EXHIBIT 10.20




                         RECEIVABLES PURCHASE AGREEMENT


                          dated as of January 29, 1999



                                      among



                           KEEBLER FUNDING CORPORATION



                              KEEBLER FOODS COMPANY



                          LIBERTY STREET FUNDING CORP.


                                       and



                             THE BANK OF NOVA SCOTIA


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                                TABLE OF CONTENTS


ARTICLE I.          
AMOUNTS AND TERMS OF THE PURCHASES
   
Section 1.1.        Purchase Facility................................  1
Section 1.2.        Making Purchases.................................  2
Section 1.3.        Purchased Interest Computation...................  4
Section 1.4.        Settlement Procedures............................  4
Section 1.5.        Fees............................................. 10
Section 1.6.        Payments and Computations, Etc................... 10
Section 1.7.        Dividing or Combining Portions of the Capital 
                    of the Purchased Interest........................ 10
Section 1.8.        Increased Costs.................................. 11
Section 1.9.        Requirements of Law.............................. 12
Section 1.10.       Inability to Determine Eurodollar Rate........... 13
Section 1.11.       Mitigation....................................... 14

ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS

Section 2.1.        Repesentations and Warranties; Covenants......... 14
Section 2.2.        Termination Events............................... 14

ARTICLE III.
INDEMNIFICATION

Section 3.1.        Indemnities by the Seller........................ 15
Section 3.2.        Indemnities by the Servicer...................... 17
Section 3.3.        Defense of Claims................................ 18

ARTICLE IV.
ADMINISTRATION AND COLLECTIONS

Section 4.1.        Appointment of the Servicer...................... 20
Section 4.2.        Duties of the Servicer........................... 21
Section 4.3.        Establishment and Use of Certain Accounts........ 22
Section 4.4.        Enforcement Rights............................... 23
Section 4.5.        Responsibilities of the Seller................... 24
Section 4.6.        Servicing Fee.................................... 25

ARTICLE V.
MISCELLANEOUS

Section 5.1.        Amendments, Etc.................................. 25
Section 5.2.        Notices, Etc..................................... 26
Section 5.3.        Assignability.................................... 26
Section 5.4.        Costs, Expenses and Taxes........................ 27


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Section 5.5.        No Proceedings; Limitation On Payments............ 28
Section 5.6.        Confidentiality................................... 28
Section 5.7.        GOVERNING LAW AND JURISDICTION.................... 29
Section 5.8.        Execution in Counterparts......................... 29
Section 5.9.        Survival of Termination........................... 30
Section 5.10.       WAIVER OF JURY TRIAL.............................. 30
Section 5.11.       Entire Agreement.................................. 30
Section 5.12.       Headings.......................................... 30
Section 5.13.       Issuer's Liabilities.............................. 30
Section 5.14.       Tax Treatment..................................... 31


EXHIBIT I           Definitions
EXHIBIT II          Conditions of Purchases
EXHIBIT III         Representations and Warranties
EXHIBIT IV          Covenants
EXHIBIT V           Termination Events

SCHEDULE I          Credit and Collection Policy
SCHEDULE II         Lock-box Banks and Lock-box Accounts
SCHEDULE III        Trade Names

ANNEX A             Form of Monthly Report
ANNEX B             Form of Purchase Notice



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     This RECEIVABLES PURCHASE AGREEMENT (as amended,  supplemented or otherwise
modified from time to time, this  "Agreement") is entered into as of January 29,
1999, Among KEEBLER FUNDING CORPORATION, a Delaware corporation,  as seller (the
"SELLER"),KEEBLER FOODS COMPANY, a Delaware corporation ("KEEBLER"),  as initial
servicer (in such capacity,  together with its successors and permitted  assigns
in such  capacity,  the  "SERVICER"),  LIBERTY  STREET FUNDING CORP., a Delaware
corporation  (together with its successors and permitted assigns, the "ISSUER"),
and THE BANK OF NOVA SCOTIA,  a Canadian  chartered  bank acting through its New
York Agency  ("BNS"),  as  administrator  (in such  capacity,  together with its
successors and assigns in such capacity, the "ADMINISTRATOR").

     PRELIMINARY  STATEMENTS.  Certain  terms  that  are  capitalized  and  used
throughout  this Agreement are defined in EXHIBIT I.  References in the Exhibits
hereto to the "Agreement" refer to this Agreement,  as amended,  supplemented or
otherwise modified from time to time.

     The Seller  desires to sell,  transfer  and  assign an  undivided  variable
percentage interest in a pool of receivables,  and the Issuer desires to acquire
such undivided variable percentage  interest,  as such percentage interest shall
be adjusted  from time to time based upon,  in part,  reinvestments  made by the
Issuer.

     In  consideration  of  the  mutual  agreements,  provisions  and  covenants
contained herein, the parties hereto agree as follows:


                                   ARTICLE I.
                       AMOUNTS AND TERMS OF THE PURCHASES


     Section 1.1 PURCHASE FACILITY.  (a) On the terms and conditions hereinafter
set forth,  the Issuer hereby  agrees  subject to the next sentence to purchase,
and make reinvestments in, undivided  percentage  ownership  interests up to the
Purchase  Limit with regard to the Purchased  Interest from the Seller from time
to time  from  the  date  hereof  to the  Facility  Termination  Date.  Under no
circumstances  shall the Issuer make any such purchase or reinvestment if, after
giving  effect to such  purchase  or  reinvestment,  the  aggregate  outstanding
Capital of the Purchased Interest would exceed the Purchase Limit.

     (b)  The  Seller  may,  upon  at  least  15  days'  written  notice  to the
Administrator,  terminate  in whole or reduce in part the unused  portion of the
Purchase Limit; PROVIDED,  that each partial reduction shall be in the amount of
at least  $5,000,000,  or an integral  multiple of $1,000,000 in excess thereof,
and that,  unless  terminated in whole,  the Purchase Limit shall in no event be
reduced below $50,000,000.

<PAGE>

     Section 1.2 MAKING  PURCHASES.  (a) Each purchase (but not reinvestment) of
undivided  percentage  ownership interests with regard to the Purchased Interest
hereunder shall be made upon the Seller's irrevocable written notice in the form
of Annex B delivered to the  Administrator in accordance with SECTION 5.2 (which
notice must be received by the  Administrator  before 11:00 a.m.,  New York City
time):  (i) at least three Business Days before the requested  purchase date, in
the case of a  purchase  to be funded at the  Alternate  Rate and based upon the
Eurodollar  Rate, (ii) at least two Business Days before the requested  purchase
date,  in the case of a purchase  to be funded at the  Alternate  Rate and based
upon the Base Rate,  and (iii) at least one  Business  Day before the  requested
purchase  date,  in the case of a  purchase  to be funded at the CP Rate,  which
notice shall  specify:  (A) the amount  requested to be paid to the Seller (such
amount,  which shall not be less than $1,000,000,  being the Capital relating to
the undivided percentage ownership interest then being purchased),  (B) the date
of such purchase  (which shall be a Business Day),  and (C) the desired  funding
basis for such purchase (which shall be based upon the Eurodollar Rate, the Base
Rate or the CP Rate). If the Seller has requested that the purchase be funded at
the CP Rate,  the  Administrator  shall  promptly  thereafter  notify the Seller
whether the Issuer has exercised its  discretion  not to fund such purchase with
the issuance of Notes  because such purchase with the issuance of Notes would be
economically  inadvisable to the Issuer or the Issuer is unable to or prohibited
from  issuing  Notes,  the  Administrator,  the  Seller or any  other  similarly
situated Person,  or otherwise not permitted,  in which case the Seller shall be
deemed to have  requested  that the purchase be funded at the Alternate Rate and
be based upon the Base Rate.

     (b) On the  date of each  purchase  (but  not  reinvestment)  of  undivided
percentage  ownership interests with regard to the Purchased Interest hereunder,
the Issuer shall,  upon  satisfaction of the applicable  conditions set forth in
EXHIBIT II, make  available to the Seller in same day funds,  at First  National
Bank of Chicago,  account number 5585600, ABA 071000013,  an amount equal to the
Capital (as specified by the Seller  pursuant to Section 1.2(a) above)  relating
to the undivided percentage ownership interest then being purchased.

     (c)  Effective  on the date of each  purchase  pursuant to this Section and
each  reinvestment  pursuant to SECTION 1.4, the Seller hereby sells and assigns
to the  Issuer an  undivided  percentage  ownership  interest  in: (i) each Pool
Receivable  then existing,  (ii) all Related  Security with respect to such Pool
Receivables,  and (iii) all Collections  with respect to, and other proceeds of,
such Pool Receivables and Related Security.

