<PAGE>
                                                                   EXHIBIT 10.16

 
                               FIRST AMENDED AND
                                   RESTATED
                             PRODUCTION AGREEMENT
                             --------------------

     This First Amended and Restated Production Agreement (the "Agreement") is
made as of the 19th day of November, 1997, by and between Aurora Foods, Inc.
(formerly known as MBW Foods, Inc.), a Delaware corporation ("Buyer"), and The
Red Wing Company, Inc., a Delaware corporation ("Producer").

                                  WITNESSETH

     WHEREAS, Buyer and Producer entered into a Production Agreement dated as of
June 9,1997;

     WHEREAS, Buyer and Producer desire to amend and restate such Production
Agreement;

     WHEREAS, Buyer possesses formulas and processes for the manufacture of
certain food products described in Schedule A hereto (the "Products");
                                   ----------
     WHEREAS, Producer is engaged in the business of manufacturing and mixing
food products, including food products similar to the Products;

     WHEREAS, Producer has facilities and expertise for the production of the
Products; and

     WHEREAS, Buyer and Producer desire to define and develop a business
relationship whereby Producer will manufacture and sell, and Buyer will
purchase, the Products subject to the terms and conditions set forth herein.

     NOW THEREFORE, for mutual and adequate consideration, Producer and Buyer
agree as follows:

1.   TERM. Unless earlier terminated in accordance with Section 22 hereof, this
     Agreement shall commence as of June 9, 1997, (the "Commencement Date") and
     shall end on the fifth anniversary of the Commencement Date (the "Original
     Term") and shall be subject to automatic renewal for additional consecutive
     one year terms (the "Renewal Term or Terms") unless a decision is made by
     either party not to renew. My decision not to renew shall be submitted in
     writing by the party making such decision no later than one-hundred eighty
     (180 ) days prior to the expiration of the Original Term or any Renewal
     Term. The "Agreement Term" shall mean the Original Term, and if this
     Agreement is renewed, the Renewal Term or Terms.
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2.  PRODUCTION FACILITIES. The Products will be manufactured at Producer's
    facilities located at San Jose, California (the "San Jose Plant"), Streator,
    Illinois (the "Streator Plant"), Fredonia, New York (the "Fredonia Plant"),
    and any other plant location of Producer as is approved in advance by Buyer,
    which approval shall not be unreasonably withheld (each, an "Approved
    Facility").

3.  PRODUCTS. Subject to the terms and conditions of this Agreement, Producer
    agrees to manufacture and sell to Buyer, and Buyer agrees to purchase from
    the Producer, the Products as set forth on Schedule A in such quantities and
                                               ----------
    at such Approved Facilities as shall be determined from time to time in the
    sole judgment of Buyer. Notwithstanding the foregoing, Buyer agrees that (i)
    during the first year of the Original Term (with the first year being
    measured from the Commencement Date to the day immediately preceding the
    first anniversary of the Commencement Date), Buyer shall order at least one
    million five hundred thousand equivalent cases of Products from the Producer
    (with an equivalent case being equal to 288 ounces of the Products) and (ii)
    during each year of the Original Term thereafter, Buyer shall order at least
    two million five hundred thousand equivalent cases of Products from the
    Producer. IF, DURING ANY SUCH YEAR OF THE ORIGINAL TERM, BUYER SHALL FAIL TO
    ORDER AT LEAST SUCH NUMBER OF EQUIVALENT CASES OF PRODUCTS FROM THE
    PRODUCER, THE SOLE AND EXCLUSIVE REMEDY FOR PRODUCER FOR SUCH FAILURE SHALL
    BE THAT, FOR EACH YEAR IN WHICH THE BUYER FAILS TO ORDER AT LEAST SUCH
    NUMBER OF EQUIVALENT CASES OF PRODUCTS FROM THE PRODUCER, AN ADDITIONAL ONE
    HUNDRED EIGHTY DAYS SHALL BE ADDED TO THE ORIGINAL TWO YEAR PERIOD SET FORTH
    IN SECTION 22(B) OF THIS AGREEMENT BEFORE THE BUYER SHALL HAVE THE RIGHT TO
    TERMINATE THIS AGREEMENT PURSUANT TO SECTION 22(B).

4.  MANUFACTURING STANDARDS. Producer agrees to manufacture each of the Products
    in accordance with Buyer's specifications, quality control standards and
    other procedures that are contained in the Operating Manual that has been
    delivered to Producer and that shall be deemed to be a part hereof as
    Schedule B (the specifications), which may be modified from time to time in
    ----------
    the sole judgment of Buyer upon thirty days prior written notice to the
    Producer; provided, however, in the event any such modifications to the
    Specifications result in any change in the cost to produce the Products, the
    price for the Products shall be adjusted upward or downward, as the case may
    be, to cover the change in the cost to produce the Products. Upon written
    notification from Buyer to the Producer modifying the Specifications,
    Schedule B shall be deemed amended by such modification. Buyer agrees to
    ----------
    promptly supply Producer with all formulas, operating techniques,
    manufacturing procedures and other technical information necessary and
    appropriate for the manufacture of the Products; provided, however, that
    Producer understands that Buyer is relying upon Producer's 

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    expertise in suggesting to Buyer and implementing the appropriate procedures
    for the manufacture of the Products.

5.  GRANT OF LICENSE. Subject to the terms and conditions of this Agreement,
    Buyer hereby grants to Producer, who accepts the same, a non-exclusive, non-
    assignable, indivisible and royalty-free right and license to manufacture
    and sell the Products to Buyer exclusively. The license includes the right
    to use the Specifications and any other technical know-how, formulas,
    manufacturing processes, and other technical and confidential information
    useful or necessary for the manufacture of the Products. This license will
    remain in effect until the expiration or other termination of this Agreement
    and may not be assigned, transferred (including any transfer by operation
    of law), subcontracted or sublicensed to any third party (other than, in the
    case of a sublicense or subcontract, to a wholly-owned subsidiary of the
    Producer) without the prior written consent of Buyer, which consent may be
    withheld in the sole discretion of Buyer. In the event Producer enters into
    any sublicense or subcontract with a wholly-owned subsidiary of Producer,
    Producer shall be responsible for all acts and omissions of its wholly-owned
    subsidiary.

6.  CONFIDENTIAL INFORMATION.

    a.  For the purpose of this Agreement, "Confidential Information" shall mean
        all written information related to the Products and all formulas,
        manufacturing processes, data, know-how, technical and non-technical
        materials, and product samples and specifications (including the
        Specifications) which Buyer has disclosed to Producer prior to this
        Agreement or which Buyer may disclose to Producer pursuant to or in
        connection with this Agreement, and all pricing information with respect
        to the Products, all written financial information, manufacturing
        processes, data, know-how, technical and non-technical materials which
        Producer has disclosed to Buyer prior to this Agreement or which
        Producer may disclose to Buyer pursuant to or in connection with this
        Agreement.

    b.  Notwithstanding the foregoing, Confidential Information shall not
        include any information which the non-disclosing party can demonstrate
        by reasonable evidence: (i) is or becomes public knowledge through no
        fault or omission of the non-disclosing party; (ii) is lawfully obtained
        by the non-disclosing party from a third party under no obligation of
        confidentiality concerning such information; (iii) was, at the time of
        receipt, otherwise known to the non-disclosing party without
        restrictions as to use or disclosure; or (iv) is developed independently
        by the non-disclosing party and without reliance upon the Confidential
        Information disclosed hereunder. The burden of proving any such
        exceptions to the definition of Confidential Information will reside
        with the non-disclosing party.

