<PAGE>

                                                                EXHIBIT 10.44
                                  AGREEMENT
                                  ---------

     THIS AGREEMENT made and executed this 12th day of January, 2001, between
AURORA FOODS INC. with its offices at 75 Empire Drive, West Seneca, New York,
14224, hereinafter referred to as the Employer and the BAKERY, CONFECTIONERY,
TOBACCO WORKERS & GRAIN MILLERS' INTERNATIONAL UNION OF AMERICA, LOCAL 429, with
its offices at 1560 Harlem Road, Cheektowaga, New York, 14206, hereinafter
referred to as the Union.

                              W I T N E S S E T H:
                              --------------------

     This Agreement as to hours, wages and working conditions is entered into
and shall be binding on the parties hereto and their successors and assigns from
January 12th, 2001 until terminated as hereinafter provided.


                            ARTICLE 1 - RECOGNITION
                            -----------------------

     Section 1.  The Employer recognizes the Union as the collective bargaining
agent for all of his Employees, at the Aurora Foods West Seneca facility
production, quality assurance, shipping, packing, maintenance and sanitation,
including regular part-time Employees, but excluding store clerks, office and
clerical Employees, route salesmen, drivers and supervisors.

     Section 2.  It shall be a condition of employment that all of the
Employer's Employees in the contractual bargaining unit who are members of the
Union in good standing on either the effective date or the execution date of the
Agreement, whichever is later, shall remain members in good standing for the
term of the Agreement; those Employees in the unit who are not members on the
latter of those two dates, shall become Union members on the 31st day following
either the effective date or the execution date of this Agreement, whichever is
later, and remain good standing members for the term of the Agreement; all new
Employees in the unit shall become Union members on the 31st day following the
beginning of such employment, and remain good standing members for the term of
the Agreement.

                 It is agreed that the Employer shall retain in his employ only
such Employees covered by this Agreement who are dues paying members in good
standing of the Bakery, Confectionery, Tobacco Workers & Grain Millers'
International Union of America. Good standing members are those owing not more
than two (2) months dues. The Employer shall have sixty (60) calendar days to
determine if the new Employee qualifies to do the work before he/she shall be
considered regular full-time during which time the Employee may be discharged
without recourse, unless the Union and Employer agree in writing to extend the
period for a term not to exceed three (3) weeks.

                                                                               1
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                           ARTICLE 2 - HOURS OF WORK
                           -------------------------

     Section 1.  Minimum wages and classification shall be as agreed upon in
negotiation conferences and as set forth in Schedule `A', a copy of which is
annexed hereto and made a part hereof, and is to be identified by the signature
of the Employer and the Union.

     Section 2.  The normal work day for full-time Employees shall be seven and
one-half (7.5) hours and the normal work week shall consist of five (5) days or
thirty-seven and one-half (37.5) hours, which need not be worked consecutively,
being the normal times worked at straight time rates. A part-time Employee is
one who works less than thirty-seven and one-half (37.5) hours per week. The
normal workweek shall commence on a Sunday or any other day which shall be
selected at the option of the Employer. This section is intended only to provide
a basis for the calculation of overtime and it should not be construed as a
guarantee of work per day or per week.

     Section 3.  All regular full-time Employees asked to report for work shall
be guaranteed seven and one-half (7.5) hours per day and all part-time Employees
asked to report for work shall be guaranteed four (4) hours per day, except
those voluntarily agreeing to work less hours.

     Section 4.  All hours worked in excess of seven and one half (7.5) hours in
any one day and/or thirty-seven and one-half (37.5) hours per week, shall be
compensated for at the rate of time and one-half the straight time hourly
classification rate.

     Section 5.  Time and one-half the straight time hourly classification rate
shall be paid for all hours worked on the sixth (6th) day and double time on the
seventh (7th) consecutive day of any one (1) work week. For the purposes of this
section the day is defined as no less than seven and one half (7.5) hours
worked, with the exception of those voluntarily agreeing to work less hours.

     Section 6.  Overtime is to be calculated on either the daily or weekly
basis, whichever is greater, but not on both.

     Section 7.  Except in the event of an emergency, no Employee may be
required to work more than ten (10) hours in any one (1) day. As far as possible
the distribution of available overtime shall be equally divided among all
Employees, subject, however, to the qualifications of such Employee to do the
required work. For the purpose of this Agreement, emergency shall be defined as
a malfunction in the production line or plant support, an unavoidable absence
with regard to which the Employer was not notified within a reasonable time or
an injury occurring during the work day with regard to whose station no
replacement can be reasonably found.

                 When Employees are required to work overtime, they shall be so
notified at least one (1) hour before the completion of their scheduled shift,
except in cases of emergency.

                                                                               2
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     Section 8.  The parties agree that it is the spirit and intent of this
Agreement for all Employees to enjoy a five (5) day work week. The Union
recognizes however, that occasions may arise when it might become necessary for
an Employer to request that work be performed on the sixth (6th) day and/or
seventh (7th) consecutive day. The Union, therefore, agrees that if under such
circumstances, it cannot supply qualified workers as needed by the Employer, the
Employees will work the extra day or days unless they have a valid reason for
not doing so. The Shop Committee and Management will resolve any questions
concerning the validity of any such excuse.


                              ARTICLE 3 - HOLIDAYS
                              --------------------

    Section 1.
    ---------

     (a)  The following days shall be observed as holidays. All observances
shall be as prescribed by the Federal Government.

                    New Year's Day                Labor Day
                    Martin Luther King Day        Thanksgiving Day
                    Easter Monday                 Christmas Eve
                    Memorial Day                  Christmas Day
                    Independence Day

     (b)  An Employee's birthday shall be considered a holiday, provided that
the Employee has so notified the Employer in writing at least two (2) weeks
prior thereto, each year of the term of this Agreement. In the event two (2) or
more Employees' birthdays fall on the same day, seniority shall prevail.

     Section 2.  To be eligible for a particular unworked holiday, an Employee
   must meet all of the following requirements:

            (a)  The Employee must have thirty (30) days of service as a full-
time Employee.

            (b)  In the case of a full-time Employee, he/she must have worked
seven and one-half (7.5) hours on his/her scheduled shift the day preceding the
holiday and seven and one-half (7.5) hours on his/her scheduled shift the day
following the holiday.

                 Eligible Employees shall receive seven and one-half (7.5) hours
pay for each holiday in the case of a full-time Employee. In the event an
Employee is prevented from reporting to work because of inclement weather
conditions, this factor may be considered by the Employer in determining whether
the Employee reported for work during said week, but said factor need not be
conclusive.

     Section 3.  Time and one-half the straight time hourly classification rate
shall be paid for all hours worked on the fifth (5th) day in a holiday week. In
the event Employees are
                                                                               3
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required to work on the sixth (6th) and seventh (7th) day in a holiday week,
they shall be entitled to double the straight time hourly classification rate
for hours worked on such days.

     Section 4.  In the event an Employee is laid off during a holiday week, if
employed over one year prior to being laid off, said Employee shall be entitled
to holiday pay as described in Section 2 hereof. Wherever practicable, there
shall be no Employee training during said week.

     Section 5.  In the case of sickness or accident on an Employee's last
scheduled day before a holiday or first scheduled day after a holiday, the
Employee can receive holiday pay. However, the Employee affected must have a
Doctor's Certificate. The Employer will have the right to check on the Doctor's
Certificate. The Union will cooperate with the Employer if the Employer has any
problems on the above. Employees who are receiving Disability or Workers'
Compensation payments will not be eligible for holiday pay.

     Section 6.  No production work will be performed on the holidays. However,
no overtime shall be earned by Employees facilitating the shutdown prior to a
holiday day or reopening it subsequent thereto. Rest periods are deemed waived
for this purpose.

     Section 7.  Time and one-half the straight time hourly classification rate
shall be paid for all hours worked on the holiday except no overtime shall be
earned by Employees facilitating the shutdown prior to a holiday day or
reopening it subsequent thereto.

     Section 8.  The Company and the Union agree that normally holidays will be
scheduled to begin at 10:00 P.M. the day before the holiday and end at 10:00
P.M. on the holiday. However, it is understood the Company and the Union may
change this time frame by mutual agreement.


                           ARTICLE 4 - NIGHT PREMIUM
                           -------------------------

     A night premium of twenty cents ($.20) per hour will be paid to employees
regularly assigned to second or third shifts. Night premium will be included in
the overtime computation for the assigned second and third shift employees.


                       ARTICLE 5 - LUNCH & RELIEF PERIODS
                       ----------------------------------

     Not less than or more than thirty (30) minutes lunch period shall be
granted to all Employees in the middle of the work day, which shall not be paid
for nor included in the regular working hours.

     Employees scheduled to work seven and one-half (7.5) hours or more shall
receive two (2) ten (10) minute relief periods, one (1) period before and one
(1) period after lunch. If the workday is more than seven and one half (7.5)
hours, a fifteen (15) minute relief period shall be granted after the seven and
one-half (7.5) hours. Additional ten (10) minute relief periods
                                                                               4
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will be granted for every additional two (2) hours of work. These relief periods
shall be considered as time worked and compensated for. For the purpose of
company meetings only, any employee required to attend a company meeting shall
receive a rest period only if the meeting will require more than one (1) hour to
attend.


                             ARTICLE 6 - REST HOURS
                             ----------------------

     There shall be a minimum of twelve (12) hours of rest for all Employees
between daily shifts; and a minimum of thirty-six (36) hours of rest during
their regular scheduled day off; and sixty (60) hours rest between shifts when a
double holiday or double day off occurs. The sixty (60) hours rest shall be the
maximum circumstance for which the following premium pay guidelines shall apply.