     (d) To secure all of the Seller's obligations (monetary or otherwise) under
this Agreement and the other Transaction Documents

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<PAGE>

to which it is a party,  whether now or hereafter existing or arising, due or to
become due, direct or indirect, absolute or contingent, the Seller hereby grants
to the  Issuer a  security  interest  in all of the  Seller's  right,  title and
interest  (including any undivided  interest of the Seller) in, to and under all
of the following,  whether now or hereafter owned,  existing or arising: (i) all
Pool  Receivables,   (ii)  all  Related  Security  with  respect  to  such  Pool
Receivables,  (iii) all Collections with respect to such Pool Receivables,  (iv)
the Lock-Box  Accounts and the  Collection  Account,  and all amounts on deposit
therein,  and  all  certificates  and  instruments,  if any,  from  time to time
evidencing  such Lock-Box  Accounts and the Collection  Account,  and amounts on
deposit  therein,  (v) all rights  (but none of the  obligations)  of the Seller
under the Purchase and Sale Agreement, and (vi) all proceeds of, and all amounts
received or  receivable  under any or all of, the foregoing  (collectively,  the
"Pool Assets").  The Issuer shall have, with respect to the Pool Assets,  and in
addition to all the other rights and remedies  available to the Issuer,  all the
rights and remedies of a secured party under any applicable UCC.

     Section 1.3. PURCHASED INTEREST  COMPUTATION.  The Purchased Interest shall
be initially computed on the date of the initial purchase hereunder. Thereafter,
until  the  Facility   Termination   Date,  the  Purchased   Interest  shall  be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than  a  Termination  Day.  The  Purchased   Interest  as  computed  (or  deemed
recomputed) as of the day before the Facility  Termination Date shall thereafter
remain  constant.  The  Purchased  Interest  shall  become zero when the Capital
thereof and Discount  thereon shall have been paid in full, all the amounts owed
by the Seller and the Servicer  hereunder to the Issuer,  the  Administrator and
any  other  Indemnified  Party or  Affected  Person  are  paid in full,  and the
Servicer shall have received the accrued Servicing Fee thereon.

     Section  1.4.  SETTLEMENT  PROCEDURES.  (a)  The  collection  of  the  Pool
Receivables  shall be  administered  by the  Servicer  in  accordance  with this
Agreement.  The Seller  shall  provide  to the  Servicer  on a timely  basis all
information needed for such  administration,  including notice of the occurrence
of any Termination Day and current computations of the Purchased Interest.

     (b) The Servicer shall,  on each Business Day on which  Collections of Pool
Receivables  are  received by the Seller or Servicer or are  deposited  into the
Lock-Box  Accounts,   transfer  such  Collections  therefrom  and  deposit  such
Collections  into the Collection  Account.  With respect to such  Collections on
such  day and with  respect  to any  Collection  transferred  to the  Collection
Account  on such day  pursuant  to the last  paragraph  of Section  1.4(e),  the
Servicer shall:

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          (i) set aside and hold in the  Collection  Account  for the benefit of
     the Issuer,  out of the percentage of such  Collections  represented by the
     Purchased  Interest,  FIRST an amount equal to the Discount accrued through
     such  day for each  Portion  of  Capital  and not  previously  transferred,
     SECOND,  an amount  equal to the fees set forth in the Fee  Letter  accrued
     through such day for the Purchased Interest and not previously transferred,
     and THIRD, to the extent funds are available  therefor,  an amount equal to
     the Issuer's  Share of the Servicing  Fee accrued  through such day and not
     previously transferred; and

          (ii) subject to SECTION 1.4 (f), if such day is not a Termination Day,
     remit  to the  Seller,  on  behalf  of the  Issuer,  the  remainder  of the
     percentage of such Collections,  represented by the Purchased Interest,  to
     the extent representing a return on the Capital;  such Collections shall be
     automatically  reinvested in Pool Receivables,  and in the Related Security
     and Collections and other proceeds with respect thereto,  and the Purchased
     Interest  shall be  automatically  recomputed  pursuant to SECTION  1.3; IT
     BEING  UNDERSTOOD,  that prior to remitting to the Seller the  remainder of
     such Collections by way of reinvestment in Pool  Receivables,  the Servicer
     shall have  calculated  the  Purchased  Interest  on such day,  and if such
     Purchased  Interest shall exceed 100% on such day, such  Collections  shall
     not be  remitted  to the  Seller  but  shall be set  aside  and held in the
     Collection  Account  for the  benefit  of the  Issuer  in  accordance  with
     PARAGRAPH (iii) below;

          (iii)  if such  day is a  Termination  Day (or if such day is a day on
     which the Purchased  Interest  exceeds 100%), (A) set aside and hold in the
     Collection  Account for the benefit of the Issuer the entire  remainder  of
     the percentage of the Collections represented by the Purchased Interest (or
     such amount set forth in PARAGRAPH  (ii) above);  PROVIDED  that so long as
     the  Facility  Termination  Date has not occurred if any amounts are so set
     aside on any Termination  Day and  thereafter,  the conditions set forth in
     SECTION 2 of EXHIBIT II are  satisfied or are waived by the  Administrator,
     such  previously  set aside amounts  shall,  to the extent  representing  a
     return on the Capital,  be  reinvested  in  accordance  with the  preceding
     PARAGRAPH  (ii) on the day of such  subsequent  satisfaction  or  waiver of
     conditions,  and (B) set aside and hold in the  Collection  Account for the
     benefit  of the  Issuer  the entire  remainder  of the  Collections  in the
     Collection Account represented by the Seller's Share of the Collections, if
     any;  PROVIDED  that so  long  as the  Facility  Termination  Date  has not
     occurred  if any  amounts  are so set  aside  on any  Termination  Day  and
     thereafter,  the  conditions  set  forth in  SECTION  2 of  EXHIBIT  II are
     satisfied or are waived by the

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     Administrator,  such  previously  set aside amounts shall be distributed to
     the  Seller  on the  day of  such  subsequent  satisfaction  or  waiver  of
     conditions; and

          (iv) during the times when  amounts are required to be  reinvested  in
     accordance  with the foregoing  PARAGRAPH  (ii) or the proviso to PARAGRAPH
     (iii),  release  to the Seller  (subject  to  SECTION  1.4(f))  for its own
     account any Collections in excess of (x) such amounts, (y) the amounts that
     are  required  to be  set  aside  in the  Collection  Account  pursuant  to
     PARAGRAPH  (i) above and (z) in the event the  Seller is not the  Servicer,
     all reasonable and appropriate  out-of-pocket costs and expenses (including
     the  Servicing  Fee to the extent such  Servicing  Fee has not already been
     paid) of such Servicer of servicing,  collecting and administering the Pool
     Receivables.

     (c) The Servicer  shall  deposit into the  Administration  Account (or such
other account designated by the Administrator), on each Settlement Date:

          (i)  Collections  held on deposit in the  Collection  Account  for the
     benefit of the Issuer  pursuant to SECTION  1.4(b)(i) in respect of accrued
     Discount and accrued and unpaid Fees;

          (ii)  Collections  held on deposit in the  Collection  Account for the
     benefit of the Issuer pursuant to SECTION 1.4(f); and 

          (iii) the lesser of (x) the amount of Collections then held on deposit
     in the Collection Account for the benefit of the Issuer pursuant to SECTION
     1.4(b)(iii) and (y) the aggregate amount of Capital on such date.

The Servicer shall deposit to its own account from  Collections  held on deposit
in the  Collection  Account  pursuant  to  SECTION  1.4(b)(i)  in respect of the
accrued Servicing Fee, an amount equal to such accrued Servicing Fee.

     (d)  Upon  receipt  of funds  deposited  into  the  Administration  Account
pursuant  to  CLAUSE  (c),  the  Administrator  shall  cause  such  funds  to be
distributed as follows:

          (i) if such distribution occurs on a day that is not a Termination Day
     and the  Purchased  Interest  does not exceed 100%,  FIRST to the Issuer in
     payment in full of all accrued  Discount  with  respect to each  Portion of
     Capital and accrued and unpaid  Fees,  and SECOND,  if the Servicer has set
     aside amounts in respect of the Servicing Fee pursuant to CLAUSE (b)(i) and
     has not  retained  such  amounts  pursuant to CLAUSE  (c), to the  Servicer
     (payable  in  arrears  on each  Settlement

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<PAGE>

     Date) in payment in full of the Issuer's Share of accrued Servicing Fees so
     set aside, and

          (ii) if such distribution occurs on a Termination Day or on a day when
     the Purchased Interest exceeds 100%, FIRST to the Issuer in payment in full
     of all accrued Discount with respect to each Portion of Capital and accrued
     and unpaid Fees, SECOND to the Issuer in payment in full of Capital (or, if
     such day is not a  Termination  Day,  the  amount  necessary  to reduce the
     Purchased  Interest to 100%),  THIRD, if Keebler or an Affiliate thereof is
     not the  Servicer,  to the  Servicer  in  payment  in  full of all  accrued
     Servicing Fees, FOURTH, if the Capital and accrued Discount with respect to
     each  Portion  of  Capital  have  been  reduced  to zero,  and all  accrued
     Servicing  Fees  payable  to the  Servicer  (if other  than  Keebler  or an
     Affiliate thereof) have been paid in full, to the Issuer, the Administrator
     and any other  Indemnified  Party or Affected  Person in payment in full of
     any other  amounts  owed thereto by the Seller  under this  Agreement  and,
     FIFTH,  unless such amount has been  retained by the  Servicer  pursuant to
     CLAUSE (c), to the  Servicer  (if the  Servicer is Keebler or an  Affiliate
     thereof) in payment in full of the Issuer's Share of all accrued  Servicing
     Fees.