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    c.  The non-disclosing party agrees to hold all Confidential Information of
        the disclosing party in confidence and not to disclose any Confidential
        Information to any third party except (i) those with a need to know in
        order to assist in the manufacture of the Products, (ii) as may be
        required by law, or (iii) to accountants, attorneys, bankers and other
        professional advisors of a party. The non-disclosing party agrees not to
        make any use of the Confidential Information except as provided herein.

    d.  The non-disclosing party agrees that its directors, officers, employees,
        agents and other representatives who have access to the Confidential
        Information of the disclosing party will be made aware of the
        obligations of confidentiality and non-use set forth in Section 6 of
        this Agreement and will be bound to abide by these obligations. The non-
        disclosing party agrees that it shall be responsible for any breach of
        the obligations of confidentiality or non-use by any person to whom such
        information is disclosed by the non-disclosing party.

    e.  The Confidential Information of the disclosing party shall remain the
        exclusive property of the disclosing party, and the non-disclosing party
        acquires no interest in or rights thereto under this Agreement or
        otherwise. Upon termination of this Agreement, or at any time upon the
        disclosing party's request, the non-disclosing party shall, at its sole
        option, either promptly return all tangible forms of Confidential
        Information of the disclosing party (including copies) to the disclosing
        party then in the non-disclosing party's possession or under its control
        or destroy such Confidential Information and deliver a certificate to
        the disclosing party certifying such destruction. Upon termination of
        this Agreement, to the extent that any document prepared by or on behalf
        of the non-disclosing party incorporates any Confidential Information of
        the disclosing party, the non-disclosing party shall destroy such
        documentation and deliver a certificate to the disclosing party
        certifying such destruction.

    f.  The non-disclosing party shall be liable to the disclosing party for all
        direct and incidental damages (including, without limitation, reasonable
        attorneys fees) incurred as a result of the breach of the
        confidentiality and/or non-use provisions of Section 6 of this Agreement
        by the non-disclosing party. The non-disclosing party also acknowledges
        and agrees that, in the event of such a breach, such Damages may not be
        an adequate remedy and that the disclosing party shall be entitled to
        specific performance and injunctive or other equitable relief as a
        remedy for any such breach.

    g.  The non-disclosing party acknowledges that the Confidential information
        disclosed or to be disclosed by the disclosing party represents the
        disclosing party's valuable property, which is intended to be maintained
        in 

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        perpetuity as trade secret property. Accordingly, the confidentiality
        and non-use obligations of Section 6 of this Agreement shall be
        continuing in nature and shall survive termination of this Agreement.

7.  SALE AND PURCHASE OF PRODUCTS.

    a.  The terms and conditions contained in this Agreement shall be effective
        for all Products sold by the Producer to the Buyer during the Agreement
        Term. During the Agreement Term, Producer agrees to manufacture and sell
        the Products to Buyer against the Monthly Production Request (as such
        term is hereinafter defined in Section 10 of this Agreement) of the
        Buyer, which request shall be deemed to be a production purchase order.
        During the Agreement Term, Producer agrees to deliver the Products
        manufactured and sold to Buyer against shipping orders of Buyer. Except
        as otherwise set forth in this Agreement, each contract for the purchase
        and sale of the Products shall be initiated hereunder by Buyer's
        issuance to Producer of a production purchase order and delivery of such
        Products shall be initiated against shipping orders of the Buyer. Unless
        Buyer otherwise agrees in writing, ALL PRODUCTION PURCHASE ORDERS AND
        SHIPPING ORDERS ARE EXPRESSLY LIMITED TO THE TERMS HEREOF AND ANY
        ADDITIONAL OR DIFFERENT TERMS ARE OBJECTED TO WITHOUT FURTHER
        NOTIFICATION BY PRODUCER AND BUYER. Shipping orders shall be issued to
        the Producer at least five (5) business days prior to the requested
        shipping date. If the quantity of the particular Product requested in
        such shipping order for delivery in a calendar month, when added
        together with all other shipping orders for such particular Product for
        delivery in the same calendar month, is not in excess of the quantity
        for such Product as set forth in the then current Monthly Production
        Request, such shipping order for such Product shall be deemed accepted
        without any further act of the Producer. If the quantity of the
        particular Product requested in such shipping order for delivery in a
        calendar month, when added together with all other shipping orders for
        such particular Product for delivery in the same calendar month, is in
        excess of the quantity for such Product as set forth in the then current
        Monthly Production Request, such shipping order shall be deemed accepted
        to the extent that such quantities are not in excess of the then current
        Monthly Production Request for such Product and, with respect to the
        remaining quantities, shall be accepted or rejected by Producer in
        writing within five (5) business days of the issuance of the shipping
        order to the Producer. If the Producer shall not have otherwise notified
        the Buyer within five (5) business days of the issuance of such shipping
        order, the order shall be deemed accepted in full by Producer and, to
        the extent the quantities are in excess of the then current Monthly
        Production Request for such Product, shall be deemed to be a production
        purchase order with respect to such excess quantities. Producer shall

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        use its best efforts to deliver all quantities of Products ordered by
        Buyer pursuant to any shipping order. This Agreement and all orders
        issued pursuant hereto shall be deemed a series of installments and
        shall be deemed to constitute a single contract between Producer and
        Buyer. The parties recognize that the demands and convenience of
        business operations may make it necessary or desirable for Buyer to
        transmit, and Producer to accept, production purchase orders and
        shipping purchase orders by telecopier or by electronic data interchange
        (in each case with reasonable confirmation procedures in place).

    b.  Time and quantity shall be of the essence in any shipping order. Unless
        otherwise specified, delivery times specified are the times of delivery
        of the Products at an Approved Facility as designated by Buyer. Producer
        shall inform Buyer immediately of any occurrence which will or is
        expected to result in any delivery at any time or in any quantity not
        specified in any shipping order and also of corrective measures which
        Producer has taken, or will take, to minimize the effect of such
        occurrence. Buyer, in addition to all other remedies available to it in
        law or in equity, shall have the right to cancel any shipping order or
        part thereof if delivery is not made within the time specified or in the
        quantities ordered.

    c.  If, for any reason other than a Force Majeure Event (as hereinafter
        defined in Section 19), Producer is unable to produce from an Approved
        Facility the amount of the Monthly Production Request for any particular
        line of Product that the Monthly Production Request contemplates being
        produced from such Approved Facility, Producer shall produce the amount
        at another Approved Facility of the Producer, including, if approved by
        the Buyer (which approval shall not be unreasonably withheld) facilities
        of the Producer that are not currently Approved Facilities (each, a
        "Substitute Facility"). The price charged to the Buyer for the Product
        produced at the Substitute Facility shall be the unit price that would
        have been charged to Buyer had such Product been produced at the
        Approved Facility. In addition, in the event Producer is required to
        produce Products at a Substitute Facility, Producer shall reimburse
        Buyer for all incidental damages (e.g., additional shipping charges)
        incurred by Buyer as a result of the Products being produced at a
        Substitute Facility.

