EXHIBIT 10.2

                              FRESH AMERICA CORP

                                NOTE AGREEMENT

                            DATED AS OF MAY 4, 1998

           $20,000,000 12% SENIOR SUBORDINATED NOTES DUE MAY 1, 2003
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                               TABLE OF CONTENTS
                            (NOT PART OF AGREEMENT)
                                                                            PAGE

1.    PAYMENTS.............................................................  1
      1.1   Interest Payment...............................................  1
      1.2   Required Principal Payments....................................  1
      1.3   Optional Principal Payments....................................  1
      1.4   Special Principal Payments.....................................  3
      1.5   Offer to Pay Upon Change in Control............................  4
      1.6   Delivery of Notes in Payment of Warrant Purchase
            Price..........................................................  6
      1.7   Payments Among Noteholders.....................................  6
      1.8   Notation of Notes on Payment...................................  6
      1.9   No Other Payments of Principal; Acquisition of
            Notes..........................................................  7
      1.10  Manner of Payments.............................................  8

2.    REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES........................  8
      2.1   Registration of Notes..........................................  8
      2.2   Exchange of Notes..............................................  9
      2.3   Replacement of Notes...........................................  9
      2.4   Issuance Taxes................................................. 10

3.    GENERAL COVENANTS.................................................... 10
      3.1   Payment of Taxes and Claims.................................... 10
      3.2   Maintenance of Properties; Corporate Existence;
            etc............................................................ 10
      3.3   Payment of Notes and Maintenance of Office..................... 11
      3.4   Pension Plans.................................................. 11
      3.5   Private Offering............................................... 12

4.    NEGATIVE AND FINANCIAL COVENANTS..................................... 12
      4.1   Mergers and Consolidations..................................... 12
      4.2   Disposition of Assets, Restricted Subsidiary Stock............. 13
      4.3   Liens.......................................................... 16
      4.4   Net Worth...................................................... 20
      4.5   Fixed Charge Coverage.......................................... 20
      4.6   Total Debt..................................................... 20
      4.7   Senior Debt.................................................... 20
      4.8   Restricted Payments and Restricted Investments................. 21
      4.9   Seniority to Future Subordinated Debt.......................... 22
      4.10  Designation of Subsidiaries.................................... 22
      4.11  Line of Business............................................... 23
      4.12  Transactions with Affiliates................................... 23
      4.13  Subsidiary Guarantees.......................................... 24

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5.    REPORTING COVENANTS.................................................. 24
      5.1   Financial and Business Information............................. 24
      5.2   Officer's Certificates......................................... 27
      5.3   Accountants' Certificates...................................... 28
      5.4   Inspection..................................................... 28

6.    EVENTS OF DEFAULT.................................................... 28
      6.1   Events of Default.............................................. 28
      6.2   Default Remedies............................................... 31
      6.3   Annulment of Acceleration of Notes............................. 32

7.    SUBORDINATION........................................................ 33
      7.1   General........................................................ 33
      7.2   Insolvency..................................................... 33
      7.3   Proofs of Claim................................................ 33
      7.4   Acceleration of Senior Debt.................................... 34
      7.5   Payment Default in Respect of Senior Debt...................... 34
      7.6   Significant Nonpayment Default in Respect of
            Senior Debt.................................................... 34
      7.7   Standstill..................................................... 35
      7.8   Turnover of Payments........................................... 36
      7.9   Subordination Unaffected by Certain Events..................... 36
      7.10  Waiver and Consent............................................. 37
      7.11  Reinstatement of Subordination................................. 37
      7.12  Obligations Not Impaired....................................... 37
      7.13  Payment of Senior Debt; Subrogation............................ 38
      7.14  Reliance of Holders of Senior Debt............................. 38
      7.15  Identity of Holders of Senior Debt............................. 38
      7.16  Amendments to Senior Credit Facility........................... 38

8.    INTERPRETATION OF THIS AGREEMENT..................................... 39
      8.1   Terms Defined.................................................. 39
      8.2   Accounting Principles.......................................... 65
      8.3   Directly or Indirectly......................................... 66
      8.4   Section Headings and Table of Contents and
            Construction................................................... 66
      8.5   Governing Law.................................................. 66
      8.6   General Interest Provisions.................................... 66

9.    MISCELLANEOUS........................................................ 68
      9.1   Communications................................................. 68
      9.2   Reproduction of Documents...................................... 68
      9.3   Survival; Entire Agreement..................................... 69
      9.4   Successors and Assigns......................................... 69

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      9.5   Amendment and Waiver........................................... 69
      9.6   Expenses....................................................... 71
      9.7   Waiver of Jury Trial; Consent to Jurisdiction;
            Etc............................................................ 71
      9.8   Execution in Counterpart....................................... 72

Annex 1     --     Addresses of Purchasers; Payment Information
Annex 2     --     Address of Company
Annex 3     --     Senior Credit Agreement Definitions
Attachment A      --     Form of Note

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                                NOTE AGREEMENT

      NOTE AGREEMENT, dated as of May 4, 1998, among FRESH AMERICA CORP., a
Texas corporation (together with its successors and assigns, the "COMPANY"), and
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, JOHN HANCOCK VARIABLE LIFE INSURANCE
COMPANY and SIGNATURE 1A (CAYMAN), LTD. (together with their respective
successors and assigns, the "PURCHASERS").

                                   RECITALS

      WHEREAS, pursuant to the Securities Purchase Agreement, the Purchasers
have agreed to purchase from the Company, and the Company has agreed to sell to
the Purchasers, Twenty Million Dollars ($20,000,000) in aggregate principal
amount of the Notes; and

      WHEREAS, the Company and the Purchasers wish to enter into
this Agreement to govern the terms of the Notes;

                                   AGREEMENT

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties to this Agreement hereby agree as follows:

1.    PAYMENTS

      1.1   INTEREST PAYMENT.

      Interest on the Notes shall be computed and paid in the manner and on the
dates provided in the Notes.

      1.2   REQUIRED PRINCIPAL PAYMENTS.

      The Company shall pay, and there shall become due and payable, Six Million
Six Hundred Sixty-Six Thousand Six Hundred Sixty-Six Dollars ($6,666,666) in
principal amount of the Notes on each of May 1, 2001 and May 1, 2002, in each
case, at one hundred percent (100%) of the principal amount paid, together with
interest accrued thereon to the date of payment. The entire principal of the
Notes remaining outstanding on May 1, 2003, together with interest accrued
thereon, shall become due and payable on such date. The payments required to be
made on May 1, 2001 and May 1, 2002, and the payment required to be made at
maturity on May 1, 2003, are each hereinafter referred to as a "REQUIRED
PRINCIPAL PAYMENT."

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      1.3   OPTIONAL PRINCIPAL PAYMENTS.

            (A) OPTIONAL PRINCIPAL PAYMENTS WITH PREPAYMENT COMPENSATION AMOUNT.
      The Company may pay the principal amount of the Notes in whole or in part,
      on any date in a minimum aggregate amount of Five Hundred Thousand Dollars
      ($500,000), or in any higher integral multiples of One Hundred Thousand
      Dollars ($100,000) (or, if the aggregate outstanding principal amount of
      the Notes is less than Five Hundred Thousand Dollars ($500,000) at such
      time, then such principal amount), together with:

                  (i) an amount equal to the Prepayment Compensation Amount due
            at such time in respect of the principal amount of the Notes being
            so paid; and

                  (ii) interest on such principal amount then being paid accrued
            to the payment date.

            (B) NOTICE OF OPTIONAL PAYMENT. The Company will give notice of any
      optional payment of the Notes pursuant to this Section 0 to each holder of
      Notes not less than thirty (30) days nor more than sixty (60) days before
      the specified payment date, stating:

                  (i)   the specified payment date;

                  (ii)  that such payment is to be made pursuant to
            this Section 0;

                  (iii)       the principal amount of each Note to be
            paid on such date;

                  (iv) the interest to be paid on each such Note, accrued to the
            specified payment date;

                  (v) the amounts and the due dates of the then remaining
            Required Principal Payments determined after giving effect to such
            payment; and

                  (vi) if such payment is made on or prior to May 1, 2001, the
            calculation (with details) of an estimated Standard Prepayment
            Compensation Amount, if any (calculated as if the date of such
            notice was the date of payment), due in connection with such
            payment; and, if such payment is made after May 1, 2001, the
            Modified Prepayment Compensation Amount in connection with such
            payment.

      Notice of payment having been so given, the aggregate principal amount of
      the Notes to be paid stated in such notice, together with the Prepayment
      Compensation Amount determined as of the specified payment date, if any,
      and interest thereon accrued to the specified payment date, shall become
      due and payable on the specified payment date. If such payment is due on
      or prior to May 1, 2001, then, two (2) Business Days prior to the making
      of such payment, the Company shall deliver to each holder of Notes by
      facsimile transmission (confirmed by nationwide overnight courier) a
      certificate of a Senior Financial Officer specifying the details of the
      calculation of the 

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      Standard Prepayment Compensation Amount as of the specified payment date,
      and including a copy of the source of interest rate information used in
      the calculation thereof.

            (C) EFFECT OF PARTIAL PAYMENTS ON REQUIRED Payments. Each partial
      payment of the principal of the Notes made pursuant to this Section 0
      shall be applied against and reduce the then-remaining Required Principal
      Payments in the inverse order of the due dates of such payments.
      1.4   SPECIAL PRINCIPAL PAYMENTS.

            (A) PRINCIPAL PAYMENTS WITH SPECIAL PREPAYMENT COMPENSATION AMOUNT.
      On any Special Prepayment Date, if any, but in any event on or before May
      1, 1999, the Company may pay all, but not less than all, the principal
      amount of the Notes, together with:

                  (i) an amount equal to the Special Prepayment Compensation
            Amount due at such time in respect of the entire principal amount of
            the Notes; and

                  (ii) interest on the principal amount of the Notes accrued to
            the Special Prepayment Date.

            (B) NOTICE OF SPECIAL PREPAYMENT. The Company will give notice of
      any optional payment of the Notes pursuant to this Section 0 to each
      holder of Notes not less than thirty (30) days nor more than sixty (60)
      days before the scheduled Special Prepayment Date, stating:

                  (i)   the scheduled Special Prepayment Date;

                  (ii)  that such payment is to be made pursuant to
            this Section 0;

                  (iii)       the principal amount of each Note to be
            paid on such Special Prepayment Date;

                  (iv) the interest to be paid on each such Note, accrued to the
            Special Prepayment Date;

                  (v) the calculation (with details) of an estimated Special
            Prepayment Compensation Amount, if any (calculated as if the date of
            such notice was the date of payment), due in connection with such
            payment.

      Notice of payment having been so given, the aggregate principal amount of
      the Notes to be paid stated in such notice, together with the Special
      Prepayment Compensation Amount, if any, determined as of the Special
      Prepayment Date, and interest thereon accrued to the Special Prepayment
      Date, shall become due and payable on such date; PROVIDED, HOWEVER, that
      the Company may not consummate such prepayment if such Special Prepayment
      Event does not occur. Two (2) Business Days prior to the making of such
      payment, the Company shall deliver to each holder of Notes by facsimile
      transmission (confirmed by nationwide overnight courier) a certificate of
      a Senior Financial Officer specifying the details of the calculation of
      the Special Prepayment Compensation Amount as of the Special Payment Date,
      and including a copy of the source of 

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      interest rate information used in the calculation thereof.

            (C) DEFERRAL OF PREPAYMENT. In the event that such Special
      Prepayment Event does not occur on the Special Prepayment Date in respect
      thereof, such purchase shall be deferred until and shall be made on the
      date on which such Special Prepayment Event occurs or, if the Company
      determines that efforts to effect such Special Prepayment Event have
      ceased or have been abandoned, then the Company's right to prepayment the
      Notes under this Section 0 shall terminate. The Company shall keep each
      holder of Notes reasonably and timely informed of:

                  (i)   any such deferral of the Special Prepayment
            Date;

                  (ii)  the date on which such Special Prepayment
            Event is expected to occur; and

                  (iii) any determination by the Company that efforts to effect
            such Special Prepayment Event have ceased or been abandoned.

      1.5   OFFER TO PAY UPON CHANGE IN CONTROL.

            (A) NOTICE OF CHANGE IN CONTROL NOTICE EVENT. In the event of the
      obtaining of knowledge of a Change in Control Notice Event by any Senior
      Officer (including, without limitation, via the receipt of notice of a
      Change in Control Notice Event from any holder of Notes), the Company
      will, within five (5) Business Days after the occurrence of such event,
      give notice of such Change in Control Notice Event to each holder of
      Notes. Each such notice shall:

                  (i) be dated the date of the sending of such notice;

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                  (ii)  be executed by a Senior Officer;

                  (iii)       refer to this Section 0; and

                  (iv) specify, in reasonable detail, the nature and date of the
            Change in Control Notice Event.