After the Capital,  Discount,  and Fees with respect to the Purchased  Interest,
Servicing  Fees, and any other amounts payable by the Seller and the Servicer to
the Issuer,  the Administrator or any other Indemnified Party or Affected Person
hereunder,  have been paid in full, all additional  Collections  with respect to
the Purchased Interest shall be paid to the Seller for its own account.

     (e) For the purposes of this SECTION 1.4:

          (i) if on any day the  Outstanding  Balance of any Pool  Receivable is
     reduced  or  adjusted  as a result of any  defective,  rejected,  returned,
     repossessed or foreclosed goods or services, or any revision, cancellation,
     allowance,  discount or other  adjustment  made by any  Originator,  Hollow
     Tree,  the  Servicer,  the Seller or any  Affiliate  of the Seller,  or any
     setoff or dispute  between any  Originator,  Hollow Tree, the Seller or any
     Affiliate of the Seller and an Obligor,  the Seller shall be deemed to have
     received on such day a Collection of such Pool  Receivable in the amount of
     such reduction or adjustment;

          (ii) if on any day any of the representations or warranties in Section
     1(g) or (m) of EXHIBIT III is not true with respect to any Pool Receivable,
     the Seller  shall be deemed to have  received on such day a  Collection  of
     such Pool  Receivable  in full  (Collections  deemed to have been  received

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     pursuant  to  CLAUSE  (i) and (ii) of this  paragraph  (e) are  hereinafter
     sometimes referred to as "Deemed Collections");

          (iii) except as otherwise  required by applicable  law or the relevant
     Contract,  all Collections received from an Obligor of any Receivable shall
     be applied to the  Receivables  of such  Obligor in the order of the age of
     such  Receivables,  starting with the oldest such  Receivable,  unless such
     Obligor  designates  in writing  its payment  for  application  to specific
     Receivables; and

          (iv) if and to the extent  the  Administrator  or the Issuer  shall be
     required  for any  reason  to pay  over  to an  Obligor  (or  any  trustee,
     receiver, custodian or similar official pursuant to an Event of Bankruptcy)
     any amount  received by it  hereunder,  such amount  shall be deemed not to
     have been so received by the Administrator or the Issuer but rather to have
     been  retained by the Seller and,  accordingly,  the  Administrator  or the
     Issuer,  as the case may be, shall have a claim against the Seller for such
     amount,  payable  when and to the extent that any  distribution  from or on
     behalf of such Obligor is made in respect thereof.

On or before the last day of each  Reporting  Period that  contains  one or more
days on which Seller is deemed to have  received a  Collection  pursuant to this
SECTION 1.4(e), Seller shall transfer an amount equal to the aggregate amount of
such  Deemed  Collections  to the  Collection  Account  and the  Servicer  shall
distribute such transferred amount in the manner set forth in SECTION 1.4(c), as
if such  transferred  amount actually had been received by Seller or Servicer on
the date of such transfer from the Obligors of such Pool  Receivables  and as if
such  transferred  amount  actually had been deposited into a Lockbox Account on
the date of such transfer.

     (f) If at any time the Seller shall wish to cause the  reduction of Capital
of the Purchased Interest (but not to commence the liquidation,  or reduction to
zero, of the entire Capital of the Purchased Interest),  the Seller may do so as
follows:

          (i) the Seller shall give the  Administrator and the Servicer at least
     two Business Days' prior written  notice  thereof  (including the amount of
     such proposed  reduction and the proposed date on which such reduction will
     commence);

          (ii) on the proposed  date of  commencement  of such  reduction and on
     each  day  thereafter,  the  Servicer  shall  cause  Collections  not to be
     reinvested  until the amount  thereof  not so  reinvested  shall  equal the
     desired amount of reduction; and

          (iii) the  Servicer  shall  hold such  Collections  in the  Collection
     Account for the benefit of the Issuer,  for payment

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     to the Administrator on the next Settlement Date immediately  following the
     current  Settlement Period, and the Capital of the Purchased Interest shall
     be deemed reduced in the amount to be paid to the  Administrator  only when
     in fact finally so paid;

provided, that:

          (A) the amount of any such reduction shall be not less than $5,000,000
     and shall be an integral multiple of $1,000,000,  and the entire Capital of
     the Purchased  Interest after giving effect to such reduction  shall be not
     less than  $50,000,000 and shall be in an integral  multiple of $1,000,000;
     and

          (B) the  Seller  shall  choose  a  reduction  amount,  and the date of
     commencement  thereof,  so that to the extent  practicable  such  reduction
     shall commence and conclude in the same Settlement Period.

     Section 1.5. FEES. The Seller shall pay to the  Administrator  certain fees
in the  amounts and on the dates set forth in a letter,  dated the date  hereof,
among the Servicer,  the Seller and the  Administrator (as such letter agreement
may be amended,  supplemented or otherwise  modified from time to time, the "Fee
Letter").

     Section 1.6. PAYMENTS AND COMPUTATIONS,  ETC. (a) All amounts to be paid or
deposited  by the  Seller  or the  Servicer  hereunder  shall  be  made  without
reduction  for offset or  counterclaim  and shall be paid or  deposited no later
than  noon  (New  York  City  time) on the day when due in same day funds to the
Administration  Account.  All amounts  received  after noon (New York City time)
will be deemed to have been received on the next Business Day.

     (b) The Seller or the Servicer,  as the case may be,  shall,  to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the  Servicer,  as the case may be, when due  hereunder,  at an interest rate
equal to 1.0% per annum above the Base Rate, payable on demand.

     (c) All  computations of interest under CLAUSE (b) and all  computations of
Discount,  fees and other amounts hereunder shall be made on the basis of a year
of 360 (or 365 or 366, as applicable,  with respect to Discount or other amounts
calculated  by  reference  to the Base Rate) days for the actual  number of days
elapsed.  Whenever any payment or deposit to be made hereunder shall be due on a
day other than a Business Day, such payment or deposit shall be made on the next
Business Day and such extension of time shall be included in the  computation of
such payment or deposit.

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     Section 1.7. DIVIDING OR COMBINING PORTIONS OF THE CAPITAL OF THE PURCHASED
INTEREST. The Seller may, on the last day of any Settlement Period,  pursuant to
written notice  delivered to the  Administrator  in accordance with SECTION 5.2:
(a) at least three  Business  Days before such last day in the case of a Portion
of Capital  to be funded  based  upon the  Eurodollar  Rate and (b) at least two
Business  Days before such last day in all other cases,  either:  (i) divide the
Capital of the Purchased  Interest into two or more portions (each a "PORTION OF
CAPITAL"),  which  Portions  of Capital  may accrue  Discount  by  reference  to
different rates, equal, in aggregate,  to the Capital of the Purchased Interest;
PROVIDED,  that after  giving  effect to such  division  the amount of each such
Portion of Capital  shall be not less than  $5,000,000  and shall be an integral
multiple of  $1,000,000,  or (ii)  combine  any two or more  Portions of Capital
outstanding on such last day and having  Settlement  Periods ending on such last
day into a single  Portion of Capital  equal to the  aggregate of the Capital of
the Purchased Interest.

     Section 1.8.  INCREASED COSTS. (a) If the  Administrator,  the Issuer,  any
Purchaser,  any  other  Program  Support  Provider  or any of  their  respective
Affiliates (each an "Affected Person") reasonably  determines that the existence
of or compliance with: (i) any law or regulation or any change therein or in the
interpretation or application thereof, in each case adopted, issued or occurring
after the date  hereof,  or (ii) any request,  guideline  or directive  from any
central bank or other Governmental Authority (whether or not having the force of
law)  issued or  occurring  after the date of this  Agreement,  affects or would
affect the amount of capital  required  or  expected  to be  maintained  by such
Affected  Person,  and such Affected  Person  determines that the amount of such
capital is increased by or based upon the  existence of any  commitment  to make
purchases  of (or  otherwise  to maintain the  investment  in) Pool  Receivables
related to this Agreement or any related liquidity facility,  credit enhancement
facility and other  commitments of the same type,  then,  upon written demand by
such  Affected  Person  (with a copy to the  Administrator),  the  Seller  shall
promptly pay to the Administrator, for the account of such Affected Person, from
time to time as specified by such Affected Person, additional amounts sufficient
to compensate  such  Affected  Person.  A  certificate  describing in reasonable
detail,  such amounts and the basis for such Affected  Person's  demand for such
amounts  submitted to the Seller and the  Administrator  by such Affected Person
shall be conclusive and binding for all purposes, absent manifest error.

