever in the Project or in the transactions contemplated by this
     Agreement.

             (i)  To the knowledge of the Company, the Company has obtained all
     necessary certificates, approvals, permits and authorizations with respect
     to the construction of the Project from applicable local governmental
     agencies and agencies of the State and the federal government.

                                       4
<PAGE>

             (j)  The information contained in the Private Placement Memorandum,
     insofar as such information relates to the Company and the Project is
     accurate in all material respects and does not contain any untrue statement
     of a material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements made therein, in light of the 
     circumstances under which they were made, not misleading.

             (k)  The Company acknowledges, represents and warrants that it
     understands the risks inherent in the issuance of the Bonds and the other
     transactions contemplated thereby, including without limitation the risk of
     loss of the Project; and that it has not relied on the Issuer for any
     guidance or expertise in analyzing the financial or other consequences of
     the issuance of the Bonds and the other transactions contemplated thereby
     or otherwise relied on the Issuer in any manner except to issue the Bonds
     in order to provide funds for the Loan.

             (l)  The Company intends to hold the Project for its own account,
     has no current plans to sell and has not entered into any agreement to sell
     the Project.

                                       5
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                                 ARTICLE III

               FINANCING OF THE PROJECT; ISSUANCE OF THE BONDS


     Section 3.1. AGREEMENT TO ISSUE BONDS; APPLICATION OF BOND PROCEEDS.  To 
provide funds to finance the Project, the Issuer agrees that it will issue 
under the Indenture, sell and cause to be delivered to the purchasers 
thereof, the Bonds in multiple series, bearing interest at the rates and 
payable as to principal and interest at the times as set forth in the 
Indenture.  The Issuer will thereupon deposit the proceeds received from the 
sale of any series of Bonds with the Trustee for use by the Borrower to pay 
Project Costs as provided in Section 3.2 hereof and in the Indenture.

     Section 3.2. DISBURSEMENT FROM THE PROJECT FUND.  The Issuer has 
authorized and directed the Trustee to disburse moneys from the Project Fund 
created pursuant to the Indenture to pay or to reimburse the Company for 
Project Costs, but only if, except as otherwise provided in Section 4.01 of 
the Indenture, the Trustee shall have received a requisition executed by a 
Company Representative and approved in writing by an Authorized Bank 
Representative, with respect to each requested disbursement.  Each 
requisition shall be signed by a Company Representative and state with 
respect to each disbursement to be made:  (a) the requisition number, (b) the 
amount to be disbursed, (c) that each obligation mentioned therein is a 
Project Cost, has been properly incurred, is a proper charge against the 
Project Fund and has not been the basis of any previous disbursement, and (d) 
that the full amount of such disbursement will be applied to reimburse the 
Company for the payment of Project Costs.

     Upon receipt of a requisition properly executed by a Company 
Representative and approved in writing by an Authorized Bank Representative, 
the Trustee shall disburse moneys from the Project Fund in accordance with 
such requisition.  All disbursements shall be as directed in the requisition 
as consented to in writing by the Credit Bank.

     Upon receipt of a properly-signed requisition, the Trustee is authorized 
to act thereon without further inquiry and, except for the negligence or 
willful misconduct of the Trustee, the Company shall hold the Trustee 
harmless against any and all losses, claims or liability incurred in 
connection with the Trustee directly making such disbursements from the 
Project Fund.  Neither the Trustee nor the Issuer shall be responsible for 
the accuracy of any representation made in such requisition or for the 
application by the Credit Bank or the Company of moneys disbursed in 
accordance with this Section 3.2.

     Section 3.3. INVESTMENT OF MONEYS.  Upon written direction of the 
Company, approved in writing by the Credit Bank, any moneys in any fund or 
account held by the Trustee shall be invested or reinvested by the Trustee as 
provided in the Indenture, and the Company hereby approves such provisions of 
the Indenture and directs the Trustee to make such investments.

                                       6
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                                  ARTICLE IV

                     LOAN OF PROCEEDS; PAYMENT PROVISIONS


     Section 4.1. LOAN OF BOND PROCEEDS.  The Issuer and the Trustee agree, 
upon the terms and conditions in this Agreement, to make a loan to the 
Company in a series of amounts aggregately equal to the aggregate principal 
amount of the Bonds issued,  delivered and outstanding at any particular 
time, for the purpose of financing the Project.  Pursuant to said covenant 
and agreement, the Issuer will issue the Bonds upon the terms and conditions 
contained in this Agreement and the Indenture and will cause the proceeds of 
each series of Bonds to be applied by the Trustee as provided in Article IV 
of the Indenture and Section 3.2 hereof.

     Section 4.2. LOAN REPAYMENT AND PAYMENT OF OTHER AMOUNTS.

             (a)  The Company hereby acknowledges its indebtedness to the 
     Issuer and agrees to repay the Loan in the amounts and at the times 
     necessary to enable the Trustee, on behalf of the Issuer, to pay all 
     amounts payable with respect to the Bonds when due, including the 
     principal and Purchase Price of, premium, if any, and interest on the 
     Bonds, whether on regularly scheduled Interest Payment Dates, at 
     maturity, on any Purchase Date, or upon redemption or acceleration or 
     otherwise.  The Company hereby agrees to cause the Letter of Credit to 
     be delivered to the Trustee in accordance with the terms of the 
     Reimbursement Agreement and Section 5.7 hereof.  To the extent Loan 
     repayments are made with the proceeds of a draw or draws on the Letter 
     of Credit, amounts paid by the Company to repay the Loan shall be paid 
     to the Credit Bank for repayment of the Company's obligations under the 
     Reimbursement Agreement.

             (b)  The Company agrees: (1) to pay to the Trustee from time to 
     time all amounts referred to in Section 9.06 of the Indenture, including 
     but not limited to reasonable compensation for all services rendered by 
     it under this Agreement, the Indenture and the other agreements relating 
     to the Bonds to which the Trustee is a party; (2) except as otherwise 
     expressly provided herein, the Indenture or such other agreements, to 
     reimburse each of the Trustee and the Tender Agent upon its request for 
     all reasonable expenses, disbursements and advances (including 
     reasonable counsel fees and disbursements) incurred or made by the 
     Trustee or the Tender Agent in accordance with any provision of the 
     Indenture or other agreements to which the Trustee or the Tender Agent 
     is a party or pursuant to which it is required to act (including the 
     reasonable compensation and the expenses and disbursements of its agents 
     and counsel), except any such expense, disbursement or advance as may be 
     attributable to its negligence or willful misconduct; (3) to indemnify 
     the Trustee and the Tender Agent for, and hold each harmless against, 
     any loss, liability or expense (including reasonable counsel fees and 
     disbursements)  incurred without negligence or bad faith on its part, 
     arising out of or in connection with the acceptance or administration of 
     the trust under this Agreement, the Indenture or any other agreement 
     relating to the Bonds to which the Trustee or the Tender Agent is a 
     party or pursuant to which it is required to act, including the costs 
     and expenses of defending itself against any claim or liability in 
     connection with the exercise or performance of any of its powers or 
     duties hereunder or thereunder, including, without limitation, any 
     costs, liabilities and expenses arising in connection with environmental 
     matters referred to in Section 5.6 hereof; and (4) to pay any fee of any 
     Rating Agency then rating the Bonds, the fees of the Remarketing Agent, 
     the Tender Agent and any paying agents, and any other amounts referred 
     to the Indenture.