8.  PRICES, PAYMENT TERMS AND DELIVERY.

    a.  The initial unit purchase prices of the Products shall be as specified
        in the pricing schedule attached hereto as Schedule C. During the
                                                   ----------
        Agreement Term, the unit purchase prices for the Products shall be
        subject to change (both upward and downward) based upon market
        fluctuations in the cost of the components that form the line item "Raw
        Materials", Packaging

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        Materials", "Direct Labor", "Variable Overhead" and "Factory Fixed" as
        set forth in Schedule C. Producer agrees that it shall not effect any
                     ----------
        change in the purchase price of the Products as a result of a change in
        the price of corn syrup except upon reasonable prior written notice from
        the Producer to the Buyer. Producer further agrees that, if Producer
        believes a change in the Factory Fixed cost component of the purchase
        price for the Products is warranted, Producer shall notify Buyer in
        writing of such requested change and identify with reasonable
        specificity the basis for the price change of the Products not less than
        thirty, nor more than sixty, days prior to an anniversary of the
        Commencement Date. Producer further agrees that the Factory Fixed cost
        component shall not be requested to be changed more than one time a
        year. Prior to implementing any change in the Factory Fixed cost
        component, Buyer and Producer shall mutually agree on such change;
        provided, however, that in the event Buyer and Producer do not mutually
        agree on such change, the parties nevertheless intend to be bound by
        this Agreement, and any such change in the Factory Fixed cost component
        shall be reasonable (as construed in accordance with Section 1302.18(A)
        of the Ohio Revised Code). Any change in the Factory Fixed cost
        component shall be effective as of the applicable anniversary of the
        Commencement Date. In the event of any price change (including a price
        change as a result of a change in the price. of corn syrup), upon
        request of Buyer, Producer shall promptly identify with reasonable
        specificity the basis for the price change of the Products. Upon request
        of Buyer, Producer shall promptly supply Buyer with copies of
        documentation supporting such price change and the methodology used by
        Producer to determine the price change. The parties intend for the price
        of the Products to be the Producer's cost of manufacturing the Products
        plus a tolling fee that is included within the line item "Factory Fixed"
        as set forth in Schedule C.
                        ----------
    b.  In all cases under this Agreement, Producer shall use its best efforts
        to obtain the lowest and best prices and/or rates for all raw materials
        and packaging materials used in the production of the Products.

    c.  In the event of a price change to the Products, Buyer may suggest to the
        Producer for its consideration reasonably acceptable alternate sources
        in order to lessen a price increase or enhance a price decrease.

    d.  Except as specifically provided elsewhere in this Agreement, Producer
        warrants that the unit purchase prices for the Products as determined in
        accordance with this Section 8 shall be complete, and no additional
        charges of any kind shall be added without Buyer's express written
        consent.

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    e.  Delivery of the Products set forth in or with reference to each shipping
        order shall be F.O.B. Buyer's carrier at the loading dock of an Approved
        Facility or any Substitute Facility of the Producer.

    f.  Producer shall submit an invoice to the Buyer on a daily basis for the
        Products produced by the Producer during the preceding business day.
        Terms of payment for each invoice will be net thirty (30) days from the
        date of invoice. The invoice will reference item code and Product name,
        number of cases, unit price per case, the Approved Facility or the
        Substitute Facility, as the case may be, and amount due.

    g.  Invoices for payment shall be sent to:
        Aurora Foods, Inc.
        445 Hutchinson Avenue
        Suite 960
        Columbus, OH 43235

        Payments shall be sent to:
        SunTrust Bank
        P.O. Box 44l8
        Atlanta Georgia 30302
        For credit to: The Red Wing Company, Inc.
        Account Number 8801079982


   h.  Producer warrants and covenants that all units of the Product delivered
       to Buyer shall be free from any security interest, lien or other
       encumbrance of any person, corporation, partnership, governmental body or
       other entity.

9. RAW MATERIALS AND PACKAGING MATERIALS.

   a.  Unless otherwise set forth herein, Producer shall be responsible for
       ordering and paying for all raw materials, packaging materials and
       supplies to be utilized in producing the Products (including ordering of
       the labels, flavors and miscellaneous packaging, if any).

   b.  Producer shall use its best efforts to maintain an adequate inventory of
       raw materials, packaging materials and supplies necessary to meet
       production requirements at each Approved Facility.

   c.  Packaging materials and other items of inventory that are tailored for
       the Products will be used by the Producer only for the Products. Producer
       shall not maintain excessive levels of such inventory at any Approved

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        Facility. Upon request, the Buyer shall be provided with access to all
        records concerning such inventory at each Approved Facility

    d.  At least annually, Producer shall discuss with Buyer strategic issues
        concerning purchasing of raw materials and packaging materials for the
        Products.
 
10. PRODUCTION SCHEDULE.

    a.  Buyer will provide Producer, on or about the fifteenth day of each month
        during the Agreement Term, with a rolling three month production
        forecast (the "Forecasted Quantities of Products") for the next three
        calendar months. The purpose of the Forecasted Quantities of Products is
        to provide the Producer with Buyer's good faith estimate of production
        needs in order to allow Producer to plan for ordering raw materials,
        packaging materials and supplies (including labels, flavors and
        miscellaneous packaging, if any) and to plan for Product production.

    b.  On or before the fifteenth day of each month during the Agreement Term,
        Buyer will provide Producer with a written production request for the
        delivery of Products during the next calendar month (the "Monthly
        Production Request"), which (i) until such time as each of the Approved
        Facilities are producing the Products, such Monthly Production Request
        shall not for any particular calendar month exceed such number of cases
        of Products as Producer shall in good faith advise Buyer that it is
        capable of producing based on its capacity limitations and (ii) after
        such time as each of the Approved Facilities are producing the Products,
        such Monthly Production Request shall not for any particular calendar
        month exceed in the aggregate [    ]* equivalent cases of Products.
        Producer shall be obligated to deliver to Buyer the quantities of the
        Products set forth in each Monthly Production Request. By the last day
        of each calendar month, Buyer shall be obligated to purchase and take
        delivery of the Products in quantities that are not less than the
        quantities as are set forth in the Monthly Production Request for such
        calendar month. Producer shall in good faith schedule the timing and
        volume of the production of the Products over the course of each month
        (with the intention being that Buyer shall not receive invoices for the
        production of Products substantially in advance of the shipping orders
        for the Products), and Buyer shall in good faith place shipping orders
        over the course of each month in a manner generally consistent with its
        past practices in an orderly fashion so that the shipping orders will
        exhaust the Monthly Production Request (with the intention being that
        Producer shall not have unreasonable day to day increases in the level
        of inventory of the finished Products during a month).

        * Confidential treatment requested by the Company.

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11. INVENTORY OF RAW MATERIALS AND PACKAGING MATERIALS.

    a.  With respect to each Approved Facility, Producer agrees to maintain at
        all times during the Agreement Term at each Approved Facility an
        inventory of raw materials. packaging materials and supplies utilized in
        producing the Products in quantities equal to produce at least five (5)
        days of the average quantities of such Products sold to Buyer during the
        preceding sixty (60) days.

12. SHIPMENT AND PALLET EXCHANGE.

    a.  Unless otherwise mutually agreed in writing, the Products will be
        shipped in pallet quantities on conventional pallets or, at Buyer's cost
        and expense, Chep pallets. Producer and Buyer agree to observe a
        conventional pallet exchange procedure pursuant to which Buyer will
        return to Producer one (1) conventional pallet for each conventional
        pallet received by Buyer. If Buyer fails to return to Producer
        conventional pallets on a one-for-one basis, Buyer shall pay Producer
        $5.00 for each conventional pallet Buyer has failed to return within
        twenty-five (25) days of date of invoice for such pallets. If Buyer has
        delivered to Producer more conventional pallets than the number of
        conventional pallets received by Buyer, Producer shall credit against
        the purchase price for the Products $5.00 for each conventional pallet
        Buyer has returned to Producer in excess of the number of conventional
        pallets received by the Buyer. Buyer and Producer shall establish
        reasonable procedures in order to comply with the terms of the pallet
        exchange program.

    b.  Shipment of Products shall be made directly by Buyer using its owned or
        contracted carriers. Title and risk of loss for the Products shall pass
        to Buyer at the time of delivery of possession of the Products to the
        carrier by Producer.

    c.  Buyer shall be responsible for transportation costs for the Products
        from an Approved Facility or outside warehousing facilities maintained
        by the Producer to the warehouse or other destination designated by
        Buyer.