     (b) If, due to either:  (i) the  introduction of or any change in or in the
interpretation of any law or regulation  occurring after the date hereof or (ii)
compliance  with any guideline or request  occurring  after the date hereof from
any  central  bank or other  Governmental  Authority  (whether or not having the
force of law), there shall be any increase in the cost to any Affected

                                       9
<PAGE>

Person of agreeing to purchase or purchasing,  or maintaining  the ownership of,
the Purchased  Interest in respect of which Discount is computed by reference to
the Eurodollar  Rate,  then,  upon written demand by such Affected  Person,  the
Seller  shall  promptly  pay to  such  Affected  Person,  from  time  to time as
specified by such Affected Person,  additional  amounts sufficient to compensate
such Affected  Person for such  increased  costs.  A  certificate  describing in
reasonable detail,  such amounts and the basis for such Affected Person's demand
for such amounts  submitted to the Seller and the Administrator by such Affected
Person shall be conclusive and binding for all purposes, absent manifest error.

     (c) In  determining  the  additional  amounts  necessary to  compensate  an
Affected  Person  pursuant to clause (a) or (b) above,  such Affected Person may
use any method of averaging  and  attribution  that it (in its sole and absolute
discretion) shall deem applicable.

     Section  1.9.  REQUIREMENTS  OF  LAW.  If any  Affected  Person  reasonably
determines  that the existence of or compliance  with: (a) any law or regulation
or any change therein or in the interpretation or application  thereof,  in each
case  adopted,  issued or occurring  after the date hereof,  or (b) any request,
guideline or directive  from any central  bank or other  Governmental  Authority
(whether or not having the force of law) issued or  occurring  after the date of
this Agreement:

          (i) does or shall subject such Affected  Person to any tax of any kind
     whatsoever  with respect to this  Agreement,  any increase in the Purchased
     Interest  or in the amount of Capital  relating  thereto,  or does or shall
     change the basis of taxation of payments to such Affected Person on account
     of Collections,  Discount or any other amounts payable hereunder (excluding
     taxes imposed on the overall  pre-tax net income of such  Affected  Person,
     franchise taxes imposed on such Affected  Person and any withholding  taxes
     imposed as a result of amounts  paid or  payable  to such  Affected  Person
     pursuant to this Agreement),

          (ii) does or shall  impose,  modify or hold  applicable  any  reserve,
     special deposit, compulsory loan or similar requirement against assets held
     by, or deposits or other  liabilities in or for the account of,  purchases,
     advances or loans by, or other credit extended by, or any other acquisition
     of funds by,  any office of such  Affected  Person  that are not  otherwise
     included  in the  determination  of the  Eurodollar  Rate or the Base  Rate
     hereunder, or

          (iii)  does  or  shall  impose  on  such  Affected  Person  any  other
     condition,

                                       10
<PAGE>

and the  result of any of the  foregoing  is: (A) to  increase  the cost to such
Affected  Person of acting as  Administrator,  or of  agreeing  to  purchase  or
purchasing  or  maintaining  the  ownership  of undivided  percentage  ownership
interests  with regard to the Purchased  Interest (or interests  therein) or any
Portion of Capital,  or (B) to reduce any amount receivable  hereunder  (whether
directly or  indirectly),  then, in any such case,  upon written  demand by such
Affected  Person,  the  Seller  shall  promptly  pay  to  such  Affected  Person
additional  amounts  necessary  to  compensate  such  Affected  Person  for such
additional cost or reduced amount receivable.  All such amounts shall be payable
as incurred. A certificate from such Affected Person to the Seller describing in
reasonable  detail the amount and basis for the amount of such additional  costs
or reduced amount  receivable  shall be conclusive and binding for all purposes,
absent manifest error.

     Section 1.10.  INABILITY TO DETERMINE EURODOLLAR RATE. If the Administrator
shall have  determined  before  the first day of any  Settlement  Period  (which
determination  shall be  conclusive  and binding  upon the parties  hereto),  by
reason of circumstances  affecting the interbank Eurodollar market, either that:
(a) dollar  deposits in the  relevant  amounts and for the  relevant  Settlement
Period are not  available,  (b) adequate and  reasonable  means do not exist for
ascertaining  the  Eurodollar  Rate  for  such  Settlement  Period  or  (c)  the
Eurodollar Rate determined  pursuant hereto does not accurately reflect the cost
to the Issuer (as conclusively  determined by the  Administrator) of maintaining
any Portion of Capital during such Settlement  Period,  the Administrator  shall
promptly give telephonic notice of such determination,  confirmed in writing, to
the Seller before the first day of such Settlement Period. Upon delivery of such
notice:  (i) no Portion of Capital  shall be funded  thereafter at the Alternate
Rate  determined  by  reference  to the  Eurodollar  Rate  unless  and until the
Administrator  shall have  given  notice to the  Seller  that the  circumstances
giving rise to such  determination no longer exist, and (ii) with respect to any
outstanding  Portions of Capital then funded at the Alternate Rate determined by
reference to the Eurodollar  Rate, such Alternate Rate shall, on the immediately
succeeding  Settlement  Date,  automatically  be converted to the Alternate Rate
determined  by  reference  to the Base Rate at the  respective  last days of the
then-current Settlement Periods relating to such Portions of Capital.

     Section 1.11. MITIGATION.  Each Affected Person agrees that if it makes any
demand for payment  under  SECTION 1.8 or 1.9,  it will use  reasonable  efforts
(consistent  with its internal policy and legal and regulatory  restrictions and
so long as such efforts would not be disadvantageous to it, as determined in its
sole discretion) to mitigate the effect upon such Affected Person of the capital
requirements,  increased  costs, tax or other matter described in SECTION 1.8 or
1.9, as applicable.

                                       11
<PAGE>


                                   ARTICLE II.
                   REPRESENTATIONS AND WARRANTIES; COVENANTS;
                               TERMINATION EVENTS


     Section 2.1. REPRESENTATIONS AND WARRANTIES;  COVENANTS. Each of the Seller
and the Servicer hereby makes the  representations  and  warranties,  and hereby
agrees to perform  and  observe  the  covenants,  applicable  to it set forth in
EXHIBITS III and IV, respectively.

     Section 2.2. TERMINATION EVENTS. If any of the Termination Events set forth
in  EXHIBIT V shall  occur,  the  Administrator  may,  by notice to the  Seller,
declare  the  Facility  Termination  Date to have  occurred  (in which  case the
Facility  Termination  Date shall be deemed to have  occurred);  PROVIDED,  that
automatically  upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice)  described in paragraph  (f) of EXHIBIT
V, the  Facility  Termination  Date  shall  occur.  Upon  any such  declaration,
occurrence or deemed occurrence of the Facility Termination Date, the Issuer and
the  Administrator  shall have, in addition to the rights and remedies that they
may have under this  Agreement,  all other  rights and remedies  provided  after
default under the New York UCC and under other  applicable law, which rights and
remedies shall be cumulative.


                                   ARTICLE III.
                                 INDEMNIFICATION


     Section 3.1.  INDEMNITIES BY THE SELLER.  Without limiting any other rights
that the Administrator, the Issuer, any Program Support Provider or any of their
respective  Affiliates,   employees,   officers,   directors,  agents,  counsel,
successors,   transferees  or  assigns  (each,   an   "Indemnified   Party"  and
collectively,  the "Parties") may have  hereunder or under  applicable  law, the
Seller hereby agrees to indemnify  each  Indemnified  Party from and against any
and all claims,  damages,  expenses,  costs,  losses and liabilities  (including
Attorney  Costs)  (all  of  the  foregoing  being  collectively  referred  to as
"Indemnified  Amounts") arising out of or resulting from this Agreement (whether
directly or indirectly), the use of proceeds of purchases or reinvestments,  the
ownership of the Purchased  Interest,  or any interest therein, or in respect of
any  Receivable,   Related  Security  or  Contract,   excluding,   however:  (a)
Indemnified  Amounts to the extent  resulting  from gross  negligence or willful
misconduct on the part of such  Indemnified  Party or its  officers,  directors,
agents (including any successor Servicer appointed by the Administrator pursuant
to SECTION 4.1(a)) or counsel,  (b) recourse  (except as otherwise  specifically
provided in this Agreement) for  uncollectible  Receivables,  or (c) any overall
net income taxes or franchise  taxes imposed on such

                                       12
<PAGE>

Indemnified  Party and any withholding taxes imposed as a result of amounts paid
or payable to such Indemnified Party pursuant to this Agreement.  Subject to the
exclusions set forth in the preceding  sentence,  but without otherwise limiting
or being  limited  by the  foregoing,  the  Seller  shall  pay on demand to each
Indemnified  Party any and all amounts  necessary to indemnify such  Indemnified
Party from and against any and all Indemnified  Amounts relating to or resulting
from any of the following:

          (i) the failure of any Receivable  included in the  calculation of the
     Net  Receivables  Pool Balance as an Eligible  Receivable to be an Eligible
     Receivable,  the failure of any information  contained in an Monthly Report
     to be true and correct, or the failure of any other information provided to
     the  Issuer  or the  Administrator  with  respect  to  Receivables  or this
     Agreement to be true and correct,

          (ii) the failure of any representation,  warranty or statement made or
     deemed made by the Seller (or any of its  officers)  under or in connection
     with this  Agreement  to have been true and  correct as of the date made or
     deemed made in all respects,