     Any Employee called in to work before the expiration of the aforementioned
rest hour shall be compensated for all such hours worked at double his/her
straight time hourly classification rate, and such hours worked shall be
considered a part of the daily guarantee and shall also be used towards the
seven and one-half (7.5) hour daily overtime calculation. It is understood that
overtime is calculated on either the daily or weekly basis, whichever is
greater, but not on both.


                ARTICLE 7 - WAGES FOR HIGHER CLASSIFICATION WORK
                ------------------------------------------------

     Section 1.  In the event an Employee works in a higher paid classification
than his/her own, he/she will receive the higher classification rate for such
hours worked, provided however, if such Employee works in excess of four (4)
hours on any one (1) shift, he/she shall be paid the higher classification rate
for the entire shift. If an Employee works twenty (20) hours or more per week,
he/she will receive the higher classification rate for the entire week.

     Section 2.  Any Employee receiving a higher hourly rate than specified in
this Agreement shall not be reduced, provided his/her classification of work is
not changed on a permanent basis.


                             ARTICLE 8 - VACATIONS
                             ---------------------

     Section 1.  All full-time Employees covered by this Agreement shall receive
vacation according to the following schedule:

     Continuous Service                                  Vacation
     ------------------                                  --------
     1 year, but less than 2 years                       1 week
     2 years, but less than 5 years                      2 weeks
     5 years, but less than 14 years                     3 weeks
     14 years, but less than 20 years                    4 weeks
     20 years or more                                    5 weeks

                                                                               5
<PAGE>

     Section 2.  Full-time Employees on vacation shall receive as vacation pay
thirty-seven and one-half (37.5) hours pay for one (1) weeks vacation, seventy-
five (75) hours pay for two (2) weeks vacation, one hundred-twelve and one-half
(112.5) hours pay for three (3) weeks vacation, one hundred-fifty (150) hours
pay for four (4) weeks vacation and one hundred-eighty seven and one-half
(187.5) hours pay for five (5) weeks vacation. A full-time Employee who shows a
pattern of night work three (3) weeks prior to taking a vacation will receive
night premium pay in their vacation pay.

     Section 3.  The regular vacation period shall be from the 1st day of
January until the 31st day of December and shall be distributed in accordance
with seniority during such period of time. All vacation polling will be
completed by March 1st. A minimum of one (1) person per shift shall be entitled
to vacation during the regular vacation period (two [2] in packing). Should a
single down week occur, all Employees not scheduled to work that week will be
required to take one (1) week of vacation during that time. Should two (2)
successive down weeks occur, all Employees not scheduled to work those weeks
will be required to take a maximum of two (2) weeks of vacation during that
time. All Employees will be excluded from this provision if the shutdown is
outside the last week of June, the entire months of July and August.
Notification of Plant down week(s) will take place not later than February 1st.

     Section 4.  Qualified relief must be available to the Employer during the
Employee's vacation period.

     Section 5.  Full-Time Employees eligible for vacation must take their
vacation, except that an Employee who loses time at work, due to illness or
unforeseen emergency, may, subject to approval by the Employer and the Union,
work during his/her vacation period and receive the extra compensation.

                 Any regular, Full-Time Employee with one (1) year of service
will receive their vacation according to the following schedule:

                   Hours Worked      Percent of Vacation
                   ------------      -------------------

     1275 Hours or more                     100%
     Less than 1275 but more than 975        75%
     Less than 975 but more than 487.5       50%
     Less than 487.5                          0%

                 For purposes of calculating hours worked the following will be
included: paid sick time, jury duty, time off for Union business, vacation,
military duty (up to two (2) weeks per year), and overtime (one (1) hour worked
equals one (1) hour of credit).

     Section 6.  The seniority list of Employees shall be posted at least thirty
(30) days prior to the start of the vacation period. The vacation schedule shall
be posted and remain posted throughout the vacation period. Employees shall
choose their time of vacation within two (2) weeks after the posting of the
seniority list.

                                                                               6
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                      ARTICLE 9 - JOB POSTING AND BIDDING
                      -----------------------------------

     Section 1.  In all cases of filling of regular full-time vacancies which
are required to be posted, the length of continuous service shall be the
governing factor (seniority). However, the Employee must also have the ability
and physical fitness to perform the work and must have a good work record
including attendance, tardiness, and job performance. In determining an
Employee's ability and physical fitness to perform the normal requirements of
the new job, consideration will be given to job experience, related job
experience, education, and/or ability.

     Section 2.  A job, other than a supervisory one, becoming open as a regular
full-time vacancy shall be posted on the appropriate bulletin board for a period
of three (3) working days by the Employer and assigned to the senior qualified
bidder.

     Section 3.  A standard form of posted notice shall be used for advertising
such job vacancy and shall contain the following information: department, date
of posting notice, description and rate of job that is vacant. Such bids shall
be in writing and submitted by the Employee to the Employer.

     Section 4.  The following rules for bidding shall apply:
     ---------

             (a)  In the event of a transfer to the production department, the
applicant must have a minimum of six (6) months seniority and a good work
record, including attendance, tardiness, and performance.

             (b)  Anyone not making claim or refusing the job within seventy-two
(72) hours after notice is posted shall forfeit any claim to the job unless it
again becomes available.

             (c)  Where no one signs the bid, the Employer will assign the work
to either a new Employee or to one of the part-time Employees most fitted for
the job.

             (d)  With respect to hourly pay rates, the following applies. Up
bidding can take place at any time. If an Employee bids up, laterally or down,
and is placed in the new job, he/she cannot bid laterally or down for a six (6)
month period. Within five (5) working days on the job, if the Employee shall so
elect, he/she shall be permitted to return to his/her former job, but will not
be permitted to lateral or down bid for a six (6) month period. If within
fifteen (15) working days on the job, the Employee is adjudged as having failed
to perform satisfactorily, he/she shall be permitted to return to his/her former
job and his/her replacement shall return to his/her former job. If an Employee
is returned to his/her former job because he/she failed to perform
satisfactorily, he/she will not be permitted to rebid into that department, from
which he/she was disqualified, for a period of six (6) months.

             (e)  With respect to shift preference, the following applies:
Notwithstanding the foregoing in Section 4(d), an Employee may bid to a
preferred shift within his/her present department and job for which he/she is
qualified and requires no additional training.

                                                                               7
<PAGE>

          When the Employee is awarded and accepts the new shift he/she, at the
time this choice is made, waives his/her five (5) day trial period, and will not
be permitted to return to his/her former shift. Shift preference bidding, as
described in this section, will be allowed only once in any six (6) month
period.

          Additionally, within the Production Department one (1) lateral bid may
be made per shift within a six (6) month period.  As is the case with a shift
preference bid, when the employee is awarded and accepts the bid, he/she waives
his/her five (5) day trial period, and will not be permitted to return to
his/her former job.

          (f)  When an Employee accepts a job which has been posted, before
his/her trial period begins, his/her name will be removed from all other active
bid sheets. If more than one (1) Employee signs a bid sheet, when that bid sheet
is removed from the bulletin board, it remains active until the job is filled.
If the senior qualified Employee on a multi-signed bid refuses or is
disqualified from the job, as outlined in Section 4(d), the 2nd senior qualified
Employee will be given the opportunity to fill the open job. If the 2nd senior
Employee refuses or is disqualified from the job, then the 3rd senior qualified
Employee is given the opportunity to fill the job. This procedure is followed
until the job opening is filled or until all names on the bid sheet have been
exhausted, at which time the bid sheet becomes inactive.

          (g)  It is understood by both the Company and the Union that an
Employee, who bids into and is awarded a job in the Production Department, will
be required to accept training and become qualified in all Production Department
jobs. It is also understood that the fifteen (15) day trial period outlined in
Section 4(d) does not allow adequate time for an Employee to become fully
qualified in all production jobs. If, after the fifteen (15) day trial period,
the Employee is awarded the job, but does not actively and willingly accept
training or, after receiving adequate training, does not become qualified in all
Production Department jobs, his/her performance will be brought to the Union's
attention before remedial action is taken by the Company. In any case, he/she
will not be able to bump the Employee who filled his/her former job.

     Section 5.  An Employee who claims a job which has been posted need not be
transferred by the Employer to the posted job if the transfer will affect the
progress of an unusually important job or if there is an emergency which
requires the Employee's retention on his/her present job. Nor shall he/she be
transferred until a replacement has been secured for him/her. The Company will
aggressively seek a replacement for any Employee who is waiting to be
transferred.

                 A person who successfully bids on a job must be moved within
six (6) weeks or he/she should receive the rate of pay (if higher), but still
receives five (5) days to adjust, and your time period starts after two (2)
weeks for purposes of bidding rights. Awarded job bid is to be posted within
seventy-two (72) hours of job being taken down. This time period may be extended
from six (6) weeks to eight (8) weeks due to unforeseen circumstances upon
mutual agreement between the Company and the Union.

                                                                               8
<PAGE>

     Section 6.  In the event a part-time Employee works thirty-seven and one-
half (37.5) hours or more on a job for a period of six (6) weeks, not including
replacement for vacation or absence of Employees, the job shall be considered a
full-time position, subject to posting and bidding.

     Section 7.  Employees who are absent from the plant with a reasonable
excuse, shall be eligible to have their name placed on a bid which is posted
during their absence, if they complete and turn into the Company a bid
preference request which indicates any job positions for which they wish to be
considered during such absence.

     Section 8.  Notwithstanding the foregoing an Employee holding a bid
position, whose bid position has been eliminated and subsequently recreated
within three (3) months, has the right to first refusal of the original job.
This applies only to the Employee whose job was eliminated.

