<PAGE>

                              SHAREHOLDER AGREEMENT

           This Agreement dated as of May 22, 2000 (the "Shareholder
Agreement") by and between Michael Foods, Inc., a Minnesota corporation
("Michael") and the Shareholders of Michael listed on Schedule I
(individually "Shareholder" and collectively "Shareholders").

           WHEREAS, Michael is a publicly-held corporation whose common stock
is traded on the NASDAQ National Market System ("NASDAQ-NMS"); and

           WHEREAS, the Shareholders desire to sell an aggregate of 1,500,000
shares of common stock of Michael (the "Shares") and Michael desires to
purchase such Shares, in each case subject to the execution and delivery of
this Shareholder Agreement;

           NOW, THEREFORE, in consideration of the foregoing and of the terms
and conditions hereinafter set forth, the parties agree as follows:

SECTION 1. CERTAIN DEFINITIONS

           As used in this Shareholder Agreement, the following terms shall
have the following meanings:

           (a)        "AFFILIATE" shall mean, as applied to a specified
Person, any other Person that directly or indirectly through one or more
intermediaries, Controls, or is Controlled by, or is under common Control
with, such specified Person.

           (b)        "BENEFICIALLY OWN OR "BENEFICIAL OWNERSHIP" with
respect to any securities shall mean having "Beneficial Ownership" of such
securities in accordance with the provisions of Rule 13d-3 under the Exchange
Act, except that a Person shall be deemed to be the Beneficial Owner of a
security if that Person has the right to acquire Beneficial Ownership of such
security without giving effect to the sixty (60) day provision provided under
such rule. Without duplicative counting of the same securities by the same
Holder, Equity Securities Beneficially Owned by a Person shall include Equity
Securities Beneficially Owned by all other Persons with whom such Person
would constitute a Group.

<PAGE>


           (c)        "BUSINESS DAY" shall mean any day that is not a
Saturday, a Sunday, a bank holiday or any other day on which commercial
banking institutions in Minneapolis, Minnesota, are not generally open for
business.

           (d)        "CLOSING" shall have the meaning set forth in Section
4(b) hereof.

           (e)        "CONTROL" shall mean, with respect to a specified
Person, the position or the possession, directly or indirectly, of the power
to direct, cause the direction of, or substantially influence the management
and policies of such Person, whether through the ownership of voting
securities, partnership interests or other ownership interests, or by
contract or otherwise; provided that, in any event, any Person who owns
directly or indirectly ten percent (10%) or more of the securities having
ordinary voting power for the election of directors or other governing body
of a corporation or ten percent (10%) or more of the partnership interests or
other ownership interests of any other Person shall be deemed to Control such
corporation or other Person.

           (f)        "EXCHANGE ACT" shall mean the Securities Exchange Act
of 1934, as amended, or any similar federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect from
time to time.

           (g)        "EQUITY SECURITIES" shall mean: (i) any and all shares
of capital stock of Michael; and (ii) any other securities, warrants, options
or rights of any nature (whether or not issued by Michael) that are
convertible into any, exchangeable for, or exercisable for the purchase of,
or otherwise give the Holder thereof any rights in respect of, shares of
capital stock of Michael.

           (h)        "GOVERNMENTAL AUTHORITY" shall mean any nation or
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

           (i)        "GROUP" shall mean two or more Persons acting together
for the purpose of acquiring, holding, voting or disposing of Equity
Securities, which Persons would be required to file a statement on


                                      -2-
<PAGE>


Schedule 13D or 13G with the SEC as a "Person" within the meaning of Section
13(d)(3) of the Exchange Act if such Persons Beneficially Owned sufficient
securities to require such a filing under the Exchange Act.

           (j)        "HOLDER" shall mean any Shareholder that owns common
stock of Michael.

           (k)        "PERSON" shall mean an individual, partnership,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture or other entity of whatever nature.

           (l)        "REGISTRABLE SECURITIES" means any Equity Securities
Beneficially Owned by a Shareholder as of the date of this Shareholder
Agreement and any Equity Securities issued in respect thereof as a result of
a stock dividend, stock split, recapitalization, merger or other similar
transaction with respect to such Equity Securities Beneficially Owned.

           (m)        "REQUIREMENT OF LAW" shall mean, as to any specified
Person, any law, treaty, rule or regulation of any Governmental Authority
applicable to such Person or any of its property or to which such Person or
any of its property is subject.

           (n)        "SEC' shall mean the Securities and Exchange Commission
or its successor.

           (o)        "SECURITIES ACT" shall mean the Securities Act of 1933,
as amended, or any similar federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect from time to time, and
a reference to a particular section thereof shall be deemed to include a
reference to the comparable section, if any, of any similar federal statute.