          (iii) the  failure by the Seller to comply  with any  applicable  law,
     rule or  regulation  with  respect to any Pool  Receivable  or the  related
     Contract,  or the failure of any Pool Receivable or the related Contract to
     conform to any such applicable law, rule or regulation,

          (iv) the  failure to vest in the Issuer a valid and  enforceable:  (A)
     perfected undivided  percentage  ownership  interest,  to the extent of the
     Purchased  Interest,  in the  Receivables  in, or  purporting to be in, the
     Receivables Pool and the other Pool Assets, or (B) first priority perfected
     security  interest in the Pool Assets,  in each case, free and clear of any
     Adverse Claim,

          (v) the  failure to have  filed,  or any delay in  filing,  financing
     statements or other similar  instruments or documents  under the UCC of any
     applicable  jurisdiction  or other  applicable  laws  with  respect  to any
     Receivables in, or purporting to be in, the Receivables  Pool and the other
     Pool Assets,  whether at the time of any purchase or reinvestment or at any
     subsequent time,

          (vi) any dispute,  claim,  offset or defense  (other than discharge in
     bankruptcy  of the Obligor) of an Obligor to the payment of any  Receivable
     in, or purporting to be in, the Receivables Pool (including a defense based
     on such  Receivable  or the related  Contract not being a legal,  valid and
     binding  obligation  of such Obligor  enforceable  against it in

                                       13
<PAGE>

     accordance  with its terms),  or any other claim resulting from the sale of
     the goods or  services  related to such  Receivable  or the  furnishing  or
     failure to  furnish  such  goods or  services  or  relating  to  collection
     activities with respect to such  Receivable (if such collection  activities
     were performed by the Seller or any of its Affiliates acting as Servicer or
     by any agent or independent contractor retained by the Seller or any of its
     Affiliates),

          (vii) any  failure of the Seller (or any of its  Affiliates  acting as
     the Servicer) to perform its duties or obligations  in accordance  with the
     provisions hereof or under the Contracts,

          (viii)  any  products   liability   or  other  claim,   investigation,
     litigation or proceeding  arising out of or in connection with merchandise,
     insurance or services that are the subject of any Contract,

          (ix) the commingling of Collections at any time with other funds,

          (x) the use of proceeds of purchases or reinvestments, or

          (xi) any  reduction  in  Capital  as a result of the  distribution  of
     Collections  pursuant  to  SECTION  1.4(d),  if all or a  portion  of  such
     distributions  shall  thereafter be rescinded or otherwise must be returned
     for any reason.

     Section 3.2. INDEMNITIES BY THE SERVICER. Without limiting any other rights
that the  Administrator,  the  Issuer  or any other  Indemnified  Party may have
hereunder or under  applicable law, the Servicer hereby agrees to indemnify each
Indemnified  Party from and against any and all Indemnified  Amounts arising out
of or resulting from (whether  directly or  indirectly):  (a) the failure of any
information contained in a Monthly Report to be true and correct, or the failure
of any other  information  provided to the Issuer or the Administrator by, or on
behalf  of,  the  Servicer  to be  true  and  correct,  (b) the  failure  of any
representation,  warranty or  statement  made or deemed made by the Servicer (or
any of its  officers)  under or in connection  with this  Agreement to have been
true and  correct in all  respects as of the date made or deemed  made,  (c) the
failure by the Servicer to comply with any  applicable  law,  rule or regulation
with respect to any Pool  Receivable or the related  Contract,  (d) any dispute,
claim,  offset or defense of the Obligor to the payment of any Receivable in, or
purporting  to be in,  the  Receivables  Pool  resulting  from or related to the
collection activities with respect to such Receivable, or (e) any failure of the
Servicer to perform its duties or obligations in accordance  with the provisions
hereof.

                                       14
<PAGE>

     Section  3.3.  DEFENSE  OF CLAIMS.  (a)  Promptly  after the  receipt by an
Indemnified  Party or Parties  of a notice of the  commencement  of any  action,
suit,  proceeding,  investigation  or claim  against such  Indemnified  Party or
Parties as to which it  proposes  to demand  indemnification  from the Seller or
Servicer (either or both such parties, as applicable,  the "INDEMNIFYING  PARTY"
or "PARTIES")  pursuant to SECTION 3.1 or 3.2, as applicable,  such  Indemnified
Party or Parties  shall notify the  Indemnifying  Party or Parties in writing of
the commencement thereof; but the failure so to notify the Indemnifying Party or
Parties will not relieve such  Indemnifying  Party or Parties from any liability
which such  Indemnifying  Party or Parties may have to such Indemnified Party or
Parties  pursuant to SECTION  3.1 or 3.2 unless to the extent that such  failure
results in a material impairment of the Indemnifying Party or Parties ability to
defend such action, suit, proceeding,  investigation or claim in accordance with
the terms of this SECTION 3.3. After such notice,  if (i) an Indemnifying  Party
or Parties shall acknowledge  (without prejudice to any exclusion of Indemnified
Amounts  as a result of an  Indemnified  Party's  gross  negligence  or  willful
misconduct  pursuant to SECTION 3.1 or 3.2) in writing to such Indemnified Party
or  Parties  that such  Indemnifying  Party or  Parties  shall be  obligated  to
indemnify  such  Indemnified  Party  or  Parties  for  any  Indemnified  Amounts
described  in SECTION 3.1 or 3.2, as  applicable,  with  respect to such action,
suit, proceeding, investigation or claim, (ii) the defendants in, or targets of,
any such  action,  suit,  proceeding,  investigation  or claim  include both the
Indemnifying  Party or Parties and any such  Indemnified  Party or Parties,  and
(iii) no Termination  Event of Unmatured  Termination  Event shall have occurred
and be continuing,  the Indemnifying Party or Parties,  to the extent that it or
they shall  wish,  jointly  with such  Indemnified  Party or  Parties,  shall be
entitled to participate therein in defense of such action,  suit,  proceeding or
investigation,  and the Indemnifying Party or Parties and such Indemnified Party
or Parties  shall  cooperate  in the defense  thereof and shall  retain  counsel
reasonably   satisfactory  to  the  Indemnifying   Party  or  Parties  and  such
Indemnified Party or Parties to undertake the joint defense of such Indemnifying
Party or Parties  and such  Indemnified  Party or  Parties at such  Indemnifying
Party's or Parties' cost, risk and expense.  If (i) in the reasonable opinion of
such Indemnified Party or Parties,  the engagement of such counsel would present
a conflict  of  interest  that  would  prevent  such  counsel  from  effectively
undertaking  such  joint  defense,   (ii)  such  Indemnified  Party  or  Parties
reasonably  conclude  that there may be legal  defenses  available to it or them
that are different from or in addition to those  available to such  Indemnifying
Party or  Parties,  (iii)  such  Indemnifying  Party or  Parties  fail to employ
counsel reasonably satisfactory to such Indemnified Party or Parties in a timely
manner, or (iv) if a Termination Event or Unmatured Termination Event shall have
occurred and be continuing,  then such  Indemnified  Party or Parties may employ
separate counsel to represent or defend it or them in

                                       15
<PAGE>

any such action,  suit,  proceeding or investigation and such Indemnifying Party
or Parties  shall pay all fees,  expenses  and  disbursements  of such  counsel;
PROVIDED,  HOWEVER, that in no event shall such Indemnifying Party or Parties be
liable  for the  fees,  expenses  and  disbursements  of more  than one  counsel
representing all Indemnified Parties that are parties to the same action,  suit,
proceeding, investigation or claim.

     (b) No  Indemnifying  Party shall (i) without the prior written  consent of
the  relevant   Indemnified  Party  or  Parties  (which  consent  shall  not  be
unreasonably  withheld or delayed)  settle or compromise or consent to the entry
of  any  judgment  with  respect  to  any  pending  action,  suit,   proceeding,
investigation or claim in respect to which  indemnification  or contribution may
be sought hereunder  (whether or not the relevant  Indemnified  Party or Parties
are  actual  or  potential  parties  to  such  claim)  unless  such  settlement,
compromise  or  consent  includes  an  unconditional  release  of each  relevant
Indemnified  Party  from  all  liability  arising  out  of  such  action,  suit,
proceeding,  investigation  or claim or (ii) be liable for any settlement of any
such action  affected  without its written  consent  (which consent shall not be
unreasonably withheld or delayed), but if settled with its written consent or if
there be a final  judgment  of the  plaintiff  in any action,  the  Indemnifying
Parties  agree to indemnify  and hold  harmless any  Indemnified  Party from and
against any  indemnified  amounts  (subject to the terms of SECTION 3.1 and 3.2)
relating thereto.