     Section 9.  In the event of a significant change in the packing department
workforce needs (e.g.: five (5) day v. six (6) day production schedule),
seniority will be a determining factor in job assignments. As always performance
must be maintained at an acceptable level.


                            ARTICLE 10 - SENIORITY
                            ----------------------

     Section 1.  The Employer and the Union believe in the principles and
doctrines of seniority, but in individual cases shall take into consideration
the efficiency, needs and industry of the Employee affected.

     Section 2.  The Employer agrees to notify the Union, once a week, of the
names and classifications of new Employees hired during that week.

     Section 3.  When reductions in the working force become necessary, the
Employer shall give proper recognition to the length of the Employee's service.
Seniority is the right of preference in the event of permanent layoff and
recall. When layoffs become necessary, the full time Employee with the least
amount of seniority shall be laid off first, and in recalling Employees, the
last Employees laid off shall be the first to be recalled, except that the right
of preference for Maintenance Department Employees shall be limited to the
Maintenance Department and the right of preference for all other plant Employees
shall be limited to the Production, Quality Assurance, Packing, Sanitation and
Shipping Departments. However, it is understood that part time Employees shall
be laid off first wherever practical.

                                                                               9
<PAGE>

     Section 4.  Seniority rights shall terminate if an Employee:

          (a)  Voluntarily quits.

          (b)  Is discharged for just cause.

          (c)  Fails to return to work within three (3) days after notice by
registered or certified mail to his/her last known address. A copy of such
notice shall also be served by mail upon the Local Union.

          (d)  Is laid off for the following period of time:

               (1)  Employees with less than one (1) year continuous service:
forty-five (45) days. However, non-probationary Employees rehired within sixty
(60) days from date of layoff will have their seniority reinstated to their
original hire date after working a period equal to the amount of time such
Employee was on layoff.

               (2)  Employees with less than two (2) years continuous service:
one hundred twenty (120) days.

               (3)  Employees with less than three (3) years continuous service:
two hundred forty (240) days.

               (4)  Employees with less than four (4) years continuous service:
three hundred forty (340) days.

               (5)  Employees with less than five (5) years continuous service:
four hundred eighty-five (485) days.

               (6)  Employees with more than five (5) years of continuous
service: seven hundred thirty (730) days.

     (e)  Absences of two (2) years or more, excluding layoff, shall terminate
seniority. Extensions may be granted by mutual agreement between the Employer
and the Union. This applies to cases occurring on or after September 1, 1998.
The Company agrees to notify the Union and the Employee, in writing, each month
for the three (3) months preceding the expiration of the two (2) year time frame
about the impending termination of seniority.

     (f)  Voluntarily transfers from full time to part time.


                             ARTICLE 11 - UNIFORMS
                             ---------------------

     The Employer agrees to furnish hairnets and caps, and to furnish and
launder and keep in repair, aprons, shirts and trousers for the Employees
covered by this Agreement.

                                                                              10
<PAGE>

                         ARTICLE 12 - DEATH IN FAMILY
                         ----------------------------

     In the event of a death in a full-time Employee's immediate family i.e.
father, mother, sister, brother, son, daughter, (includes adopted children) wife
or husband, mother-in-law, father-in-law, grandfather or grandmother, it is
recognized by the parties that the Employee may need time off to attend the
funeral service. For the above listed immediate family members, the Employer
shall grant seven and one-half (7.5) hours pay at the straight time hourly rate
for three (3) full days. It is intended that any event that authorizes three (3)
days of bereavement will receive three (3) days of pay. (This benefit is not
intended to be used for the purpose of generating overtime.) In the case of a
part-time Employee, they will be paid proportionately according to their
schedule. In the event of the death of a regular full-time Employee's immediate
brother-in-law or sister-in-law, it is recognized that the Employee may need
time off to attend the funeral service. If this day is one of the Employee's
scheduled workdays, the Employee will be granted seven and one-half (7.5) hours
pay at the straight time hourly rate for the day. This applies to an Employee's
brother's or sister's spouse, or the Employee's spouse's brother or sister.


                            ARTICLE 13 - JURY DUTY
                            ----------------------

     The Employer agrees to pay a full seven and one-half (7.5) hours pay at
straight time hourly classification rate for each day that an Employee is
required to serve and does serve as a juror, provided his/her department is
scheduled to work on the day or days actually served on a jury. The Employee,
however, will be required to turn in to the Employer the jury fees in order to
receive the compensation above provided.


                      ARTICLE 14 - PHYSICAL EXAMINATIONS
                      ----------------------------------

     The Employer shall pay for all physical examinations of Employees with the
exception of pre-employment physical examinations that may be required by law,
city ordinance and the Employer.


                           ARTICLE 15 - UNION LABEL
                           ------------------------

     All bagels and bread shall bear the Union Label. Such bagels and bread
labels shall cost the Employer the current price. The Union shall claim the
right to withdraw the label at any time, in case of misunderstanding. As printed
packages become standardized for bagels and bread, they shall bear the Union
Label. The Union will furnish the Employer Shop Cards for his own stores.

                                                                              11
<PAGE>

                          ARTICLE 16 - UNION BUSINESS
                          ---------------------------

     Section 1.  A representative of the Union shall be granted admission to the
Bakery during working hours, on notification to the Manager or his
representative, to interview members of the Union on Union business, provided it
does not interfere with the efficient operation of the Bakery.

     Section 2.  The Employer shall provide in a conspicuous place, a bulletin
board for the use of the Employees and the Union. All postings are to be
official Union business and/or approved by the local Human Resources Manager.


                      ARTICLE 17 - SELECTIVE SERVICE ACT
                      ----------------------------------

     The rights of an Employee under the Selective Service and Training Act are
recognized by both parties, and incorporated in this Agreement as if actually
written herein.


                       ARTICLE 18 - GRIEVANCE PROCEDURE
                       --------------------------------

     Should differences arise between the Employer and the Union as to the
meaning and application of this Agreement, an earnest effort shall be made to
settle such differences promptly by the following methods of procedure:

          (a)  The Shop Chairman or Chairlady shall appoint a steward from each
shift to represent the Union and the Employees in the negotiation of any
grievances or disputes.

          (b)  The Employee who believes he/she has suffered a grievance,
together with his/her department steward shall meet with his/her immediate
supervisor and attempt to adjust the difference. The supervisor will provide a
verbal response to the steward within twenty-four (24) hours after the
conclusion of this meeting. Complaints resolved in this step shall be non-
precedent setting.

          (c)  If no satisfactory settlement is reached in the preceding
paragraph, the Employee who believes he/she has suffered a grievance shall
submit the same in writing, signed by both the Employee and his/her steward, to
the Employee's immediate superior in an attempt to arrive at a satisfactory
settlement within three (3) working days after the inception of the acts or
occurrences or omissions constituting the basis of the grievances, or the right
to make a grievance is deemed to be waived.

          (d)  If no satisfactory settlement is reached in the preceding
paragraph (c) within three (3) working days after its submission to the
Employee's immediate superior, the grievance shall then be discussed between the
steward, Employee's immediate superior, Employee and Employer's manager or
representative within three (3) working days after the expiration of the time
period set forth in the preceding subparagraph (c).

                                                                              12
<PAGE>

          (e)  In the event that the parties in preceding paragraph (d) cannot
settle or adjust the grievances within three (3) working days after its
submission, the grievances shall then be discussed between the Shop Chairman and
his/her selected Committee, the Employee, the Employee's immediate Supervisor,
Plant Manager and Business Agent of the Union.

          (f)  If the parties in preceding subparagraph (e) have not settled or
adjusted the grievance within five (5) working days after its being submitted to
them, then either the Employer or the Union can submit the matter to the New
York State Board of Mediation for purposes of arbitration as hereinafter set
forth, within seven (7) working days after the expiration of the aforementioned
five (5) day period. In the event the New York State Board of Mediation is
abolished the parties agree to use the services of the American Arbitration
Association. The seven (7) working day period may be extended up to thirty (30)
calendar days upon agreement of the Plant Manager and Union Business Agent. If
the grievance is settled, a written disposition shall be noted and filed by the
parties.

          (g)  Grievances shall be separately arbitrated and are not to be
merged.

          (h)  In the event of a dispute, the Employer may take the initiative
following its interpretation of the contract provisions in question, subject to
the grievance procedure.

                                  Arbitration
                                  -----------

          (a)  Arbitration is available only to the Union and the Employer and
cannot be availed of until all the steps to be followed in the grievance
procedure have been complied with, at which time either party may submit the
controversy to arbitration as hereinabove sets forth.

          (b)  It is expressly understood that in no event shall the arbitrator
have jurisdiction or authority to add to, subtract from, modify or in any way
change the provisions of this Agreement.

          (c)  Any issues involving interpretations and/or application of any
terms of this Agreement may be initiated by either party directly, i.e., the
Union or the Employer, with the other party. Upon the failure of the Union and
Employer to agree, it may then be submitted directly to the New York State Board
of Mediation for arbitration. In the event the New York State Board of Mediation
is abolished the parties agree to use the services of the American Arbitration
Association. There shall be no strikes or lockouts while grievances or
arbitration procedures are pending. No Employee shall have the right to compel
arbitration, this right being reserved to the Union and the Employer.

                                                                              13
<PAGE>

                         ARTICLE 19 - NO STRIKE CLAUSE
                         -----------------------------

     The Union agrees that during the life of this Agreement, the Union will not
permit or cause its members to participate in any strike, slowdown, or stoppage
(total or partial) of work, or interfere directly or indirectly with the full
operation of the plant. The Employer shall have the right to discharge or
suspend any Employee participating in any action in violation of this section.
The Employer, on its part, agrees that there shall be no lockouts of any of its
Employees during the life of this Agreement.