           (p)        The "TOTAL VOTING POWER" at any measurement date shall
mean the total number of votes which could have been cast in an election of
directors of Michael had a meeting of the shareholders of Michael been duly
held based upon a record date as of the measurement date if all Equity
Securities then outstanding and entitled to vote at such meeting were present
and voted to the fullest extent possible at such meeting.


                                      -3-
<PAGE>


SECTION 2. REPRESENTATIONS AND WARRANTIES OF MICHAEL

           Michael represents and warrants to the Shareholders that:

           (a)        Michael has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Minnesota, with corporate power to transact in all material respects its
business as now conducted by it, to enter into this Shareholder Agreement,
and to perform its obligations hereunder.

           (b)        This Shareholder Agreement has been duly authorized,
executed and delivered by Michael and constitutes a legal, valid and binding
agreement of Michael, enforceable against Michael in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors generally, by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or at
law) or by an implied covenant of good faith and fair dealing.

           (c)        Except as otherwise contemplated in this Shareholder
Agreement, no consent, approval or authorization of, or filing, registration,
qualification, declaration or designation with, any Governmental Authority is
required on the part of Michael as a condition to the valid execution,
delivery and performance of this Shareholder Agreement by Michael, except
where the absence of any such consent, approval or authorization of, or the
failure to make any such filing, registration, qualification, declaration or
designation with any Governmental Authority would not have a material adverse
effect on Michael and its subsidiaries taken as a whole or materially impair
Michael's ability to perform its obligations hereunder.

           (d)        The execution, delivery and performance by Michael of
this Shareholder Agreement will not: (i) conflict with the Articles of
Incorporation or Bylaws of Michael, as amended; (ii) conflict with, result in
a violation or breach of, or constitute (with or without notice or lapse of
time or both) a default (or give rise to any third-party right of
termination, cancellation, material modification or acceleration)


                                   -4-
<PAGE>


under, any of the terms, conditions or provisions of any trust agreement,
voting agreement, shareholders agreement, voting trust, note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind affecting Michael or
to which Michael is a party or by which any of its properties or assets are
or may be bound; (iii) violate any Requirement of Law applicable to Michael;
or (iv) violate any order, injunction, judgment or decree of any court or
other Governmental Authority or any determination of an arbitrator applicable
to Michael or any of Michael's properties or assets, except where such
conflict, breach or other default under clause (ii) or any such violation
under clauses (iii) or (iv) would not have a material adverse effect on
Michael and its subsidiaries taken as a whole or materially impair Michael's
ability to perform its obligations hereunder.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS

           Each Shareholder severally represents and warrants to Michael that:

           (a)        Such Shareholder has the legal capacity, power and
authority to enter into and perform all of such Shareholder's obligations
under this Shareholder Agreement. This Shareholder Agreement has been duly
executed and delivered by each Shareholder and constitutes a legal, valid and
binding agreement of each Shareholder, enforceable against each Shareholder
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors generally, by general equity principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) or by an implied covenant of good faith and fair dealing.
If such Shareholder is married and such Shareholder's Equity Securities
constitute community property, this Shareholder Agreement has been duly
authorized, executed and delivered by, and constitutes a legal, valid and
binding agreement of such Shareholder's spouse, enforceable against such
Person in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or


                                      -5-
<PAGE>


affecting creditors generally, by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or at
law) or by an implied covenant of good faith and fair dealing.

           (b)        No consent, approval or authorization of, or filing,
registration, qualification, declaration or designation with, any
Governmental Authority is required on the part of such Shareholder as a
condition to the valid execution, delivery and performance of this
Shareholder Agreement by such Shareholder.

           (c)        The execution, delivery and performance by such
Shareholder of this Shareholder Agreement will not: (i) conflict with, result
in a violation or breach of, or constitute (with or without notice or lapse
of time or both) a default (or give rise to any third-party right of
termination, cancellation, material modification or acceleration) under, any
of the terms, conditions or provisions of any trust agreement, voting
agreement, shareholders agreement, voting trust, note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind affecting such
Shareholder or to which such Shareholder is a party or by which any of such
Shareholder's properties or assets are or may be bound; (ii) violate any
Requirement of Law applicable to such Shareholder; or (iii) violate any
order, injunction, judgment or decree of any court or other Governmental
Authority or any determination of an arbitrator applicable to such
Shareholder or any of such Shareholder's properties or assets.

           (d)        Such Shareholder is the sole record and beneficial
owner of the Shares identified in Schedule I as being sold by such
Shareholder, and such Shares are not subject to any claim, option, warrant or
other call right, and upon delivery to Michael at Closing of certificates for
such Shares, in transferable form, Michael will have good legal and
beneficial title thereto, free of all liens or encumbrances of any kind.