     In the event of any dispute  between any Indemnified  Party or Parties,  on
the one hand, and any Indemnifying  Party, on the other hand, as to whether such
Indemnifying Party or Indemnified party is acting reasonably in objecting to any
proposed  settlement,  compromise  or consent,  such  dispute  shall be resolved
through  binding  arbitration  in  Chicago,  Illinois  in  accordance  with  the
commercial  arbitration  rules of the American  Arbitration  Association.  There
shall  be a  single  arbitrator  to be  selected  by  mutual  agreement  of such
Indemnified Party or Parties and such Indemnifying  Party or Parties (or if such
parties cannot agree on an arbitrator, by an arbitrator selected by a federal or
state  court  located  in the City of  Chicago).  Any such  arbitration  must be
commenced not later than 30 days after the date such dispute arose.


                                   ARTICLE IV.
                         ADMINISTRATION AND COLLECTIONS


     Section 4.1. APPOINTMENT OF THE SERVICER. (a) The servicing,  administering
and  collection  of the Pool  Receivables  shall be  conducted  by the Person so
designated from time to time as the

                                       16
<PAGE>

Servicer in accordance with this Section.  Until the Administrator  gives notice
to  Keebler  (in  accordance  with this  Section)  of the  designation  of a new
Servicer,  Keebler is hereby  designated  as, and hereby  agrees to perform  the
duties and obligations of, the Servicer  pursuant to the terms hereof.  Upon the
occurrence and during the continuation of a Termination Event, the Administrator
may designate as Servicer any Person  (including  itself) to succeed  Keebler or
any  successor  Servicer,  on the condition in each case that any such Person so
designated  shall agree to perform the duties and  obligations  of the  Servicer
pursuant to the terms hereof.

     (b) Upon the  designation  of a  successor  Servicer as set forth in CLAUSE
(a), Keebler agrees that it will terminate its activities as Servicer  hereunder
in a manner that the  Administrator  reasonably  determines  will facilitate the
transition  of the  performance  of such  activities  to the new  Servicer,  and
Keebler  shall  cooperate  with and assist such new Servicer.  Such  cooperation
shall  include  access to and  transfer  of related  records  and, to the extent
legally  permissible,  use by the new  Servicer  of all  licenses,  hardware  or
software  necessary or desirable to collect the Pool Receivables and the Related
Security.

     (c) Keebler  acknowledges  that,  in making  their  decision to execute and
deliver  this  Agreement,  the  Administrator  and the  Issuer  have  relied  on
Keebler's  agreement to act as Servicer hereunder.  Accordingly,  Keebler agrees
that it will not voluntarily resign as Servicer.

     (d) The Servicer may with the prior written  consent of the  Administrator,
delegate  its  duties  and  obligations  hereunder  to any  subservicer  (each a
"Sub-Servicer");  PROVIDED, that, in each such delegation: (i) such Sub-Servicer
shall agree in writing to perform  the duties and  obligations  of the  Servicer
pursuant to the terms hereof,  (ii) the Servicer shall remain  primarily  liable
for the  performance  of the  duties and  obligations  so  delegated,  (iii) the
Seller,  the Administrator and the Issuer shall have the right to look solely to
the  Servicer  for  performance,  and (iv) the terms of any  agreement  with any
Sub-Servicer  shall provide that the  Administrator may terminate such agreement
upon the termination of the Servicer hereunder by giving notice of its desire to
terminate  such  agreement  to the  Servicer  (and the  Servicer  shall  provide
appropriate notice to each such Sub-Servicer).

     Section 4.2.  DUTIES OF THE SERVICER.  (a) The Servicer shall take or cause
to be taken all such action as may be necessary or advisable to  administer  and
collect each Pool  Receivable  from time to time,  all in  accordance  with this
Agreement and all applicable laws,  rules and regulations,  with reasonable care
and  diligence,  and in accordance  with the Credit and Collection  Policy.  The
Servicer shall set aside, for the accounts of the Seller and the

                                       17
<PAGE>

Issuer,  the amount of the  Collections  to which each is entitled in accordance
with ARTICLE I. The Servicer may, in accordance  with the Credit and  Collection
Policy,  extend the maturity of any Pool Receivable (but not beyond 30 days) and
extend  the  maturity  or  adjust  the  Outstanding  Balance  of  any  Defaulted
Receivable  as  the  Servicer  may  determine  to  be  appropriate  to  maximize
Collections thereof;  PROVIDED,  HOWEVER, that: (i) such extension or adjustment
shall not alter the status of such Pool Receivable as a Delinquent Receivable or
a Defaulted  Receivable  or limit the rights of the Issuer or the  Administrator
under this Agreement and (ii) if a Termination Event has occurred and Keebler or
an Affiliate  thereof is serving as the Servicer,  Keebler or such Affiliate may
make such  extension or adjustment  only upon the prior written  approval of the
Administrator.  The Seller shall deliver to the Servicer and the Servicer  shall
hold for the benefit of the Seller and the  Administrator  (individually and for
the benefit of the Issuer), in accordance with their respective  interests,  all
records and documents  (including  computer tapes or disks) with respect to each
Pool Receivable.  Notwithstanding anything to the contrary contained herein, the
Administrator  may direct the  Servicer  (whether the Servicer is Keebler or any
other  Person) to commence or settle any legal action to enforce  collection  of
any Pool  Receivable  which is a Defaulted  Receivable  or to foreclose  upon or
repossess any Related Security.

     (b) The Servicer shall, as soon as practicable  following actual receipt of
collected  funds,  turn over to the Seller the  collections of any  indebtedness
that is not a Pool Receivable,  less, if Keebler or an Affiliate  thereof is not
the Servicer, all reasonable and appropriate out-of-pocket costs and expenses of
such Servicer of servicing,  collecting and administering such collections.  The
Servicer,  if other than  Keebler or an  Affiliate  thereof,  shall,  as soon as
practicable  upon  demand,  deliver to the Seller all records in its  possession
that evidence or relate to any indebtedness  that is not a Pool Receivable,  and
copies of records in its possession that evidence or relate to any  indebtedness
that is a Pool Receivable.

     (c) The Servicer's  obligations  hereunder shall terminate on the later of:
(i) the  Facility  Termination  Date and (ii)  the  date on  which  all  amounts
required to be paid to the Issuer,  the  Administrator and any other Indemnified
Party or Affected Person hereunder shall have been paid in full.

     After such  termination,  if Keebler or an  Affiliate  thereof  was not the
Servicer on the date of such termination, the Servicer shall promptly deliver to
the Seller all books,  records and related  materials that the Seller previously
provided  to the  Servicer,  or that  have been  obtained  by the  Servicer,  in
connection with this Agreement.

                                       18
<PAGE>

     Section 4.3.  ESTABLISHMENT AND USE OF CERTAIN  ACCOUNTS.  (a) Prior to the
initial  purchase  hereunder,  the Seller shall enter into  Lock-Box  Agreements
establishing  the  Lock-Box  Accounts  listed  on  SCHEDULE  II with  all of the
Lock-Box Banks, and deliver original counterparts thereof to the Administrator.

          (b) The Servicer  agrees to  establish  the  Collection  Account on or
before the date of the first purchase hereunder. The Collection Account shall be
used to accept the transfer of Collections of Pool Receivables from the Lock-Box
Accounts pursuant to SECTION 1.4(b) and for such other purposes described in the
Transaction Documents.

          (c) Any  amounts in the  Collection  Account  may be  invested  by the
Collection Account Bank at the Servicer's direction,  in Permitted  Investments,
so long as Issuer's interest in such Permitted Investments is perfected and such
Permitted  Investments  are subject to no Adverse Claims other than those of the
Issuer provided hereunder.

          (d) Upon the occurrence and during the  continuation  of a Termination
Event, the Administrator may at any time thereafter give notice to each Lock-Box
Bank and the Collection  Account Bank that the  Administrator  is exercising its
rights under the Lock-Box  Agreements and the Collection Account  Agreement,  as
applicable,  to do  any  or all of the  following:  (i) to  have  the  exclusive
ownership  and  control of the  Lock-Box  Accounts  and the  Collection  Account
transferred to the Administrator and to exercise  exclusive dominion and control
over the funds deposited therein, (ii) to have the proceeds that are sent to the
respective   Lock-Box  Accounts   redirected  pursuant  to  the  Administrator's
instructions,  and (iii) to take any or all other  actions  permitted  under the
applicable  Lock-Box Agreement and the Collection Account Agreement.  The Seller
hereby agrees that if the  Administrator  at any time takes any action set forth
in the preceding sentence, the Administrator shall have exclusive control of the
proceeds  (including  Collections) of all Pool Receivables and the Seller hereby
further  agrees to take any other action that the  Administrator  may reasonably
request to transfer such control.  Any proceeds of Pool Receivables  received by
the  Seller  or  the  Servicer  thereafter  shall  be  sent  immediately  to the
Administrator.