                         ARTICLE 20 - BENEFITS PACKAGE
                         -----------------------------

Medical Benefits
----------------

     The Employer agrees to provide all regular full-time Employees coverage
under the Independent Health or Community Blue plans with riders for
Prescription Drug Plan, Age 25 Dependent Coverage if full-time student,
Prosthetic Devices and Medical Appliances, and Inpatient Rehabilitation for
Substance Abuse. Additional plans may be offered if the Company determines it is
cost effective to do so.

     Effective September 1, 2001 the current medical plans will be modified to
reflect an increase in the doctor's office visit co-pay and the prescription
drug co-pay. If medical premiums are increased by the carriers by more than five
(5%) percent, the Employer and the Union agree to discuss plan design changes in
an effort to minimize additional costs to the Company and the Union membership.
The Company and the Union must agree to the changes.

     Plan Redesigns for Community Blue (Option #5) and Independent Health
(Option #3) will become effective 9/1/01. The changes within these plans are as
follows:

<TABLE>
<CAPTION>
               Community Blue     Advantage     Independent Health
               --------------     ---------     ------------------
<S>            <C>                <C>           <C>
OV Copay            $15            $10/$20             $15
                                   $15/$15
Rx Copay            $10            $10/$20          $5/$10/$25
OP Surgery                                             $15
</TABLE>

     Medical coverage shall begin the first day of the month following
completion of the Employee's probationary period. Employees participating in the
medical benefits plan will be required to pay an Employee contribution equal to
ten percent (10%) of the premium cost effective January 1, 2000 through
December 31, 2001.

                                                                              14
<PAGE>

     Effective January 1, 2002 Employee cost-sharing for medical coverage will
increase according to the following schedule:

                           Employee
               Date      Contribution
               ----      ------------
              1/1/02          11%
              7/1/02          12%
              1/1/03          13%
              7/1/03          14%
              1/1/04          15%
              7/1/04          16%
              1/1/05          17%
              7/1/05          18%
              1/1/06          19%
              7/1/06          20%

     Medical benefits will be continued for one (1) year as a result of any
disability according to the provisions of the plan. In the event of a personal
leave of absence, medical benefits will cease at the end of the month in which
the Employee last worked.

     Effective February 1, 2001, Employees electing to waive medical benefits
will receive a monthly `opt-out' reimbursement as per the following schedule:

         Opt-Out       Level of
         Incentive     Coverage
         ---------     --------

            $25        Single
            $50        Employee/Spouse
            $50        Employee/Child(ren)
            $75        Family

     All employees are eligible for opt out. All employees will be required to
sign a release form and spouse's signature will also be required from married
employees. May re-enroll as the result of qualified events (marriage, loss of
job, birth of child, etc.).

     The Company will provide Flexible Spending Accounts for Dependent Care and
Health Care that will include a 10% Company match, not to exceed $500.00/plan,
and subject to plan provisions and annual limits.


Retiree Medical
---------------

     Employees who were age fifty-five (55) or older with ten (10) or more years
of service as of December 16, 1996 are covered by Kraft Foods, Inc. for Retiree
Medical Benefits.

                                                                              15
<PAGE>

Retiree Medical Phase-Out
-------------------------

     Employees who are age fifty-five (55) or older and have five (5) or more
years of service as of September 1, 2001 (identified below) and who retire prior
to September 1, 2001 will be eligible to receive Retiree Medical for themselves
and/or their dependents.

<TABLE>
     <S>                  <C>                  <C>
     Frank Ostrach        Joyce Nowicki        Diane Nawrot
     Ronald Hiller        Suzanne Phillips     William Mutignani
     Trieu Tran           Angel Sanchez        Richard Borczynski
     Sarfeeyah Annoor     Albert Goble         Joseph Weiglein
     Michael Lasek        James Feldmann       Ralph Groblewski
     Larry Stresing       Lois Fumanti
</TABLE>

    These Employees will continue to pay the percent of cost sharing in effect
as of their date of retirement.  The percent of cost sharing will be the percent
of the cost of the active Employees' current plan each year.

    If any of the Employees in this group elect to work past August 31, 2001,
they will be eligible to receive a special contribution to their 401(k) account
calculated using the Employee's years of service multiplied by $290.  This
contribution will be made in five (5) equal installments, with the first
installment in January 2002 and continuing each January thereafter in 2003,
2004, 2005, and 2006.

     In addition, if an employee from this group elects to retire prior to the
end of the five (5) year contribution schedule, they will receive any remaining
balance of the five (5) year contribution as soon as administratively possible
after their retirement.

     Also, they will be eligible to continue their medical coverage through the
Company until age 65 as per the following table:

<TABLE>
<CAPTION>
Age     Employer   Retiree
---     --------   -------
<S>     <C>        <C>
60         50%       50%
61         60        40
62         80        20
63         80        20
64         80        20
65         0        100**
</TABLE>
         ** Medicare Supplement / Medicare Risk
            Employee's Responsibility

     For the Employees identified as eligible for this program, who retire after
8/31/01, they will pay premiums for their corresponding ages as set forth in the
table above or they will pay the lower applicable percentage rate in effect at
retirement.

                                                                              16
<PAGE>

Retiree Medical Elimination
---------------------------

     All remaining active Employees and future Employees of the Employer are not
eligible for Retiree Medical Benefits.

     In consideration of the above, Employees who were on the payroll as of
January 1, 2001 are eligible to receive a special contribution to their 401(k)
account calculated using the Employee's years of service multiplied by $290.
This special contribution will be deposited into the Employee's 401(k) account
in five (5) equal installments over a five (5) year period of time, beginning
January 2002, with the final contribution being made in January 2006.

      An Employee who retires, or dies, will have any remaining balance of this
special contribution deposited directly into their 401(k) account as soon as
administratively possible after their retirement or death.

      If an Employee quits or is terminated for cause, that year's contribution
will be prorated and that contribution will be deposited directly into their
401(k) account as soon as administratively possible following termination of
employment. The remaining balance will be forfeited. Employees who work 1,000
hours in a calendar year will be eligible for that year's full contribution,
payable as soon as administratively possible following termination of
employment. Employees who work less than 1,000 hours will be prorated using a
percentage derived by dividing hours worked by 1,950 hours.

      Loss of employment with Aurora Foods Inc. due to permanent layoff (upon
expiration of recall rights), plant closure, or sale of the business would
generate full payment of any remaining balance left on the five (5) year
contribution schedule in a final distribution into the Employee's 401(k) account
as soon as administratively possible.


Dental Benefits
---------------

     The Employer agrees to provide all regular full-time Employees dental
coverage under the Aurora Foods Inc. Dental Plan effective the first of the
month following successful completion of the probationary period. This coverage
shall be available to the Employee and his/her qualified dependents, including
dependent children aged 19-25 if a full-time student.

                                                                              17
<PAGE>

Accident or Sickness
--------------------

     The Employer agrees to provide accident and sickness benefits under the
Aurora Foods Inc. Short Term Disability Plan. This Plan will pay a weekly income
benefit of sixty-six and two-thirds percent (66-2/3%) of the Employee's basic
weekly wage, up to two hundred and seventy-five dollars ($275) for up to twenty-
six (26) weeks, beginning on the eighth (8th) calendar day of disability.

     Effective January 1, 2003, the Plan's weekly benefit maximum will increase
to three hundred dollars ($300), for up to twenty-six weeks.

     This A&S benefit is not payable as a result of a work-related injury.

Long Term Disability
--------------------

     Effective January 12, 2001, all covered Employees will be enrolled in Long
Term Disability (LTD) insurance. This benefit is subject to a pre-existing
exclusion; a pre-existing condition means any injury or sickness for which the
Employee incurred expenses, received medical treatment, care or services,
including diagnostic measures, or took prescribed drugs or medicines within
three (3) months before the most recent date of insurance.

     The pre-existing limitation will apply to a period of disability, for the
pre-existing condition, that begins before the Employee is covered for at least
12 months, and/or any added or increased benefits.

     Hereinafter, newly hired Employees on the first of the month following
satisfactory completion of the probationary period.

     The LTD benefit will be sixty (60%) percent of the Employee's weekly base
pay. Approved benefits are payable after any applicable waiting periods and the
elimination period of 180 days (26 weeks of Short Term Disability) has been
satisfied.

     This benefit may remain in effect until the earlier of any of the following
events:

     .  The illness/injury causing the total disability is resolved and the
        employee is able to return to the job market.

     .  If approved by the insurance carrier, LTD benefits payments will be
        payable for the first 24 months due to the Employee's inability to
        perform his/her own work duties or functions. Benefits that are payable
        after the initial 24 months will be based on the Employee's continued
        inability to perform any work duties or functions.

                                                                              18
<PAGE>

     .  The Employee is approved for, and receives, Social Security Disability
        (SSD). At that time, the LTD benefit will be offset by Social Security
        Disability payments. If the SSD payment exceeds the LTD benefit, the LTD
        benefit will cease at that time. Periodic re-certification of disability
        is required.

     .  The disabled employee reaches normal retirement age for Social Security
        benefits to begin.

     In the cases of Sarfeeyah Annoor, Sandra Kotar, and Terry White, who were
not actively at work on January 12, 2001, they will be covered under a self-
funded LTD policy that mirrors the insured LTD policy, with approval of benefits
based on medical certification of the disability. Benefit payments will be paid
directly by the Company for the duration of the benefit period.