                                       7

<PAGE>


          (c)  The Company also agrees to pay, within thirty (30) days 
     after receipt of a request for payment thereof, all reasonable fees 
     and expenses of the Issuer or any other party incurred in connection 
     with the financing of the Project pursuant hereto and the Indenture 
     which are not otherwise required to be paid by the Company under the
     terms of this Agreement; including, without limitation, all legal
     fees and expenses incurred by the Issuer and the Trustee in
     connection with the issuance and delivery of the Bonds and the
     amendment, interpretation and enforcement of any documents
     relating to the Project or the Bonds.

          (d)  The Company also agrees to pay, on the Closing Date, the 
     administrative fee of the Issuer, if any, plus the reasonable fees 
     of counsel or other advisors to the Issuer, if any,  related to the 
     issuance of the Bonds.

          (e) The Issuer, the Trustee and the Company acknowledge that 
     the Credit Bank is not liable for the payment of amounts due under 
     the preceding paragraphs (a) through (d) other than as provided in 
     the Letter of Credit and herein.

     Section 4.3. UNCONDITIONAL OBLIGATION.  The obligations of the Company 
to make the payments required by Section 4.2 hereof and to perform and 
observe the other agreements on its part contained herein shall be absolute 
and unconditional, irrespective of any defense or any rights of set-off, 
recoupment or counterclaim it might otherwise have against the Issuer or the 
Trustee, and during the term of this Agreement, the Company shall pay 
absolutely all payments required hereunder, free of any deductions and 
without abatement, diminution or set-off.  Until such time as the principal 
and Purchase Price of, premium, if any, and interest on the Bonds shall have 
been fully paid, or provision for the payment thereof shall have been made as 
required by the Indenture, the Company (i) will not suspend or discontinue 
any payments provided for in Section 4.2 hereof; (ii) will perform and 
observe all of its other covenants contained in this Agreement; and (iii) 
except as provided in Article VIII hereof, will not terminate this Agreement 
for any cause, including, without limitation, the occurrence of any act or 
circumstances that may constitute failure of consideration, destruction of or 
damage to the Project, commercial frustration of purpose, any change in any 
laws of the United States of America or of the State or any political 
subdivision or either of these, or any failure of the Issuer or the Trustee 
to perform and observe any covenant, whether express or implied, or any duty, 
liability or obligation arising out of or connected with this Agreement or 
the Indenture, except to the extent permitted by this Agreement.

     Section 4.4. ASSIGNMENT OF ISSUER'S RIGHTS.  As security for the
payment of the Bonds, the Issuer, in the Indenture, assigns to the Trustee
certain of the Issuer's rights under this Agreement, including the right to
receive payments hereunder (except for the right of the Issuer to receive
certain payments, if any, with respect to fees, expenses and indemnification
under Sections 4.2(c) and (d), 7.3, 9.2 and 9.3 hereof), and the Issuer hereby
directs the Company to make the payments required hereunder (except such
payments for Issuer fees, expenses and indemnification) directly to the Trustee.
The Company hereby assents to such assignment and agrees to make payments
directly to the Trustee without defense or set-off by reason of any dispute
between the Company and the Issuer or the Trustee.  By virtue of such
assignment, the Trustee shall have the right to enforce the obligations of the
Company hereunder.

     In consideration for the undertaking by the Company to reimburse the 
Credit Bank for amounts drawn under the Letter of Credit to purchase Bonds 
which are tendered for purchase and not remarketed pursuant to Section 3.08 
of the Indenture by causing the Bonds so purchased to be held for the account 
of and registered in the name of the Credit Bank, the Issuer hereby assigns 
to the Credit Bank, as assignee of the Company, all of the Issuer's right, 
title and interest in and to any and all proceeds of any subsequent 
remarketing of any such Bonds so 


                                      8

<PAGE>

purchased, and hereby agrees to direct the Remarketing Agent to pay any such 
proceeds to the Credit Bank.

     Section 4.5. AMOUNTS REMAINING IN FUNDS AND ACCOUNTS.  It is agreed by 
the parties hereto that after (i) payment in full of the Bonds, or provision 
for such payment having been made as provided in the Indenture, (ii) payment 
of all fees, charges and expenses of the Trustee and any paying agents in 
accordance with the terms of the Indenture, and (iii) payment of all other 
amounts required to be paid under this Agreement and the Indenture, any 
amounts remaining in any fund or account held by the Trustee under the 
Indenture, subject to the application of amounts in the Bond Fund to the 
payment of particular Bonds, shall be paid by the Trustee as provided in 
Section 7.03 of the Indenture , and the Issuer shall have no claim to such 
amounts.

     Section 4.6. ADDITIONAL BONDS.  If the Company is not in default 
hereunder, the Issuer may, in its sole discretion, by the adoption of an 
appropriate resolution or resolutions, at the request of the Company and with 
the consent of the Credit Bank (unless there shall be a Rating Event Date in 
connection with the issuance of Additional Bonds), authorize the issuance of 
Additional Bonds upon the terms and conditions provided herein and in Section 
2.11 of the Indenture, but in no event shall the Issuer be liable for not 
issuing such Additional Bonds.  Additional Bonds may be issued only to 
provide funds to pay any one or more of the following:  (i) reimbursement of 
Project Costs not financed with the proceeds of a prior series of Bonds; (ii) 
the costs of making at any time or from time to time such substitutions, 
additions, modifications and improvements to the Project or any portion 
thereof, as authorized by the Act, as the Company may deem necessary or 
desirable; (iii) to refund any outstanding Bonds; and (iv) the costs of the 
issuance and sale of the Additional Bonds, and other costs reasonably related 
to the financing as shall be agreed upon by the Company and the Issuer.  
Prior to the issuance of such Additional Bonds, the terms thereof, the 
purchase price to be paid therefor and the manner in which the proceeds 
therefrom are to be disbursed shall have been approved in writing by the 
Company; the Company and the Issuer shall have entered into an amendment to 
this Agreement to provide that, for all purposes of this Agreement, the 
Project shall include any facilities being financed by the Additional Bonds, 
which facilities shall be described in an amendment to Exhibit B hereto, and 
to provide for an increase in the amount payable under Section 4.2 hereof as 
shall be necessary to pay the principal of, premium, if any, and interest on 
the Additional Bonds as provided in the supplemental indenture to be paid 
with respect to such Additional Bonds; and the Issuer shall have otherwise 
complied with the provisions of Section 2.11 of the Indenture with respect to 
the issuance of such Additional Bonds  The Company shall pay, or cause to be 
paid by persons other than the Issuer, all costs of issuance of any 
Additional Bonds not paid from the proceeds of sale thereof. 


                                   9
<PAGE>

                               ARTICLE V

                   SPECIAL COVENANTS AND AGREEMENTS

     Section 5.1. RIGHT OF ACCESS TO THE PROJECT AND RECORDS.  The Company 
agrees that, during the term of this Agreement, the Issuer, the Trustee and 
the duly authorized agents of either of them shall have the right at all 
reasonable times and upon reasonable notice during normal business hours to 
enter upon the site of the Project to examine and inspect the Project and to 
have access to the books and records of the Company with respect to the 
Project.

     Section 5.2. MAINTENANCE OF EXISTENCE; ASSIGNMENTS.

          (a)  The Company agrees that during the term of this 
     Agreement it will not dispose of all or substantially all of its 
     assets or will not combine or consolidate with or merge with or into 
     another entity; provided, however, that the Company may consolidate 
     with, or merge into another entity existing under the laws of one of 
     the states of the United States, or permit one or more other entities
     to consolidate with or merge the assets with such entity's
     assets; or sell or otherwise transfer to another entity all or
     substantially all of its assets as an entirety, provided that (i)
     the surviving, resulting or transferee entity, as the case may
     be, assumes and agrees in writing to pay and perform all of the
     obligations of the Company hereunder, and (ii) the Company shall
     have obtained the written approval of the Credit Bank, if any.