     Section 4.4.  ENFORCEMENT  RIGHTS. (a) At any time following the occurrence
and during the continuation of a Termination Event:

          (i) the  Administrator  may direct the  Obligors  that  payment of all
     amounts  payable  under any Pool  Receivable  is to be made directly to the
     Administrator or its designee,

          (ii) the  Administrator  may give notice of the  Issuer's  interest in
     Pool  Receivables to each Obligor,  which notice

                                       19
<PAGE>

     shall direct that  payments be made  directly to the  Administrator  or its
     designee, and

          (iii) the  Administrator  may request the  Servicer  to, and upon such
     request the Servicer  shall:  (A) assemble all of the records  necessary or
     desirable to collect the Pool Receivables and the Related Security,  and to
     the extent legally permissible  transfer or license to a successor Servicer
     the  use of all  software  necessary  or  desirable  to  collect  the  Pool
     Receivables  and the Related  Security,  and make the same available to the
     Administrator or its designee at a place selected by the Administrator, and
     (B) segregate all cash,  checks and other  instruments  received by it from
     time  to  time  constituting  Collections  in a  manner  acceptable  to the
     Administrator  and, promptly upon receipt,  remit all such cash, checks and
     instruments,  duly endorsed or with duly executed  instruments of transfer,
     to the Administrator or its designee.

     (b)  The  Seller  hereby  authorizes  the  Administrator,  and  irrevocably
appoints  the  Administrator  as  its   attorney-in-fact   with  full  power  of
substitution and with full authority in the place and stead of the Seller, which
appointment  is coupled with an interest,  to take any and all steps in the name
of the  Seller  and on behalf  of the  Seller  necessary  or  desirable,  in the
determination  of  the  Administrator,  after  the  occurrence  and  during  the
continuation of a Termination  Event, to collect any and all amounts or portions
thereof due under any and all Pool Assets,  including  endorsing the name of the
Seller on checks and other  instruments  representing  Collections and enforcing
such Pool Assets.  Notwithstanding  anything to the  contrary  contained in this
subsection,  none of the powers conferred upon such attorney-in-fact pursuant to
the preceding sentence shall subject such  attorney-in-fact  to any liability if
any action taken by it shall prove to be inadequate  or invalid,  nor shall they
confer any obligations upon such attorney-in-fact in any manner whatsoever.

     Section 4.5.  RESPONSIBILITIES  OF THE SELLER.  (a) Anything  herein to the
contrary notwithstanding, the Seller shall pay when due any taxes, including any
sales taxes payable in connection  with the Pool  Receivables and their creation
and satisfaction. The Administrator and the Issuer shall not have any obligation
or  liability  with  respect  to any Pool  Asset,  nor  shall  either of them be
obligated to perform any of the obligations of the Seller, Servicer, Hollow Tree
or any Originator thereunder.

     (b) Keebler hereby irrevocably agrees that if at any time it shall cease to
be the  Servicer  hereunder,  it  shall  act (if the  then-current  Servicer  so
requests) as the  data-processing  agent of the Servicer and, in such  capacity,
Keebler shall conduct the data-processing functions of the administration of the
Receivables  and the  Collections  thereon  in  substantially  the same way that
Keebler

                                       20
<PAGE>

conducted such data-processing functions while it acted as the Servicer.

     Section 4.6.  SERVICING  FEE. (a) Subject to CLAUSE (b), the Servicer shall
be paid a fee equal to 1.0% PER ANNUM  (the  "Servicing  Fee Rate") of the daily
average  aggregate  Outstanding  Balance of the Pool  Receivables.  The Issuer's
Share of such fee  shall  be paid  through  the  distributions  contemplated  by
SECTION 1.4(d), and the Seller's Share of such fee shall be paid by the Seller.

     (b) If the  Servicer  ceases to be Keebler  or an  Affiliate  thereof,  the
servicing  fee shall be the  greater of: (i) the amount  calculated  pursuant to
CLAUSE (a), and (ii) an alternative  amount specified by the successor  Servicer
not to exceed 100% of the aggregate  reasonable  costs and expenses  incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.


                                   ARTICLE V.
                                  MISCELLANEOUS


     Section 5.1.  AMENDMENTS,  ETC. No amendment or waiver of any  provision of
this Agreement or any other Transaction Document, or consent to any departure by
the Seller or the Servicer  therefrom,  shall be  effective  unless in a writing
signed by the  Administrator,  and, in the case of any  amendment,  by the other
parties thereto;  and then such amendment,  waiver or consent shall be effective
only in the  specific  instance  and for the  specific  purpose for which given;
PROVIDED, HOWEVER, that no such material amendment shall be effective until both
Moody's and Standard & Poor's have  notified the  Administrator  in writing that
such action will not result in a reduction  or  withdrawal  of the rating of any
Notes.  No failure on the part of the Issuer or the  Administrator  to exercise,
and no delay  in  exercising  any  right  hereunder  shall  operate  as a waiver
thereof,  nor  shall any  single  or  partial  exercise  of any right  hereunder
preclude  any other or further  exercise  thereof or the  exercise  of any other
right.  The  Administrator  shall provide each Rating Agency with a copy of each
amendment to or waiver or consent under this  Agreement  promptly  following the
effective date thereof.

     Section 5.2. NOTICES,  ETC. All notices and other  communications  provided
for hereunder shall,  unless otherwise stated herein,  be in writing  (including
facsimile  communication)  and shall be personally  delivered or sent by express
mail or courier or by certified mail,  postage-prepaid,  or by facsimile, to the
intended party at the address or facsimile  number of such party set forth under
its name on the  signature  pages  hereof or at such

                                       21
<PAGE>

other  address or  facsimile  number as shall be  designated  by such party in a
written notice to the other parties hereto.  All such notices and communications
shall be  effective,  (i) if  personally  delivered  or sent by express  mail or
courier or if sent by certified mail, when received,  and (ii) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means.

     Section 5.3. ASSIGNABILITY.  (a) This Agreement and the Issuer's rights and
obligations herein (including ownership of the Purchased Interest or an interest
therein)  shall  be  assignable,  in whole or in  part,  by the  Issuer  and its
successors and assigns with the prior written  consent of the Seller;  PROVIDED,
HOWEVER,  that such consent  shall not be  unreasonably  withheld;  and PROVIDED
FURTHER,  that no such consent  shall be required if the  assignment  is made to
BNS, any Affiliate of BNS, any Purchaser or other  Program  Support  Provider or
any Person  that is: (i) in the  business of issuing  Notes and (ii)  associated
with or administered by BNS or any Affiliate of BNS.

     (b) The  Issuer  may at any  time  grant  to one or  more  banks  or  other
institutions  (each a "Purchaser") party to the Liquidity  Agreement,  or to any
other  Program  Support  Provider,  participating  interests  in  the  Purchased
Interest.  In the  event of any  such  grant by the  Issuer  of a  participating
interest to a Purchaser  or other  Program  Support  Provider,  the Issuer shall
remain  responsible for the performance of its obligations  hereunder and except
as otherwise  provided  herein,  Seller and Servicer shall continue to deal with
Issuer as if Issuer had not  granted  such  participating  interest.  The Seller
agrees that each Purchaser or other Program  Support  Provider shall be entitled
to the benefits of SECTIONS 1.8 and 1.9.

     (c) This  Agreement  and the rights and  obligations  of the  Administrator
hereunder shall be assignable, in whole or in part, by the Administrator and its
successors  and assigns;  PROVIDED,  that unless:  (i) such  assignment is to an
Affiliate of BNS, (ii) it becomes unlawful for BNS to serve as the Administrator
or  (iii)  a  Termination  Event  exists,  the  Seller  has  consented  to  such
assignment, which consent shall not be unreasonably withheld.

     (d) Except as provided in SECTION  4.1(d),  none of the Seller,  Keebler or
the Servicer may assign its rights or delegate its obligations  hereunder or any
interest herein without the prior written consent of the Administrator.

     (e)  Without  limiting  any  other  rights  that  may  be  available  under
applicable  law,  the rights of the Issuer may be enforced  through it or by its
agents.

                                       22
<PAGE>

     Section 5.4.  COSTS,  EXPENSES AND TAXES.  (a) In addition to the rights of
indemnification  granted  under  SECTION 3.1, the Seller agrees to pay on demand
all reasonable costs and expenses in connection with the preparation, execution,
delivery  and  administration   (including   periodic  internal  audits  by  the
Administrator  of Pool  Receivables)  of this Agreement,  the other  Transaction
Documents and the other documents and agreements to be delivered  hereunder (and
all reasonable  costs and expenses in connection  with any amendment,  waiver or
modification   of  any  thereof),   including:   (i)  Attorney   Costs  for  the
Administrator,  the  Issuer and their  respective  Affiliates  and  agents  with
respect thereto and with respect to advising the  Administrator,  the Issuer and
their  respective  Affiliates  and agents as to their rights and remedies  under
this  Agreement and the other  Transaction  Documents,  and (ii) all  reasonable
costs and expenses (including Attorney Costs), if any, of the Administrator, the
Issuer  and  their  respective  Affiliates  and  agents in  connection  with the
enforcement of this Agreement and the other Transaction Documents.

     (b) In addition, the Seller shall pay on demand any and all stamp and other
taxes and fees payable in connection  with the execution,  delivery,  filing and
recording of this Agreement or the other documents or agreements to be delivered
hereunder,  and agrees to save each Indemnified  Party harmless from and against
any  liabilities  with  respect  to or  resulting  from any  delay in  paying or
omission to pay such taxes and fees.