     This Long Term Disability benefit is not payable as a result of a work-
related injury.


Life Insurance
--------------

     The Employer agrees to provide all regular, full-time Employees Company-
Paid Life Insurance under the Aurora Foods Inc. Life Insurance Plan on the first
day of the month following the successful completion of the Employee's
probationary period. The Employee will receive a life insurance benefit equal to
one time their annual base pay, calculated by multiplying base hourly rate x
2,080 hours.


                              ARTICLE 21 - PENSION
                              --------------------

     The parties agree that any and all defined pension plans are terminated as
of November 1, 1999, with the purchase of Lender's Bagel Bakery in West Seneca,
New York by Aurora Foods. Also, the parties agree to set up the Aurora Foods
Inc. Union 401(k) Savings and Retirement Plan as soon as administratively
possible following the ratification of this agreement.

     Employees will be eligible for pension benefits under the prior plan(s), if
the Employees meet the eligibility and/or vesting requirements of those plan(s).
Aurora Foods is not liable for any benefits from any previous pension/retirement
plan(s). Nor will this 401(k) Plan be reduced by any benefits previously earned
under the BC&T/GM International Pension Plan, the Kraft Foods Retirement Plan,
or the (Kellogg) Eggo Company Union Pension Plan earned as a result of service
with Lender's Bagel Bakery or its predecessors.

                                                                              19
<PAGE>

     In consideration for the termination/elimination of the former defined
pension plan, the Company will make a one time deposit of $1200 for each
employee who was actively on the payroll as of December 31, 2000 (or retired in
2000), into those Employee's 401(k) accounts, except the amount will be $2325
for the following Employees:

          Frances Machnica         Rosemary Janusz
          Sarfeeyah Annoor         Michela Nicosia
          William Bratek           Angel Sanchez
          Florence Welninski       Erik Funch, III
          Michael Lasek            Richard Kaminski

     All West Seneca Union Employees on the payroll as of December 31, 2000, are
eligible to participate in the 401(k) Plan, as soon as the 401(k) is
established. Newly hired Union Employees are eligible to participate in the
401(k) Plan on the first month following three full months of employment at
Lender's Bagel Bakery, West Seneca, NY.

     Employees can save up to 15% of their gross weekly pay. Aurora Foods will
match 50% of the first 5% of Employee savings (maximum 2.5% Company match). Via
the 401(k) Administrator, Employees will be offered a broad range of investment
funds .

     For each Employee who works 1000 hours in a Plan Year (January 1 to
December 31) and saves at least one percent (1%) of the annual gross pay, the
Company will make a end year-end Company contribution of $1125.00 each year by
December 31 of that year.

     For purposes of satisfying the one percent (1%) savings requirement,
Employees must save one percent (1%) of total gross earnings earned after the
date the Employee is eligible to participate in the Plan.

     Example: An Employee starts to work on 1/15/01 and earn $6,000 from 1/15/01
     through 4/30/01. The Employee is eligible to participate on May 1, 2001.
     The Employee earns $16,000 from May 1, 2001 through December 31, 2001.
     Therefore, the Employee must save $160 (1% of $16,000) to qualify for the
     year end Company contribution.

     For Employees who work less than 1000 hours in a Plan Year, the Company
will make a pro-rated year-end Company contribution, based upon dividing hours
worked in the plan year by 1950 hours.

                                       20
<PAGE>

     For purposes of calculating hours worked, the following time paid will be
included: paid sick time, jury duty, funeral leave, time off for Union business,
vacation, military duty (up to two [2] weeks per year), and overtime (one [1]
hour worked equals one [1] hour of credit). In addition, up to five hundred
(500) hours will be credited for any covered personal or work related
disability.

     Employee savings and earnings on Employee savings are 100% vested. Company
matching, year-end Company contributions and earnings on Company match and
contributions vest on a Five (5) Year Graduated Vesting Schedule (vesting at 20%
for each full year of service) with 100% vesting occurring after five (5) years.
Lender's years of service counts toward vesting. Employees with 5 years of
Lender's service are 100% vested on all Company matches, contributions and
earnings.

     The Aurora Foods Inc. Union 401(k) Summary Plan Description (SPD) describes
eligibility requirements, investment options, loan, and withdrawal provisions,
etc. The Plan is subject to all Federal Laws and regulations and the
Administrator's policies and rules.

                            ARTICLE 22 - SICK LEAVE
                            -----------------------

     Section 1.
     ---------

          (a)  Employees with one (1) year service are entitled to three (3)
days sick leave per calendar year.

          (b)  New Employees with less than one (1) year service are entitled to
sick leave as follows:

          Hired January 2 to April 30            Two (2) days
          Hired May 1 to September 1             One (1) day
          Hired after September 1                Zero (0) day

          (c)  In the event entitled sick leave is not used within the calendar
year, pay for these unused sick days will be added to an Employee's paycheck no
later than December 15th. It is understood probationary Employees are not
eligible for sick leave.

     Section 2.  In the event an Employee is hurt on the job and is unable to
complete his/her day's work, he/she shall receive wages for the entire day. When
such Employee returns to work, he/she must furnish a Doctor's Certificate that
he/she is capable of returning to work.

     Section 3.  An Employee who becomes ill while at work shall notify his/her
immediate supervisor before leaving the plant. If the Employee becomes ill away
from work, he/she shall notify the Employer as soon as possible of the reason
for his/her absence.

                                                                              21
<PAGE>

     Section 4.  Notwithstanding the provisions of Sections 1 and 2 of this
Article, any Employee absent from work for three (3) days or more may not return
to work until the Employee has furnished to the Employer a Certificate from a
Doctor stating that he/she has been sick during such period of time.


                             ARTICLE 23 - CHECKOFF
                             ---------------------

     It is agreed that the Employer and the Union shall establish a checkoff
plan of Union initiation fees and dues for all Employees covered by this
Agreement. It is further agreed the Employees shall sign statements authorizing
the Employer to make proper deductions from the Employee's pay in accordance
with the checkoff plan. The Employer shall forward a copy of the signed checkoff
authorization to the Union office.

     The Company agrees to deduct Union dues on a weekly basis.


                        ARTICLE 24 - LEAVES OF ABSENCE
                        ------------------------------

     Section 1.  Any member of the Union who is elected as a delegate or
representative of the Union in any activity necessitating temporary absence from
his/her employment shall be granted such leave of absence without pay upon
adequate advance notice thereof to the Employer.

                 For the purpose of Steward education, the Company will pay one
(1) day of wages, at the straight time hourly rate, per contract year. The Union
agrees to validate attendance at such training.

     Section 2.  Any member of the Union who is elected to a full-time position
with the Union necessitating lengthy absence from his/her employment, shall be
granted a leave of absence not exceeding one (1) year in length without loss of
seniority and at the end of such service in the business of the Union he/she
shall be re-employed at his/her former wage rate, plus any increase or less any
reduction that may have become effective during his/her absence.

     Section 3.  Such leaves of absence by the joint and mutual consent and
approval of both the Union and the Employer will be renewed and extended for
additional periods of one (1) year each, subject to the conditions set forth in
Paragraph 2 above.

     Section 4.  Leaves of absence may be granted in special and extenuating
circumstances on a case by case basis with prior approval from the Company. Such
requests must be sent, in writing, to the Plant Manager. The Union shall be
notified when such leaves are granted.

                                                                              22
<PAGE>

                       ARTICLE 25 - RIGHTS OF MANAGEMENT
                       ---------------------------------

     The Employer retains the sole right to manage its business including but
not limited to the rights to decide the number and location of plants, the
number and type of machinery and equipment to be used, the products to be
produced, the method and place of production, the schedules of production, the
size and composition of the working force, and the control of raw materials
which may be incorporated into the products produced; the right to shift
product, processes or types of work or methods in or out of the plant; plus the
rights to hire, assign, layoff, recall, transfer, and promote Employees, to
maintain order and efficiency in its plant operation; to discipline and
discharge Employees for just cause; to set job requirements and reasonably
determine the individual qualifications of all Employees; to determine the
starting and quitting times and the number of hours to be worked of all
Employees; to discontinue all or any part of its business operation; to control,
regulate, or discontinue the use of supplies, machinery, equipment and other
property owned, used, possessed, or leased by the Employer. Management shall
have all other rights and prerogatives subject only to those express
restrictions on such rights as are provided in this Agreement.


                   ARTICLE 26 - EXECUTIVE OR MANAGEMENT WORK
                   -----------------------------------------

     Executive or Management Work - Non-Union supervisory Employees shall not do
work usually performed by the Employees covered by this Agreement, except:

          (a)  Covering absent Employees until a replacement is secured.

          (b)  For replacing ill or injured Employees pending replacement.

          (c)  Providing physical relief for Employees.

          (d)  For giving instructions or for the purpose of performing
experimental or research work.

          (e)  Emergency and Act of God, such as equipment failure, fire, flood,
etc.


                     ARTICLE 27 - NONDISCRIMINATION CLAUSE
                     -------------------------------------

     No Employee shall be discriminated against in hiring, promotion, or
continued employment because of their race, color, creed, national origin, sex,
age, or physical handicap. Neither the Employer nor the Union, in carrying out
their obligations under this agreement, shall discriminate in any manner
whatsoever against any Employee because of race, sex, religious affiliation,
nationality, age, or Vietnam Era Veteran status.

                                                                              23
<PAGE>

                          ARTICLE 28 - MISCELLANEOUS
                          --------------------------

     Employer to furnish and replace (upon fair wear and tear) Freezer Wear
Paraphernalia worn by Shipper and Freezer tenders such as: Insulated Chill
Factor Rated Gloves, Boots and Head Covering, also at the option of the wearer,
Cold Weather Masks.