          (b)  The rights and obligations of the Company under 
     this Agreement may be assigned by the Company to any person in 
     whole or in part, in connection with and in proportion to, any 
     conveyance of all or part of the Project permitted by the 
     Reimbursement Agreement; provided that (i) the assignee shall 
     assume in writing the obligations of the Company hereunder to 
     the extent of the interest assigned, and a copy of such instrument 
     of assumption shall be delivered to the Issuer and the Trustee 
     within ten (10) days after the execution thereof; (ii) the Company 
     shall have obtained the written consent of the Credit Bank, if any; 
     and (iii) the Company shall remain liable for its obligations
     hereunder to the extent of any interest not so assigned.

          (c)  The rights and obligations of the Company under 
     this Agreement may also be assigned by the Company to any person 
     in whole or in part, subject, however, to each of the following 
     conditions:

               (i) No assignment other than pursuant to subsection (a) or 
          (b) of this Section 5.2 shall relieve the Company from primary 
          liability for any of its obligations hereunder, and in the event of 
          any assignment not pursuant to subsection (a) or (b) of this Section 
          5.2 the Company shall continue to remain primarily liable for the 
          payments specified in Section 4.2 hereof and for performance and 
          observance of the other agreements on its part herein provided to be 
          performed and observed by the Company.

               (ii) Any assignment from the Company shall retain for the Company
          such rights and interests as will permit it to perform its obligations
          under this Agreement, and any assignee from the Company shall assume 
          the obligations of the Company hereunder to the extent of the interest
          assigned.

               (iii) The Company shall, within thirty days after delivery 
          thereof, furnish or cause to be furnished to the Issuer and the 
          Trustee a true and complete copy 


                                             10
<PAGE>

          of each such assignment together with an instrument of assumption 
          and the written consent of the Credit Bank to such assignment.

          Section 5.3. STATEMENT OF COMPLIANCE; NOTICE OF EVENT OF DEFAULT
          AND CERTAIN EVENTS.

          (a)  The Company will deliver to the Issuer and the Trustee, 
     within 120 days after the end of each fiscal year, a written statement 
     signed by a Company Representative stating, as to the signer thereof, 
     that (1) a review of the activities of the Company during such year
     and of performance under this Agreement has been made under his
     supervision, and (2) to the best of the knowledge of such Company
     Representative, based on such review, the Company has fulfilled
     all its obligations under this Agreement throughout such year,
     or, if there has been a default in the fulfillment of any such
     obligation, specifying each such default known to such Company
     Representative and the nature and status thereof.

          (b)  The Company hereby covenants to notify the Issuer and the 
     Trustee in writing of the occurrence of any Event of Default hereunder 
     or any event which, with the passage of time or service of notice,
     or both, would constitute an Event of Default hereunder,
     specifying the nature and period of existence of such event and
     the actions being taken or proposed to be taken with respect
     thereto.  Such notice shall be given promptly, and in no event
     less than ten (10) Business Days after the Company receives
     notice or knowledge of the occurrence of any such event.  The
     Company further agrees that it will give prompt written notice to
     the Trustee if insurance proceeds or condemnation awards are
     received with respect to the Project and are not used to repair
     or replace the Project, which notice shall state the amount of
     such proceeds or award.

     Section 5.4. INSURANCE; MAINTENANCE AND REPAIR.  The Company
agrees to insure the Project or cause the Project to be insured (including
through self-insurance) during the term of this Agreement for such amounts and
for such occurrences as are required under the Reimbursement Agreement, or to
the extent that no Reimbursement Agreement exists, for such amounts and for such
occurrences as are generally carried by persons engaged in similar businesses as
the Company and for facilities substantially similar to the Project.  The
Company further agrees to provide the Trustee and the Credit Bank with evidence
of such insurance and to certify compliance with the insurance requirements by
not later than October 1 of each year, or any other date that the Company
determines as its insurance policy renewal date end year.

     The Company further agrees to maintain the Project, or cause the
Project to be maintained, during the term of this Agreement (i) in a reasonably
safe condition and (ii) in reasonably good repair and in reasonably good
operating condition, ordinary wear and tear excepted, making from time to time
all necessary repairs thereto and renewals and replacements thereof.

     Section 5.5. ADDITIONAL INSTRUMENTS; DEED OF TRUST.  The Company
hereby covenants to execute and deliver such additional instruments and to
perform such additional acts as may be necessary, in the opinion of the Issuer
or the Trustee, to carry out the intent hereof or to perfect or give further
assurances of any of the rights granted or provided for herein or contemplated
hereby.  The Company shall incur no obligations in addition to the obligations
created hereby in connection with the execution and delivery of such additional
instruments except as may be set forth in such additional instruments.

     The Company hereby agrees to execute and deliver to the Trustee,
and cause to be properly recorded, a Deed of Trust in a form acceptable to the
Issuer and the Trustee on or prior to the date on which the Bonds are remarketed
as a result of the occurrence of a Rating Event Date.


                                        11
<PAGE>


     Section 5.6. ENVIRONMENTAL MATTERS.  The Company hereby agrees to not 
engage in any activity in any part of the Project, and shall use best efforts 
to prevent others from engaging in any activity therein, which will result in 
the Project, or any part thereof, containing any of the following in 
concentrations or under conditions in violation of Hazardous Materials Laws 
(as defined below):  (a) any oil, or Hazardous Materials, as defined below 
(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 be 
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 Section 5.6.  If at any time it is 
determined that the provisions of this Section 5.6 have been violated, then 
unless the Company provides a Hazardous Materials Report (as defined below) 
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 the Issuer reasonably believes that the value of its security interest in 
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 Project in violation of any Hazardous Materials 
Laws, then the Issuer may request and the Company agrees to submit, if 
requested by the Issuer, a report (the "Hazardous Materials Report"), 
satisfactory to the Issuer 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 of the Issuer 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, the Issuer 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 Project, and the reasonable expense 
thereof shall be deemed to be an operating expense of the Company.  The 
Company hereby grants to the Issuer, its agents, employees, consultants and 
contractors the rights to enter upon the Project, during normal business 
hours after notice and in a manner than will not unreasonably disturb the use 
and enjoyment of the Project, and to perform such tests on the Project as are 
reasonably necessary to conduct such a review and/or investigation.  Any 
liability of the Company arising out of this Section 5.6 shall survive the 
Company's satisfaction of its obligations hereunder, including, without 
limitation, a transfer of the Project or any portion thereof, by foreclosure, 
by deed in lieu of foreclosure or otherwise.

     As used herein, "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 Project.

     As used herein, "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) post a hazard to the Project or to persons on or about the Project 
or (ii) cause the Project to be in violation of any Hazardous Materials Laws; 
(b) asbestos in any form which is or could become friable, urea folmaldehyde 
foam insulation, transformers or other equipment which contain dielectric 
fluid containing levels of 


                                       12
<PAGE>


polychlorinated biphenyls in excess of fifty (50) parts per million; (c) any 
chemical, materials 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, 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 Project or the owners and/or occupants of 
property adjacent to or surrounding the Project.

     As used herein, "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.

     Section 5.7. LETTER OF CREDIT.  In order to provide for the payments 
required by the Company pursuant to Section 4.2(a) hereof, the Company shall 
cause to be provided on the Closing Date, and be continuously available to 
the Trustee, as beneficiary, at all times prior to a Rating Event Date, an 
irrevocable Letter of Credit (whether in the form of a letter of credit or 
any other credit instrument) meeting the requirements of Section 5.01 of the 
Indenture.  The Company shall have the right, subject to the provisions of 
the Reimbursement Agreement, to provide to the Trustee a substitute Letter of 
Credit which meets the requirements of Section 5.01(b) of the Indenture.