     Section 5.5. NO  PROCEEDINGS;  LIMITATION ON PAYMENTS.  Each of the Seller,
Keebler,  the  Servicer,  the  Administrator,  each  assignee  of the  Purchased
Interest or any interest  therein,  hereby covenants and agrees that it will not
institute against, or join any other Person in instituting  against,  the Issuer
any   bankruptcy,   reorganization,   arrangement,   insolvency  or  liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law,  for one year and one day  after the  latest  maturing  Note  issued by the
Issuer is paid in full.  The  provision  of this  SECTION 5.5 shall  survive any
termination of this Agreement.

     Section 5.6. CONFIDENTIALITY.  Unless otherwise required by applicable law,
each of the Seller and Servicer agrees to maintain the  confidentiality  of this
Agreement  and the  other  Transaction  Documents  (and all  drafts  hereof  and
thereof) in communications with third parties and otherwise;  PROVIDED that this
Agreement may be disclosed  to: (a) third parties to the extent such  disclosure
is made pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Administrator, (b) the Seller's legal counsel and
auditors  if they agree to hold it  confidential  and (c) in filings  made under
securities  laws.  Unless  otherwise  required by  applicable  law,  each of the
Administrator  and the Issuer  agrees to  maintain  the  confidentiality  of all
information   regarding  Keebler  and  its  Subsidiaries;   PROVIDED  that

                                       23
<PAGE>

such  information  may be  disclosed  to: (i) third  parties to the extent  such
disclosure is made pursuant to a written  agreement of  confidentiality  in form
and  substance  reasonably  satisfactory  to  Keebler,  (ii) legal  counsel  and
auditors  of  the  Issuer  or  the  Administrator  if  they  agree  to  hold  it
confidential,  (iii) the rating  agencies  rating  the Notes to the extent  such
information relates to the Receivables Pool or the transactions  contemplated by
this  Agreement,  or if not so  related,  upon  obtaining  the prior  consent of
Keebler (such consent not to be unreasonably withheld), (iv) any Program Support
Provider or potential  Program Support  Provider to the extent such  information
relates  to the  Receivables  Pool  or the  transactions  contemplated  by  this
Agreement,  or if not so related,  upon  obtaining the prior written  consent of
Keebler (such consent not to be unreasonably withheld),  (v) any placement agent
placing the Notes, and (vi) any regulatory  authorities having jurisdiction over
BNS, the Issuer any Program Support Provider or any Purchaser.

     Section 5.7.  GOVERNING LAW AND  JURISDICTION.  (a) THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT  MADE UNDER AND  GOVERNED  BY THE  INTERNAL  LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE  SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL  OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER,  IN RESPECT
OF ANY PARTICULAR  COLLATERAL  ARE GOVERNED BY THE LAWS OF A JURISDICTION  OTHER
THAN THE STATE OF NEW YORK.

     (b) ANY LEGAL ACTION OR  PROCEEDING  WITH RESPECT TO THIS  AGREEMENT MAY BE
BROUGHT IN THE  COURTS OF THE STATE OF NEW YORK OR OF THE UNITED  STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE PARTIES HERETO CONSENTS,  FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE  NON-EXCLUSIVE  JURISDICTION OF THOSE COURTS.  EACH OF THE PARTIES HERETO
IRREVOCABLY  WAIVES,  TO THE MAXIMUM  EXTENT  PERMITTED BY LAW,  ANY  OBJECTION,
INCLUDING  ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS,  THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH  JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED  HERETO.  EACH OF THE  PARTIES  HERETO  WAIVES  PERSONAL  SERVICE OF ANY
SUMMONS,  COMPLAINT  OR OTHER  PROCESS,  WHICH  SERVICE MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY NEW YORK LAW.

     Section 5.8.  EXECUTION IN COUNTERPARTS.  This Agreement may be executed in
any number of counterparts,  each of which, when so executed, shall be deemed to
be an original, and all of which, when taken together,  shall constitute one and
the same agreement.

     Section 5.9. SURVIVAL OF TERMINATION.  The provisions of SECTIONS 1.8, 1.9,
3.1, 3.2,  5.4, 5.5, 5.6, 5.7, 5.8, 5.10 and 5.13 shall survive any  termination
of this Agreement.

                                       24
<PAGE>

     Section 5.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES THEIR
RESPECTIVE  RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS  CONTEMPLATED
HEREBY IN ANY ACTION,  PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE  PARTIES  AGAINST ANY OTHER PARTY OR  PARTIES,  WHETHER  WITH  RESPECT TO
CONTRACT  CLAIMS,  TORT CLAIMS OR OTHERWISE.  EACH OF THE PARTIES  HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING,  EACH OF THE PARTIES HERETO FURTHER AGREES
THAT ITS  RESPECTIVE  RIGHT TO A TRIAL BY JURY IS  WAIVED BY  OPERATION  OF THIS
SECTION AS TO ANY ACTION,  COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION  HEREOF.  THIS  WAIVER  SHALL  APPLY  TO  ANY  SUBSEQUENT  AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

     Section 5.11.  ENTIRE  AGREEMENT.  This Agreement and the other Transaction
Documents  embody the entire  agreement  and  understanding  between the parties
hereto, and supersede all prior or contemporaneous agreements and understandings
of such Persons,  verbal or written,  relating to the subject  matter hereof and
thereof.

     Section 5.12. HEADINGS. The captions and headings of this Agreement and any
Exhibit,  Schedule or Annex hereto are for  convenience  of  reference  only and
shall not affect the interpretation hereof or thereof.

     Section 5.13. ISSUER'S LIABILITIES. The obligations of the Issuer under the
Transaction  Documents are solely the corporate  obligations  of the Issuer.  No
recourse  shall be had for any  obligation or claim arising out of or based upon
any Transaction Document against any stockholder, employee, officer, director or
incorporator  of the Issuer;  PROVIDED,  HOWEVER,  that this  Section  shall not
relieve any such Person of any  liability  it might  otherwise  have for its own
gross negligence or willful misconduct.

     Section 5.14. TAX TREATMENT.  The Seller has structured  this Agreement and
the  Purchased  Interest to facilitate a secured,  credit-enhanced  financing on
favorable  terms with the intention that the Purchased  Interest will constitute
indebtedness  of the Seller for federal income and state and local tax purposes.
The  Seller  and  Issuer  by  acceptance  of the  Purchased  Interest,  agree to
recognize and report the Purchased  Interest as  indebtedness  of the Seller for
purposes of federal, state and local income or franchise taxes and any other tax
imposed on or  measured  by  income,  and to report all  receipts  and  payments
relating thereto in a manner that is consistent with such characterization.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       25
<PAGE>

                         

    IN WITNESS WHEREOF, the parties have caused this agreement to be exectued
by their respective  officers  thereunto duly  authorized,  as of the date first
above written.
                                                                               

                                   KEEBLER FUNDING CORPORATION

                                   By: /s/ THOMAS E. O'NEILL
                                      ------------------------------------- 
                                      Name:  Thomas E. O'Neill
                                      Title: Vice President

                                      Address:

                                      3875 Bay Center Place
                                      Hayward, California 94545
                                      Attention:
                                      Telephone:
                                      Facsimile:

                                   KEEBLER FOODS COMPANY

                                   By: /s/ THOMAS E. O'NEILL
                                      -------------------------------------
                                      Name:  Thomas E. O'Neill
                                      Title: Vice President   

                                      Address:

                                      One Hollow Tree Lane
                                      677 Larch Avenue
                                      Elmhurst, Illinois 60126
                                      Attention: Treasurer
                                      Telephone: (630) 782-2690
                                      Facsimile: (630) 833-3372



                                                  
                                       S-1
<PAGE>

                                   LIBERTY STREET FUNDING CORP.

                                   By: /s/ ANDREW L. STIDD
                                      -------------------------------------
                                      Name:   Andrew L. Stidd
                                      Title:  President

                                      Address:

                                      Liberty Street Funding Corp.
                                      c/o Global Securitization
                                        Services, LLC
                                      25 West 43rd Street, Suite 704
                                      New York, New York 10036
                                      Attention: Andrew L. Stidd
                                      Telephone No.: (212) 302-8330
                                      Facsimile No.: (212) 302-8767

                                      With a copy to:
     
                                      The Bank of Nova Scotia
                                      One Liberty Plaza
                                      New York, New York 10006
                                      Attention: Richard A. Josephs
                                      Telephone No.: (212) 225-5000
                                      Facsimile No.: (212) 225-5090


                                      THE BANK OF NOVA SCOTIA,
                                        as Administrator

                                   By: /s/ RICHARD A. JOSEPHS
                                      -------------------------------------
                                      Name:   Richard A. Josephs
                                      Title:  Product Manager
                                        
                                      Address:

                                      The Bank of Nova Scotia
                                      One Liberty Plaza
                                      New York, New York 10006
                                      Attention: Richard A. Josephs
                                      Telephone No.: (212) 225-5000
                                      Facsimile No.: (212) 225-5090



                                                  
                                      S-2
<PAGE>