     It is understood that the Company will supply, on an as-needed basis,
Company-owned rubber boots, gloves and protective clothing, when available. It
is also understood that in the event there is an unexpected shortage of any of
the above Company-owned articles, the necessary work assignments will be
completed as assigned.

     The Company agrees to provide a tool allowance of two hundred dollars
($200.00) net (after taxes) per contract year upon proof of purchase.


             SHOE PROGRAM FOR LENDER'S BAGEL BAKERY - WEST SENECA
             ----------------------------------------------------

I.  PURPOSE
    -------

    The Lender's Shoe Program is designed to help ensure the safety of its
Employees as they work within the confines of the bakery. The Program helps
prevent slips and falls which may be caused by water, raw materials or
ingredients spilled on the floor in the working area.

II.   REQUIREMENTS OF THE PROGRAM
      ---------------------------

             A.  All Lender's Employees who have work assignments that require
                 them to access the bakery must wear shoes.

             B.  All Employees affected by this Program will be required to wear
                 shoes with an anti-slip sole (slip coefficient of friction of
                 at least 0.5) as determined by the Company.

             C.  The shoe payout is a maximum of one hundred dollars ($100.00)
                 per year per employee on one (1) pair of shoes per year, paid
                 out on proof of purchase and verification that the shoes meet
                 Policy standards.

             D.  Shoes shall be of sturdy construction to afford some impact
                 protection. Only low-heeled leather/vinyl-type shoes are
                 permitted. Shoe types prohibited are canvas, nylon, sandal-
                 type, open heels, open toes, deep-grooved soles (1/4" or more).
                 Suede is not permitted on shoes.

             E.  Shoes will be kept clean, neat and in good repair.

             F.  Shoes with a safety toe are highly recommended for all
                 employees, but are not mandatory.

                                                                              24
<PAGE>

          G.  Employees found not to be in compliance with the guidelines of the
              Policy will not be permitted to work until they comply.

          H.  Employees involved in an accident which is related to a slip or
              fall, and who are not wearing shoes as outlined in the Policy,
              will be subject to Disciplinary Action up to and including
              Termination.

          I.  Visitors and Contractors to the bakery who are taking a plant tour
              must comply with Item "D" of this Program. It is also highly
              recommended that these individuals be informed prior to their
              entry into the bakery of the hazards they may encounter.

          J.  The Company will provide a list of shoe vendors and styles.
              Purchases outside of this approved list are the Employees'
              responsibility to ensure compliance with the Policy as listed
              above.

          K.  Exceptions to this Policy will be made on a case-by-case basis and
              must be accompanied by medical documentation.

          L.  All Employees will be in compliance by January 1, 1996.


                     ARTICLE 29 - POSTING OF WORK SCHEDULE
                     -------------------------------------

     A schedule of starting times for all Employees for the following week shall
be posted at least sixty (60) hours in advance. In the event it is necessary to
change the Employee's starting time, he/she shall be notified by the Employer at
the completion of his/her work day. The only time a change can be made is in
case of emergency.


                          ARTICLE 30 - SEVERANCE PAY
                          --------------------------

     The Company has a responsibility to improve its competitive position
through equipment upgrades, technology advances, and work methods. The Company
agrees to offer training or education to Employees impacted by these changes.

     It is agreed that each full-time Employee who is displaced from his/her
employment by reason of the closing of the plant, shutdown of a department,
displacement from their job as a result of the introduction of labor saving
machinery, or to any full-time Employee who leaves his/her employment in the
event the Employer moves his shop to another place located thirty-five (35) or
more miles from his shops present location, shall be compensated by the Employer
or his/her predecessor for such displacement providing he/she has been actively
employed by the "Employer" for a period of at least two (2) years. An eligible
Employee's compensation for his/her displacement shall be on the basis of
thirty-seven and one-half hours (37.5) of severance pay (at his/her straight
time hourly rate of pay) for each full year of his/her actual employment,
commencing with the third (3rd) year thereof.

                                                                              25
<PAGE>

               ARTICLE 31 - SCOPE OF AGREEMENT AND SEPARABILITY
               ------------------------------------------------

     Section 1.  It is agreed that this written Agreement reflects the entire
Agreement between the Union and the Company. Amendments or clarification of this
Agreement, mutually agreed upon, shall be reduced to writing and become a part
of this Agreement.

     Section 2.  The Union and the Employer acknowledge that during the
negotiations which resulted in this Agreement, each had the unrestricted right
and opportunity to present demands and proposals with respect to any matter
subject to collective bargaining. Therefore, this Agreement includes all
contracted matters related to wages, hours, benefits and conditions of
employment. All other matters related to wages, hours, benefits and conditions
of employment are expressly and unequivocally waived. Further, the Employer and
the Union freely agree that during the life of this Agreement neither party
shall be obligated to bargain with respect to any matter or subject covered or
not covered in this Agreement, except in the event the Employer creates a new
job classification, the Employer will notify and discuss with the Union the wage
rate of such new classification.

     Section 3.  Should any part or provision of this Agreement be rendered or
declared invalid by reason of any existing or subsequently enacted legislation
or by decree of a court of competent jurisdiction, such invalidation of such
part or provision of this Agreement shall not invalidate the remaining portions
of this Agreement and they shall remain in full force and effect.


                           ARTICLE 32 - TERMINATION
                           ------------------------

     This Agreement shall be in full force and effect from January 12, 2001 to
and including August 31, 2006 and thereafter from year to year until terminated
by either party as hereinafter provided. Sixty (60) days prior to August 31,
2006 or any subsequent annual expiration date, either party may notify the other
of its desire to negotiate a new Agreement. During negotiations, this Agreement
shall remain in full force and effect and the wage rate provisions of such new
Agreement, when consummated, shall be retroactive to August 31, 2006 or any
subsequent annual expiration date. However, such retroactive provision shall not
be applicable to any Employee who has resigned or been discharged prior to the
time of the signing of this Agreement.

    In the event either party shall not be satisfied with the progress of the
negotiations, the Employer or the Union, Local #429 with the sanction of the
Bakery, Confectionery, Tobacco Workers, & Grain Millers' International Union of
America, may terminate this Agreement, after any expiration date, upon forty-
eight (48) hours notice to the other party.

                                                                              26
<PAGE>

                     ARTICLE 33 - POLITICAL CONTRIBUTIONS
                     ------------------------------------

     Effective upon thirty (30) days notice from the Union, the Employer agrees
to honor contribution deduction authorization from its Employees for the BCT/GM-
PAC. It is understood that the authorization is voluntarily made by the
Employees and such deduction shall be on a monthly basis.


                 ARTICLE 34 - AMERICANS WITH DISABILITIES ACT
                 --------------------------------------------

     The parties recognize that each of them have obligations pursuant to the
Americans With Disabilities Act to employ and, in some cases, to accommodate,
disabled persons. The parties further acknowledge that the Employer may take
whatever action is necessary to comply with the provisions of that Act and that
nothing in this agreement is intended to interfere with, or impede, the Employer
in meeting these obligations.

     The parties hereto recognize and agree to comply with the Family Medical
Leave Act as such applies to the Employees of the Employer.

                      ARTICLE 35  -  PART-TIME EMPLOYEES
                      ----------------------------------

   a)  The part-time workforce will not exceed six percent (6%) of the regular,
       full-time workforce.

   b)  Part-time Employees will not be eligible for holiday or vacation pay.

   c)  Part-time Employees will be eligible for funeral leave as stated in
       Article 12.

   d)  Part-time Employees who become regular, full-time Employees will be
       eligible for holiday pay provided they have thirty (30) days of service
       as part-time Employees.

   e)  Part-time Employees who become regular, full-time Employees will become
       eligible for medical benefits on the first of the month following their
       move to regular, full-time status, provided they have sixty (60) days of
       service as part-time.

   f)  This language applies only to part-time Employees hired after 9/1/95.


                   ARTICLE 36  -  ALTERNATIVE WORK SCHEDULE
                   ----------------------------------------

     In addition to the provisions of the Agreement, the Employer may establish
an Alternative Work Schedule. Such Alternative Work Schedule shall be subject to
agreement with a full-time Officer and Shop Committee of the Union.

                                                                              27
<PAGE>

                     ARTICLE 37  -  SUBSTANCE ABUSE POLICY
                     -------------------------------------

SUBSTANCE ABUSE POLICY
----------------------

     Aurora Foods Inc. (Aurora) recognizes the growing problem of drug and
alcohol abuse in society, while also realizing that drug and alcohol dependency
and abuse can be treated and controlled. Aurora desires to provide a safe work
environment for all of its Employees. To this end, the purpose of this policy is
to provide a work environment that is free of illegal drugs and alcohol by
offering programs concerned with awareness, intervention and rehabilitation.

     Aurora will offer assistance to all Employees for the treatment of drug and
alcohol abuse through programs authorized by the Company for this purpose.
Employees are encouraged to voluntarily acknowledge a problem before any
disciplinary action is initiated and to undertake a Company-approved treatment
program. If no other Company policies are violated, Employees who successfully
complete the program will not place their jobs in jeopardy.