                                      -5-
<PAGE>


SECTION 4. SALE OF MICHAEL SHARES

           (a)        At the Closing, each of the Shareholders shall sell and
deliver to Michael and Michael shall purchase from each Shareholder, the
number of Shares set forth opposite the Shareholder's name on SCHEDULE I. The
purchase price for each of the Shares shall be $21.77 per share, that being
three percent (3%) below the average closing price of Michael common stock as
reported on the NASDAQ-NMS for the ten trading days commencing on May 8, 2000
and ending on May 19, 2000. The purchase price will be paid at Closing by
wire transfer of same day funds to the account of each Shareholder against
receipt of certificates for the Shares in transferable form.

           (b)        Closing will be held at the offices of Maun & Simon,
PLC in Minneapolis, Minnesota on the date that this Shareholder Agreement is
executed and delivered by Michael and each of the Shareholders, unless the
Shareholders and Michael agree on a different time, place or manner of
Closing. In addition to the exchange of the consideration provided in Section
4(a), at the Closing the Shareholders and Michael will deliver to each other
a certificate or certificates confirming the truth and `completeness of the
representations and warranties of such party as of the date of Closing and
such other documents, certificates or conveyances as counsel for Michael and
the Shareholders shall reasonably request.

SECTION 5. COVENANTS OF THE SHAREHOLDERS

           (a)        ACQUISITION OF EQUITY SECURITIES. Until April 26, 2001
or the first date that the Shareholders, collectively and in the aggregate,
Beneficially Own Equity Securities representing less than five percent (5%)
of the Total Voting Power, whichever is earlier, no Shareholder shall,
directly or indirectly, acquire, offer to acquire, agree to acquire, become
the Beneficial Owner of, or obtain any rights in respect of, any Equity
Securities, by purchase or otherwise, or take any action in furtherance
thereof, if the effect of such acquisition, agreement or other action would
be (either immediately or upon consummation of any such acquisition,
agreement or other action, or expiration of any period of time provided in
any such acquisition, agreement or other action) to increase the aggregate
voting power in the


                                      -7-
<PAGE>


election of directors of all Equity Securities then Beneficially Owned by all
Shareholders (such aggregate voting power, (the "Aggregate Voting Power") to
twenty percent (20%) or more of the Total Voting Power (such maximum
percentage limitation, the "Maximum Percentage"). Notwithstanding anything to
the contrary in this Section 5(a), the Maximum Percentage may be exceeded if,
and solely to the extent that, the Aggregate Voting Power is or will be
increased solely as a result of a repurchase of any Voting Securities by
Michael or any of its subsidiaries or any other change in Michael's
capitalization or by reason of the issuance of stock options by Michael to
any of the Shareholders pursuant to any stock option plan maintained by
Michael.

           (b)        NO VOTING TRUSTS. Until April 26, 2001 or the first
date that the Shareholders, collectively and in the aggregate, Beneficially
Own Equity Securities representing less than five percent (5%) of the Total
Voting Power, whichever is earlier, no Shareholder shall deposit any Equity
Securities in a voting trust or subject any Equity Securities to any
arrangement or agreement with respect to the voting of such Equity Securities
except for a voting trust or other arrangement among the Shareholders or any
of their Affiliates.

           (c)        NO PROXY SOLICITATION ADVERSE TO BOARD RECOMMENDATION.
Until April 26, 2001 or the first date that the Shareholders, collectively
and in the aggregate, Beneficially Own Equity Securities representing less
than five percent (5%) of the Total Voting Power, whichever is earlier, no
Shareholder shall solicit proxies or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the
Exchange Act) in opposition to the recommendation of the Board of Directors
of Michael with respect to any matter.

           (d)        NO FORMATION OF GROUP. Until April 26, 2001 or the
first date that the Shareholders, collectively and in the aggregate,
Beneficially Own Equity Securities representing less than five percent (5%)
of the Total Voting Power, whichever is earlier, no Shareholder shall join a
partnership, limited partnership, syndicate or other Group, or otherwise act
in concert with any other Person, for the purpose


                                      -8-
<PAGE>

of acquiring, holding, voting or disposing of Equity Securities, or otherwise
become a "Person" within the meaning of Section 13(d)(3) of the Exchange Act
(in each case other than solely with other Shareholders or their Affiliates
or with such Shareholders' or Affiliates' representatives for estate planning
purposes).