     Section 5.8. INDENTURE.  The Company hereby agrees to all of the terms 
and provisions of the Indenture and accepts each of his obligations expressed 
or implied thereunder.  The Company hereby approves the initial appointment 
under the Indenture of the Trustee, the Remarketing Agent and the Tender 
Agent for the Bonds.  The Company hereby agrees that it will not, and will 
not permit any affiliate of the Company to, purchase any Bonds from the 
Remarketing Agent.

     Section 5.9. TITLE TO AND COMPLETION OF THE PROJECT.  The Company shall 
have fee title to the Project free and clear of any lien or encumbrance 
except for (i) liens for nondelinquent assessments and taxes not yet due or 
which are being contested in good faith by appropriate proceedings; and (ii) 
any other encumbrances approved by the Credit Bank.

     Section 5.10. DESIGN OF THE PROJECT.  To the best of the Company's 
knowledge the design, construction and operation of the Project in the manner 
completed and as described herein does not conflict with any zoning, water or 
air pollution or other resolution, order, law or regulation applicable 
thereto; the Company has caused the Project to be designed and constructed in 
accordance with all the applicable federal state and local laws or 
resolutions (including rules and regulations) relating to zoning, building, 
safety and environmental quality; and the Company has not failed, or will not 
fail, to obtain and maintain in effect any licenses, permits, franchises or 
other governmental authorizations necessary for the construction, operation 
and conduct of the Project to date.  The Company hereby agrees to operate the 
Project, or cause any 


                                        13
<PAGE>


lessee or other user of the Project, to operate the Project as a "project" 
as contemplated by the Act

     Section 5.11. NO UNTRUE STATEMENTS.  Neither this Agreement or any other 
document or certificate furnished to the Trustee, the Credit Bank, the 
Remarketing Agent or the Issuer by the Company or any Company Representative 
on or after the Closing Date, contains, to the best of the Company's 
knowledge, any untrue statement of a material fact or omits to state a 
material fact necessary in order to make the statements contained herein and 
therein not misleading as of the date of submittal thereof, the date of 
execution hereof and as of the Closing Date.  It is specifically understood 
by the Company that all statements, representations and warranties made in 
the Agreement or any other document, certificate or statement furnished to 
the Trustee, the Credit Bank, the Remarketing Agent or the Issuer by the 
Company or any Company Representative shall be deemed to have been relied 
upon by the Issuer as an inducement to make the Loan and that if any such 
statements, representations and warranties were materially incorrect at the 
time they were made or as of the Closing Date, the Issuer may consider any 
such misrepresentation or breach an Event of Default.

     Section 5.12. DATE OF CONSTRUCTION.  The Company hereby represents and 
warrants that the acquisition, construction, equipping, furnishing and 
improvement of all portions of the Project to be financed with proceeds from 
the sale of the Bonds has been completed.

     Section 5.13. EMPLOYMENT AND OTHER REPORTS.  Within sixty (60) days 
following the end of the Company's fiscal year, the Company shall furnish a 
written report to the Issuer, and upon request, to the California Industrial 
Development Financing Advisory Commission, stating the number of full-time 
and part-time employees of the Company employed at the Project during such 
fiscal year, and supplying, copies of financial statements and reports 
required to be delivered to the Credit Bank pursuant to the Reimbursement 
Agreement.

     Section 5.14. PREVAILING WAGE CLAUSE.  All workers employed by the 
Company with respect to the acquisition and construction of the Project, 
exclusive of those engaged to do strictly maintenance work, shall have been 
paid not less than the general prevailing rate of per diem wages for work of 
a similar character in the locality in which the work is performed, and not 
less than the general prevailing rate of per diem wages for holiday and 
overtime work.  Those rates shall be determined by the Director of the 
Department of Industrial Relations in accordance with the standards set forth 
in section 1773 of the California Labor Code.  The Director's determination 
shall be final, the sections 1773.5, 1774 and 1776 (excepting subdivision 
(f)) of the California Labor Code shall apply.

     Section 5.15. CONTINUING DISCLOSURE.  In the event that any of the 
continuing disclosure provisions set forth in Rule 15(c)(2)-12 as promulgated 
and amended by the Securities and Exchange Commission under the Securities 
Exchange Act of 1934, creates any disclosure obligations with respect to the 
Bonds, the Company or the Project, the Company hereby agrees to take such 
actions as may reasonably be requested by the Remarketing Agent or the Issuer 
so as to meet the Issuer's or Company's obligations thereunder.  The Company 
hereby agrees to pay all costs, fees or expenses arising from the compliance 
by the Issuer or the Company with the provisions of this Section 5.15. 
ARTICLE VI


                                      14
<PAGE>


                                   ARTICLE VI

                      DAMAGE, DESTRUCTION AND CONDEMNATION;
                                USE OF PROCEEDS

     Section 6.1. OBLIGATION TO CONTINUE PAYMENTS.  If prior to full payment 
of the Bonds (or provision for payment thereof in accordance with the 
provisions of the Indenture) the Project or any portion thereof is destroyed 
(in whole or in part) or is damaged by fire or other casualty, or title to, 
or the temporary use of, the Project or any portion thereof shall be taken 
under the exercise of the power of eminent domain by any governmental body or 
by any person, firm or corporation acting under governmental authority, the 
Company shall nevertheless be obligated to continue to pay the amounts 
specified in Article IV hereof, to the extent not prepaid in accordance with 
Article VIII hereof.

     Section 6.2. APPLICATION OF NET PROCEEDS.  The Net Proceeds, if any, of 
any insurance or condemnation award resulting from the damage, destruction or 
condemnation of the Project or any portion thereof shall be applied in one or 
more of the following ways at the election of the Company, such election to 
be subject to any conditions set forth in the Reimbursement Agreement, by 
written notice to Issuer, the Credit Bank and the Trustee:

          (a)  The prompt repair, restoration, relocation, modification or 
     improvement of the damaged, destroyed or condemned portion of the 
     Project to enable such portion of the Project to accomplish at least 
     the same function as such portion of the Project was designed to
     accomplish prior to such damage or destruction or exercise of such 
     power of eminent domain.

          (b)  Prepayment of all or a portion of the Loan, subject to and in 
     accordance with Article VIII hereof, and redemption of Bonds; provided 
     that no part of the Net Proceeds may be applied for such purpose
     unless (1) the entire amount of the Loan is so prepaid and all of
     the Outstanding Bonds are to be redeemed in accordance with the
     Indenture, or (2) in the event that only a portion of the Loan is
     so prepaid, the Company shall furnish to the Issuer, the Credit
     Bank and the Trustee a certificate of the Company Representative
     acceptable to the Issuer and the Credit Bank stating (i) that the
     property forming part of the portion of the Project that was
     damaged or destroyed by such casualty or was taken by such
     condemnation proceedings is not essential to the Company's use or
     possession of such portion of the Project or (ii) that such part
     of the portion of the Project has been repaired, replaced,
     restored, relocated, modified or improved to enable such portion
     of the Project to accomplish at least the same function as such
     portion of the Project was designed to accomplish prior to such
     damage or destruction or the taking by such condemnation
     proceedings.

     Section 6.3. INSUFFICIENCY OF NET PROCEEDS.  If the Project or a portion 
thereof is to be repaired, restored, relocated, modified or improved pursuant 
to Section 6.2 hereof, and if the Net Proceeds are insufficient to pay in 
full the cost of such repair, restoration, relocation, modification or 
improvement, the Company will nonetheless complete the work or cause the work 
to be completed and will pay or cause to be paid any cost in excess of the 
amount of the Net Proceeds. 