13. MANUFACTURING EQUIPMENT OF BUYER.

    a.  Subject to the provisions of Section 13(g) of this Agreement, Buyer
        shall supply to Producer, deliver and install, at no cost to the
        Producer, certain existing equipment of the Buyer identified in 
        Schedule D (the "Manufacturing Equipment") that is used in the 
        ----------
        production of the Products for installation in the Approved Facility
        identified on Schedule D. Buyer shall use its bests efforts to ensure
                      ----------
        that the delivery and installation of the equipment at an Approved
        Facility shall be completed no later than the

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        dates set forth on Schedule D, subject to any Force Majeure Events.
                           ----------
        Except as disclosed to Producer at the time of the removal of the
        Manufacturing Equipment from their current locations, Buyer represents
        and warrants that the Manufacturing Equipment is, or shall be, after
        delivery and installation at the Approved Facilities, in good operating
        condition and repair (reasonable wear and tear excepted) and suitable
        for its intended purpose.

    b.  Subject to the provisions of Section 13(g) of this Agreement, Buyer
        shall control, and be responsible for all costs related to, the removal,
        packaging, moving and reinstallation of the Manufacturing Equipment to
        the designated Approved Facility for such equipment. Buyer shall retain
        title to all of the Manufacturing Equipment.

    c.  In the event Buyer and Producer jointly agree in writing that any
        additional manufacturing equipment is needed to manufacture the Products
        at an Approved Facility under this Agreement, Buyer shall be responsible
        for all costs related to the purchase, delivery and installation of such
        additional equipment. Such additional equipment shall become part of the
        Manufacturing Equipment, the title to which shall be retained by Buyer.

    d.  In the event that any of the Manufacturing Equipment (whether or not
        such equipment is existing as of the Commencement Date) requires
        extraordinary repairs in the nature of major overhauls and/or major
        upgrades during the Agreement Term, the Buyer shall control, and be
        responsible for all costs related to, such extraordinary repairs.

    e.  Producer shall control, and be responsible for all costs related to, all
        ordinary and routine maintenance and repair of the Manufacturing
        Equipment during the Agreement Term. In the ordinary course of business,
        Producer shall maintain and repair such Manufacturing Equipment so that
        such equipment is, and remains, in substantially the same condition as
        when installed at the Approved Facilities by Buyer, reasonable wear and
        tear and damage by unavoidable casualty excepted.

    f.  Producer agrees that the Manufacturing Equipment shall only be used by
        Producer in connection with the production of the Products on behalf of
        Buyer. Producer agrees that it shall not use such equipment for any
        other purpose.

    g.  Notwithstanding the provisions of Sections 13(a), 13(b) and 14(b) of
        this Agreement, Buyer and Producer agree that Buyer (1) shall be
        responsible for all costs related to the moving and reinstallation of
        the Manufacturing Equipment for the Mrs. Butterworths/R/ lines to the
        designated Approved Facilities; and (2) shall reimburse Producer far all
        costs associated with

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         retrofitting Producer Manufacturing Equipment, provided that such
         responsibility and reimbursement shall not exceed $3,300,000.00 in the
         aggregate. Producer shall be responsible for all costs related to the
         moving and reinstallation of the Manufacturing Equipment and the
         retrofitting of the Producer Manufacturing Equipment that are in excess
         of $3,300,000.00. Buyer and Producer acknowledge and agree that the
         removing and packaging of the Manufacturing Equipment for the Mrs.
         Butterworths/R/ lines shall also be the responsibility of the Buyer,
         and the costs to Buyer of removing and packaging such equipment shall
         not be applied in calculating the $3,300,000 cap described previously
         in this paragraph.

   (h)   Upon mutual agreement of Buyer and Producer, Buyer shall purchase
         palletizers (at a cost that shall not exceed $200,000) for installation
         in connection with the Mrs. Butterworths/R/ lines. Buyer and Producer
         acknowledge and agree that such cost shall not be applied in
         calculating the $3,300,000 cap described previously in Section 13(g) of
         this Agreement. Buyer shall be invoiced directly by the seller of the
         palletizers.

   (i)   Prior to reinstalling the Manufacturing Equipment for the Mrs.
         Butterworths/R/ lines at an Approved Facility, Buyer shall cause to be
         performed, and shall be responsible for all costs related to, certain
         mutually agreed upon maintenance projects relating to certain pieces of
         the Manufacturing Equipment. Those maintenance projects include:(i) the
         repair and maintenance of two glass cleaners, (ii) the repair and
         maintenance of a labeler and (iii) the repair and maintenance of a
         homogenizer. In addition, Buyer shall purchase, and shall be
         responsible for all costs related to the purchase of parts cabinets as
         mutually agreed upon by Buyer and Producer. The current estimated cost
         of the repair and maintenance of the foregoing items and the purchase
         of the parts cabinets is $132,000. Buyer and Producer acknowledge and
         agree that the costs of such repair and maintenance of the foregoing
         items and the cost of purchasing the parts cabinets shall be the
         responsibility of the Buyer, but such costs shall not be applied in
         calculating the $3,300,000 cap described previously in Section 13(g) of
         this Agreement

14.  MANUFACTURING EQUIPMENT OF THE PRODUCER

     a.  Producer agrees that certain manufacturing equipment owned and used by
         Producer at its San Jose Facility, which equipment is identified on
         Schedule E (the "Producer Manufacturing Equipment"), shall be used in
         ----------
         connection with the production of some of the Products at such Approved
         Facility.

                                      -12-
<PAGE>
 
     b.  Subject to the provisions of Section 13(g) of this Agreement, Buyer
         agrees to reimburse Producer for all costs associated with retrofitting
         the Producer Manufacturing Equipment so as to enable the Producer to
         utilize such equipment in the production of Products. Producer shall
         have title to all retrofitted pieces of equipment; provided Buyer shall
         have title to any change parts which are needed solely for the
         production of the Products. Schedule E sets forth an estimate of the
                                     ----------
         costs to retrofit certain Producer Manufacturing Equipment but shall
         not, subject to the provisions of Section 13(g) of this Agreement, be
         deemed to limit Buyer's obligation to reimburse Producer for all costs
         associated with the retrofitting.

     c.  Buyer understands and agrees that the Producer Manufacturing Equipment
         will not be used solely to produce the Products, but will also be used
         by Producer to produce other products, including, but not limited to,
         Producer's spaghetti sauce and ketchup's.

     d.  In the event that any of the Producer Manufacturing Equipment (whether
         or not such equipment is existing as of the Commencement Date) requires
         extraordinary repairs in the nature of major overhauls and/or major
         upgrades during the Agreement Term, the Producer shall control, and be
         responsible for all costs related to, such extraordinary repairs.

     e.  Producer shall control, and be responsible for all costs related to,
         all ordinary and routine maintenance and repair of the Producer
         Manufacturing Equipment during the Agreement Term. In the ordinary
         course of business, Producer shall maintain and repair such Producer
         Manufacturing Equipment so that such equipment is, and remains, in good
         operating condition and repair and suitable for its intended purpose.

15.  ADDITION TO THE STREATOR FACILITY.

     a.  In consideration for the Buyer entering into this Agreement, Producer
         has agreed to construct an addition to its Streator Facility (the
         "Streator Addition"). The estimated costs of the. Streator Addition are
         attached hereto as Schedule F
                            ----------

     b.  The Producer shall control, and be responsible for all costs related
         to, the construction of the Streator Addition. Title to the Streator
         Addition shall be in the name of Producer. The Producer agrees to
         commence construction of the Streator Addition as soon as possible and
         agrees that it will use its best efforts to ensure that the
         construction of the Streator Addition will be completed no later than
         December 31, 1997, subject to any Force Majeure Events.