            (B) OFFER IN RESPECT OF A CHANGE IN CONTROL. In the event of a
      Change in Control, the Company will, within five (5) Business Days after
      the occurrence of such event (or, in the case of any Change in Control the
      consummation or finalization of which would involve any action of the
      Company, at least twenty (20) days prior to such Change in Control), give
      notice of such Change in Control to each holder of Notes. Such notice
      shall contain an irrevocable separate offer to each holder of Notes to pay
      all, but not less than all, of the principal of, and interest and
      Prepayment Compensation Amount, if any, on the Notes held by such holder
      on a date (the "CHANGE IN CONTROL PAYMENT DATE") specified in such notice
      that is not less than twenty (20) days and not more than thirty (30) days
      after the date of such notice. Each such notice shall:

                  (i)   be dated the date of the sending of such
            notice;

                  (ii)  be executed by a Senior Officer;

                  (iii)       specify, in reasonable detail, the
            nature and date of the Change in Control;

                  (iv)  specify the Change in Control Payment Date;

                  (v)   specify the principal amount of each Note
            outstanding;

                  (vi) specify the interest that would be due on each Note
            offered to be paid, accrued to the Change in Control Payment Date;
            and

                  (vii) if the Change in Control Payment Date is on or prior to
            May 1, 2001, the calculation (with details) of an estimated Standard
            Prepayment Compensation Amount, if any (calculated as if the date of
            such notice was the date of payment), due in connection with such
            payment; and, if such Change in Control Payment Date is after May 1,
            2001, the Modified Prepayment Compensation Amount in connection with
            such payment.

            (C) ACCEPTANCE, REJECTION. Each holder of Notes shall have the
      option to accept or reject such offered payment. In order to reject such
      offered payment, a holder of Notes shall cause a notice of such rejection
      to be delivered to the Company at least five (5) days prior to the Change
      in Control Payment Date. A failure to reject in writing such written offer
      of payment as provided in this Section 0, or a written acceptance of such
      offered prepayment, shall be deemed to constitute an acceptance of such
      offer.

            (D) DEFERRAL OF OBLIGATION TO PURCHASE. The obligation of the
      Company to purchase Notes pursuant to the offers required by Section 0 and
      accepted or deemed accepted in accordance with Section 0 is subject to the
      occurrence of the Change in Control in respect of which such offers and
      acceptances shall have been made. In the event that such Change in Control
      does not occur prior to the Change in Control Payment Date in respect
      thereof, such purchase shall be deferred until and shall be made on the
      date on which such Change in Control occurs or, if the Company determines
      that efforts to effect such Change in Control have ceased or have been
      abandoned, then such offer, acceptances and obligation to purchase shall
      be deemed to have been rescinded. The Company shall keep each holder of
      Notes reasonably and timely informed of:

                  (i)   any such deferral of the date of purchase;

                  (ii)  the date on which such Change in Control and
            the purchase are expected to occur; and

                  (iii) any determination by the Company that efforts to effect
            such Change in Control have ceased or been abandoned.

            (E) PAYMENT. The offered payment shall be made at one hundred
      percent (100%) of the principal amount of the Notes to be prepaid,
      together with interest and Prepayment 

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      Compensation Amount, if any, on such Notes, accrued to and determined as
      of the Change in Control Payment Date. In the event that such Change of
      Control Payment Date is on or prior to May 1, 2001, two (2) Business Days
      prior to the making of such payment, the Company shall deliver to each
      holder of Notes by facsimile transmission a certificate of a Senior
      Financial Officer specifying:

                  (i) the details of the calculation of the Standard Prepayment
            Compensation Amount as of the specified payment date, and including
            a copy of the source of interest rate information used in such
            calculation; and

                  (ii) the amounts and the due dates of the then remaining
            Required Principal Payments determined after
            giving effect to such payment.

            (F) EFFECT OF PARTIAL REPURCHASES ON REQUIRED Payment. At the time
      of the making of any partial repurchase of Notes pursuant to this Section
      0, an amount equal to the principal amount of the Notes so repurchased
      shall be applied against and reduce each of the then remaining Required
      Principal Payments by a percentage equal to the quotient of:

                  (i)   the aggregate principal amount of the Notes
            so paid; DIVIDED BY

                  (ii) the aggregate principal amount of the Notes outstanding
            immediately prior to such payment.

      1.6   DELIVERY OF NOTES IN PAYMENT OF WARRANT PURCHASE PRICE.

      The Warrant Agreement provides that a holder of Warrants may tender Notes
in partial or complete payment of the purchase price for the shares of Common
Stock issued upon exercise of the Warrants. Promptly following the receipt of
any Note so tendered, the Company shall promptly cancel and retire such
surrendered Note (and no such Note shall be reissued), and shall issue to the
holder thereof a new Note in the principal amount of such tendered Note
remaining after deduction of the principal amount thereof applied to payment of
the purchase price for the shares of Common Stock. For purposes of Rule 144
under the Securities Act, 17 C.F.R. ss.230.144, the Company and you agree that a
tender of Notes in payment of the exercise price in respect of the Warrants
shall not be deemed a prepayment of the Notes, but rather a conversion of such
Notes, pursuant to the terms of the Warrant Agreement and the Warrants, into
Common Stock.

      1.7   PAYMENTS AMONG NOTEHOLDERS.

      If at the time any payment of the principal of the Notes made pursuant to
Section 0, Section 0 or Section 0 is due there is more than one Note
outstanding, the aggregate principal amount of each such required or optional
partial payment of the Notes shall be allocated among the Notes at the time
outstanding pro rata in proportion to the respective unpaid principal amounts of
all such outstanding Notes.

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      1.8   NOTATION OF NOTES ON PAYMENT.

      Upon any partial payment of a Note, the holder of such Note may (but shall
not be required to), at its option:

            (a) surrender such Note to the Company pursuant to Section 0 in
      exchange for a new Note in a principal amount equal to the principal
      amount remaining unpaid on the surrendered Note;

            (b) make such Note available to the Company for notation thereon of
      the portion of the principal so paid; or

            (c) mark such Note with a notation thereon of the portion of the
      principal so paid.

In case the entire principal amount of any Note is paid, such Note shall be
surrendered to the Company for cancellation and shall not be reissued, and no
Note shall be issued in lieu of the paid principal amount of any Note.

      1.9   NO OTHER PAYMENTS OF PRINCIPAL; ACQUISITION OF NOTES.

      Except for payments of principal made in accordance with this Section 0,
the Company may not make any payment of principal in respect of the Notes. The
Company will not, and will not permit any Subsidiary or any Affiliate to,
directly or indirectly, acquire or make any offer to acquire any Notes unless:

            (a) the Company or such Subsidiary or Affiliate shall have offered
      in writing to acquire Notes, PRO RATA, from all holders of the Notes upon
      the same terms and at the same price, which price shall be clearly
      disclosed;

            (b) such offer will remain open for at least ten (10) Business Days
      from the date the offer is received by each holder of Notes;

            (c) the Company will provide each holder of Notes with a calculation
      of the estimated Prepayment Compensation Amount that would be due if the
      Company were to pay, in accordance with Section 1.3, the amount of Notes
      in respect of which such offer is being made; and

            (d) the Company will promptly provide each holder of Notes with such
      other information regarding such offer (including, without limitation, if
      requested, a list of all holders of Notes indicating the amount of the
      holdings of each and whether such holder shall have accepted or rejected
      such offer, as of the most recent practicable time) as such holder shall
      reasonably request.

In the event that the Company acquires any Notes, such Notes will thereafter be
cancelled and no Notes will be issued in substitution therefor. The aggregate
principal amount of Notes so repurchased by the Company shall be applied against
and reduce each of the then remaining Required Principal Payments by a
percentage equal to the quotient of:

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                  (i) the aggregate principal amount of the Notes so paid;
            DIVIDED BY

                  (ii) the aggregate principal amount of the Notes outstanding
            immediately prior to such payment.

      1.10  MANNER OF PAYMENTS.

            (A) MANNER OF PAYMENT. The Company shall pay all amounts payable
      with respect to each Note (without any presentment of such Notes and
      without any notation of such payment being made thereon) by crediting, by
      federal funds bank wire transfer, the account of the holder thereof in any
      bank in the United States of America as may be designated in writing by
      such holder, or in such other manner as may be reasonably directed or to
      such other address in the United States of America as may be reasonably
      designated in writing by such holder. Annex 1 shall be deemed to
      constitute notice, direction or designation (as appropriate) by the
      Purchaser to the Company with respect to payments to be made to the
      Purchaser as aforesaid. In the absence of such written direction, all
      amounts payable with respect to each Note shall be paid by check mailed
      and addressed to the registered holder of such Note at the address shown
      in the register maintained by the Company pursuant to Section 0.

            (B) PAYMENTS DUE ON HOLIDAYS. If any payment due on, or with respect
      to, any Note shall fall due on a day other than a Business Day, then such
      payment shall be made on the first Business Day following the day on which
      such payment shall have so fallen due; PROVIDED that if all or any portion
      of such payment shall consist of a payment of interest, for purposes of
      calculating such interest, such payment shall be deemed to have been
      originally due on such first following Business Day, such interest shall
      accrue and be payable to (but not including) the actual date of payment,
      and the amount of the next succeeding interest payment shall be adjusted
      accordingly.

            (C) PAYMENTS, WHEN RECEIVED. Any payment to be made to the holders
      of Notes hereunder or under the Notes shall be deemed to have been made on
      the Business Day such payment actually becomes available at such holder's
      bank prior to the close of business of such bank, PROVIDED that interest
      for one day at the non-default interest rate of the Notes shall be due on
      the amount of any such payment that actually becomes available to such
      holder at such holder's bank after 12:00 noon (local time of such bank).

2.    REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

      2.1   REGISTRATION OF NOTES.

      The Company will keep at its office, maintained pursuant to Section 3.3, a
register for the registration and transfer of Notes. The name and address of
each holder of one or more Notes, each transfer thereof made in accordance with
Section 0 and the name and address of each transferee of one or more Notes shall
be registered in such register. The Person in whose name any Note shall be
registered shall be deemed and treated as the owner and holder thereof for all
purposes hereof, and the Company shall not be affected by any notice or
knowledge to the contrary, other than in accordance with Section 0.

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      2.2   EXCHANGE OF NOTES.

            (A) EXCHANGE OF NOTES. Upon surrender of any Note at the office of
      the Company maintained pursuant to Section 0, duly endorsed or accompanied
      by a written instrument of transfer duly executed by the registered holder
      of such Note or such holder's attorney duly authorized in writing, the
      Company will execute and deliver, at the Company's expense (except as
      provided in Section 0), a new Note or Notes in exchange therefor, in an
      aggregate principal amount equal to the unpaid principal amount of the
      surrendered Note. Each such new Note shall be registered in the name of
      such Person as such holder may request and shall be substantially in the
      form of Attachment A. Each such new Note shall be dated and bear interest
      from the date to which interest shall have been paid on the surrendered
      Note or dated the date of the surrendered Note if no interest shall have
      been paid thereon. Each such new Note shall carry the same rights to
      unpaid interest and interest to accrue that were carried by the Note so
      exchanged or transferred. Notes shall not be transferred in denominations
      of less than Five Hundred Thousand Dollars ($500,000), PROVIDED that a
      holder of Notes may transfer its entire holding of Notes regardless of the
      principal amount of such holder's Notes.

            (B) COSTS. The Company will pay the cost of delivering to or from
      such holder's home office or custodian bank from or to the Company, the
      surrendered Note and any Note issued in substitution or replacement for
      the surrendered Note. The Company may require payment of a sum sufficient
      to cover any stamp tax or governmental charge imposed in respect of any
      such transfer of Notes.

      2.3   REPLACEMENT OF NOTES.

      Upon receipt by the Company from the registered holder of a Note of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Note (which evidence shall be, in the case of an
institutional investor, notice from such institutional investor of such loss,
theft, destruction or mutilation), and:

            (a) in the case of loss, theft or destruction, of indemnity
      reasonably satisfactory to the Company; PROVIDED, HOWEVER, that if the
      holder of such Note is a Purchaser, an institutional investor or a nominee
      either, the unsecured agreement of indemnity of such Purchaser or
      institutional investor (but not of any nominee therefor) shall be deemed
      to be satisfactory; or

            (b)   in the case of mutilation, upon surrender and
      cancellation thereof;

the Company at its own expense will execute and deliver, in lieu thereof, a
replacement Note, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.

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      2.4   ISSUANCE TAXES.

      The Company will pay all taxes (if any) due (but not, in any event, income
taxes) in connection with and as the result of the initial issuance and sale of
the Notes and in connection with any modification, waiver or amendment of this
Agreement or the Notes and shall save each holder of Notes harmless without
limitation as to time against any and all liabilities with respect to all such
taxes.