SECTION 6. ADDITIONAL COVENANTS OF SHAREHOLDERS

           (a)        RESTRICTIONS ON DISPOSITION. Except as otherwise
permitted herein, the Shareholders, individually and collectively, shall not:

                      (i)        until June 30, 2000, other than the Shares sold
           pursuant to this Shareholder Agreement, sell or offer to sell any
           Equity Securities; or

                      (ii)       during each of the calendar quarters ending
           September 30, 2000 and December 31, 2000, sell or offer to sell
           Equity Securities in excess of 200,000 shares of Michael common
           stock, as adjusted for any share dividend, stock split or other
           recapitalization of Equity Securities or;

                      (iii)      prior to January 1, 2001, pledge, hypothecate
           or encumber any Equity Securities Beneficially Owned by such
           Shareholder, except to a financial institution pursuant to a bona
           fide pledge, hypothecation or encumbrance to secure a bona fide loan
           for money borrowed to one or more Shareholders, provided that, upon
           foreclosure on such Equity Securities, such financial institution has
           executed and delivered to Michael an agreement whereby such financial
           institution agrees to be legally bound by the terms of this
           Shareholder Agreement as a "Shareholder" as if such financial
           institution were an original signatory hereto.

           (b)        RESTRICTIONS ON DISPOSITION. Until April 26, 2001 or
the first date that the Shareholders, collectively and in the aggregate,
Beneficially Own Equity Securities representing less than five percent (5%)
of the Total Voting Power, whichever is earlier, the Shareholders,
individually or collectively, shall not:


                                      -9-
<PAGE>


                      (i)        sell or offer to sell Equity Securities having
           five percent (5%) or more of the Total Voting Power of Michael to any
           Person or Group in any single transaction or series of transactions
           without providing Michael the first right to buy such shares as
           provided in Section 6(c) below; or

                      (ii)       sell or offer to sell Equity Securities to any
           Person or Group which the Shareholders have actual knowledge at time
           of the sale to Beneficially Own five percent (5%) or more of the
           Total Voting Power of Michael or, to any Person or Group who, by
           virtue of the sale or offer, would Beneficially Own, five percent
           (5%) or more of the Total Voting Power of Michael, without in either
           case, providing to Michael a first right to buy such shares as
           provided in Section 6(c) below.

           (c)        MICHAEL'S FIRST RIGHT TO PURCHASE. During the period
and upon the occurrence of any event described in Section 6(b)(i) or (ii),
the Shareholder or Shareholders proposing to sell or offer Equity Securities
shall provide written notice thereof to Michael and shall offer to Michael
the right to purchase such Equity Securities. The notice shall state the
number of shares offered and the price per share and any other conditions of
the proposed sale or offer and shall include a copy of any written document
setting forth the terms of the proposed sale or offer between the Shareholder
or Shareholders and the purchaser or offeree. Michael shall have twenty (20)
days from its receipt of such notice within which to purchase the Equity
Securities so offered. In the event that Michael does not complete the
purchase within such twenty (20) day period, the Shareholder or Shareholders
sending the notice shall be permitted for a period of thirty (30) days
thereafter to sell Equity Securities equal in number to the shares offered in
such notice free of any restrictions under this Shareholder Agreement at a
price not less than the purchase price per share set forth in such notice and
under terms and conditions no more favorable to the purchaser than the terms
and conditions offered to Michael in such notice.


                                      -10-
<PAGE>


           (d)        TENDER OFFERS. The restrictions set forth in Section
6(b) and the first right to buy set forth in Section 6(c) shall not apply if
a tender offer is made for all or substantially all of the outstanding shares
of Michael Common Stock and the Board of Directors of Michael does not,
within seven (7) days of the commencement of such tender offer, announce its
opposition to the tender offer. Notwithstanding the foregoing, the following
additional terms and conditions shall apply in the event of the commencement
of a tender offer:

                      (i)        In the event that one or more of the
           Shareholders has given notice to Michael pursuant to Section 6(c) of
           this Shareholder Agreement and, prior to the exercise of Michael's
           right to buy, a tender offer is commenced for all or substantially
           all of the outstanding shares of Michael Common Stock, Michael shall,
           within twenty (20) days of the date that such Shareholder or
           Shareholders have given such notice, have the right to acquire the
           Equity Securities subject to the notice at the higher of the price
           offered by the Shareholder or Shareholders in the notice or the
           tender offer price, regardless of whether Michael's Board of
           Directors has announced its opposition to such tender offer.

                      (ii)       In the event that one or more of the
           Shareholders has given notice to Michael pursuant to Section 6(c) of
           this Shareholder Agreement and, subsequent to the exercise of
           Michael's right to buy, either a tender offer is commenced for all or
           substantially all of the outstanding shares of Michael Common Stock
           or the Board of Directors rescinds its earlier opposition to such
           tender offer, Michael shall have the option of (A) rescinding its
           agreement to purchase the shares from the Shareholder or Shareholders
           within two (2) days after the commencement of such tender offer or
           the announcement by the Board of the rescission of opposition to the
           tender offer, or (B) acquiring such shares at the higher of the price
           offered by the Shareholder or Shareholders in the notice or the
           tender offer price.