                                      -13-
<PAGE>
 
     c.  During the Agreement Term, the Streator Addition shall not be used to
         store or produce any other products, unless such storage or production
         does not materially disrupt or interfere with the production and
         storage of Products at the Streator Addition.

     d.  In consideration for the Producer constructing the Streator Addition,
         during the Agreement Term, Buyer agrees to pay an additional charge on
         each case of Mrs. Butterworths/R/ Products produced at any Approved
         Facility or Substitute Facility in the amount set forth in Schedule C
                                                                    ----------
         up to an aggregate amount that is the lesser of (i) the actual
         construction cost of the Streator Addition or (ii) the estimated cost
         of the Streator Addition as set forth on Schedule F. On a quarterly
                                                  ----------
         basis, the Producer shall provide to Buyer an itemized account of the
         number of cases for each particular line of the Product purchased by
         Buyer from each Approved Facility and any Substitute Facility and the
         aggregate amount of the additional charge paid by Buyer to Producer
         relating to the Streator Addition.

     e.  If on the anniversary date of the Commencement Date each year, the
         aggregate amount of the building amortization charge on each case of
         Mrs. Butterworths(R) Products sold during such year is less than
         $240,000, Buyer shall pay to Producer the difference between the
         aggregate amount of the building amortization charge and $240,000,
         which amount shall be paid within ten (10) days of the anniversary date
         of the Commencement Date.


16.  WARRANTIES OF PRODUCER REGARDING QUALITY OF PRODUCT AND CONFORMANCE TO
     SPECIFICATIONS.

     a.  Producer agrees and warrants to Buyer that Producer has and will adhere
         to all laws, regulations, orders, ordinances and industry standards
         relating to Producer's manufacture, packaging, labeling and sale of the
         Products, including those specifically relating to the manufacture and
         packaging of foodstuffs and the Federal Food, Drug and Cosmetic Act;
         that each unit of the Products will meet the Specifications therefor
         and, upon delivery to Buyer, will be free of all defects of
         manufacture, handling, packaging and processing.

     b.  Producer warrants that it has obtained, or prior to the time it
         commences production of the Products will have obtained, any
         governmental approvals required in connection with the production and
         sale of the Products, and will furnish copies or other evidence
         satisfactory to Buyer of all such approvals Upon the request of Buyer.

                                      -14-
<PAGE>
 
     c.  Producer warrants that all raw materials and packaging materials for
         the manufacturing and packaging of the Products will be sampled and
         tested by Producer in accordance with its obligations under this
         Agreement, including those contained in Section 17 of this Agreement.

     d.  At Producer's request, Buyer shall make reasonable amounts of each
         allegedly defective or nonconforming unit of the Product available for
         Producer's inspection or shall, if so directed by Producer, return, at
         Producer's cost and expense, each such unit of the Product to an
         Approved Facility of the Producer.

     e.  In the event of Producer's breach of the covenants or warranties set
         forth in this Section 16, Producer shall, at Buyer's option, either (i)
         replace the defective or nonconforming units of the Product at
         Producer's sole cost and expense and deliver the replacement units of
         the Product to Buyer within 20 days, or (ii) permit Buyer, at
         Producer's sole cost and expense, to return the defective or
         nonconforming units of the Product and, if payment therefor has already
         been made credit the price thereof to Buyer, together with all
         incidental damages incurred by Buyer in connection with such return.
         Buyer shall have no obligation to accept delivery or take possession of
         any defective or nonconforming Product from Producer. The remedies of
         Buyer set forth in this Section 16(e) for breach of any of the
         warranties and covenants in Section 16 by Producer are the sole and
         exclusive remedies of Buyer for any such breach by Producer.

     f.  THE FOREGOING WARRANTIES ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
         WARRANTIES EXCEPT THAT OF TITLE, WHETHER WRITTEN, ORAL OR IMPLIED, IN
         FACT OR IN LAW (INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS
         FOR A PARTICULAR PURPOSE).


17.  QUALITY ASSURANCE INSPECTIONS AND TESTING

     a.  Representatives of Buyer shall have the right to inspect, at reasonable
         times and upon prior notice, the Approved Facilities and to observe its
         procedures prior to and during the period of manufacturing, packaging,
         storing and handling the Products. Producer reserves the right to guide
         such inspections in order to protect the confidential nature of other
         products being manufactured by Producer.

     b.  Producer shall be responsible for routine quality assurance of the
         Products at the time of manufacture and, in the fulfillment of such
         obligations, shall apply quality assurance tests, procedures and
         methods in accordance with the Specifications.

                                      -15-
<PAGE>
 
18.  INSPECTIONS, ACCEPTANCE AND RETURNS.

     a.  Product not rejected within thirty (30) days after title passes to
         Buyer will be deemed accepted by Buyer. If after any inspection, Buyer
         attempts to reject any Product, Buyer shall specify all claimed non-
         conformity in a notice of rejection sent to Producer. Product rejected
         by Buyer shall be returned in substantially the same condition as when
         title passed to Buyer. Nothing contained in this Agreement shall
         relieve in any way Producer from the obligation of testing, inspection
         and quality control.

19.  FORCE MAJEURE; PRODUCTION AT SUBSTITUTE FACILITIES

     a.  In the event of strikes; war; civil insurrection; riots; thefts;
         inability to obtain necessary labor, materials, components, fuel or
         transportation; changes in the Specifications; fire; flood; earthquake;
         or other act of God or other cause beyond the control of the parties
         hereto which renders it impracticable for either party to comply with
         the terms of this Agreement (a "Force Majeure Event"), except as
         otherwise set forth herein, no liability for non-compliance caused
         thereby during the continuance thereof will exist or arise under this
         Agreement.

     b.  If a Force Majeure Event occurs, the party who is unable to perform as
         a result of such event shall immediately notify the other party, which
         other party may suspend its obligations hereunder for a period equal to
         the Force Majeure Event. In addition, it within 90 days after the
         occurrence of the Force Majeure Event, the party who was unable to
         perform as a result of such event is still unable to perform in
         accordance with this Agreement, the other party may terminate this
         Agreement upon written notice to the party who is unable to perform in
         accordance with this Agreement.

     c.  If a Force Majeure Event occurs, the party who is unable to perform as
         a result of such event agrees that it shall use its best effort to
         eliminate the cause of such event or otherwise take actions so that it
         is able to perform under this Agreement as promptly as is reasonably
         practicable. Notwithstanding the foregoing, if a Force Majeure Event
         prevents Producer from performing any of its obligations hereunder and
         such Force Majeure Event could be cured by Producer incurring
         additional costs (e.g., if there were a strike and the strike could be
         resolved by Producer's meeting the demands of its employees), Producer
         shall have no obligation to cure such Force Majeure Event by the
         incurrence of additional costs in connection with the production of the
         Products unless Buyer agrees to pay such additional costs.