                                    15
<PAGE>

                               ARTICLE VII

                      EVENTS OF DEFAULT AND REMEDIES

     Section 7.1. EVENTS OF DEFAULT.  Any one of the following which occurs 
and continues shall constitute an Event of Default:

          (a)  failure by the Company to pay any amounts required to be paid 
     under Section 4.2(a) hereof at the times specified therein;

          (b)  failure by the Company to observe and perform any other covenant,
     condition or agreement on its part required to be observed or performed by
     this Agreement, and which continues for a period of thirty (30) days after 
     written notice, specifying such failure and requesting that it be remedied,
     given to the Company by the Issuer or the Trustee, unless the Issuer and 
     the Trustee shall, with the consent of the Credit Bank, agree in writing 
     to an extension of such time prior to its expiration; provided, however, 
     that if the failure stated in the notice cannot be corrected within such 
     period, the Issuer and the Trustee will not unreasonably withhold their 
     consent to an extension of such time if corrective action is instituted 
     within such period and diligently pursued until the default is corrected;

          (c)  the making of any representation or warranty by the Company in 
     this Agreement or in any document executed in connection with this 
     Agreement which is false or misleading in any material adverse respect 
     when made; or

          (d)  an event of default pursuant to and as defined in the provisions
     of the Indenture which has occurred and is continuing.

     The provisions of subsection (b) of this Section 7.1 are subject to the 
limitation that the Company shall not be deemed in default if and so long as 
the Company is unable to carry out its agreements hereunder by reason of 
strikes, lockouts or other industrial disturbances; acts of public enemies; 
orders of any kind of the government of the United States or of the State or 
any of their departments, agencies, or officials, or any civil or military 
authority; insurrections, riots, epidemics, landslides; lightning; 
earthquake; fire; hurricanes; storms; floods; washouts; droughts; restraint 
of government and people; civil disturbances; explosions; breakage or 
accident to machinery, transmission pipes or canals; partial or entire 
failure of utilities; or any other cause or event not reasonably within the 
control of the Company; it being agreed that the settlement of strikes, 
lockouts and other industrial disturbances shall be entirely within the 
discretion of the Company, and the Company shall not be required to make 
settlement of strikes, lockouts and other industrial disturbances by acceding 
to the demands of the opposing party or parties when such course is, in the 
judgment of the Company, unfavorable to the Company.  This limitation shall 
not apply to any default except under subsection (b) of this Section 7.1.

     Section 7.2. REMEDIES ON DEFAULT.

          (a)  Whenever any Event of Default shall have occurred and shall 
     continue, after giving notice to the Credit Bank and subject to any right 
     of the Credit Bank to cure any such default, the Issuer and the Trustee
     may take any one or more of the following remedial steps:

               (1) The Trustee upon the occurrence of an Event of Default under 
          Section 7.1(a) hereof or upon an acceleration of the principal of and 
          interest on 


                                        16
<PAGE>


          the Bonds pursuant to the Indenture shall immediately declare to be 
          due and payable immediately the unpaid balance of the amount loaned 
          hereunder.

               (2) The Issuer, the Credit Bank and the Trustee may have access 
          to and may inspect, examine and make copies of the books and records 
          and any and all accounts and data of the Company.

               (3) Subject to the provisions of subsection (b) of this Section 
          7.2, the Issuer or the Trustee may take whatever action at law or in 
          equity as may be necessary or desirable to collect the payments and 
          other amounts then due and thereafter to become due or to enforce 
          performance and observance of any obligation, agreement or covenant of
          the Company under this Agreement.

               (4) Subject to the provisions of subsection (b) of this Section 
          7.2, the Trustee may institute any action or proceeding at law or in 
          equity for the collection of any sums due and unpaid, and may 
          prosecute any such action or proceeding to judgment or final decree, 
          and may enforce any such judgment or final decree against the Company 
          and collect in the manner provided by law the moneys adjudged or 
          decreed to be payable.

     (b)  Notwithstanding anything to the contrary set forth in this 
Agreement, neither the Issuer nor the Trustee shall take any enforcement 
action pursuant to subsection (a)(3) or (4) above until twenty 20 days after 
written notice to the Credit Bank of the intent by the Issuer or the Trustee 
to exercise rights pursuant to either or both of such subsections and 
provided that the Credit Bank shall not have provided to the Issuer and the 
Trustee, within said 20-day period, an Opinion of Counsel selected by the 
Credit Bank and reasonably acceptable to the Issuer that such enforcement 
will impair the security of the Credit Bank under the Deed of Trust by reason 
of section 726 of the California Code of Civil Procedure (the so-called "one 
form of action rule") or otherwise.

     (c)  In case the Trustee or the Issuer shall have proceeded to enforce 
its rights under this Agreement and such proceedings shall have been 
discontinued or abandoned for any reason or shall have been determined 
adversely to the Trustee or the Issuer, then, and in every such case, the 
Company, the Trustee, the Credit Bank and the Issuer shall be restored 
respectively to their several positions and rights hereunder, and all rights, 
remedies and powers of the Company, the Trustee, the Credit Bank and the 
Issuer shall continue as though no such action had been taken.

     (d)  In case proceedings shall be pending for the bankruptcy or for the 
reorganization of the Company under the federal bankruptcy laws or any other 
applicable law, or in case a receiver or trustee shall have been appointed 
for the property of the Company or in the case of any other similar judicial 
proceedings relative to the Company, or the creditors or property of the 
Company, then the Trustee shall be entitled and empowered, by intervention in 
such proceedings or otherwise, to file and prove a claim or claims for the 
whole amount owing and unpaid pursuant to this Agreement and, in case of any 
judicial proceedings, to file such proofs of claim and other papers or 
documents as may be necessary or advisable in order to have the claims of the 
Trustee allowed in such judicial proceedings relative to the Company, its 
creditors or its property, and to collect and receive any moneys or other 
property payable or deliverable on any such claims, and to distribute such 
amounts as provided in the Indenture after the deduction of its charges and 
expenses.  Any receiver, assignee or trustee in bankruptcy or reorganization 
is hereby authorized to make such payments to the Trustee, and to pay to the 
Trustee any reasonable amount due it for compensation 


                                          17

<PAGE>

and expenses, including expenses and fees of counsel incurred by it up 
to the date of such distribution.

     Section 7.3. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES.  In the 
event the Company should default under any of the provisions of this 
Agreement and the  Issuer or the Trustee should employ attorneys or incur 
other expenses for the collection of the payments due under this Agreement or 
the enforcement of performance or observance of any obligation or agreement 
on the part of the Company herein contained, the Company agrees to pay to the 
Issuer or the Trustee the reasonable fees of such attorneys and such other 
expenses so incurred by the Issuer or the Trustee.

     Section 7.4. NO REMEDY EXCLUSIVE.  No remedy herein conferred upon or 
reserved to the Issuer or the Trustee is intended to be exclusive of any 
other available remedy or remedies, but each and every such remedy shall be 
cumulative and shall be in addition to every other remedy given under this 
Agreement or now or hereafter existing at law or in equity or by statute.  No 
delay or omission to exercise any right or power accruing upon any default 
shall impair any such right or power or shall be construed to be a waiver 
thereof, but any such right and power may be exercised from time to time and 
as often as may be deemed expedient.  In order to entitle the Issuer or the 
Trustee to exercise any remedy reserved to it in this Article VII, it shall 
not be necessary to give any notice, other than such notice as may be herein 
expressly required or required by law to be given.  Such rights and remedies 
as are given the Issuer hereunder shall also extend to the Trustee, and the 
Trustee and the holders of the Bonds shall be deemed third party 
beneficiaries of all covenants and agreements herein contained.