                                      -11-
<PAGE>


SECTION 7. LEGEND

           All certificates representing shares of common stock of Michael
which are subject to this Shareholder Agreement shall bear the following
legend:

                     "The shares represented by this certificate are subject to
           certain restrictions on the transfer, sale or other disposition of
           the shares pursuant to an agreement dated May 22, 2000, between the
           issuer and the registered owner hereof, a copy of which may be
           obtained from the secretary of the corporation."

           The Shareholders shall promptly deliver all certificates for
Equity Securities to the secretary of Michael who shall place the foregoing
legend on the certificates. The Secretary of Michael shall promptly return
the legended certificates to the Shareholders.

SECTION 8. DIRECTORS

           For a period of three years from the date of this Agreement, if
the Shareholders collectively own ten percent (10%) or more of the
outstanding common stock of Michael, they shall be entitled to nominate two
(2) persons to stand for election as directors of Michael. During such
three-year period, if the Shareholders own less than ten percent (10%), but
more than five percent (5%), of the outstanding common stock of Michael, they
shall be entitled to nominate one (1) person to stand for election as a
director of Michael. Within thirty (30) days following the end of each
calendar year the Shareholders shall give notice to Michael of the nominees
of the Shareholders. No director serving as a nominee of the Shareholders
shall be required to resign as a result of a decline in the Shareholders'
percentage ownership of common stock of Michael. If either Stephen Papetti or
Arthur J. Papetti voluntarily terminate employment with the Company and its
subsidiaries while he is serving as a director of the Company, he will tender
his resignation from the Board but the Board of Directors shall not be
required to accept such resignation.


                                      -12-
<PAGE>

SECTION 9. REGISTRATION RIGHTS

           (a)        REQUESTED REGISTRATION. Until April 26, 2001 or the
date that all of the shares of Michael common stock Beneficially Owned by the
Shareholders are eligible for sale under Rule 144 of the SEC without any
volume limitation, whichever is earlier, subject to the following provisions
a Shareholder may request that Michael register all or a portion of his
Registrable Securities. If Michael shall receive a written request from one
or more Shareholders that Michael effect the registration under the
Securities Act of all or a part of such Shareholders' Registrable Securities,
then Michael will, within ten (10) days after receipt thereof, give notice to
all other Shareholders of the receipt of such request and each such holder
may elect by written notice received by Michael within ten (10) days from the
date of the notice by Michael to have all or part of his Registrable
Securities included in such registration. Upon receipt of such notice,
Michael will, as soon as practicable, use reasonable efforts to effect the
registration on Form S-3 and pursuant to Rule 415 (the "Resale Registration
Statement") under the Securities Act of all Registrable Securities which it
has been so requested to register covering resales from time to time of such
Registrable Securities and Michael shall use its reasonable best efforts to:
(i) cause the Resale Registration Statement to be declared effective by the
SEC as soon as practicable thereafter; and (ii) maintain the effectiveness of
the Resale Registration Statement continuously until the earliest of: (A) the
date on which the Shareholders no longer hold Registrable Securities
registered under the Resale Registration Statement or (B) the third
anniversary of this Shareholder Agreement or such lesser time as may be
permitted under Rule 144 under the Securities Act to enable the Shareholders
to sell the Registrable Securities under the Securities Act without such
registration. Michael: (i) shall not be obligated to cause any special audit
to be undertaken in connection with any such registration; (ii) shall be
entitled to postpone for a reasonable period of time, but not in excess of
ninety (90) days, the filing of any registration statement otherwise required
to be prepared pursuant to this section if Michael is, at such time,
conducting or about to conduct an underwritten public offering of Equity
Securities (or securities


                                      -13-
<PAGE>


convertible into Equity Securities) and is advised in writing by its managing
underwriter that such underwritten public offer would, in its opinion, be
adversely effected by the registration so requested; and (iii) shall be
entitled to postpone such requested registration for up to ninety (90) days
if Michael determines, in view of the advisability of deferring public
disclosure of material corporate developments or other information, that such
registration and the disclosure required to be made pursuant thereto would
not be in the best interest of Michael at such time.

           (b)        EFFECTIVE REGISTRATION. A registration pursuant to this
Section 9 will not be deemed to have been effected unless the Registration
Statement has been declared effective by the SEC; provided, however, that if
after such Registration Statement has been declared effective, the offering
of Registrable Securities pursuant to such Registration Statement is
interfered with by any stop order, injunction or other order or requirement
of the SEC or any other Governmental Authority or court, such Registration
Statement will be deemed not to have been effected during the period of such
interference until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume.

           (c)        REGISTRATION EXPENSES. The Shareholders requesting
registration shall bear all expenses incurred in connection with the
registration of the Registrable Securities pursuant to this Section 9. Such
expenses shall include, without limitation, all printing, legal and
accounting expenses (other than normal audit expenses) incurred by Michael
and all registration and filing fees imposed by the SEC, any state securities
commission or the NASDAQ-NMS, any brokerage fees or commissions and any taxes
of any kind (including, without limitation, transfer taxes) with respect to
any disposition, sale or transfer of Registrable Securities, and any legal,
accounting and other expenses incurred by such Shareholder.