                                      -16-
<PAGE>
 
     d.  If a Force Majeure Event occurs that directly affects fewer than all of
         the Approved Facilities of the Producer (e.g., a fire at only one of
         the Approved Facilities), Producer agrees that, if, as a result of the
         Force Majeure Event, Producer is unable to produce from an Approved
         Facility the amount of the Monthly Production Request for any
         particular line of Product that the Monthly Production Request
         contemplates being produced from such Approved Facility, Producer shall
         use its best efforts to produce the amount at a Substitute Facility in
         a manner that is consistent with its obligations to other customers.
         The price charged to the Buyer for the Product produced at the
         Substitute Facility shall be the unit price for producing such Product
         at the Substitute Facility.

     e.  If a Force Majeure Event occurs that directly affects fewer than all of
         the Approved Facilities of the Producer, Producer agrees that, in the
         event that the transfer of production of Products to a Substitute
         Facility creates production capacity problems at the Substitute
         Facility, Producer shall in good faith take reasonable steps to meet
         the production requirements of the Buyer under this Agreement in a
         manner consistent with Producer's obligations to other customers. In
         addition, Producer agrees that, in the event of a production capacity
         problem at a Substitute Facility as a result of a Force Majeure Event
         that directly affects fewer than all of the Approved Facilities of the
         Producer, Producer shall fairly and in good faith allocate production
         capacity at the Substitute Facility among Buyer and other customers who
         have outstanding production contracts with Producer.

20.  INDEMNIFICATION.

     a.  Producer will indemnify and hold harmless Buyer and its
         representatives, stockholders, controlling persons, and affiliates
         (collectively, the "Buyer Indemnified Persons") for, and will pay to
         the Buyer Indemnified Persons, the amount of, any loss, liability,
         claim, damage, cost and expense (including costs of investigation and
         defense and reasonable attorneys' fees), (collectively, "Damages"),
         incurred by the Buyer Indemnified Persons involving a third-party claim
         arising, directly or indirectly, from or in connection with any injury
         (including death) to person or property to the extent proximately
         caused by the Producer's breach of this Agreement, negligence or
         willful misconduct.

         The remedies provided in this Section 20(a) will not be exclusive of or
         limit any other remedies that may be available to Buyer or Buyer
         Indemnified Persons.

     b.  Buyer will indemnify and hold harmless the Producer and its
         representatives, stockholders, controlling persons and affiliates
         (collectively, 

                                      -17-
<PAGE>
 
         the "Producer Indemnified Persons") for, and will pay to the Producer
         Indemnified Persons, (i) the amount of any Damages incurred by the
         Producer Indemnified Persons involving a third-party claim arising,
         directly or indirectly, from or in connection with any injury
         (including death) to person or property to the extent proximately
         caused by the Buyer's breach of this Agreement, negligence or willful
         misconduct and (ii) the amount of any Damages incurred by the Producer
         Indemnified Persons arising, directly or indirectly, from or in
         connection with any infringement, alleged infringement or any other
         violation or alleged violation of any patent, trademark, trade dress or
         copyright rights or other proprietary rights owned or controlled by
         third parties by reason of the manufacture, production, use,
         distribution, advertising or sale of the Products.

         The remedies provided in this Section 20(b) will not be exclusive of or
         limit any other remedies that may be available to Producer or the
         Producer Indemnified Persons.

     c.  Promptly after receipt by an indemnified party under Section 20(a) or
         20(b) of notice of the commencement of any proceeding against it, such
         indemnified party will, if a claim is to be made against an
         indemnifying party under any such Section, give written notice to the
         indemnifying party of the commencement of such claim, but the failure
         to notify the indemnifying party will not relieve the indemnifying
         party of any liability that it may have to any indemnified party,
         except to the extent that the indemnifying party demonstrates that the
         defense of such action is prejudiced by the indemnifying party's
         failure to give such notice.

     d.  If any proceeding referred to in Section 20(c) is brought against an
         indemnified party and it gives notice to the indemnifying party of the
         commencement of such proceeding, the indemnifying party will be
         entitled to participate in such proceeding and, to the extent that it
         wishes (unless (i) the indemnifying party is also a party to such
         proceeding and the indemnified party determines in good faith that
         joint representation would be inappropriate, or (ii) the indemnifying
         party fails to provide reasonable assurance to the indemnified party of
         its financial capacity to defend such proceeding and provide
         indemnification with respect to such proceeding), to assume the defense
         of such proceeding with counsel reasonably satisfactory to the
         indemnified party and, after notice from the indemnifying party to the
         indemnified party of its election to assume the defense of such
         proceeding, the indemnifying party will not, as long as it diligently
         conducts such defense, be liable to the indemnified party under this
         Section 20 for any fees of other counsel or any other expenses with
         respect to the defense of such proceeding subsequently incurred by the
         indemnified party in connection with the defense of such proceeding. If

                                      -18-
<PAGE>
 
         the indemnifying party assumes the defense of a proceeding, (i) no
         compromise or settlement of such claims may be effected by the
         indemnifying party without the indemnified party's consent (which
         consent shall not be unreasonably withheld) unless (A) there is no
         finding or admission of any violation of legal requirements or any
         violation of title rights of any person and no affect on any other
         claims that may be made against the indemnified party; and (B) the sole
         relief provided is monetary damages that are paid in full by the
         indemnifying party; and (ii) the indemnified party will have no
         liability with respect to any compromise or settlement of such claims
         effected without its consent. If notice is given to an indemnifying
         party of the commencement of any proceeding and the indemnifying party
         does not, within ten days after the indemnified party's notice is
         given, give notice to the indemnified party of its election to assume
         the defense of such proceeding, the indemnifying party will be bound by
         any determination made in such proceeding or any compromise or
         settlement effected by the indemnified party.

     e.  Notwithstanding the foregoing, if an indemnified party determines in
         good faith that there is a reasonable probability that a proceeding may
         adversely affect it or its affiliates other than as a result of
         monetary damages for which it would be entitled to indemnification
         under this Agreement, the indemnified party may, by notice to the
         indemnifying party, assume the exclusive right to defend, compromise,
         or settle such proceeding, but the indemnifying party will not be
         conclusively bound by any determination of a proceeding so defended or
         any compromise or settlement effected without its consent (which may
         not be unreasonably withheld).


21.  INSURANCE. During the Agreement Term, Producer agrees to maintain insurance
     against public liability which may arise out of, relate to or be caused by
     the Products insurance in an amount of not less than $2 million per
     occurrence. Producer will maintain at all times during the Agreement Term
     product liability insurance in an amount of not less than $5 million per
     occurrence. In addition, Producer shall maintain liability umbrella
     coverage of not less than $5 million. Producer shall deliver to Buyer
     certificates of insurance issued by the insurance carriers adding the Buyer
     as an additional insured on all such policies. Each such certificate shall
     provide that such insurance shall not be canceled without fifteen days
     prior written notice to the Buyer.

22.  TERMINATION.

     a.  If either party shall breach any of the provisions of this Agreement
         and such breach shall continue for a period of thirty (30) days after
         the receipt of written notice specifying the breach to such party, or
         should either party

                                      -19-
<PAGE>
 
         (i) file or have filed against it a bankruptcy petition (which, in the
         case of a petition filed against a party, is not thereafter dismissed
         within sixty days after the filing of the petition against the party)
         or (ii) enter into any type of proceeding under and pursuant to the
         insolvency or receivership laws of any state or (iii) make a general
         assignment for the benefit of creditors or (iv) a Force Majeure Event
         occurs that gives rise to a right of termination under Section 19,
         then, and in any such events, the other party shall have the right to
         terminate this Agreement by giving written notice to that effect to
         such party, with termination becoming effective upon the date set forth
         therein. If this Agreement is terminated as a result of a breach of any
         of the provisions of this Agreement by Buyer or as a result of the
         occurrence of an event identified in clause (i), (ii), (iii) or (iv) of
         This Section 22(a), Buyer shall pay to Producer, in addition to any
         other remedies or damages available to Producer at law or equity,
         within thirty days after such termination, the unpaid balance of the
         amount That Buyer would have paid pursuant to Section 15(d) of this
         Agreement for the Streator Addition.

     b.  Subject to the provisions of Section 3 of this Agreement, on and after
         the second anniversary of the Commencement Date, Buyer may terminate
         this Agreement entirely, or terminate the Agreement as it relates to
         production of Products at a particular Approved Facility, at any time
         upon one hundred eighty days prior written notice to the Producer. If
         the Buyer terminates this Agreement entirely pursuant to this Section
         22(b), within thirty days after such termination, Buyer shall pay to
         Producer as a termination fee the unpaid balance of the amount that
         Buyer would have paid pursuant to Section 15(d) of this Agreement for
         the Streator Addition.

     c.  The termination of this Agreement shall not relieve either party of any
         obligation or liability accrued prior to termination, or rescind or
         give rise to any right to rescind anything done by either party prior
         to such termination. The termination of this Agreement shall not in any
         way affect the confidentiality and non-use obligations under Section 6
         of this Agreement or any other obligations which are expressly stated
         herein to be continuing or are by their nature continuing.

     d.  Upon the effective date of a complete termination of this Agreement:

         (i)   The license provided for in Section 5 shall terminate.