     Section 7.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER.  In the event 
any agreement or covenant contained in this Agreement should be breached by 
the Company and thereafter waived by the Issuer or the Trustee with the 
consent of the Credit Bank, such waiver shall be limited to the particular 
breach so waived and shall not be deemed to waive any other breach hereunder. 

                                       18
<PAGE>

                                  ARTICLE VIII

                                   PREPAYMENT

     Section 8.1. PREPAYMENT OF LOAN.  The Loan may be prepaid by the Company 
in whole or in part at any time, and shall be prepaid by the Company in whole 
upon an event of default under the Reimbursement Agreement and the direction 
of the Credit Bank to effect a mandatory redemption of Bonds as a result 
thereof.  Any prepayment of the Loan as set forth above shall be applied to 
effect the optional redemption or mandatory redemption, of the Bonds solely 
as provided in the Indenture and in the Bonds.   The Company shall be 
permitted or required to prepay, or shall be deemed to have prepaid, the 
Loan, in whole or in part, and the principal amount thereof shall be reduced 
accordingly, in an amount equal to the principal amount of Bonds redeemed and 
on the date of such redemption, in such amounts as will enable the Issuer to 
redeem the Bonds called for redemption pursuant to the Indenture.

     Section 8.2. REDEMPTION OF BONDS UPON PREPAYMENT.  Upon any prepayment 
of the Loan as provided in Section 8.1, the Trustee is required by the 
Indenture to call all or part of the Bonds for redemption and to draw upon 
the Letter of Credit in the respective amounts set forth in Section 5.02 of 
the Indenture.

     Section 8.3. AMOUNT OF PREPAYMENT.  In the event of any prepayment 
pursuant to Section 8.1, the amount of the Loan deemed to be prepaid shall be 
equal to the principal amount of Bonds redeemed as described in Section 8.2.  
In the case of prepayment of the Loan in full, the Company shall pay to the 
Trustee an amount sufficient, together with other funds held by the Trustee 
and available for such purpose, to pay all reasonable and necessary fees and 
expenses of the Issuer, the Trustee and any paying agent accrued and to 
accrue through final payment of the Bonds and all other liabilities of the 
Company accrued and to accrue under this Agreement, and shall pay to the 
Issuer any amount required by Section 4.2(c).  In the case of partial 
prepayment of the Loan, the Company shall pay or cause to be paid to the 
Trustee an amount sufficient, together with other funds held by the Trustee 
and available for such purpose, to pay expenses of redemption of the Bonds to 
be redeemed upon such prepayment.

     The Company agrees that it will not voluntarily prepay the Loan or any 
part thereof, except in amounts sufficient to redeem Bonds in Authorized 
Denominations, and to pay any applicable redemption premium and accrued 
interest to the redemption date.

                                       19
<PAGE>

                                  ARTICLE IX

                      LIMITATION ON LIABILITY OF ISSUER;
                           EXPENSES; INDEMNIFICATION

     Section 9.1. LIMITATION ON LIABILITY OF ISSUER.  The Issuer shall not be 
obligated to pay the principal of, or premium, if any, or interest on the 
Bonds, except from Revenues.  The Company hereby acknowledges that the 
Issuer's sole source of moneys to repay the Bonds and to pay expenses related 
thereto will be provided by the payments made by the Company pursuant to this 
Agreement, together with other Revenues, including any drawings under the 
Letter of Credit or investment income on certain funds and accounts held by 
the Trustee under the Indenture, and hereby confirms that amounts available 
to pay all principal of, and premium, if any, and interest on the Bonds as 
the same shall become due (whether by maturity, redemption, acceleration or 
otherwise), have been calculated to be at all times sufficient for such 
purpose.

     Any obligation or liability of the Issuer created by or arising out of 
this Agreement (including, without limitation, any liability created by or 
arising out of the representations, warranties or covenants set forth herein 
or otherwise) shall not impose a debt or pecuniary liability upon the Issuer 
or a charge upon its general credit, but shall be payable solely out of the 
Revenues. Neither the issuance of the Bonds nor the delivery of this 
Agreement shall, directly or indirectly or contingently, obligate the Issuer 
to make any appropriation for their payment.  Nothing in the Bonds or in the 
Indenture or this Agreement or the proceedings of the Issuer authorizing the 
Bonds or in the Act or in any other related document shall be construed to 
authorize the Issuer to create a debt of the Issuer within the meaning of any 
constitutional or statutory provision of the State.  No breach of any pledge, 
obligation or agreement of the Issuer hereunder may impose any pecuniary 
liability upon the Issuer or any charge upon its general credit.

     Section 9.2. EXPENSES.  The Company covenants and agrees to pay and to 
indemnify the Issuer and the Trustee against all costs and charges, including 
reasonable fees and disbursements of attorneys, accountants, consultants and 
other experts, incurred in good faith in connection with this Agreement, the 
Bonds or the Indenture.

     Section 9.3. INDEMNIFICATION.

          (a)  The Company releases the Issuer from, and covenants and agrees 
    that the Issuer shall not be liable for, and covenants and agrees, to the 
    extent permitted by law, to indemnify and hold harmless the Issuer and 
    its officers, employees and agents from and against, any and all losses, 
    claims, damages, liabilities or expenses, of every conceivable kind, 
    character and nature whatsoever arising out of, resulting from or in any 
    way connected with (1) the Project, or the conditions, occupancy, use, 
    possession, conduct or management of, or work done in or about, or from 
    the planning, design, acquisition, installation or construction of the 
    Project or any part thereof; (2) the issuance and sale, resale or 
    remarketing of any Bonds or any certifications or representations made by 
    anyone other than the Issuer in connection therewith and the carrying out 
    of any of the transactions contemplated by the Bonds and this Agreement; 
    (3) the Trustee's acceptance or administration of the trusts under the 
    Indenture, or the exercise or performance of any of its powers or duties 
    under the Indenture; (4)  any untrue statement or alleged untrue 
    statement of any material fact or omission or alleged omission to state a 
    material fact necessary to make the statements made, in the light of the 
    circumstances under which they were made, not misleading, in the Private 
    Placement Memorandum or other offering circular utilized by the Issuer or 
    any underwriter or placement agent in connection with the sale or 
    remarketing of any Bonds; (5) any event

                                       20
<PAGE>


     or occurrence with respect to the Hazardous Materials Laws; or (6) any 
    statement or information provided by the Company in connection with its 
    compliance under Section 5.15 hereof; provided that such indemnity shall 
    not be required for damages that result from the negligence or willful 
    misconduct on the part of the party seeking such indemnity.  The Company 
    further covenants and agrees, to the extent permitted by law, to pay or 
    to reimburse the Issuer and its officers, employees and agents for its 
    any and all costs, reasonable attorneys, fees, liabilities or expenses 
    incurred in connection with investigating, defending against or otherwise 
    in connection with any such losses, claims, damages, liabilities, 
    expenses or actions, except to the extent that the same arise out of the 
    gross negligence or willful misconduct of the party claiming such payment 
    or reimbursement.  The provisions of this Section 9.3 shall survive the 
    final payment and the defeasance of the Bonds, or the discharge of the 
    Bonds, or the defeasance of the lien of the Indenture and the termination 
    of this Agreement.