           (d)        SELECTION OF UNDERWRITER AND INVESTMENT MANAGER. If a
requested registration pursuant to this Section 9 involves an underwritten
offering, the selling Shareholders shall have the exclusive right to select
an investment banker or bankers and managers to administer the offering.


                                      -14-
<PAGE>


           (e)        REGISTRATION PROCEDURES. If and whenever Michael is
required to use its reasonable efforts to cause the registration of any
Registrable Securities under the Securities Act as provided in this
Shareholder Agreement, Michael will, as expeditiously as reasonably possible:
(i) prepare and file with the SEC such amendments and supplements to such
Resale Registration Statement and the prospectus used in connection therewith
and shall timely file with the SEC all required filings under the Exchange
Act as may be necessary to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by such
Resale Registration Statement and to keep the Resale Registration Statement
effective, but only while it shall be required under the provisions of this
Shareholder Agreement to cause the Registration Statement to remain current;
(ii) furnish to each Shareholder seeking registration hereunder such number
of copies of the prospectus included in such Resale Registration Statement
(including each preliminary prospectus and summary prospectus), and such
other documents as each such Shareholder may reasonably request in order to
facilitate the disposition of the Registrable Securities by such Shareholder
but only while it shall be required under the provisions hereof to cause the
Registration Statement to remain current; (iii) use its reasonable efforts to
register or qualify such Registrable Securities covered by such Resale
Registration Statement under such other securities or blue sky laws of such
jurisdictions as the Shareholders shall reasonably request, except that
Michael shall not, for any purpose, be required to qualify generally to do
business as a foreign corporation in any jurisdiction where, but for the
requirements of this clause, it would not be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction, or consent to general
service of process in any such jurisdiction; (iv) use its reasonable efforts
to list the Registrable Securities on the NASDAQ-NMS, if such Registrable
Securities are not already so listed.

           (f)        POST-REGISTRATION NOTICES. Michael shall promptly
notify the Shareholders: (i) when a prospectus or any prospectus supplement
or post-effective amendment (including any required filings under the
Exchange Act) has been filed and, with respect to the Resale Registration
Statement or any


                                      -15-
<PAGE>


post-effective amendment, when the same has become effective; (ii) of any
request by the SEC or any state securities authority for amendments or
supplements to the Resale Registration Statement and prospectus or for
additional information after the Resale Registration Statement has become
effective; (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Resale Registration Statement; (iv) of the issuance by
any state securities commission or other regulatory authority of any order
suspending the qualification or exemption from qualification of any of the
Registrable Securities under such state's securities or "blue sky" laws; and
(v) of the happening of any event which makes any statement made in the
Resale Registration Statement or related prospectus untrue or which requires
the making of changes in such Resale Registration Statement or prospectus so
that they will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. As soon as practicable, following the expiration of the
Suspension Period (as defined below), Michael shall prepare and file with the
SEC and furnish a supplement or amendment to such prospectus so that, as
thereafter deliverable to the purchasers of such Registrable Securities, such
prospectus will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.

           Upon receipt of any notice (a "Suspension Notice") by the
Shareholders from Michael of the happening of any event of the kind described
in this Section 9(g), the Shareholders shall forthwith discontinue
disposition of the Registrable Securities pursuant to the Resale Registration
Statement until the Shareholders' receipt of the copies of the supplemental
or amended prospectus contemplated by this Section 9(g) or until the
Shareholders have been advised in writing (the "Advice") by Michael that the
use of the prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in the
prospectus, and, if so directed by Michael, will, or will request any broker
or dealer acting as the Shareholders' agent(s) to deliver to Michael (at
Michael's expense) all


                                      -16-
<PAGE>

copies, other than permanent file copies then in the Shareholders' or their
brokers' or dealers' possession of the prospectus covering such Registrable
Securities current at the time of receipt of such notice; provided, however,
that in no event shall the period from the date on which the Shareholders
receive a Suspension Notice to the date which the Shareholders receive either
the Advice or copies of the supplemental or amended prospectus contemplated
in this Section 9(g) (the "Suspension Period") exceed sixty (60) calendar
days.

           (g)        INFORMATION. Michael may require each selling
Shareholder to furnish it with such information regarding such selling
Shareholder and pertinent to the disclosure requirements relating to the
registration and the distribution of such securities as Michael may from time
to time reasonably request in writing.

           (h)        UNDERWRITING AGREEMENT. The selling Shareholders shall
execute and deliver an underwriting agreement in customary form in connection
with any underwritten offering made pursuant to a registration hereunder.