         (ii)  Producer shall:

               (a) cease any use of the Confidential Information of Buyer;

               (b) return to Buyer or destroy all tangible forms of the
                   Confidential Information of Buyer;

                                      -20-
<PAGE>
 
               (c) make available for purchase by the Buyer at Producer's cost
                   all packaging materials and other items of inventory that,
                   pursuant to Section 9(c), are tailored exclusively for the
                   Products;

               (d)  return to Buyer, at Buyer's sole cost and expense, all of
                    Manufacturing Equipment installed in any of the Approved
                    Facilities and provide access during normal business hours
                    to any representatives of Buyer to any such facilities for
                    the removal of such equipment from the facilities of the
                    Producer; and

               (e)  make available for delivery to Buyer any finished Product
                    inventory maintained by Producer.

        (iii)  Buyer shall;

               (a)  within ten days after such termination, purchase at
                    Producer's cost all packaging materials and other items of
                    inventory that, pursuant to Section 9(c), are tailored
                    exclusively for the Products and that are in good and usable
                    condition;

               (b)  within thirty days after such termination, remove at Buyer's
                    cost and expense, all of Manufacturing Equipment installed
                    in any of the Approved Facilities and repair all damage
                    caused to any of the Approved Facilities in connection with
                    the removal of such equipment;
 
               (c)  within ten days after such termination, purchase any
                    finished Product inventory maintained by Producer;
 
               (d)  cease any use of the Confidential Information of Producer;
                    and

               (e)  return to Producer or destroy all tangible forms of the
                    Confidential Information of Producer.


        (iv)   Producer shall make conforming deliveries under the terms of this
               Agreement for any then-outstanding Orders; and

        (v)    All sums owed Producer by Buyer shall become immediately due and
               payable.

                                      -21-
<PAGE>
 
23.  MISCELLANEOUS.

     a.  Notice. Notices permitted or requested to be given hereunder shall be
         in writing and shall be deemed effective, if given by registered or
         certified mail, postage prepaid, ten (10) days after deposit thereof
         with the appropriate postal authorities, if given by nationally
         recognized express courier which provides a receipt of delivery, on the
         date delivery is completed, and if given by confirmed telecopier, on
         the date of transmittal, and in all cases addressed to:

         It to Producer:  The Red Wing Company, Inc.
                          196 Newton Street
                          Fredonia, New York 14063
                          Attention:  Gene Bailen, President
                          Facsimile:  (716)679-7702

         If to Buyer:     Aurora Foods, Inc.
                          445 Hutchinson Avenue
                          Suite 960
                          Columbus, Ohio 43235
                          Attention:  Thomas J. Ferraro
                          Facsimile:  (614) 436-6655

     b.  Assignment. Neither party shall assign this Agreement without the prior
         written consent of the other party; provided, however, that either
         party may assign this Agreement without the written consent of the
         other party in connection with the sale of all or substantially all
         of the assets of such assigning party.

     c.  Entire Agreement This Agreement constitutes the entire agreement and
         understanding between the parties and supersedes all prior or
         contemporaneous agreements and understandings whether written, oral or
         implied between Buyer and Producer or their affiliates with respect to
         the subject matter hereto.

     d.  Amendment. Except for any Specifications that are furnished by Buyer to
         Producer from time to time after the date hereof and which shall become
         a part of this Agreement, this Agreement may not be amended, superseded
         or altered except by an instrument in writing duly executed and
         delivered on behalf of each of the parties hereto.

     e.  Waiver. No failure or delay on the part of either party hereto to
         exercise any right, privilege or power under this Agreement shall
         operate as a relinquishment thereof; nor shall any single or partial
         exercise

                                      -22-
<PAGE>
 
         by either party preclude any other or further exercise thereof, or the
         exercise of any other right privilege or power.

     f.  Severability. The provisions of this Agreement are separate and
         divisible and if any court of competent jurisdiction shall determine
         any provision of this Agreement to be void and/or unenforceable, the
         remaining provision or provisions shall be construed as if the void
         and/or unenforceable provision or provisions were not included in the
         Agreement.

     g.  Non-Exclusive Agreement. This Agreement is not an exclusive agreement
         and Buyer may, without limitation, manufacture the Products or may
         enter into an agreement with other parties for the manufacture of such
         Products.

     h.  Governing Law. This Agreement shall be governed and construed in
         accordance with the laws of the State of Ohio.

     i.  Independent Contractors. The parties are independent contractors.
         Nothing contained herein shall be deemed to create the relationship of
         partnership or joint venture between the parties. Neither party shall
         have the right to incur any obligation to Third parties which shall be
         binding upon the other.

24.  LIMITATION OF LIABILITY FOR CONSEQUENTIAL DAMAGES. Except as may arise
     pursuant to the indemnification provided by Section 20 of this Agreement,
     neither party shall be liable for consequential damages (including lost
     profits or lost revenues) of any kind resulting from a breach of this
     Agreement by a party.

25.  RIGHT OF FIRST OPPORTUNITY. Subject to other provisions of This Section 25,
     Buyer hereby agrees that, during the Agreement Term, Buyer shall provide
     Producer with a right of first opportunity to bid or otherwise quote Buyer
     for the production of any products owned, developed or acquired by Buyer
     that are not currently set forth on Schedule A and that are within the
                                         ----------
     production or packing expertise of Producer. Buyer shall also provide
     Producer with the first opportunity to produce Products on the terms and
     conditions set forth in this Agreement that may be in excess of the 350,000
     equivalent case cap that is set forth in Section 10(b) of this Agreement.
     Producer shall promptly respond to any request from Buyer for a bid or
     quote on any such products or to produce Products in excess of the Monthly
     Production Request cap set forth in Section 10(b) of this Agreement.
     Notwithstanding the foregoing, Producer shall not have a right of first
     opportunity to bid or otherwise quote for the production of the "Portion
     Pac" business for Mrs. Butterworths/R/ products, Log Cabin/R/ products or
     other branded syrup products.

                                      -23-
<PAGE>
 
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their respective duly authorized representative to be effective as
of the date first set forth above.