3.    GENERAL COVENANTS

      The Company covenants that on and after the Closing Date and so long as
any of the Notes shall be outstanding:

      3.1   PAYMENT OF TAXES AND CLAIMS.

      The Company will, and will cause each Restricted Subsidiary to, pay before
they become delinquent:

            (a)   all taxes, assessments and governmental charges
      or levies imposed upon it or its Property; and

            (b) all claims or demands of materialmen, mechanics, carriers,
      warehousemen, vendors, landlords, growers or suppliers of agricultural
      products and other like Persons that, if unpaid, might result in the
      creation of a statutory, regulatory or common law Lien (other than a Lien
      expressly permitted pursuant to Section 0) upon its Property;

PROVIDED, that items of the foregoing description need not be paid so long as
such items are being actively contested in good faith and by appropriate
proceedings and reasonable book reserves in accordance with GAAP have been
established and maintained with respect thereto.

      3.2   MAINTENANCE OF PROPERTIES; CORPORATE EXISTENCE; ETC.

      The Company shall, and will cause each Restricted Subsidiary to:

            (A) PROPERTY -- maintain its Property in good condition, ordinary
      wear and tear and obsolescence excepted, and make all necessary renewals,
      replacements, additions, betterments and improvements thereto; PROVIDED,
      HOWEVER, that this Section 0 shall not prevent the Company or any
      Restricted Subsidiary from discontinuing the operation or the maintenance
      of any of its Properties if such discontinuance is desirable in the
      conduct of its business and such discontinuance could not reasonably be
      expected to have a Material Adverse Effect;

            (B) INSURANCE -- maintain, with financially sound and reputable
      insurers, insurance with respect to its Property and business against such
      casualties and contingencies, of such types and in such amounts as is
      customary in the case of corporations of established reputations engaged
      in the same or a similar business and similarly situated;

            (C) FINANCIAL RECORDS -- keep proper books of record and account, in
      which full and correct entries shall be made of all dealings and
      transactions of or in relation to the Properties and business thereof, and
      which will permit the production of financial statements in accordance
      with GAAP;

                                       10
<PAGE>
            (D) CORPORATE EXISTENCE AND RIGHTS -- do or cause to be done all
      things necessary to preserve and keep in full force and effect its
      corporate existence, corporate rights (charter and statutory) and
      corporate franchises, except as permitted by Section 0; and

            (E) COMPLIANCE WITH LAW -- comply with all laws, ordinances and
      governmental rules and regulations to which it is subject (including,
      without limitation, any environmental protection law) and obtain all
      licenses, certificates, permits, franchises and other governmental
      authorizations necessary to the ownership of its Properties and the
      conduct of its business except for such violations and failures to obtain
      that, in the aggregate, could not reasonably be expected to have a
      Material Adverse Effect.

      3.3   PAYMENT OF NOTES AND MAINTENANCE OF OFFICE.

      The Company will punctually pay, or cause to be paid, the principal of and
interest (and Prepayment Compensation Amount, if any) on, the Notes, as and when
the same shall become due according to the terms hereof and of the Notes, and
will maintain an office at the address of the Company provided in Annex 2 where
notices, presentations and demands in respect hereof or the Notes may be made
upon it. Such office will be maintained at such address until such time as the
Company notifies the holders of the Notes of any change of location of such
office, which will in any event be located within the United States of America.

      3.4   PENSION PLANS.

            (A) COMPLIANCE. The Company will, and will cause each ERISA
      Affiliate to, at all times with respect to each Pension Plan, comply with
      all applicable provisions of ERISA and the IRC, except for such failures
      to comply that, in the aggregate, could not reasonably be expected to have
      a Material Adverse Effect.

            (B)   PROHIBITED ACTIONS.  The Company will not, and
      will not permit any ERISA Affiliate to:

                  (i) engage in any "prohibited transaction" (as such term is
            defined in section 406 of ERISA or section 4975 of the IRC) or
            "reportable event" (as such term is defined in section 4043 of
            ERISA) that could result in the imposition of a tax or penalty;

                  (ii) incur with respect to any Plan any "accumulated funding
            deficiency" (as such term is defined in section 302 of ERISA),
            whether or not waived;

                  (iii) terminate any Plan in a manner that could result in the
            imposition of a 

                                       11
<PAGE>
            Lien on the Property of the Company or any Restricted Subsidiary
            pursuant to section 4068 of ERISA or the creation of any liability
            under section 4062 of ERISA;

                  (iv)  fail to make any payment required by section
            515 of ERISA;

                  (v) incur any withdrawal liability under Title IV of ERISA
            with respect to any Multiemployer Plan or any liability as a result
            of the termination of any Multiemployer Plan; or

                  (vi) incur any liability or suffer the existence of any Lien
            on the Property of the Company or any ERISA Affiliate, in either
            case pursuant to Title I or Title IV of ERISA or pursuant to the
            penalty or excise tax or security provisions of the IRC;

      if the aggregate amount of the taxes, penalties, funding deficiencies,
      interest, amounts secured by Liens, and other liabilities in respect of
      any of the foregoing at any time could reasonably be expected to have a
      Material Adverse Effect.

            (C) FOREIGN PENSION PLANS. The Company will, and will cause each
      Restricted Subsidiary to, at all times, comply in all material respects
      with all laws, regulations and orders applicable to the establishment,
      operation, administration and maintenance of all Foreign Pension Plans,
      and pay when due all premiums, contributions and any other amounts
      required by applicable Foreign Pension Plan documents or applicable laws,
      except where the failure to comply with such laws, regulations and orders,
      and to make such payments, in the aggregate for all such failures, could
      not reasonably be expected to have a Material Adverse Effect.

      3.5   PRIVATE OFFERING.

      The Company will not, and will not permit any Person acting on its behalf
to, offer the Notes or any part thereof or any similar securities for issue or
sale to, or solicit any offer to acquire any of the same from, any Person so as
to bring the issuance and sale of the Notes within the provisions of section 5
of the Securities Act.


4.    NEGATIVE AND FINANCIAL COVENANTS

      4.1   MERGERS AND CONSOLIDATIONS.

      The Company will not, nor will it permit any Restricted Subsidiary to,
merge with or into or consolidate with any other Person, permit any other Person
to merge or consolidate with or into it or sell all or substantially all of its
Property to any other Person; PROVIDED, HOWEVER, that the foregoing restriction
does not apply to the merger or consolidation of the Company with or into
another corporation or sale of all or substantially all of the Property of the
Company to any other Person if:

            (a) the corporation that results from such merger or consolidation
      or to which all or substantially all of the Property of the Company is
      sold (the "SURVIVING Corporation") is 

                                       12
<PAGE>
      organized under the laws of, and conducts substantially all of its
      business and has substantially all of its Properties within, the United
      States of America or any jurisdiction or jurisdictions thereof;

            (b) the Surviving Corporation (if not the Company) expressly assumes
      the due and punctual payment of the principal of and Prepayment
      Compensation Amount, if any, and interest on all of the Notes, according
      to their tenor, and the due and punctual performance and observance of all
      the covenants in the Notes, this Agreement and each other Financing
      Document to be performed or observed by the Company, pursuant to such
      assumption agreements and instruments in such forms as shall be approved
      by the Required Holders, and the Company causes to be delivered to each
      holder of Notes an opinion, satisfactory in form and substance to the
      Required Holders, of independent counsel to the effect that such
      agreements and instruments are enforceable in accordance with their terms;
      and

            (c) immediately prior to, and immediately after the consummation of
      the transaction, and after giving effect thereto:

                  (i) no Default or Event of Default exists or would exist; and

                  (ii) the Surviving Corporation would be permitted by the
            provisions of Section 0 to incur at least One Dollar ($1.00) of
            additional Adjusted Debt, and of Section 0 to incur at least One
            Dollar ($1.00) of additional Senior Debt, assuming that the
            financial ratios set forth in Section 0 and Section 0 were
            recalculated on a Pro Forma Adjusted Basis as of the last day of the
            fiscal quarter of the Surviving Corporation then most recently
            ended.

Notwithstanding the foregoing, a Restricted Subsidiary may merge with or into,
or consolidate with, or Transfer all or substantially all of its Property to:

            (A)   the Company so long as the Company is the
      Surviving Corporation;

            (B) a Wholly-Owned Restricted Subsidiary, so long as such
      Wholly-Owned Restricted Subsidiary is the Surviving Corporation; and

            (C) any Person other than the Company or a Restricted Subsidiary so
      long as such Transfer complies in all respects with Section 0.

      4.2   DISPOSITION OF ASSETS, RESTRICTED SUBSIDIARY STOCK.

            (A) DISPOSITION OF ASSETS. The Company will not, and will not permit
      any Restricted Subsidiary to Transfer any Property except:

                  (i) Transfers of inventory and of other Property no longer
            necessary for the operation of, and that are individually and in the
            aggregate immaterial to, the business of the Company and the
            Restricted Subsidiaries, in each case in the ordinary course of
            business of the Company or such Restricted Subsidiary;

                                       13
<PAGE>
                  (ii)  Transfers from the Company to a Wholly-Owned
            Restricted Subsidiary;

                  (iii)       Transfers from a Restricted Subsidiary
            to the Company or a Wholly-Owned Restricted Subsidiary;

                  (iv) Transfers for Acceptable Consideration arising solely out
            of Sale-Leaseback Transactions, so long as:

                        (A) the Property is both Transferred and concurrently or
                  thereafter leased by the Company or a Restricted Subsidiary as
                  lessee, in each case within one hundred eighty (180) days
                  after the construction of such Property or the initial
                  acquisition thereof by the Company or a Restricted Subsidiary;

                        (B) within one hundred eighty (180) days after the
                  Transfer involved in such Sale-Leaseback Transaction, the
                  proceeds of such Transfer, net of reasonable and ordinary
                  transaction costs, expenses and income tax on any gain related
                  to such Transfer incurred and actually paid in connection with
                  such Transfer, are applied by the Company or such Restricted
                  Subsidiary to:

                              (I)   purchase Tangible Property ; or

                              (II) pay, on or prior to its scheduled maturity,
                        an amount of Debt of the Company or any Restricted
                        Subsidiary (other than Debt owing to an Affiliate or
                        Debt subordinate to the Subordinated Notes); and

                        (C) immediately before and after the consummation of the
                  Transfer, and after giving effect thereto, no Default or Event
                  of Default would exist;

                  (v) any other Transfer at any time of any Property (other than
            in connection with Sale-Leaseback Transactions) to a Person for an
            Acceptable Consideration if:

                        (A) the SUM of:

                              (I) the book value of such Property at the time of
                        Transfer; PLUS

                              (II) the aggregate book value of all other
                        Property Transferred (other than in Excluded Transfers)
                        after the Fiscal Year End Date immediately preceding the
                        date of such Transfer;

                  would be less than fifteen percent (15%) of Consolidated Total
                  Assets measured as of the Fiscal Year End Date immediately
                  preceding the date of such Transfer;

                        (B) the SUM of:

                                       14
<PAGE>
                             (I) the book value of such Property at the time of
                        Transfer; PLUS

                              (II) the aggregate book value of all other
                        Property Transferred (other than in Excluded Transfers)
                        since the Closing Date;

                  would be less than forty percent (40%) of Consolidated Total
                  Assets measured as of the most recent Fiscal Year End Date;
                  and

                        (C) immediately before and after the consummation of the
                  Transfer, and after giving effect thereto, no Default or Event
                  of Default would exist;

            and

                  (vi) any other Transfer of Property (other than in a
            Sale-Leaseback Transaction), but solely to the extent that, within
            one hundred eighty (180) days after such Transfer, the proceeds of
            such Transfer, net of reasonable and ordinary transaction costs,
            expenses and income tax on any gain related to such Transfer
            incurred and actually paid in connection with such Transfer, are
            applied by the Company or such Restricted Subsidiary to:

                        (A)   purchase Tangible Property; or

                        (B) pay, on or prior to its scheduled maturity, an
                  amount of Debt of the Company or any Restricted Subsidiary
                  (other than Debt owing to an Affiliate or Debt subordinate to
                  the Subordinated Notes).