          (b)  The Company releases the Trustee from, and covenants and 
    agrees that the Trustee shall not be liable for, and covenants and 
    agrees, to the extent permitted by law, to indemnify and hold harmless 
    the Trustee and its officers, employees and agents from and against any 
    and all losses, claims, damages, liabilities or expenses, of every 
    conceivable kind, character and nature whatsoever arising out of, 
    resulting from or in any way connected with (1) the Project, or the 
    conditions, occupancy, use, possession, conduct or management of, or work 
    done in or about, or from the planning, design, acquisition, installation 
    or construction of the Project or any part thereof; (2) the issuance, 
    sale, resale or remarketing of any Bonds or any certifications or 
    representations made by any one other than the Trustee  in connection 
    therewith and the carrying out by anyone of any of the transactions 
    contemplated by the Bonds and this Agreement; (3) the Trustee's 
    acceptance or administration of the trusts under the Indenture, or the 
    exercise or performance of any of its powers or duties under the 
    Indenture; or (4)  any untrue statement or alleged untrue statement of 
    any material fact or omission or alleged omission to state a material 
    fact necessary to make the statements made, in the light of the 
    circumstances under which they were made, not misleading, in the Official 
    Statement or other offering circular utilized by the Issuer or any 
    underwriter or placement agent in connection with the sale or remarketing 
    of any Bonds; provided that such indemnity shall not be required for 
    damages that result from negligence or willful misconduct on the part of 
    the party seeking such indemnity.  The Company further covenants and 
    agrees, to the extent permitted by law, to pay or to reimburse the 
    Trustee and its officers, employees and agents for any and all costs, 
    reasonable attorneys, fees, liabilities or expenses incurred in 
    connection with investigating, defending against or otherwise in 
    connection with any such losses, claims, damages, liabilities, expenses 
    or actions, except to the extent that the same arise out of the 
    negligence or willful misconduct of the party claiming such payment or 
    reimbursement.  The provisions of Sections 4.2, 7.3, 9.2 and 9.3  shall 
    survive the Trustee's resignation or removal, the final payment and 
    defeasance of the lien of the Indenture and the termination of this 
    Agreement.

     Nothing contained herein shall in any way be construed to impose any 
duties upon the Trustee beyond those contained in the Indenture.  All 
immunities, indemnities, exceptions from liability and other provisions of 
the Indenture insofar as they relate to the Trustee shall apply to this 
Agreement. The immunities of the Trustee also extend to its directors, 
officers, employees and agents.

                                       21
<PAGE>

                                   ARTICLE X

                                 MISCELLANEOUS

     Section 10.1. NOTICES.  All notices, certificates or other 
communications shall be deemed sufficiently given on the third day following 
the day on which the same have been mailed by first class mail, postage 
prepaid, addressed to the Issuer, the Company, the Trustee or the Credit Bank 
at the respective addresses set forth in Section 12.01 of the Indenture.  A 
duplicate copy of each notice, certificate or other communication given 
hereunder by either the Issuer or the Company to the other shall also be 
given to the Trustee and the Credit Bank. The Issuer, the Company, the 
Trustee and the Credit Bank may, by notice given hereunder, designate any 
different addresses to which subsequent notices, certificates or other 
communications shall be sent.

     Section 10.2. SEVERABILITY.  If any provision of this Agreement shall be 
held or deemed to be, or shall in fact be, illegal, inoperative or 
unenforceable, the same shall not affect any other provision or provisions 
herein contained or render the same invalid, inoperative, or unenforceable to 
any extent whatever.

     Section 10.3. EXECUTION OF COUNTERPARTS.  This Agreement may be executed 
in several counterparts, each of which shall be an original and all of which 
shall constitute but one and the same instrument; provided, however, that for 
purposes of perfecting a security interest in this Agreement by the Trustee 
under Article 9 of the California Uniform Commercial Code, only the 
counterpart delivered, pledged, and assigned to the Trustee shall be deemed 
the original.

     Section 10.4. AMENDMENTS, CHANGES AND MODIFICATIONS.  Except as 
otherwise provided in this Agreement or the Indenture, subsequent to the 
initial issuance of Bonds and prior to their payment in full, or provision 
for such payment having been made as provided in the Indenture, this 
Agreement may be effectively amended, changed, modified, altered or 
terminated only by written instrument executed by the parties hereto and only 
with the written consent of the Credit Bank; provided, however, written 
consent of the  Credit Bank shall not be required in connection with any 
amendment, change, modification, alternation or termination effected in 
connection with a Rating Event Date.  The Company hereby agrees to amend this 
Agreement as may reasonably be required by the Rating Agency in connection 
with a Rating Event Date.

     Section 10.5. GOVERNING LAW.  This Agreement shall be governed 
exclusively by and construed in accordance with the applicable laws of the 
State.

     Section 10.6. AUTHORIZED REPRESENTATIVES.  Whenever under the provisions 
of this Agreement the approval of the Company, the Issuer or the Credit Bank 
is required for any action, and whenever the Company, the Issuer or the 
Credit Bank is required to deliver any notice or other writing, such approval 
or such notice or other writing shall be given, respectively, on behalf of 
the Company by the Company Representative, on behalf of the Issuer by the 
Authorized Issuer Representative and on behalf of the Credit Bank by the 
Authorized Bank Representative, and the Issuer, the Trustee, the Credit Bank 
and the Company shall be authorized to act on any such approval or notice or 
other writing and none of the parties hereto nor the Credit Bank shall have 
any complaint against the other or against the Trustee as a result of any 
such action taken.

     Section 10.7. TERM OF THE AGREEMENT.  This Agreement shall be in full 
force and effect from the date hereof and shall continue in effect as long as 
any of the Bonds are outstanding or the Trustee holds any moneys under the 
Indenture, whichever is later.  The provisions of Section 9.3 hereof shall 
survive the termination of this Agreement.

                                       22
<PAGE>

     Section 10.8. BINDING EFFECT; THIRD PARTY BENEFICIARY.  This Agreement 
shall inure to the benefit of and shall be binding upon the Issuer, the 
Trustee, the Company and their respective successors and assigns; subject, 
however, to the limitations contained in Section 5.2 hereof.  The Credit Bank 
is intended to be a third party beneficiary of this Agreement to the extent 
the provisions hereof are expressly for the benefit of the Credit Bank.

     Section 10.9. CAPACITY OF TRUSTEE.  The Trustee is entering into this 
Agreement solely in its capacity as Trustee under the Indenture and the 
duties, powers and liabilities of the Trustee in acting hereunder shall be 
subject to the provisions of the Indenture, including, without limitation, 
the provisions of Article VIII thereof.

                                       23
<PAGE>

     IN WITNESS WHEREOF, the Issuer has caused this Agreement to be executed 
in its name and its seal to be hereunto affixed and attested by its duly 
authorized officer, the Trustee has caused this Agreement to be executed in 
its name by its duly authorized officer, and the Company has caused this 
Agreement to be executed in its name by its duly authorized officer, all as 
of the date first above written.

                                       LA MIRADA INDUSTRIAL 
                                       DEVELOPMENT AUTHORITY


                                       By: /s/
                                          -------------------------------
                                                   Treasurer


                                       BANKERS TRUST COMPANY OF
                                       CALIFORNIA, N. A.


                                       By: /s/
                                          -------------------------------
                                                Vice President


                                       RYKOFF-SEXTON, INC.


                                       By: /s/
                                          -------------------------------
                                             Senior Vice President &
                                             Chief Financial Officer


                                       24
<PAGE>

                                    EXHIBIT A

                          FORM OF FUNDING REQUISITION


Date ________________, 19___                        Requisition No.____________


     1.  We hereby request that the sum of $______________________ be 
disbursed from the Project Fund for the items described on Exhibit A hereto, 
to be paid to the Company as reimbursement for amounts paid in connection 
with the acquisition and construction of the Project.