The elements of this program are:

1.  The sale, use or possession of alcohol or illegal drug or controlled
    substances are prohibited. Violation of this rule will result in
    disciplinary action up to and including termination.

    a)  Using, selling or possessing illegal narcotics, drugs or controlled
        substances (including, but not limited to, marijuana, cocaine, crack,
        PCP, heroin, LSD, amphetamines and barbiturates) while on the job or on
        Company-owned or Company-leased property (including vehicles). In
        addition, any illegal substances will be turned over to the appropriate
        law enforcement agency and may result in criminal prosecution.

    b)  Bringing or consuming alcohol on any Company-owned or Company-leased
        property (including vehicles), unless specifically authorized by a
        senior Aurora manager.

    c)  If an Employee is subject to discipline or termination for cause under
        existing rules, separate and apart from any impairment related to
        substance abuse (i.e.: plant rules or attendance policies), such
        Employee shall not utilize the substance abuse policy to circumvent
        other policies or practices to avoid discipline or termination.
        Disciplinary actions other than those specified under this policy shall
        follow the time limits and principles of progressive discipline and,
        where applicable, the collective bargaining agreement, and bargaining
        unit Employees shall have recourse to the grievance and arbitration
        procedure therein.

    d)  Working with a level of prohibited drugs in one's system above cutoff
        level. Prohibited drugs include both illegal substances and prescription
        drugs that have not been specifically prescribed by a registered
        physician for specific treatment purposes
                                                                              28
<PAGE>

for the Employee. Employees are required to report to work in a condition that
allows them to perform their duties. Employees who appear to be unfit for work
may be subject to a fitness-for-duty examination at a designated medical
facility.

    e)  Working while under the influence of alcohol.

2.  Voluntary Recognition of Substance Abuse/Dependency (Self-Identification)
    -------------------------------------------------------------------------

    a)  Employees of the Company with drug and/or alcohol dependency/abuse
        problems are encouraged to come forward voluntarily.

    b)  Employees will be strongly encouraged to seek and receive the services
        of the Employee Assistance Program prior to any violations of this
        policy which causes disciplinary action to be initiated.

    c)  Individuals who voluntarily seek assistance for substance abuse/chemical
        dependency (either directly or through a third party) will be eligible
        for the Employee Assistance Program established by the Company.

    d)  The concerned individual will be referred to a designated medical and/or
        counseling facility for evaluation of their problem/dependency. A
        recovery program will be outlined and submitted to the Plant Manager or
        other appropriate senior manager. If appropriate, that program may
        include a leave of absence of up to four (4) consecutive weeks for
        inpatient treatment and two (2) weeks outpatient treatment at a facility
        designated by the Company.

    e)  Following completion of the leave of absence, the individual will be
        expected to return to their former position (with no loss of seniority)
        and complete continuing and/or follow-up rehabilitation
        treatment/counseling. To reinforce the treatment regimen, the Company
        reserves the right to require the affected Employee to submit to
        drug/alcohol tests within the first year following referral for
        treatment on a random basis as determined by the Company. Refusal to be
        tested or comply with the approved treatment plan will result in
        termination.

    f)  Employees who successfully complete the Employee Assistance Program and
        their individual treatment plan agreements, return to work and
        subsequently relapse into substance abuse/dependency will be afforded a
        second and final opportunity to use the Employee Assistance Program's
        services under the terms provided in this Section if they come forward
        voluntarily and prior to any violations of this policy which causes
        disciplinary action to be initiated.

3.  Involuntary Recognition of Substance Abuse/Dependency
    -----------------------------------------------------

    Employees who do not voluntarily confront their alcohol/drug
    dependency/abuse problems will be subject to the following terms which
    differ from those outlined above:

                                                                              29
<PAGE>

   a)  When a supervisor or manager (hereafter referred to as the "Employer")
       has reasonable suspicion to conclude that an Employee has a substance
       abuse/chemical dependency problem, the Employer may attempt to meet with
       and counsel that Employee to seek treatment and rehabilitation.

   b)  When the Employer has reasonable suspicion to determine an Employee's job
       performance is impaired by alcohol or drugs (hereafter referred to as
       "substance"), the Employer shall document these observations in writing
       and contact another Employer representative for purposes of confirming
       the observations

       The Employer shall contact the Business Agent, Union Steward or other
       Union representative for the purpose of informing and involving the
       appropriate and available Union representative in the immediate
       situation.

       In the presence of the employee and the Union representative, the
       Employer shall present the observations establishing reasonable
       suspicion. The Employee shall, upon hearing the Employer's confirmed
       observations, receive counseling as to the policy and shall be presented
       with the opportunity to immediately enter the Employee Assistance
       Program. If the Employee agrees to enter the Employee Assistance Program,
       at this point it will be treated as voluntary recognition and the
       aforementioned provisions of Section 2 shall apply. If the Employee does
       not agree to enter the Employee Assistance Program, the Employee will be
       subject to drug/alcohol testing for substance abuse. The refusal to be
       tested will cause termination.

   c)  Reasonable suspicion based on objective criteria means that based on
       specific personal observations which the Employer representative can
       describe concerning the appearance, behavior, speech or performance of
       the Employee, it is reasonable to conclude that because of drug or
       alcohol use the Employee is unable to satisfactorily perform his or her
       job. Suspicion is not reasonable, and thus not a basis for testing, if it
       is based solely on third party observations and reports.

       The Employer may require that the Employee immediately go to a medical
       facility to provide urine specimens for the purpose of testing and/or
       taking a breath test and to receive a fitness-for-work examination by a
       licensed physician.

   d)  While the observations of the Business Agent, Union Steward, or other
       bargaining unit employee may be solicited and are relevant in the context
       of the joint Employer/Union commitment to addressing the problem of
       substance abuse, Union representatives shall have no right to interfere
       with the Employer's decision to require testing or to take other
       management action.

4.  Drug/Alcohol Test Procedures
    ----------------------------

    Drug/Alcohol testing shall be done at the medical facility using urine
    specimens/breathalyzer tests. With regard to alcohol, the cutoff level
    below which a test is
                                                                              30
<PAGE>

presumed negative shall be that used by the State Police to conclude impairment
in the operation of a motor vehicle.

a)  If required by the medical facility or testing lab the Employee shall sign
    forms authorizing: (1) providing the medical facility a specimen of urine;
    (2) the testing laboratory to release the results of the testing indicating
    the presence or absence of a substance capable of causing impairment to the
    medical facility for physician review and to the designated manager of the
    Company, and; (3) at the Employee's discretion, he/she may authorize the
    same release as defined in (2 above) to the Union. An Employee's refusal to
    sign the release shall constitute a refusal to be examined and tested. Such
    refusal shall result in termination.

b)  The Employee to be tested shall be taken to the medical facility by an
    Employer representative accompanied, at the request of the Employee, by the
    Business Agent, Union Steward or another Employee.

c)  In an effort to protect individual privacy, Employees will not be subject to
    direct observation while rendering urine samples. If the Employee provides
    urine samples that contain confirmed evidence of any form of tampering or
    substitution, the Employee shall be discharged.

d)  Urine samples shall be drawn, subject to the provisions set forth below.
    Upon receipt of the specimens by the laboratory one of three urine specimens
    (or subdivisions of a single specimen) will be placed immediately, unopened
    in a locked freezer for storage. A second sample will be used for the
    initial and confirming test. In the event of a positive initial test, within
    twenty-four (24) hours a second, independent, confirming test will be
    conducted at the laboratory site. The cost of the examination and initial
    and confirming test shall be borne by the Company. A negative result in the
    confirming test will prevail.

    A third sample will, at the Employee's request, be transferred to a
    laboratory (meeting standards mutually agreed on by Company and Union)
    chosen by the Employer for an independent test. The Employee shall bear all
    costs for this test.

e)  The examination and testing procedures and standards to be carried out by
    the medical facility personnel and testing laboratory shall be those adopted
    by the Employer and the Union and shall include the following general
    components:

    (e.1)  Medical Facilities:

    Medical facilities performing the examination must be under the direction of
    a licensed physician. The facility must employ at least one charge nurse who
    is a registered nurse, or a degreed, registered medical technician.

    A licensed physician must perform the fitness for work examination and
    review the laboratory reports. The physician must have knowledge of
    substance abuse
                                                                              31
<PAGE>

     disorders and must possess the appropriate medical training to interpret
     and evaluate all positive test results together with the Employee's medical
     history, including medications used, and any other relevant biomedical
     information.

     The medical facility must possess all necessary personnel, materials,
     equipment, facilities, and supervision to provide for the collection,
     security, temporary storage, and transportation (shipping) of urine
     specimens to the testing laboratory.

     The medical facility must provide written assurances that the specimen
     collection space is secure; that chain of custody forms will be properly
     executed by authorized collection personnel upon receipt of specimens; that
     the handling and transportation of specimens from one authorized individual
     or place to another will be accomplished through the use of chain of
     custody procedures; and that no unauthorized personnel are permitted in any
     part of the specimen collection or storage spaces.

     (e.2)  Laboratory Facilities

     Laboratory facilities must comply with applicable provisions of any state
     licensing requirement and must meet the standards for accreditation
     promulgated by the National Institute on Drug Abuse and be an ongoing
     participant in a program of external quality assurance. These standards may
     be revised as recommended by the National Institute on Drug Abuse.


f)   Specific specimen collection procedures that include safeguards to ensure
     the Employee's right to privacy:

     (f.1)  Authorized specimen collection personnel shall request that the
     Employee show positive identification by providing a pictured
     identification card such as a driver's license, or being identified by
     accompanying Management or Union personnel, and shall assure that the
     Employee signs the notice that explains the procedures for testing and
     reporting results.  These personnel shall remove all articles and items
     from the collection space or bathroom, shall turn off the hot water valve
     under the sink, shall assure that the tamper-proof specimen collection kit
     is intact, and shall instruct the Employee to wash and dry hands prior to
     entry.