            (B) DISPOSITION OF RESTRICTED SUBSIDIARY STOCK. The Company will
      not, and will not permit any Restricted Subsidiary to, sell or otherwise
      dispose of any shares of the stock or Rights of a Restricted Subsidiary
      (such stock and Rights herein called "RESTRICTED SUBSIDIARY STOCK"), nor
      will any Restricted Subsidiary issue, sell or otherwise dispose of any
      shares of, or Rights to purchase shares of, its own Restricted Subsidiary
      Stock; PROVIDED, HOWEVER, that the foregoing restrictions do not apply to:

                  (i) Transfers by the Company or a Restricted Subsidiary of
            shares of Restricted Subsidiary Stock to the Company or a
            Wholly-Owned Restricted Subsidiary;

                  (ii) the issuance by a Restricted Subsidiary of shares of its
            own Restricted Subsidiary Stock to the Company or a Wholly-Owned
            Restricted Subsidiary;

                  (iii) the issuance by a Restricted Subsidiary of shares of its
            own Restricted Subsidiary Stock to directors, Management or
            Affiliates; PROVIDED, however, that at no time shall the total
            number of shares of such Restricted Subsidiary Stock issued to or
            held by Management and Affiliates as a group (including shares
            underlying Rights) exceed twenty-five percent (25%) of the total
            number of shares of such Restricted Subsidiary Stock outstanding
            following any such issuance; and

                                       15
<PAGE>
                  (iv) the Transfer of all of the Restricted Subsidiary Stock of
            a Restricted Subsidiary owned by the Company and its other
            Restricted Subsidiaries if:

                        (A) such Transfer satisfies the requirements of Section
                  0 or Section 0 or both;

                        (B) in connection with such Transfer, the entire
                  Investment (whether represented by stock, Debt, claims or
                  otherwise) of the Company and its other Restricted
                  Subsidiaries in such Restricted Subsidiary is Transferred to a
                  Person other than the Company or a Restricted Subsidiary not
                  being simultaneously disposed of; and

                        (C) the Restricted Subsidiary being disposed of has no
                  continuing Investment in any other Restricted Subsidiary not
                  being simultaneously disposed of or in the Company.

            For purposes of determining the book value of assets constituting
      Restricted Subsidiary Stock being Transferred as provided in clause
      (b)(iv) above, such book value shall be deemed to be the aggregate book
      value of the net assets of the Restricted Subsidiary that shall have
      issued such
      Restricted Subsidiary Stock.

            (C)   RESTRICTED SUBSIDIARY MERGERS AND
      Consolidations. A merger or consolidation of a Restricted Subsidiary in
      which a Person other than the Company or a Wholly-Owned Restricted
      Subsidiary shall be the Surviving Corporation shall be deemed to be a
      disposition of the Restricted Subsidiary Stock of such Restricted
      Subsidiary and shall be
      subject to Section 0.

      4.3   LIENS.

            (A) NEGATIVE PLEDGE. The Company will not, and will not permit any
      Restricted Subsidiary to, cause or permit, or agree or consent to cause or
      permit in the future (upon the happening of a contingency or otherwise),
      any of their Property, whether now owned or hereafter acquired, at any
      time to be subject to a Lien except:

                  (I)   CLOSING DATE LIENS --

                        (A) Liens in existence on the Closing Date and described
                  in PART 2.2(C) OF ANNEX 3;

                  (II)  ORDINARY COURSE BUSINESS LIENS --

                        (A) PERFORMANCE BONDS -- Liens incurred or deposits made
                  in the ordinary course of business to secure the performance
                  of letters of credit, bids, tenders, sales contracts, leases,
                  statutory obligations, surety and performance bonds 

                                       16
<PAGE>
                  (of a type other than set forth in Section 0) and other
                  similar obligations not incurred in connection with the
                  borrowing of money, the obtaining of advances or the payment
                  of the deferred purchase price of Property;

                        (B) REAL ESTATE -- Liens in the nature of reservations,
                  exceptions, encroachments, easements, rights-of-way,
                  covenants, conditions, restrictions, leases and other similar
                  title exceptions or encumbrances affecting real property;
                  PROVIDED, HOWEVER, that such exceptions and encumbrances do
                  not in the aggregate materially detract from the value of said
                  Properties or materially interfere with the use of such
                  Properties in the ordinary conduct of the business of the
                  Company and the Subsidiaries;

                        (C)   TAXES, WORKERS' COMPENSATION, ETC. --

                              (I) Liens securing taxes, assessments or
                        governmental charges which are either not yet due or
                        payable or which are being actively contested in good
                        faith and by appropriate proceedings, or

                              (II) pledges or deposits securing obligations
                        under worker's compensation, unemployment compensation
                        laws or similar legislation to secure public or
                        statutory obligations of the Company or any Restricted
                        Subsidiary; or

                              (III) levies or the claims or demands of
                        materialmen, mechanics, carriers, warehousemen, vendors,
                        landlords and other like Persons;

                  PROVIDED, HOWEVER, that the payment thereof is not required by
                  Section 0 and that adequate reserves have been made against
                  such claims; and

                        (D) PACA -- any Lien (including any Lien arising out of
                  any constructive trust) arising under PACA which is asserted,
                  perfected or imposed by any growers or suppliers to the
                  Company or any Restricted Subsidiary of agricultural products,
                  so long as no creditors of the Company or any of the
                  Restricted Subsidiaries have asserted their rights under PACA
                  that, in the aggregate, exceed Five Hundred Thousand Dollars
                  ($500,000);


                  (III) JUDICIAL LIENS -- Liens arising from judicial
            attachments and judgments, securing appeal bonds or supersedeas
            bonds, and arising in connection with court proceedings (including,
            without limitation, surety bonds and letters of credit or any other
            instrument serving a similar purpose); PROVIDED, HOWEVER, that the
            execution or other enforcement of such Liens is effectively stayed,
            that the claims secured thereby are being actively contested in good
            faith and by appropriate proceedings, that adequate reserves have
            been made against such claims and that the aggregate amount so
            secured will not at any time exceed Five Million Dollars
            ($5,000,000);

                                       17
<PAGE>
                  (IV) INTERGROUP LIENS -- Liens on Property of a Restricted
            Subsidiary; PROVIDED, HOWEVER, that such Liens secure only
            obligations owing to the Company;

                  (V) PURCHASE MONEY LIENS -- any Lien on Property acquired or
            owned by the Company or any Restricted Subsidiary or leased by the
            Company or any Restricted Subsidiary as lessee under any Capital
            Lease which secures Debt (including Debt in respect of a Capital
            Lease) incurred to pay all or a portion of the related purchase
            price or costs of construction, extension or improvement of such
            Property, so long as:

                        (A) that such purchase price or costs of construction,
                  extension or improvement shall not exceed the Fair Market
                  Value of such Property, extension or improvement, as the case
                  may be, determined at the time of the creation of such Lien;

                        (B) such Lien is created contemporaneously with, or
                  within one hundred eighty (180) days of, such acquisition,
                  construction, extension or improvement;

                        (C) such Lien encumbers only Property so purchased,
                  acquired, constructed, extended or improved after the Closing
                  Date;

                        (D) such Lien is not, after the creation thereof,
                  extended to any other Property; and

                        (E) immediately prior to the incurrence of, and after
                  giving effect to the incurrence of, all Debt secured by the
                  Liens referred to in such clauses, no Default or Event of
                  Default exists or would exist;

                  (VI) ACQUISITION LIENS -- any Lien (including, without
            limitation, any Lien arising out of a Capital Lease) existing on
            Property at the time of acquisition thereof by the Company or any
            Restricted Subsidiary (whether or not the Debt secured thereby is
            assumed by the Company or any Restricted Subsidiary), or existing on
            the Property of, the Debt of or the Capital Stock of any Person
            (other than an Unrestricted Subsidiary) at the time such Person
            became a Restricted Subsidiary (whether by means of the acquisition
            of all or substantially all of the Property of such Person, of the
            Capital Stock thereof or otherwise) or merges or consolidates with
            the Company or any Restricted Subsidiary, so long as:

                        (A) the aggregate principal amount of Debt secured
                  thereby does not exceed the acquisition cost of such Property,
                  the consideration paid for the acquisition of such Person or
                  the consideration paid in connection with such merger or
                  consolidation, as the case may be, as determined at the date
                  of the acquisition, merger or consolidation;

                                       18
<PAGE>
                        (B) such Lien shall not extend to or cover any Property
                  other than the Property subject to such Lien at the time of
                  any such acquisition; and

                        (C) immediately after, and after giving effect to, such
                  acquisition, merger or consolidation, and the assumption of
                  all such Liens no Default or Event of Default exists or would
                  exist; and

                  (VII) OTHER LIENS -- Liens securing Debt of the Company or any
            Restricted Subsidiary and not otherwise permitted by clauses (i)
            through (vi), inclusive, of this Section 0(a) so long as,
            immediately prior to, and immediately after giving effect to the
            incurrence of such Debt:

                        (A)   no Default or Event of Default exists
                  or would exist; and

                        (B) it would be permitted by the provisions of Section 0
                  to incur at least One Dollar ($1.00) of additional Adjusted
                  Debt, and, to the extent that such Liens secure Senior Debt,
                  of Section 0 to incur at least One Dollar ($1.00) of
                  additional Senior Debt, assuming that the financial ratios set
                  forth in Section 0 and Section 0 were recalculated on a Pro
                  Forma Basis as of the last day of the fiscal quarter of the
                  Company then most recently ended.

            (B) EQUAL AND RATABLE LIEN; EQUITABLE LIEN. In case any Property
      shall be subjected to a Lien in violation of Section 0, the Company will
      forthwith make or cause to be made, to the fullest extent permitted by
      applicable law, provision whereby the Notes will be secured equally and
      ratably as to such Property with all other obligations secured thereby
      pursuant to such agreements and instruments as shall be approved by the
      Required Holders, and the Company will promptly cause to be delivered to
      each holder of a Note an opinion of independent counsel satisfactory to
      the Required Holders to the effect that such agreements and instruments
      are enforceable in accordance with their terms, and in any event the Notes
      shall have the benefit, to the full extent that, and with such priority
      as, the holders of Notes may be entitled under applicable law, of an
      equitable Lien on such Property (and any proceeds thereof) securing the
      Notes. Such violation of Section 0 will constitute an Event of Default
      hereunder, whether or not any such provision is made or any equitable Lien
      is created pursuant to this Section 0.

            (C) CONSTRUCTION. Nothing in this Section 0 shall be construed to
      permit the incurrence or existence of any Debt not otherwise permitted by
      this Agreement. Nothing in this Agreement that permits the incurrence or
      existence of any Debt shall be construed to permit the incurrence or
      existence of a Lien securing such Debt unless such Lien is permitted by
      Section 0.

      4.4   NET WORTH.

      The Company will not at any time permit Consolidated Net Worth to be less
than an amount equal to the sum of:

                                       19
<PAGE>
            (a)   Nineteen Million Five Hundred Thousand Dollars
      ($19,500,000); PLUS

            (b) for each fiscal quarter of the Company ending after January 2,
      1998, an amount equal to the greater of:

                  (i)   Zero Dollars ($0); and

                  (ii) fifty percent (50%) of Consolidated Net Company Income
            determined in respect of such fiscal quarter.

      4.5   FIXED CHARGE COVERAGE.

      The Company will not at any time permit the Pro Forma Combined Fixed
Charge Coverage Ratio for a period consisting of any four (4) out of the five
(5) then most recently ended full consecutive fiscal quarters of the Company,
measured as at the end of the most recently ended fiscal quarter of the Company,
to be less than 1.5 to 1.0.

      4.6   TOTAL DEBT.

      The Company will not at any time permit the ratio of Consolidated Adjusted
Debt at such time to Pro Forma Combined EBITDA, as determined in respect of the
then most recently ended period of four (4) full consecutive fiscal quarters of
the Company, to exceed:

            (a) 4.5 to 1.0 at any time from the Closing Date through and
      including January 7, 2000; or

            (b)   4.0 to 1.0 at any time following January 7, 2000.

      4.7   SENIOR DEBT.

      The Company will not at any time permit the ratio of Consolidated Senior
Debt at such time to Pro Forma Combined EBITDA, as determined in respect of the
then most recently ended period of four (4) full consecutive fiscal quarters of
the Company, to exceed:

            (a) 3.5 to 1.0 at any time from the Closing Date through and
      including January 7, 2000; or

            (b)   3.0 to 1.0 at any time following January 7, 2000.

                                       20
<PAGE>
      4.8   RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS.