SECTION 10. INDEMNIFICATION AND CONTRIBUTION

           (a)        INDEMNIFICATION BY MICHAEL. Michael agrees to indemnify
and hold harmless to the full extent permitted by law, each Shareholder from
and against all losses, claims, damages, liabilities and expenses (including,
without limitation, reasonable legal fees and expenses incurred by
shareholders (collectively, the "Damages") to which the Shareholders may
become subject under the Securities Act or otherwise, insofar as such Damages
(or proceedings in respect thereto arise out of or are based upon any untrue
or alleged untrue statement of a material fact contained in the Resale
Registration Statement (or any supplement or amendment thereto, including
filings under the Exchange Act) pursuant to which Registrable Securities were
registered under the Securities Act, or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made, not
misleading, or caused by any untrue statement or alleged


                                      -17-
<PAGE>

untrue statement of a material fact contained in any prospectus (as amended
or supplemented if Michael shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in light of the
circumstances under which they were made, not misleading, except insofar as
such Damages arise out of or are based upon any such untrue statement or
omission based upon information relating to the Shareholders furnished in
writing to Michael by the Shareholders specifically for use therein;
provided, however, that Michael shall not be liable to the Shareholders under
this Section 10(a) to the extent that any such Damages were caused by the
fact that the Shareholders sold Registrable Securities to a Person as to who
it shall be established that there was not sent or given, at or prior to
written confirmation of such sale, a copy of the prospectus as then amended
or supplemented if, but only if: (i) Michael has previously furnished copies
of such amended or supplemented prospectus to the Shareholders; and (ii) such
Damages were caused by any untrue statement or omission or alleged untrue
statement or omission contained in the prospectus so delivered which was
corrected in such amended or supplemented prospectus.

           (b)        INDEMNIFICATION BY SHAREHOLDERS. The Shareholders agree
to indemnify, jointly and severally, and hold harmless Michael, its
stockholders, directors, officers and each Person, if any, who Controls
Michael within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from Michael to the Shareholders in Section 10(a) of this Shareholder
Agreement but only with reference to information relating to the Shareholders
furnished in writing to Michael by the Shareholders specifically for use in
the Resale Registration Statement (or any amendment thereto) or any
prospectus (or any amendment or supplement thereto); provided, however, that
the Shareholders shall not be obligated to provide such indemnity to the
extent that such Damages result from a failure of Michael to promptly amend
or take action to correct or supplement any such Resale Registration
Statement or prospectus on the basis of corrected or


                                      -18-
<PAGE>

supplemental information provided in writing by the Shareholders to Michael
expressly for such purpose. In no event shall the liability of the
Shareholders hereunder be greater in amount than the amount of the proceeds
received by the Shareholders upon the sale of the Registrable Securities
giving rise to such indemnification obligation.

           (c)        CONTRIBUTION. To the extent that the indemnification
provided for in Section 10(a) or (b) is unavailable to an indemnified party
or insufficient in respect of any Damages, then each indemnifying party under
such Section, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such Damages in such proportion as is appropriate to reflect the
relative fault of Michael, on the one hand, and the Shareholders, on the
other hand, in connection with the statements or omissions that resulted in
such Damages, as well as any other relevant equitable considerations. The
relative fault of Michael, on the one hand, and the Shareholders, on the
other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
Michael or by the Shareholders and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

           If indemnification is available under Section 10(a) or (b), the
indemnifying parties shall indemnify each indemnified party to the full
extent provided in such sections without regard to the relative fault of said
indemnifying party or the indemnified party or any other equitable
considerations provided for in this Section 10(c). Michael and the
Shareholders agree that it would not be just or equitable if contribution
pursuant to this Section 10(c) were determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to in this section.


                                      -19-
<PAGE>

SECTION 11. GENERAL PROVISIONS

           (a)        GOVERNING LAW. This Shareholder Agreement shall be
governed by and interpreted and enforced in accordance with the laws of the
State of Minnesota without giving effect to any conflicts of law provisions.

           (b)        REMEDIES. Michael, on the one hand, and the
Shareholders, on the other, acknowledge and agree that the other would not
have an adequate remedy at law for money damages in the event that any of the
covenants or agreements in this Shareholder Agreement of such party were not
performed in accordance with its terms, and it is therefore agreed that in
addition to and without limiting any other remedy or right such party may
have, any party will have the right to an injunction or other equitable
relief (including specific performance) in any court of competent
jurisdiction, enjoining any such breach and enforcing specifically the terms
and provisions hereof. All rights, powers and remedies provided under this
Shareholder Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative.