     2.  The undersigned hereby represents that:

          (a) the full amount of such disbursement will be applied to pay or 
     reimburse the Company for the payment of Project Costs.

          (b) that reimbursements being made to the Company pursuant hereto 
     relate to Project Costs, have been properly incurred, are a proper charge 
     against the Project Fund pursuant to the Indenture and have not been the 
     basis of any previous disbursement; and


                                       RYKOFF-SEXTON, INC.


                                       By: 
                                          -------------------------------
                                              Company Representative


DISBURSEMENT CONSENTED TO BY:

THE FIRST NATIONAL BANK OF CHICAGO


By: 
    -------------------------------
    Authorized Bank Representative



     Capitalized terms used herein shall have the meanings given to
them in the Indenture of Trust, dated as of November 1, 1996, by and between the
La Mirada Industrial Development Authority and Bankers Trust Company, as
trustee.

                                       A-1
<PAGE>

                                   EXHIBIT B

                    FACILITIES FINANCED FROM BOND PROCEEDS

     The Project consists of a single-story, 413,200 square-foot building on 
a 26.7-acre site in La Mirada, California.  The Project includes a dry 
storage area, a freezer/cooler area with 100,000 square feet, and 
administrative offices.

     The legal description of the real property on which the Project is 
located is described as follows:

PARCEL 11, IN THE CITY OF LA MIRADA, COUNTY OF LOS ANGELES, STATE OF 
CALIFORNIA AS SHOWN ON THE MAP OF PARCEL MAP NO. 23208, FILED IN BOOK 263 
PAGES 35 THROUGH 42 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY 
RECORDER OF SAID COUNTY.

EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOTS 17, 18, 23, 24, 37 
AND 38, ALL OIL, GAS, ASPHALTUM, OTHER HYDROCARBON SUBSTANCES AND ALL OTHER 
MINERAL RIGHTS AND OTHER SUBSTANCES LYING IN AND UNDER SAID PROPERTY AT A 
DEPTH BELOW 500 FEET OF THE SURFACE THEREOF, WITH NO RIGHT OF ENTRY TO THE 
SURFACE THEREOF OR WITHIN SAID 500 FEET, AS RESERVED BY C. VANDERHAM AND 
AARTJE VANDERHAM, HUSBAND AND WIFE, IN DEED RECORDED MAY 24, 1957 AS 
INSTRUMENT NO. 2236 IN BOOK 54593 PAGE 382, OFFICIAL RECORDS, BY MYRLE G.
MC COMBER, A WIDOW, IN DEED RECORDED MAY 24, 1957 AS INSTRUMENT NO. 2233, IN 
BOOK 54593 PAGE 442, OFFICIAL RECORDS, BY C. GARNER MC COMBER, ALSO KNOWN AS 
GARNER MC COMBER, A MARRIED MAN AND ELOISE M. MC COMBER, HIS WIFE AND 
GERALDINE M. CHEWNING, A MARRIED WOMAN, IN DEED RECORDED MAY 24, 1957 AS 
INSTRUMENT NO. 2234, IN BOOK 54593 PAGE 386, OFFICIAL RECORDS AND BY LINNIE 
H. MC COMBER, SURVIVING TRUSTEE UNDER DECLARATION OF TRUST RECORDED IN BOOK 
15114 PAGE 126 OF OFFICIAL RECORDS OF LOS ANGELES COUNTY, IN DEED RECORDED 
MAY 24, 1957 AS INSTRUMENT NO. 2231 IN BOOK 54593 PAGE 376, OFFICIAL RECORDS.

SAID DEED ALL RECITES:  "THE ABOVE EXCEPTION SHALL NOT BE CONSTRUED TO 
INCLUDE WATER, WATER RIGHTS OR CLAIMS FOR THE USE THEREOF EXCEPT SUCH WATER 
AS IS USED, DIVERTED, INTERFERED WITH, NECESSARY FOR, INCIDENTAL TO OR WHICH 
ARISES FROM THE DRILLING, MINING, REMOVAL PRODUCTION, RECOVERY OR EXTRACTION 
THEREFROM OF SAID OIL, MINERALS, MINERAL RIGHTS OR OTHER SUBSTANCES AS 
HEREINBEFORE SET FORTH.

ALSO EXCEPT FROM THE REMAINDER OF SAID LAND ALL OIL, GAS, ASPHALTUM, OTHER 
HYDROCARBON SUBSTANCES AND ALL OTHER MINERALS AND MINERAL RIGHTS AND OTHER 
SUBSTANCES LYING IN AND UNDER SAID PUBLIC UTILITY AT A DEPTH BELOW 500 FEET 
OF THE SURFACE THEREOF, WITH NO RIGHT OF ENTRY TO THE SURFACE THEREOF OR 
WITHIN SAID 500 FEET, AS RESERVED BY G. D. MC COMBER, A WIDOWER AND G. DONALD 
MC COMBER, AS TRUSTEE UNDER THE WILL OF ELLYNE HASKELL MC COMBER, DECEASED, 
AND THE DECREE OF THE DISTRIBUTION OF HER ESTATE, IN DEED RECORDED MAY 24, 
1957 AS INSTRUMENT NO. 2230 IN BOOK 54593 PAGE 384, OFFICIAL RECORDS.

SAID DEED RECITES:  "THE ABOVE EXCEPTION SHALL NOT BE CONSTRUED TO INCLUDE 
WATER, RIGHTS OR CLAIMS FOR THE USE THEREOF EXCEPT SUCH WATER

                                       B-1
<PAGE>

IS USED, DIVERTED, INTERFERED WITH, NECESSARY FOR, INCIDENTAL TO OR WHICH 
ARISES FROM THE DRILLING, MINING, REMOVAL PRODUCTION, RECOVERY OR EXTRACTION 
THEREFROM OR SAID OIL, MINERALS, MINERAL RIGHTS OR OTHER SUBSTANCES AS 
HEREINBEFORE SET FORTH.

ALSO EXCEPT ALL MINERALS CONTAINED IN THE ABOVE DESCRIBED LAND, INCLUDING 
WITHOUT LIMITING THE GENERALITY THEREOF, OIL, GAS AND OTHER HYDROCARBON 
SUBSTANCES, AS WELL AS METALLIC OR OTHER SOLID MINERALS, PROVIDED, THAT SANTA 
FE SHALL NOT HAVE THE RIGHT TO GO UPON OR USE THE SURFACE OF SAID LAND, OR 
ANY PART THEREOF, FOR THE PURPOSE OF DRILLING FOR, MINING, OR OTHERWISE 
REMOVING ANY OF SAID MINERALS, SANTA FE MAY HOWEVER, AND HEREBY RESERVES THE 
RIGHT TO, REMOVE ANY OF SAID MINERALS FROM SAID LAND BY MEANS OF WELLS, 
SHAFTS, TUNNELS, OR OTHER MEANS OF ACCESS TO SAID MINERALS WHICH MAY BE 
CONSTRUCTED, DRILLED OR DUG FROM OTHER LAND, PROVIDED THAT THE EXERCISE OF 
SUCH RIGHTS BY SANTA FE SHALL IN NO WAY INTERFERE WITH OR IMPAIR THE USE OF 
THE SURFACE OF THE LAND HEREBY CONVEYED OR OF ANY IMPROVEMENTS THEREON, AS 
RESERVED BY THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, BY DEED 
RECORDED DECEMBER 28, 1990 AS INSTRUMENT NO. 90-2127299.


                                       B-2