            (A) LIMIT ON RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS. The
      Company will not, nor will it permit any Restricted Subsidiary to, at any
      time, declare or make or incur any liability to declare or make any
      Restricted Payment or make or authorize, or permit any Restricted
      Subsidiary to make or authorize, any Restricted Investment unless,
      immediately after and after giving effect to the proposed Restricted
      Payment or Restricted Investment:

                  (i)   the sum of

                        (A) the aggregate amount of Restricted Investments
                  (valued in each case at acquisition cost) made during the
                  period commencing on the Closing Date and ending on the date
                  of, and after giving effect to, such proposed Restricted
                  Payment or Restricted Investment; PLUS

                        (B) the aggregate amount of Restricted Payments made
                  during the period commencing on the Closing Date and ending on
                  the date of, and after giving effect to, such proposed
                  Restricted Payment or Restricted Investment;

            would not exceed an amount equal to the sum of:

                              (I)   Five Million Dollars ($5,000,000); PLUS

                              (II) fifty percent (50%) of Consolidated Net
                        Company Income in respect of the period beginning on
                        January 2, 1998 and ending on the last day of the fiscal
                        quarter of the Company then most recently ended (or
                        MINUS one hundred percent (100%) of Consolidated Net
                        Company Income for such period if Consolidated Net
                        Company Income for such period is a loss); PLUS

                              (III) the aggregate amount of net cash proceeds
                        received by the Company from the sale of any Specified
                        Stock made after the Closing Date; PLUS

                              (IV) the aggregate amount of net cash proceeds
                        received after the Closing Date by the Company or any
                        Subsidiary from the sale or liquidation, or as a result
                        of the final maturity, of any Restricted Investment made
                        after the Closing Date; PLUS

                              (V) the aggregate principal amount of any Debt
                        (including the Notes) cancelled in exchange for or
                        converted into any Specified Stock after the Closing
                        Date; and

                  (ii) no Default or an Event of Default would exist.

                                       21
<PAGE>
            (B) OTHER MATTERS. For the purpose of making computations under
      Section 0, Restricted Investments made solely by issuance of Specified
      Stock of the Company shall in each case be excluded. Any Person that
      becomes a Restricted Subsidiary after the Closing Date shall be deemed to
      have made, at the time it becomes a Restricted Subsidiary, all Restricted
      Investments of such Person existing immediately after it becomes a
      Restricted Subsidiary.

      4.9   SENIORITY TO FUTURE SUBORDINATED DEBT.

      The Company shall not incur, create, assume or Guaranty any Debt which is
subordinated in right of payment to any other Debt of the Company unless such
Debt is also subordinated in right of payment, on the same terms, to the
obligations of the Company in respect of the Notes and this Agreement. The
Company shall not incur, create, assume or Guaranty any Debt owing to any
Subsidiary or any Affiliate unless such Debt is subordinated in right of
payment, on terms acceptable to the Required Holders, to the obligations of the
Company in respect of the Notes and this Agreement.

      4.10  DESIGNATION OF SUBSIDIARIES.

            (A) RIGHT OF DESIGNATION. Subject to the following sentence, each of
      the Subsidiaries listed on Annex 3 shall be a Restricted Subsidiary so
      long as it shall continue to satisfy the requirements of the definition of
      Restricted Subsidiary. Subject to the satisfaction of the requirements of
      Section 0, the Company shall have the right to designate as a Restricted
      Subsidiary any Subsidiary which, following such designation, would meet
      the definition of a "Restricted Subsidiary," and to designate any
      Restricted Subsidiary as an Unrestricted Subsidiary, by delivering to each
      holder of Notes a writing, signed by a Senior Officer, so designating such
      Subsidiary. Any Subsidiary not designated as a Restricted Subsidiary shall
      be deemed to be an Unrestricted Subsidiary.

            (B)   DESIGNATION CRITERIA.

                  (i) No Subsidiary shall at any time after the Closing Date be
            designated as a Restricted Subsidiary unless:

                        (A) such Subsidiary at such time meets all of the
                  requirements of being a Restricted Subsidiary as set forth in
                  the definition thereof (other than clause (a) of such
                  definition);

                        (B) immediately before and after, and after giving
                  effect to such designation, no Default or Event of Default
                  exists or would exist; and

                        (C) such Subsidiary shall not previously have been
                  designated as a Restricted Subsidiary on more than one (1)
                  other occasion.

                  (ii) No Restricted Subsidiary shall at any time after the
            Closing Date be designated as an Unrestricted Subsidiary unless:

                        (A) immediately after, and after giving effect to such
                  designation, no Default or Event of Default exists or would
                  exist; and

                        (B) immediately prior to such designation, such
                  Restricted Subsidiary being so designated does not own,
                  directly or indirectly, any Capital Stock of any Restricted
                  Subsidiary not being simultaneously designated as an
                  Unrestricted Subsidiary.

                                       22
<PAGE>
            (C) CONSEQUENCE OF DESIGNATION. By designating a Subsidiary as an
      Unrestricted Subsidiary, the Company shall be deemed to have made an
      Investment in such Subsidiary in an amount equal to the Fair Market Value
      of its Investment in such Subsidiary on the date of such designation.

            (D) EFFECTIVENESS. Any designation under this Section 0 that
      satisfies all of the conditions set forth in this Section 0 shall become
      effective, for purposes of this Agreement, on the day that notice thereof
      shall have been delivered by the Company to each holder of Notes in
      accordance with Section 0.

      4.11  LINE OF BUSINESS.

      The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business if, as a result, the general nature of the business in
which the Company and the Restricted Subsidiaries, taken as a whole, would then
be engaged would be substantially changed from the general nature of the
business in which the Company and the Restricted Subsidiaries, taken as a whole,
are engaged on the Closing Date as described in the Offering Memorandum.

      4.12  TRANSACTIONS WITH AFFILIATES.

      The Company will not, and will not permit any Restricted Subsidiary to,
enter into any transaction, including, without limitation, the purchase, sale,
lease or exchange of Property or the rendering of any service, with any
Affiliate, except for:

            (a) relocation loans (including, without limitation, short-term
      bridge financing in connection with the purchase of a principal residence)
      to any executive or employee of the Company or any Restricted Subsidiary
      not exceeding at any time Five Hundred Thousand Dollars ($500,000);

            (b) other loans, advances and other extensions of credit to any
      executive, officer, director or stockholder (or any relative of any of the
      foregoing) not exceeding at any time the sum of:

                  (i)   Three Hundred Thousand Dollars ($300,000) in
            the aggregate at any time outstanding; PLUS

                  (ii) one percent (1%) of Consolidated Net Company Income in
            respect of the period beginning on the first day of the fiscal
            quarter of the Company commencing after the First Closing Date and
            ending on the last day of the fiscal quarter of the Company then
            most recently ended (or MINUS one percent (1%) of Consolidated Net
            Company Income for such period if Consolidated Net Company Income
            for such period is a loss); and

            (c) transactions in the ordinary course of and pursuant to the
      reasonable requirements of the Company's or such Restricted Subsidiary's
      business and upon fair and reasonable terms no less favorable to the
      Company or such Restricted Subsidiary than would obtain in a comparable
      arm's-length transaction with a Person not an Affiliate.

                                       23
<PAGE>
      4.13  SUBSIDIARY GUARANTEES.

      The Company will not at any time permit any Subsidiary to incur, create,
assume, Guaranty or otherwise become liable in respect of any Debt in respect of
any Senior Credit Facility (whether as primary obligor, guarantor, surety or
otherwise) after the Closing Date unless such Subsidiary, upon or prior to such
incurrence, creation, assumption, Guaranty or otherwise becoming liable in
respect of any such Debt, shall enter into an unconditional subordinated
Guaranty (the "SUBSIDIARY GUARANTEE") in favor of the holders of the Notes in
substantially the form of Exhibit 4.5(c) to the Securities Purchase Agreement.
The Company will cause each Subsidiary which entered into a Subsidiary Guarantee
on the Closing Date, and each Subsidiary subsequently entering into a Subsidiary
Guarantee pursuant to this Section 0, to maintain such Subsidiary Guarantee for
so long as such Subsidiary remains liable in respect of any such Debt.

5.    REPORTING COVENANTS

      5.1   FINANCIAL AND BUSINESS INFORMATION.

      The Company shall deliver to each holder of Notes:

            (A) QUARTERLY FINANCIAL STATEMENTS -- as soon as practicable after
      the end of each quarterly fiscal period in each fiscal year of the Company
      (other than the last quarterly fiscal period of each such fiscal year),
      and in any event within fifty (50) days thereafter:

                  (i)   a consolidated balance sheet as at the end
            of such quarter; and

                  (ii) consolidated statements of income, changes in
            shareholders' equity and cash flows for such quarter and (in the
            case of the second and third quarters) for the portion of the fiscal
            year ending with such quarter;

      for the Company and the Restricted Subsidiaries, setting forth in each
      case, in comparative form, the financial statements for the corresponding
      periods in the previous fiscal year, all in reasonable detail, prepared in
      accordance with GAAP applicable to quarterly financial statements
      generally, and certified as complete and correct by a Senior Financial
      Officer, and accompanied by the certificate required by Section 0;
      PROVIDED, that delivery of copies of the Company's Quarterly Report on
      Form 10-Q filed with the SEC within the time period specified above shall
      be deemed to satisfy the requirements of this Section 0 so long as such
      Quarterly Report contains or is accompanied by the information specified
      in this Section 0;

            (B) ANNUAL FINANCIAL STATEMENTS -- as soon as practicable after the
      end of each fiscal year of the Company, and in any event within one
      hundred twenty (120) days thereafter:

                  (i)   a consolidated balance sheet as at the end
            of such year; and

                  (ii) consolidated statements of income, changes in
            shareholders' equity and cash flows for such year;

      for the Company and the Restricted Subsidiaries, setting forth, in
      comparative form, the financial statement for the previous fiscal year,
      all in reasonable detail, prepared in accordance with GAAP, and
      accompanied by:

                  (A) an audit report thereon of independent certified public
            accountants of recognized national standing, which report shall
            state without qualification (including, without limitation,
            qualifications related to the scope of the audit, the compliance of
            the audit with generally accepted auditing standards, or the ability
            of the Company or a material subsidiary thereof to continue as a
            going concern), that such financial statements have been prepared
            and are in conformity with GAAP; and

                                       24
<PAGE>
                  (B)   the certificates required by Section 0 and
            Section 0;

      PROVIDED, that delivery of the Company's Annual Report on Form 10-K for
      such fiscal year filed with the SEC within the time period specified above
      shall be deemed to satisfy the requirements of this Section 0 so long as
      such Annual Report contains or is accompanied by the reports and other
      information otherwise specified in this Section 0;

            (C) SEC AND OTHER REPORTS -- promptly upon their becoming available,
      and in any event within fifteen (15) days thereafter:

                  (i) each financial statement, report, notice or proxy
            statement sent by the Company to stockholders generally;

                  (ii) each regular or periodic report (including, without
            limitation, each Form 10-K, Form 10-Q and Form 8-K), any
            registration statement which shall have become effective, and each
            final prospectus and all amendments thereto filed by the Company or
            any Restricted Subsidiary with the SEC; and

                  (iii) all press releases and other statements made available
            by the Company or any Restricted Subsidiary to the public concerning
            material developments in the business of the Company or the
            Restricted Subsidiaries;

            (D) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- within two (2) Business
      Days of becoming aware:

                  (i)   of the existence of any condition or event
            which constitutes a Default or an Event of Default; or

                  (ii) that the holder of any Note, any lender or creditor in
            respect of a Senior Credit Facility or any holder of any other Debt
            in a principal amount of Two Hundred Fifty Thousand Dollars
            ($250,000) or more, shall have given notice or taken any other
            action with respect to a claimed Default, Event of Default or
            default or event of default;

      a notice specifying the nature of the claimed Default, Event of Default or
      default or event of default and the notice given or action taken (if any)
      by such holder and what action the Company is taking or proposes to take
      with respect thereto;

            (E)   ERISA --

                  (i) within two (2) Business Days of becoming aware of the
            occurrence of any "reportable event" (as such term is defined in
            section 4043 of ERISA) for which notice thereof has not been waived
            pursuant to regulations of the DOL or "prohibited transaction" (as
            such term is defined in section 406 of ERISA or section 4975 of the
            IRC) in connection with any Plan or any trust created thereunder, a
            notice specifying the nature thereof, what action the Company is
            taking or proposes to take with respect thereto, and, when known,
            any action taken by the Internal Revenue Service, the DOL or the
            PBGC with respect thereto; and


                                       25
<PAGE>
                  (ii) prompt notice of and, where applicable, a description of:

                        (A) any notice from the PBGC in respect of the
                  commencement of any proceedings pursuant to section 4042 of
                  ERISA to terminate any Plan or for the appointment of a
                  trustee to administer any Plan, and any distress termination
                  notice delivered to the PBGC under section 4041 of ERISA in
                  respect of any Plan, and any determination of the PBGC in
                  respect thereof;

                        (B) the placement of any Multiemployer Plan in
                  reorganization status under Title IV of ERISA, any
                  Multiemployer Plan becoming "insolvent" (as such term is
                  defined in section 4245 of ERISA) under Title IV of ERISA, or
                  the whole or partial withdrawal of the Company or any ERISA
                  Affiliate from any Multiemployer Plan and the withdrawal
                  liability incurred in connection therewith; or

                        (C) the occurrence of any event, transaction or
                  condition that could result in the incurrence of any liability
                  of the Company or any ERISA Affiliate or the imposition of a
                  Lien on the Property of the Company or any ERISA Affiliate, in
                  either case pursuant to Title I or Title IV of ERISA or
                  pursuant to the penalty or excise tax or security provisions
                  of the IRC;

      PROVIDED, HOWEVER, that the Company shall not be required to deliver any
      such notice at any time when the aggregate amount of the actual or
      potential liability of the Company and the Restricted Subsidiaries in
      respect of all such events at such time could not reasonably be expected
      to have a Material Adverse Effect;

            (F) AUDITOR'S REPORTS -- each report or, upon the request of any
      holder of Notes, any management letter submitted to the Company or any
      Restricted Subsidiary by independent accountants in connection with any
      annual, interim or special audit made of the books of the Company or any
      Subsidiary;

            (G) ACTIONS, PROCEEDINGS -- promptly after the commencement of any
      action or proceeding relating to the Company or any Subsidiary in any
      court or before any governmental authority or arbitration board or
      tribunal as to which there is a reasonable possibility of an adverse
      determination and that, if adversely determined, is reasonably likely to
      have a Material Adverse Effect, a notice specifying the nature and period
      of existence thereof and what action the Company is taking or proposes to
      take with respect thereto;

            (H) OTHER CREDITORS -- promptly upon the reasonable request of any
      holder of Notes, copies of any statement, report or certificate furnished
      to any holder of Debt to the extent that the information contained in such
      statement, report or certificate has not already been delivered to each
      holder of Notes;

            (I) RULE 144A -- promptly upon the request of any holder of Notes,
      information required to permit the holder to comply with 17 C.F.R.
      ss.230.144A, as amended from time to time, in connection with a transfer
      of any Note; and

            (J) REQUESTED INFORMATION -- with reasonable promptness, such other
      data and information as from time to time may be reasonably requested by
      any holder of Notes.