AURORA FOODS, INC.                        THE RED WING COMPANY, INC.
("Buyer")                                 ("Producer")

By: /s/ Herrar                          By: /s/ Eugene W. Bailer
   ------------------------                  -------------------------

Its: President                            Its:President
    -----------------------                   ------------------------

                                      -24-
<PAGE>
 
                                   SCHEDULE A
                                LIST OF PRODUCTS



<TABLE>
<CAPTION>
 SKU                             Description - Syrup
-------------------------------------------------------------------------------
<S>                             <C> 
397162                          Display Gallons
-------------------------------------------------------------------------------
397170                          Display Gallons French
-------------------------------------------------------------------------------
579129                          24 Oz. Regular
-------------------------------------------------------------------------------
529224                          24 Oz. Lite
-------------------------------------------------------------------------------
579412                          12 Oz. Regular
-------------------------------------------------------------------------------
579169                          12 Oz. Regular 1.69
-------------------------------------------------------------------------------
529212                          12 Oz. Lite
-------------------------------------------------------------------------------
529169                          12 Oz. Lite 1.69
-------------------------------------------------------------------------------
579408                          36 Oz. Regular
-------------------------------------------------------------------------------
529208                          36 Oz. Lite
-------------------------------------------------------------------------------
</TABLE> 
<PAGE>
 
                                  SCHEDULE B 
                                SPECIFICATIONS


The Buyer's Operating Manual, which has been separately delivered to Producer,
is deemed to be included herein and a pan of the Agreement.
<PAGE>
 
                                  SCHEDULE C


            Confidential treatment for Schedule C has been requested
<PAGE>
 
                                   SCHEDULE D

<TABLE>
<CAPTION>
                                                           BEST EFFORT
                                                        COMPLETION DATES
-----------------------------------------------------------------------------------------------
   Production        Facility          Delivery           Installation            Produce
-----------------------------------------------------------------------------------------------
<S>                <C>            <C>                  <C>                  <C>
Gallons              San Jose        w/o 07/21/97         w/o 08/11/97                 08/18/97
-----------------------------------------------------------------------------------------------
Glass                Streator        w/o 12/03/97         w/o 01/01/98                 02/01/98
-----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
 
                                  SCHEDULE E
                       PRODUCER MANUFACTURING EQUIPMENT
                      RELOCATION/RETROFIT COST ESTIMATES

<TABLE>
<CAPTION>
             ITEM NAME                        STREATOR                SAN JOSE
             ---------                        --------                --------
                                                $                       $
                                                -                       -
<S>                                       <C>                     <C>
GALLON PRODUCTION
        Processing                               5,000                  38,500
         Holding Tank                              N/A                  50,000
         Product Cooling                        25,500                  10,500
         Controls                                5,500                  20,000
         Piping                                  9,500                  15,000
         Homogenizer                            75,500                  53,300
         Deasrator                              18,000                     N/A
         Mechanical Installation                 5,000                  12,500
         Electrical Installation                10,000                  12,500
         Contingency                             6,500                       0
                                              --------                --------
Sub Total Gallon Processing                    160,500                 212,300

        Packaging
         Installation of Gallon Line               N/A                  50,000
         Filler Parts                            3,000                     N/A
         Copper Parts                              N/A                     N/A
         Labeler Parts                           2,500                   7,500
                                              --------                --------
         Sub Total Gallon Packaging              5,500                  57,500

TOTAL GALLON PRODUCTION                        166,000                 269,800
</TABLE>
<PAGE>
 
                       RELOCATION/RETROFIT COST ESTIMATES


<TABLE>
<CAPTION>
             ITEM NAME                       STREATOR               SAN JOSE              SAN JOSE             SAN JOSE
                                            ALL SIZES              24 OZ. ONLY           12 & 24 OZ.         12, 24, 36 OZ
                                                $                       $                     $                    $
                                      ------------------      -----------------      -----------------    ----------------
<S>                                   <C>                     <C>                    <C>                  <C>
RETAIL PRODUCTION
 Processing Revisions
   Gum Induction                                 N/A                  34,000                34,000               34,000
   Process Control Upgrade                   327,980 a                   N/A                   N/A                  N/A
   Sweetner Tank(s)                          235,000 b                20,000                20,000               20,000
   Product Cooling                           107,000                  50,000                50,000               50,000
                                      ------------------      -----------------      -----------------    ----------------
Sub Total Retail Processing                  669,980                 104,000               104,000              104,000

 Packaging Revisions
   Glass Cleaner                              33,508 d                45,000 c              45,000 c             45,000 c
   Filler                                        N/A                  21,521                23,880               28,440
   Capper                                        N/A                  24,515                28,122               31,729
   Labeler                                    38,340 d                42,516                67,344               92,506
   Packer                                        N/A                   7,141                14,232               21,322
   Palletizer                                  4,163 d                     0                     0                    0
                                      ------------------      -----------------      -----------------    ----------------
Sub Total Retail Packaging                    76,011                 140,693               178,578              218,997

 Olathe Equipment
   Millwright Dismantle                          TBD *
   Electrical Dismantle                          TBD *
   Equipment Transfer                            TBD *
   Millwright Install                        400,000
   Electrical Install                        300,000
   Compressed Air                             25,000
   Water                                      25,000
   Hot Water                                  30,000
   Line Lube                                   5,000
   Vendor Start-Up Service                    20,000                       0                     0                    0      
                                      ------------------      -----------------      -----------------    ----------------
Sub Total Olathe Equipment                   805,000                       0                     0                    0
</TABLE> 
<PAGE>
 
                                   SCHEDULE E
                        PRODUCER MANUFACTURING EQUIPMENT
                       RELOCATION/RETROFIT COST ESTIMATES

<TABLE>
<CAPTION>
             ITEM NAME                       STREATOR               SAN JOSE              SAN JOSE             SAN JOSE
                                            ALL SIZES              24 OZ. ONLY           12 & 24 OZ.         12, 24, 36 OZ
                                                $                       $                     $                    $
                                      ------------------      -----------------      -----------------    ----------------
<S>                                   <C>                     <C>                    <C>                  <C>
RETAIL PRODUCTION
 Support Services
 Electrical
   Utility High Viltage Feed                  65,000 
   Primary Switch                             50,000 
   Transformer/Service                       150,000 
   Feeder to MCC's                           200,000
   Contingency                                50,000                       0                     0                    0 
                                      ------------------      -----------------      -----------------    ----------------
Sub Total                                    515,000                       0                     0                    0  

 Steam                                        15,000                       0                     0                    0 

 Water
   Water Main/Meter                           30,000
   Charcoal Filters                           10,000
   Water Softner                              50,000                       0                     0                    0 
                                      ------------------      -----------------      -----------------    ----------------
Sub Total                                     90,000                       0                     0                    0  

 Compressed Air
   Air Compressor                             40,000
   New Header                                  5,000                       0                     0                    0 
                                      ------------------      -----------------      -----------------    ----------------
Sub Total                                     45,000                       0                     0                    0  

Sub Total Support Services                   665,000                       0                     0                    0 

TOTAL RETAIL PRODUCTION                    2,215,991                 244,693               282,578              322,997
</TABLE> 
*=   To Be Determined
a =  discrationary Item to Update obsolete control system.
b =  Replacing existing sweetner tanks with outside storage tanks.
c =  To provide bottle cleaner; existing will not work.
d =  Dalayed P.M.'s discovered 5/29 visit.
<PAGE>
 
                                  SCHEDULE F
                          STREATOR BUILDING ADDITION
<TABLE> 
<CAPTION> 
        ITEM NAME                                     STREATOR
                                                          $
        ---------                                     ---------
<S>                                                   <C>   
BUILDING CONSTRUCTION
  New Building Addition (~13,000 SF)                    910,000
  Iowa Street Dock Renovations
     Enclosure                                           25,000
     Cooler                                              68,500
  Existing Shipping Warehouse Renovations
     Sanitary Sewers                                    131,500
     Storm Sewers                                        10,000
     Wall Removals/Modifications                         70,000
                                                      ---------
TOTAL BUILDING CONSTRUCTION                           1,185,000
</TABLE>