     (f.2)  Employees shall remove all coats, sweaters, jackets and similar
     excess clothing and leave belongings outside the bathroom and shall provide
     urine samples in multiple containers.  Employees will not be subject to
     direct observation while rendering samples.  Authorized specimen collection
     personnel shall, however, be present outside the bathroom and shall receive
     the containers, assure that the quantity is sufficient for testing, check
     color and measure the temperature of each container and record same.  These
     personnel shall fill in specimen labels in the presence of the Employee,
     shall cap and seal containers with evidence tape and shall secure the
     Employee's initials on the tape.

                                                                              32
<PAGE>

g)  Flawless chain of custody procedures shall govern specimen handling
    throughout the testing process. Chain of custody procedures shall assure
    that urine samples shall not leave the sight of the Employee until each vial
    has been sealed and initialed and that at least the following measures are
    taken by medical facility and laboratory staff:

    (g.1)  Medical Facilities

    Personnel shall complete a chain of custody form and shall place the sealed
    and initialed specimens in the drug collection kit or box provided by the
    laboratory along with the chain of custody form and signed notice. The
    collection kit or box shall be sealed by authorized medical facility
    personnel and this seal or tape shall be initialed by these personnel.

    The medical facility shall make prior arrangements for courier pickup of the
    specimens and shall assure that all specimens are couriered or shipped to
    the testing laboratory as immediately as possible. The medical facility
    shall assure that no specimens will be shipped on a Friday or the day before
    a holiday and that any specimens held at the facility overnight shall be
    placed in a secured refrigerator until courier pickup.

    (g.2)  Laboratory

    The testing laboratory shall assure that personnel authorized to receive
    specimens immediately open the package, inspect the sealing tape for
    initials, and open the kit or box. These personnel shall examine and inspect
    the chain of custody form, the specimen containers, and kit or box to assure
    that it conforms to the requirements of Subsection g.1 (above). If these
    requirements are not met, the laboratory personnel shall immediately notify
    the laboratory's scientific director and shall document any and all
    inadequacies in the chain of custody requirements. The laboratory's
    scientific director shall immediately notify the medical facility and the
    Company of the inadequacies and shall retain the specimens in a locked
    freezer pending disposition direction. Failure to maintain the secure chain
    of custody delineated will be the equivalent of a negative test result.

    If the requirements are met, authorized laboratory personnel shall sign on
    the appropriate line of the chain of custody form and deliver the specimen
    kit or box to authorized laboratory technologists for testing. Each
    technologist shall sign on the appropriate line of the chain of custody
    form.

    All positive samples shall be resecured with evidence tape, signed, and
    dated by an authorized technologist. Upon completion of testing procedures,
    testing reports shall be prepared and a signed by at least two authorized
    technologists for the review, approval, and signature of the scientific
    director.

                                                                              33
<PAGE>


h)  Established levels below which specimens are deemed negative:

    Drug Assay             Cut-Off Level
    ----------             -------------
    Cocaine Metabolite        300 ng/ml
    Phencyclidine              25 ng/ml
    Opiates                   300 ng/ml
    Amphetamine              1000 ng/ml
    Cannabinoids              100 ng/ml

i)  Laboratory use of appropriate screening and confirmation procedures and
    technology:

    (i.1)  The laboratory shall assure that each specimen in both initial and
    confirming tests (as well as tests paid for by the Employee) will use gas
    chromatography/mass spectrometry.  Both tests must be positive before a
    specimen is reported as positive.

j)  Procedures to assure the confidentiality of test results and the treatment
    of these records as confidential health information or data:

    (j.1)  The laboratory shall ensure that alcohol and drug testing reports,
    including the original chain of custody form, are mailed only to the
    appropriate personnel at the medical facility, the designated manager of
    the Company and, if the Employee so chooses, to the Union immediately.
    The lab shall ensure that, in the event that telephone reports of testing
    results are required, a security code system be used to establish that
    results are being verbally reported only to those individuals authorized by
    the medical facility, the Employee and the Employer.

    (j.2)  If an Employee is taking a prescription or non-prescription
    medication in the appropriate manner, had noted such use, and the observed
    impairment in the opinion of the physician reviewing laboratory reports of
    tests could reasonably have been caused, in the absence of other
    substances, by the legal medication, then the Employee will not be
    disciplined under this policy and will be returned to work or, at the
    Employer's discretion, given sick leave and/or disability for the duration
    of the medication's use.

    (j.3)  All information other than positive or negative test results and
    fitness-for-work examination results are confidential and will be revealed
    only to the examining physician, Employee and those authorized by him or
    her.

5.  Status of Tested Employees and Penalties for Positive Results
    -------------------------------------------------------------

a)  Employees subject to the requirement for testing shall be suspended without
    pay, effective immediately after receipt of the fitness-for-work examination
    and rendering of samples for the period of time required to process, confirm
    and report test results.

b)  Employees whose test results are negative, and who pass the fitness-for-work
    examination, shall be reinstated and made whole for the period of
    suspension.

c)  Employees whose first alcohol/drug test results are positive shall not be
    eligible for reinstatement with back pay but shall be given a final
    opportunity to immediately enter the Employee Assistance Program. Failure to
    enter the rehabilitation program and failure to abide by the terms of the
    treatment plan shall be grounds for discharge. This option will not be
    afforded to those who test positive for a second time.

d)  An Employee who, on the basis of such random and mandatory tests as defined
    in this policy, provides samples that contain positive and confirmed
    evidence of

                                                                              34
<PAGE>


      substances at or above the stipulated levels, or confirmed evidence of
      tampering or substitution, shall be discharged.

6.   Right of Search
     ---------------

     Aurora does not intend to authorize indiscriminate searches of employee
     desks, lockers, vehicles or personal effects such as purses and lunch
     boxes, but the Company reserves the right to authorize searches for illegal
     drugs, alcohol or contraband, if warranted, by reasonable cause.

                                                                              35
<PAGE>


    IN WITNESS WHEREOF, the parties hereto have set their hands and seals the
day and year first above written.


AURORA FOODS, INC. /                          BAKERY, CONFECTIONERY, TOBACCO
LENDER'S BAGEL BAKERY                         WORKERS & GRAIN MILLERS'
                                              INTERNATIONAL UNION OF AMERICA,
                                              LOCAL 429

For the Company:                              For the Union:
----------------                              --------------


/s/ Stefon L. Martin                          /s/  James T. Short
-------------------------------------------   ----------------------------------
Stefon L. Martin, General Manager             James T. Short, Business Agent
Lender's Bagel Bakery                         BCT/GM Local 429


/s/ Francis W. Furlong                        /s/ Robert T. Giczkowski
-------------------------------------------   ----------------------------------
Francis W. Furlong, Human Resources Manager   Robert T. Giczkowski, President
Lender's Bagel Bakery                         BC&T/GM Local 429


/s/ Edward C. Malowney                        /s/ Timothy C. Ahrens
-------------------------------------------   ----------------------------------
Edward C. Malowney, Regional HR Manager       Timothy C. Ahrens, Shop Chairman
Aurora Foods, Inc.                            BC&T/GM Local 429


/s/ John M. Keough                            /s/ Edward J. Walsh
-------------------------------------------   ----------------------------------
John M. Keough, Production Manager            Edward J. Walsh, Committee Member
Lender's Bagel Bakery                         BC&T/GM Local 429


/s/ Karen A. Prokop                           /s/ Sandra L. Dorman
-------------------------------------------   ----------------------------------
Karen A. Prokop, Human Resource Generalist    Sandra L. Dorman, Committee Member
Lender's Bagel Bakery                         BC&T/GM Local 429

                                              /s/ David A. Urban
                                              ----------------------------------
                                              David A. Urban, Committee Member
                                              BC&T/GM Local 429

                                                                              36
<PAGE>


                       SCHEDULE "A" OF AGREEMENT BETWEEN
                             AURORA FOODS INC. AND
            BAKERY, CONFECTIONERY, TOBACCO WORKERS & GRAIN MILLERS'
                   INTERNATIONAL UNION OF AMERICA, LOCAL 429
                          DATED AS OF JANUARY 12, 2001

                                 WAGE SCHEDULE
                                 -------------

<TABLE>
<CAPTION>
                     Effective  Effective  Effective  Effective  Effective
CLASSIFICATION        09/02/01   09/01/02   08/31/03   08/29/04   08/28/05
-------------------  ---------  ---------  ---------  ---------  ---------
<S>                  <C>        <C>        <C>        <C>        <C>
Maintenance          $   14.93  $   15.43  $   15.93  $   16.43  $   16.93
Employees

Production &         $   13.87  $   14.37  $   14.87  $   15.37  $   15.87
Quality Assurance
Employees

Shippers             $   13.27  $   13.77  $   14.27  $   14.77  $   15.27

Packers, Sanitors    $   13.02  $   13.52  $   14.02  $   14.52  $   15.02
and Helpers
</TABLE>

    Any Employee receiving a higher rate than specified in this Agreement,
his/her hourly rate shall not be reduced under any condition.

    New, inexperienced Employees hired after August 31, 1995 shall be paid at
the rate of seventy percent (70%) of the job rate in the classification in which
the Employee is working for the first six (6) months, eighty percent (80%) of
the job rate for the second six (6) months, and ninety percent (90%) for the
third six (6) months.  Thereafter, the Employee shall receive the rate of the
classification.  If an Employee has worked in the industry and has completed the
necessary time requirements and leaves such company and resumes work with the
same company or another company in the industry and still maintains the skills
and ability, such Employee will not be required to meet the time requirements
again, and will receive the rate stated in the classification the Employee is
working.

                                                                              37