      5.2   OFFICER'S CERTIFICATES.

      Each set of financial statements delivered to each holder of Notes
pursuant to Section 0 or Section 0 shall be accompanied by a certificate of a
Senior Financial Officer, setting forth:

                                       26
<PAGE>
            (A) COVENANT COMPLIANCE -- the financial information (including
      detailed calculations) required in order to establish whether the Company
      was in compliance with the requirements of Section 0 (in each case where
      such Section imposes numerical financial requirements) as of the end of
      the period covered by the financial statements then being furnished
      (including with respect to such Section, where applicable, the
      calculations of the maximum or minimum amount, ratio or percentage, as the
      case may be, permissible under the terms of such Section, and the
      calculation of the amount, ratio or percentage then in existence); and

            (B) EVENT OF DEFAULT -- a statement that the signer has reviewed the
      relevant terms hereof and has made, or caused to be made, under his or her
      supervision or authority, a review of the transactions and conditions of
      the Company and the Subsidiaries from the beginning of the accounting
      period covered by the income statements being delivered therewith to the
      date of the certificate and that such review shall not have disclosed the
      existence during such period of any condition or event that constitutes a
      Default or an Event of Default or, if any such condition or event existed
      or exists, specifying the nature and period of existence thereof and what
      action the Company shall have taken or proposes to take with respect
      thereto.

      5.3   ACCOUNTANTS' CERTIFICATES.

      Each set of annual financial statements delivered pursuant to Section 0
shall be accompanied by a certificate of the accountants who were engaged to
audit such financial statements, stating that they have reviewed Section 0(A),
Section 0(B) and Section 0 through Section 0, inclusive, and the corresponding
definitions of financial terms used therein and defined in Section 0, and
stating further, whether, in making their audit, such accountants have become
aware of any condition or event that then constitutes a Default or an Event of
Default, and, if such accountants are aware that any such condition or event
then exists, specifying the nature and period of existence thereof.

      5.4   INSPECTION.

      The Company will permit the representatives of each holder of Notes to
visit and inspect any of the Properties of the Company or any of the Restricted
Subsidiaries, to examine all their respective books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the finances and affairs of the Company
and the Restricted Subsidiaries) all at such reasonable times, upon such
reasonable notice and as often as may be reasonably requested. At all times
during which there exists a Default or Event of Default, expenses incurred by
the holders of the Notes in connection with this Section 0 shall be paid in
accordance with Section 0 and otherwise such expenses will be borne by such
holder.


6.    EVENTS OF DEFAULT

      6.1   EVENTS OF DEFAULT.

      An "EVENT OF DEFAULT" exists at any time if any of the following both
occurs and is continuing thereafter for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be effected by
operation of law or otherwise):

            (A)   PAYMENTS ON NOTES --

                  (I) PRINCIPAL OR PREPAYMENT COMPENSATION AMOUNT PAYMENTS --
            the Company fails to make any payment of principal or Prepayment
            Compensation Amount on any Note on or before the date such payment
            is due; or

                                       27
<PAGE>
                  (II) INTEREST PAYMENTS -- the Company fails to make any
            payment of interest on any Note on or before five (5) Business Days
            after the date such payment is due;

            (B)   OTHER DEFAULTS --

                  (I) NEGATIVE AND FINANCIAL COVENANT DEFAULTS -- the Company or
            any Restricted Subsidiary fails to comply with any provision of
            Section 0; or

                  (II) OTHER DEFAULTS -- the Company or any Restricted
            Subsidiary fails to comply with any other provision hereof, and such
            failure continues for more than thirty (30) days after such failure
            shall first become known to any Senior Officer;

            (C) WARRANTIES OR REPRESENTATIONS -- any warranty, representation or
      other statement by or on behalf of the Company contained in the Securities
      Purchase Agreement or any other Financing Document, in any written
      amendment, supplement, modification or waiver with respect to any
      Financing Document or in any instrument furnished in compliance herewith
      or in reference hereto, shall have been false or misleading in any
      material respect when made;

            (D)   ACCELERATION OF DEBT --

                  (i) the Company or any Restricted Subsidiary fails to make,
            when due, at maturity or otherwise, any payment or payments in an
            amount aggregating in excess of Two Million Dollars ($2,000,000) in
            respect of any Debt; or

                  (ii) any event shall occur or any condition shall exist in
            respect of Debt, or under any agreement securing or relating to such
            Debt:

                        (A) as a result of which the maturity of such Debt, or a
                  portion thereof, is accelerated; or

                        (B) that requires the Company or any Restricted
                  Subsidiary to repurchase such Debt from the holders thereof;

            PROVIDED that the aggregate amount of all obligations in respect of
            all such Debt exceeds at such time Two Million Dollars ($2,000,000);

            (E)   INSOLVENCY --

                  (I)   INVOLUNTARY BANKRUPTCY PROCEEDINGS --

                        (A) a receiver, liquidator, custodian or trustee of the
                  Company or any Restricted Subsidiary, or of all or any
                  substantial part of the Property of either, is appointed by
                  court order and such order remains in effect for more than
                  sixty (60) days; or an order for relief is entered with
                  respect to the Company or any Restricted Subsidiary, or the
                  Company or any Restricted Subsidiary is adjudicated a bankrupt
                  or insolvent;

                        (B) all or any substantial part of the Property of the
                  Company or any Restricted Subsidiary is sequestered by court
                  order and such order remains in effect for more than sixty
                  (60) days; or

                                       28
<PAGE>
                        (C) a petition is filed against the Company or any
                  Restricted Subsidiary under any bankruptcy, reorganization,
                  arrangement, insolvency, readjustment of debt, dissolution or
                  liquidation law of any jurisdiction, whether now or hereafter
                  in effect, and is not dismissed within sixty (60) days after
                  such filing;

                  (II) VOLUNTARY PETITIONS -- the Company or any Restricted
            Subsidiary files a voluntary petition in bankruptcy or seeks relief
            under any provision of any bankruptcy, reorganization, arrangement,
            insolvency, readjustment of debt, dissolution or liquidation law of
            any jurisdiction, whether now or hereafter in effect, or consents to
            the filing of any petition against it under any such law; or

                  (III) ASSIGNMENTS FOR BENEFIT OF CREDITORS, ETC. -- the
            Company or a Restricted Subsidiary makes an assignment for the
            benefit of its creditors, or admits in writing its inability, or
            fails, to pay its debts generally as they become due, or consents to
            the appointment of a receiver, liquidator or trustee of the Company
            or a Restricted Subsidiary or of all or a substantial part of its
            Property;

            (F) UNDISCHARGED FINAL JUDGMENTS -- a final, non-appealable judgment
      or final, non-appealable judgments for the payment of money aggregating
      more than Two Million Dollars ($2,000,000) in excess of all applicable
      insurance coverage which has not been contested by the relevant insurer or
      insurers is or are outstanding against one or more of the Company and the
      Restricted Subsidiaries and any one of such judgments shall have been
      outstanding for more than sixty (60) days from the date of its entry and
      shall not have been discharged in full or stayed; or

            (G) SUBSIDIARY GUARANTY -- any Subsidiary Guaranty shall cease to be
      in full force and effect or shall be declared by a court or other
      Governmental Authority of competent jurisdiction to be void, voidable or
      unenforceable against any Subsidiary Guarantor; the validity or
      enforceability of any Subsidiary Guaranty against any Subsidiary Guarantor
      shall be contested by such Subsidiary Guarantor, the Company or any
      Affiliate; or any Subsidiary Guarantor, the Company or any Affiliate shall
      deny that such Subsidiary Guarantor has any further liability or
      obligation under any Subsidiary Guaranty.


      6.2   DEFAULT REMEDIES.

            (A)   ACCELERATION OF MATURITY OF NOTES.

                  (I)   ACCELERATION ON EVENT OF DEFAULT.

                        (A) AUTOMATIC. If any Event of Default specified in
                  Section 0 shall exist, all of the Notes at the time
                  outstanding shall automatically become immediately due and
                  payable together with interest accrued thereon and, to the
                  extent permitted by law, the Prepayment Compensation Amount at
                  such time with respect to the principal amount of such Notes,
                  without presentment, demand, protest or notice of any kind,
                  all of which are hereby expressly waived.

                        (B) BY ACTION OF HOLDERS. Subject to Section 0, if any
                  Event of Default shall exist, the Required Holders may
                  exercise any right, power or Remedy permitted to such

                                       29
<PAGE>
                  holder or holders by law, and shall have, in particular,
                  without limiting the generality of the foregoing, the right to
                  declare the entire principal of, and all interest accrued on,
                  all the Notes then outstanding to be, and such Notes shall
                  thereupon become, forthwith due and payable, without any
                  presentment, demand, protest or other notice of any kind, all
                  of which are hereby expressly waived, and the Company shall
                  forthwith pay to the holder or holders of all the Notes then
                  outstanding the entire principal of, and interest accrued on,
                  the Notes and, to the extent permitted by law, the Prepayment
                  Compensation Amount at such time with respect to such
                  principal amount of such Notes.

                  (II) ACCELERATION ON PAYMENT DEFAULT. Subject to Section 0,
            during the existence of an Event of Default described in Section 0,
            and irrespective of whether the Notes then outstanding shall have
            become due and payable pursuant to Section 0, any holder of Notes
            who or which shall have not consented to any waiver with respect to
            such Event of Default may, at his or its option, by notice in
            writing to the Company, declare the Notes then held by such holder
            to be, and such Notes shall thereupon become, forthwith due and
            payable together with all interest accrued thereon, without any
            presentment, demand, protest or other notice of any kind, all of
            which are hereby expressly waived, and the Company shall forthwith
            pay to such holder the entire principal of and interest accrued on
            such Notes and, to the extent permitted by law, the Prepayment
            Compensation Amount at such time with respect to such principal
            amount of such Notes.

            (B) VALUABLE RIGHTS. The Company acknowledges, and the parties
      hereto agree, that the right of each holder to maintain its investment in
      the Notes free from repayment by the Company (except as herein
      specifically provided for) is a valuable right and that the provision for
      payment of a Prepayment Compensation Amount by the Company in the event
      that the Notes are prepaid or are accelerated as a result of an Event of
      Default is intended to provide compensation for the deprivation of such
      right under such circumstances.

            (C) OTHER REMEDIES. During the existence of an Event of Default and
      irrespective of whether the Notes then outstanding shall become due and
      payable pursuant to Section 0, and irrespective of whether any holder of
      Notes then outstanding shall otherwise have pursued or be pursuing any
      other rights or Remedies, subject to Section 0, any holder of Notes may
      proceed to protect and enforce its rights hereunder and under such Notes
      by exercising such Remedies as are available to such holder in respect
      thereof under applicable law, either by suit in equity or by action at
      law, or both, whether for specific performance of any agreement contained
      herein or in aid of the exercise of any power granted herein; PROVIDED,
      HOWEVER, that the maturity of such holder's Notes may be accelerated only
      in accordance with Section 0.