           (c)        NOTICES. All notices, demands and other communications
given under this Shareholder Agreement shall be in writing, shall be given
either by personal delivery or by nationally recognized overnight courier or
by telecopier, and shall be deemed to have been given or made when personally
delivered, one Business Day after delivered to a nationally recognized
overnight courier, postage prepaid, and receipt requested, or one Business
Day after transmission by facsimile, receipt confirmed, addressed as follows:

                      (i)      IF TO MICHAEL:

                               Gregg A. Ostrander
                               Chairman of the Board, President and Chief
                                 Executive Officer
                               Michael Foods, Inc.
                               5353 Wayzata Boulevard
                               324 Park National Bank Building
                               Minneapolis, Minnesota  55416
                               Telephone:  612-546-1500
                               Facsimile No.: 612-546-3711


                                      -20-
<PAGE>

                               with a copy to:

                               Albert A. Woodward
                               Maun & Simon, PLC
                               2000 Midwest Plaza Building West
                               801 Nicollet Mall
                               Minneapolis, Minnesota 55402
                               Telephone: 612-904-7400
                               Facsimile No.: 612-904-7424

                     (ii)      IF TO THE SHAREHOLDERS:

                               Arthur J. Papetti
                               Alfred Papetti
                               Stephen Papetti
                               c/o Papetti Holding Company
                               877 North Avenue East
                               Building 4
                               Elizabeth, New Jersey 07206
                               Telephone: 908-527-1900
                               Facsimile No.: 908-527-1996

                               with a copy to:

<TABLE>
                               <S>                                      <C>
                               Martin B. O'Connor, II                   Robert M. LaRose
                               O'Connor, Morss & O'Connor               Thompson Coburn LLP
                               Liberty Hall Center                      One Firstar Plaza
                               1085 Morris Avenue                       Suite 3400
                               Union, New Jersey 07083                  St. Louis, Missouri 63101
                               Telephone: 908-354-5660                  Telephone: 314-552-6068
                               Facsimile No.: 908-354-5786              Facsimile No.: 314-552-7068
</TABLE>

or to such other address as any such Person may from time to time designate
by notice to the others.

           (d)        SEVERABILITY. If any term, provision, covenant or
restriction of this Shareholder Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remainder of the
terms, provisions, covenants and restrictions shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. The parties
agree that they will use their best efforts at all times to support and
defend this Shareholder Agreement.

           (e)        AMENDMENTS. This Shareholder Agreement may be amended
only by an agreement in writing signed by all of the parties hereto.


                                      -21-
<PAGE>

           (f)        DESCRIPTIVE HEADINGS. Descriptive headings are for
convenience only and shall not control or affect the meaning or construction
of any provision of this Shareholder Agreement.

           (g)        COUNTERPARTS. This Shareholder Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
bears the signatures of each of the parties hereto. This Shareholder
Agreement may be executed in any number of counterparts, each of which shall
be an original as against the party whose signature appears thereon, or on
whose behalf such counterpart is executed, but all of which when taken
together shall be one and the same statement.

           (h)        SUCCESSORS AND ASSIGNS. This Shareholder Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
successors and assigns of the parties hereto, provided that a Shareholder may
not assign any of his rights or obligations hereunder to any Person without
the prior written consent of Michael. Notwithstanding the foregoing, the
consent of Michael shall not be required in connection with the assignment of
this Shareholder Agreement to the estate of a Shareholder.

           (i)        This Shareholder Agreement is intended to supercede any
earlier-dated shareholder agreements, including the Shareholder Agreement
dated February 26, 1997, as amended February 25, 2000, in their entirety.
From and after the date of this Shareholder Agreement, all such earlier-dated
shareholder agreements shall terminate and all rights and obligations of the
parties thereto shall be governed solely by this Shareholder Agreement.


                                      -22-
<PAGE>

IN WITNESS WHEREOF, the parties hereto intending to be legally bound have
duly executed this Shareholder Agreement, all as of the day and year first
above written.

                                       MICHAEL FOODS, INC.

                                       By:  /s/ Gregg A. Ostrander
                                            -----------------------------------

                                       Its: Chairman / CEO / President
                                            -----------------------------------



                                       SHAREHOLDERS:

                                       /s/ Stephen Papetti
                                       ----------------------------------------
                                       Stephen Papetti

                                       /s/ Alfred Papetti
                                       ----------------------------------------
                                       Alfred Papetti

                                       /s/ Arthur J. Papetti
                                       ----------------------------------------
                                       Arthur J. Papetti


                                      -23-
<PAGE>


                                   SCHEDULE I
                              LIST OF SHAREHOLDERS

<TABLE>
<CAPTION>
                                                          NUMBER OF
A.         SHAREHOLDERS                                   SHARES SOLD
           ------------                                   -----------
<S>        <C>                                            <C>
           Stephen Papetti                                375,000
           Alfred Papetti                                 375,000
           Arthur J. Papetti                              750,000
</TABLE>


                                      -24-