            (D) NONWAIVER; REMEDIES CUMULATIVE. No course of dealing on the part
      of any holder of Notes nor any delay or failure on the part of any holder
      of Notes to exercise any right shall operate as a waiver of such right or
      otherwise prejudice such holder's rights, powers and Remedies. All rights
      and Remedies of each holder of Notes hereunder and under applicable law
      are cumulative to, and not exclusive of, any other rights or Remedies any
      such holder of Notes would otherwise have.

            (E) SUBORDINATION. The rights of the holders of the Notes to receive
      payments in respect of this Agreement and the Notes, and to exercise any
      Remedies, solely as between the holders of the Notes and the holders of
      the Senior Debt, shall be subject in all respects to the provisions of
      Section 7; PROVIDED, HOWEVER, that all such rights shall remain
      unconditional and absolute as between the holders of the Notes and the
      Company.

                                       30
<PAGE>
      6.3   ANNULMENT OF ACCELERATION OF NOTES.

      If a declaration is made pursuant to Section 0, then and in every such
case, the holders of sixty-six and two-thirds percent (66_%) in principal amount
of the Notes at the time outstanding (exclusive of Notes then owned by any one
or more of the Company, any Restricted Subsidiary or any Affiliate) may, by
written instrument filed with the Company, rescind and annul such declaration,
and the consequences thereof; PROVIDED, however, that at the time such
declaration is annulled and rescinded:

            (a) no judgment or decree shall have been entered for the payment of
      any moneys due on or pursuant hereto or the Notes;

            (b) all arrears of interest upon all of the Notes and all of the
      other sums payable hereunder and under the Notes (except any principal of,
      or interest or Prepayment Compensation Amount on, the Notes which shall
      have become due and payable by reason of such declaration under Section 0)
      shall have been duly paid; and

            (c) each and every other Default and Event of Default shall have
      been waived pursuant to Section 0 or otherwise made good or cured;

and PROVIDED FURTHER that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.

7.    SUBORDINATION

      7.1   GENERAL.

      The Subordinated Debt is subordinate and junior in right of payment to all
Senior Debt to the extent provided in this Section 0.

      7.2   INSOLVENCY.

      In the event of:

            (a) any insolvency, bankruptcy, receivership, liquidation,
      reorganization, readjustment, composition or other similar proceeding
      relating to the Company, its creditors or its Property;

            (b) any proceeding for the liquidation, dissolution or other
      winding-up of the Company, voluntary or involuntary, whether or not
      involving insolvency or bankruptcy proceedings;

            (c)   any assignment by the Company for the benefit of
      creditors; or

            (d)   any other marshalling of the assets of the
      Company;

all Senior Debt shall first be paid in full, in cash or cash equivalents, before
any payment or distribution, whether in cash, Securities or other Property,
shall be made to any holder of any Subordinated Debt on account of any
Subordinated Debt. Any payment or distribution, whether in cash, Securities or
other Property (other than Securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinated, at least to the extent provided in this Section 0 with respect to
Subordinated Debt, to the payment of all Senior Debt at the time outstanding and
to any Securities issued in respect thereof under any such plan of

                                       31
<PAGE>
reorganization or readjustment), which would otherwise (but for this Section 0)
be payable or deliverable in respect of Subordinated Debt shall be paid or
delivered directly to the holders of Senior Debt in accordance with the
priorities then existing among such holders until all Senior Debt shall have
been paid in full, in cash or cash equivalents.

      7.3   PROOFS OF CLAIM.

      If any holder of Subordinated Debt does not file a proper claim or proof
of debt therefor prior to ten (10) days before the expiration of the time to
file such claim or proof, then the Senior Agent is hereby authorized and
empowered (but not obligated) as the agent and attorney-in-fact for such holder
for the specific and limited purpose set forth in this paragraph, to file such
claim or proof for or on behalf of such holder; PROVIDED, HOWEVER, that the
Senior Agent shall have, prior to taking any such action, given fifteen (15)
days prior written notice (which notice may be given up to sixty (60) days prior
to the expiration of the time to file such claim) to such holder of Subordinated
Debt that they intend to file such claim or proof of debt. In no event may the
Senior Agent or any holder of the Senior Debt vote any claim on behalf of any
holder of the Subordinated Debt, and such agency and appointment of
attorney-in-fact shall not extend to any such right to vote any such claim.

      7.4 ACCELERATION OF SENIOR DEBT. In the event that the holders of any
Senior Debt, or any trustee or agent acting on behalf of any such holders,
accelerate the maturity of such Senior Debt or demand that the Company
repurchase the same, then, and in each such case, no direct or indirect payment
(in cash, Property or Securities or by set-off or otherwise) shall be made or
agreed to be made on account of any Subordinated Debt, or as a sinking fund for
any Subordinated Debt, or in respect of any redemption, retirement, purchase,
prepayment or other acquisition or payment of any Subordinated Debt until such
time as such Senior Debt has been paid in full in cash or cash equivalents. The
Company shall give prompt written notice to each holder of Subordinated Debt of
its knowledge of the acceleration of the maturity of any Senior Debt.

      7.5   PAYMENT DEFAULT IN RESPECT OF SENIOR DEBT.

      If:

            (a) the Company shall default in the payment of any principal of or
      premium, if any, or interest on any Senior Debt (a "SENIOR PAYMENT
      DEFAULT") when the same becomes due and payable, whether at maturity or at
      a date fixed for prepayment or otherwise; and

            (b) the Company receives from the Senior Agent written notice (a
      "PAYMENT DEFAULT NOTICE") of the happening of such Senior Payment Default
      stating that such notice is a payment blockage notice pursuant to this
      Section 0;

then no direct or indirect payment (in cash, Property or Securities or by
set-off or otherwise) shall be made or agreed to be made on account of any
Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in respect
of any redemption, retirement, purchase, prepayment or other acquisition or
payment of any Subordinated Debt unless and until such Senior Payment Default
shall have been cured or waived or otherwise shall have ceased to exist.

      The Company shall give prompt written notice to each holder of
Subordinated Debt of its receipt of any Payment Default Notice under this
Section 0.

      7.6   SIGNIFICANT NONPAYMENT DEFAULT IN RESPECT OF SENIOR
            DEBT.

      If:

            (a)   any Significant Nonpayment Default shall have
      occurred; and

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            (b) the Company receives from the Senior Agent written notice (a
      "NONPAYMENT DEFAULT NOTICE") of the happening of such Significant
      Nonpayment Default, stating that such notice is a payment blockage notice
      pursuant to Section 0 of this Agreement;

then no direct or indirect payment (in cash, property or Securities or by
set-off or otherwise) shall be made or agreed to be made for or on account of
any Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in
respect of any redemption, retirement, repurchase, prepayment, purchase or other
acquisition or payment of any Subordinated Debt, for a period (each, a "PAYMENT
BLOCKAGE PERIOD") commencing on the date the Nonpayment Default Notice is
delivered to the Company and ending on the Payment Blockage Period Termination
Date; PROVIDED, HOWEVER, that:

                  (i) only one such Payment Blockage Period may arise in any
            period of three hundred sixty (360) consecutive days;

                  (ii) no more than three (3) Payment Blockage Periods may be
            instituted pursuant to this Section 0; and

                  (iii) no Payment Blockage Period may be imposed as a result of
            any Significant Nonpayment Default which served as the basis for or
            was continuing during a previous Payment Blockage Period.

      All payments in respect of Subordinated Debt postponed during any Payment
Blockage Period shall be immediately due and payable upon the termination
thereof (together with such additional interest as is provided for herein and in
the Notes for late payment of principal, Prepayment Compensation Amount and
interest).

      The Company shall give prompt written notice to each holder of
Subordinated Debt of its receipt of any Nonpayment Default Notice under this
Section 0.

      7.7   STANDSTILL.

      Notwithstanding anything contained in this Agreement or any other
Financing Document to the contrary, for so long as any amount is outstanding
under a Senior Credit Facility, no holder of any Subordinated Debt may exercise
any Remedies in respect thereof (and no acceleration or purported acceleration
pursuant to Section 0 or Section 0 shall become effective) during any period (a
"STANDSTILL PERIOD") commencing on the first date the holders of the
Subordinated Debt, but for the provisions of this Section 0, would have been
entitled to accelerate the maturity of the Subordinated Debt pursuant to Section
0 or Section 0 and ending upon the earliest of:

            (a)   the date which is:

                  (i) if any Event of Default described in Section 0 has
            occurred and is continuing, ninety (90) days; and

                  (ii) if no Event of Default described in Section 0 has
            occurred or is continuing, one hundred twenty (120) days;

      in each case, after the commencement of such Standstill
      Period;

            (b) the date that any holder of any Senior Debt commences the
      exercise of any Remedies in respect of such Debt; and

                                       33
<PAGE>
            (c) the first date upon which any of the Events of Default described
      in Section 0 shall have occurred and be continuing beyond any period of
      grace specified therein; and, in such event, the automatic acceleration of
      the Notes contemplated in respect of such Event of Default pursuant to
      Section 0 shall occur immediately upon the termination of the Standstill
      Period.

      7.8   TURNOVER OF PAYMENTS.

      If:

            (a) any payment or distribution shall be paid to or collected or
      received by any holders of Subordinated Debt in contravention of any of
      the terms of this Section 0; and

            (b) the Senior Agent shall have notified the holders of Subordinated
      Debt of the facts by reason of which such payment or collection or receipt
      so contravenes this Section 0 or constituted a Significant Nonpayment
      Default;

then such holders of Subordinated Debt will deliver such payment or
distribution, to the extent necessary to pay all such Senior Debt in full, in
cash or cash equivalents, to the Senior Agent, on behalf of the holders of the
Senior Debt, and, until so delivered, the same shall be held in trust by such
holders of Subordinated Debt as the property of the holders of such Senior Debt.
If any amount is delivered to the Senior Agent pursuant to this Section 0,
whether or not such amounts have been applied to the payment of Senior Debt, and
the outstanding Senior Debt shall thereafter be paid in full, in cash or cash
equivalents, by the Company or otherwise other than pursuant to this Section 0,
the holders of Senior Debt shall return to such holders of Subordinated Debt an
amount equal to the amount delivered to such holders of Senior Debt pursuant to
this Section 0, so long as after the return of such amounts the Senior Debt
shall remain paid in full, in cash or cash equivalents.

      7.9   SUBORDINATION UNAFFECTED BY CERTAIN EVENTS.

      The rights set forth in this Section 0 of the holders of the Senior Debt
as against each holder of Subordinated Debt shall remain in full force and
effect without regard to, and shall not be impaired by:

            (a)   any act or failure to act on the part of the
      Company;

            (b) any change in the manner, place or terms of payment of, or any
      extension or indulgence in respect of, any payment or prepayment of the
      Senior Debt or any part thereof or in respect of any other amount payable
      to any holder of Senior Debt;

            (c) any amendment, modification, restatement, renewal, refinancing
      or waiver of, or addition or supplement to, or deletion from, or
      compromise, release, consent or other action in respect of, any of the
      terms of any Senior Debt or any other agreement relating to any Senior
      Debt, other than such as would cause all or any portion of such Debt to
      fail to meet the definition of "Senior Debt;"

            (d) any sale, exchange, release or other dealing with any Property
      which is the subject of any Lien securing any Senior Debt, or any failure
      or delay in the perfection of any such Lien;

            (e) any release of any Person liable in any manner (including,
      without limitation, by virtue of any Guaranty) for the payment or
      collection of the Senior Debt;

            (f) any exercise or non-exercise by any holder of Senior Debt of any
      right, power, privilege or remedy under or in respect of any Senior Debt
      or Subordinated Debt or any waiver of any such right, power,

                                       34
<PAGE>
      privilege or remedy or any default in respect of any Senior Debt or the
      Subordinated Debt, any dealing with or action against any collateral
      security therefor or any receipt by any holder of Senior Debt of any
      security, or any failure by any holder of Senior Debt to perfect a
      security interest in, or any release by any such holder of Senior Debt of,
      any security for the payment of any Senior Debt;

            (g) any merger or consolidation of the Company or any of its
      Subsidiaries into or with any of its Subsidiaries or into or with any
      Person, or any Transfer of any or all of the Property of the Company or
      any of its Subsidiaries to any other Person; or

            (h) the absence of any notice to, or knowledge of, any holder of
      Subordinated Debt of the existence or occurrence of any of the matters or
      events set forth in the foregoing clauses (a) through (g).

      7.10  WAIVER AND CONSENT.

      Each holder of Subordinated Debt waives any and all notices of the
acceptance of the provisions of this Section 0 or of the creation, renewal,
extension or accrual, now or at any time in the future, of any Senior Debt.

      7.11  REINSTATEMENT OF SUBORDINATION.

      The obligations of each holder of Subordinated Debt under the provisions
set forth in this Section 0 shall continue to be effective, or be reinstated, as
the case may be, as to any payment in respect of any Senior Debt that is
rescinded or must otherwise be returned by the holder of such Senior Debt upon
the occurrence or as a result of any bankruptcy or judicial proceeding, all as
though such payment had not been made.

      7.12  OBLIGATIONS NOT IMPAIRED.

      Nothing contained in this Section 0 shall impair, as between the Company
and any holder of Subordinated Debt, the obligation of the Company to pay to
such holder the principal thereof and Prepayment Compensation Amount, if any,
and interest thereon as and when the same shall become due and payable in
accordance with the terms thereof and to comply with each and every provision of
the Notes and this Agreement or prevent any holder of any Subordinated Debt from
exercising all rights, powers and remedies otherwise permitted by applicable law
or under this Agreement, all subject to the rights of the holders of the Senior
Debt to receive cash, Securities or other Property otherwise payable or
deliverable to the holders of Subordinated Debt.
      7.13  PAYMENT OF SENIOR DEBT; SUBROGATION.

      Upon the payment in full of all Senior Debt, the holders of Subordinated
Debt shall be subrogated to all rights of any holder of Senior Debt to receive
any further payments or distributions applicable to the Senior Debt until the
Subordinated Debt shall have been paid in full, and such payments or
distributions received by the holders of Subordinated Debt by reason of such
subrogation, of cash, Securities or other Property which otherwise would be paid
or distributed to the holders of Senior Debt, shall, as between the Company and
its creditors other than the holders of Senior Debt, on the one hand, and the
holders of Subordinated Debt, on the other hand, be deemed to be a payment by
the Company on account of Senior Debt and not on account of Subordinated Debt.

                                       35
<PAGE>
      7.14  RELIANCE OF HOLDERS OF SENIOR DEBT.

      Each holder of Subordinated Debt by its acceptance thereof shall be deemed
to acknowledge and agree that the foregoing subordination provisions are, and
are intended to be, an inducement to and a consideration of each holder of any
Senior Debt, whether such Senior Debt was created or acquired before or after
the creation of Subordinated Debt, to acquire and hold, or to continue to hold,
such Senior Debt, and such holder of Senior Debt shall be deemed conclusively to
have relied on such subordination provisions in acquiring and holding, or in
continuing to hold, such Senior Debt. Each such holder of Senior Debt is
intended to be, and is, a third party beneficiary of this Section 0. Each holder
of Subordinated Debt acknowledges and agrees that the provisions set forth in
this Section 0 shall be enforceable against such Persons by the holders of the
Senior Debt. Notwithstanding anything contained in this Agreement or any other
Financing Document to the contrary, none of the provisions of this Section 0
(including, without limitation, this Section 0) may, directly or indirectly, be
amended, modified, supplemented or waived without the prior written consent of
the Senior Agent, on behalf of the holders of the Senior Debt.

      7.15  IDENTITY OF HOLDERS OF SENIOR DEBT.

      Upon the request of any holder of Subordinated Debt, the Company shall
deliver to such holder a list of all holders of Senior Debt outstanding at such
time, providing the name and address of each such holder of Senior Debt and the
principal amount of Senior Debt held by each such holder; PROVIDED, however,
that, if any holder of Senior Debt shall have appointed an agent or other
representative with respect to the Senior Debt held by it, the Company may
provide the name and address of such agent or representative in lieu of the name
and address of such holder of Senior Debt.

      7.16  AMENDMENTS TO SENIOR CREDIT FACILITY.

      Notwithstanding the other provisions of this Section 0, no amendment to or
refinancing, replacement or refunding of the Senior Debt or any agreement or
instrument related thereto shall be effective as to the holders of the
Subordinated Debt or be entitled to the benefits of this Section 0 without the
consent of each holder of Notes to the extent that such amendment, refinancing,
replacement or refunding would directly prohibit the Company or any Subsidiary
from making scheduled or required payments in respect of the Subordinated Debt
in any manner which is not specifically set forth in the Senior Credit
Agreement, as in effect on the Closing Date. The holders of the Senior Debt may
restrict the right of the Company to make, or prohibit the Company from making,
optional prepayments of the Notes in accordance with the provisions of Section 0
or Section 0 or other optional repurchases of the Notes.

8.    INTERPRETATION OF THIS AGREEMENT

      8.1   TERMS DEFINED.

      As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:

      ACCEPTABLE CONSIDERATION -- means, with respect to any Transfer of any
Property of the Company or any Restricted Subsidiary, cash consideration,
promissory notes or such other consideration (or any combination of the
foregoing) as is, in each case for the Fair Market Value thereof and in each
case in which the value of the Property so Transferred is equal to or greater
than One Million Dollars ($1,000,000), determined by the Board of Directors, in
its good faith opinion, to be in the best interests of the Company and to
reflect the Fair Market Value of such Property.

      ACCEPTABLE REVOLVING CREDIT FACILITY -- means and includes a revolving
credit agreement or similar agreement:

                                       36
<PAGE>
            (a) pursuant to which the lender commits to permit the Company,
      subject to the conditions therein, to obtain from time to time thereunder
      loans or advances of cash, letters of credit or bankers acceptances and
      periodically repay the same; and

            (b) the obligations under which are not, by its terms or the terms
      of any ancillary agreement, expressed to be subordinated in right of
      payment to any other Debt of the Company or any Subsidiary; and

            (c) the obligations under which are not owing to the Company, any
      Affiliate or any Subsidiary.

      ACQUIRED BUSINESS -- means and includes, in connection with any
computation of Pro Forma Combined Income Available for Fixed Charges, Pro Forma
Combined EBITDA or Pro Forma Combined Fixed Charges for any period, any Person
(other than an Unrestricted Subsidiary) all the Capital Stock of which or
substantially all of the Property of which was acquired by the Company or a
Restricted Subsidiary, or which shall have merged into or consolidated with the
Company (with the Company being the Surviving Corporation) or which shall have
merged with or into or consolidated with a Restricted Subsidiary with the result
that the Surviving Corporation became a Restricted Subsidiary, in each case,
during such period, if, but only if:

            (a) Consolidated EBITDA, Consolidated Rental Expense and
      Consolidated Fixed Charges and for such acquired Persons for such Period
      can be determined on a basis reasonably acceptable to the holders of Notes
      for such period, and Consolidated Debt and Consolidated Senior Debt for
      such acquired Persons can be determined on a basis reasonably acceptable
      to the holders of Notes as at the relevant time of determination; and

            (b) concurrently with any such determination, the Company shall have
      delivered to the holders of the Notes audited financial statements (to the
      extent available) and other financial information prepared in accordance
      with GAAP and reasonably satisfactory to the holders of the Notes with
      respect to such acquired Person, which financial statements and
      information demonstrates the basis for such determination to an extent
      reasonably satisfactory to the holders of the Notes.

      ADJUSTED DEBT -- with respect to any Person, means, without duplication,
the liabilities of such Person with respect to:

            (A)   BORROWED MONEY -- borrowed money;

            (B) SECURED LIABILITIES -- borrowed money secured by any Lien
      existing on Property owned by such Person (whether or not such liabilities
      have been assumed);

            (C)   CAPITAL LEASES -- Capital Leases of such Person;
      and

            (D) GUARANTEES -- any Guaranty of such Person of any obligation or
      liability of another Person of obligations of the type listed in clause
      (a) through clause (d) of this definition of Adjusted Debt.

Adjusted Debt shall not include letters of credit, surety bonds or similar
instruments.

      AFFILIATE -- means and includes, at any time, each Person (other than a
Restricted Subsidiary):

            (a) that directly or indirectly through one or more intermediaries
      controls, or is controlled by, or is under common control with, the
      Company;

                                       37
<PAGE>
            (b) that beneficially owns or holds ten percent (10%) or more of any
      class of the Voting Stock of the Company;

            (c) ten percent (10%) or more of the Voting Stock (or in the case of
      a Person that is not a corporation, ten percent (10%) or more of the
      equity interest) of which is beneficially owned or held by the Company or
      a Subsidiary; or

            (d)   that is an officer or director of the Company or
      that is an Initial Manager Affiliate;

at such time; PROVIDED, HOWEVER, that none of the Purchasers nor any affiliate
of any Purchaser shall be deemed to be an "Affiliate," and no Person holding any
one or more of the Notes or Warrants shall be deemed to be an "Affiliate" solely
by virtue of the ownership of such securities. As used in this definition:

            CONTROL -- means the possession, directly or indirectly, of the
      power to direct or cause the direction of the management and policies of a
      Person, whether through the ownership of voting securities, by contract or
      otherwise.

      AGREEMENT, THIS -- and references thereto shall mean this Note Agreement
as it may from time to time be amended or supplemented.

      ANNEX 3 -- means Annex 3 to the Securities Purchase Agreement.

      APPLICABLE INTEREST LAW -- means any present or future law (including,
without limitation, the laws of the State of New York and the United States of
America) which has application to the interest and other charges pursuant to
this Agreement and the Notes.

      BANK OF AMERICA -- means Bank of America Texas, N.A.

      BOARD OF DIRECTORS -- means, at any time, the board of directors of the
Company or any committee thereof that, in the instance, shall have the lawful
power to exercise the power and authority of such board of directors.

      BORROWING BASE -- means:

            (a) for so long as the Senior Credit Agreement (as amended, renewed
      or extended) remains in effect, the "Adjusted Borrowing Base," as defined
      in the Senior Credit Agreement, as in effect on the date hereof, and as
      set forth on Annex 3 hereto; PROVIDED, HOWEVER, that if clause (b) of the
      definition of "Adjusted Borrowing Base" in the Senior Credit Agreement is
      amended (including, without limitation, in connection with a renewal or
      extension of the Senior Credit Facility) to remove the PACA Adjustment
      deduction from the "Borrowing Base" (as defined in the Senior Credit
      Agreement as in contained therein, then such amendment shall be given
      effect for purposes of calculating the Borrowing Base; and

            (b) thereafter, any substantially similar formulation contained in
      any other Acceptable Revolving Credit Facility at such time, so long as:

                  (i) if such formulation contains a PACA Adjustment, such
            formulation would yield an amount no higher than the amount
            calculated in accordance with the definition of "Adjusted Borrowing
            Base" as set forth in the Senior Credit Agreement, as in effect on
            the date hereof; and

                  (ii) if such formulation does not contain a PACA Adjustment,
            such formulation would yield an amount no higher than the amount
            calculated in accordance with the definition of "Adjusted 

                                       38
<PAGE>
            Borrowing Base" as set forth in the Senior Credit Agreement, as in
            effect on the date hereof but assuming that such definition did not
            contain a PACA Adjustment;

      and, in either case, which formulation is provided to each holder of the
      Notes in writing disclosing that the Company intends to use such
      formulation as the "Borrowing Base."

So long as:

            (i) there has been no bad faith on the part of either the Company or
      any lender in the preparation of the Borrowing Base Certificate;

            (ii)  the Borrowing Base Certificate contains no
      manifest error;

            (iii) such Borrowing Base Certificate was completed no more than
      thirty-five (35) days prior to the date of determination; and

            (iv) such Borrowing Base Certificate measures the Borrowing Base as
      of a date no more than fifty (50) days prior to the date of determination;

then the Borrowing Base at any time shall be deemed to be the amount set forth
on the most recent Borrowing Base Certificate delivered to the Senior Agent. In
all other cases, the Borrowing Base shall equal the actual Borrowing Base on the
date of determination.

      BORROWING BASE CERTIFICATE - for so long as the Senior Credit Agreement
(as amended, renewed or extended) remains in effect, has the meaning ascribed to
the term "Borrowing Base Report" in the Senior Credit Agreement, as in effect on
the date hereof, and as set forth on Annex 3 hereto; and thereafter, means any
such similar certificate provided pursuant to the terms of the Acceptable
Revolving Credit Facility the borrowing base formulation under which is
designated by the Company to be the "Borrowing Base" in compliance with the
provisions of the definition of "Borrowing Base."

      BUSINESS DAY -- means a day other than a Saturday, a Sunday or a day on
which banks in the State of New York or in the State of Texas are required or
permitted by law (other than a general banking moratorium or holiday for a
period exceeding four (4) consecutive days) to be closed.

      CAPITAL LEASE -- means, at any time, a lease with respect to which the
lessee is required to recognize the acquisition of an asset and the incurrence
of a liability in accordance with GAAP.

      CAPITAL STOCK -- means any class of preferred, common or other capital
stock, share capital or similar equity interest of a Person including, without
limitation, any partnership interest in any partnership or limited partnership
and any membership interest in any limited liability company.

      CHANGE IN CONTROL -- means, at any time, an occurrence or circumstance as
a result of which individuals who, as of the date of this Agreement, constitute
the Board of Directors (for purposes of this definition, the "INCUMBENT BOARD")
cease for any reason to constitute at least a majority of the Board of
Directors; PROVIDED, HOWEVER, that any individual becoming a director of the
Company, subsequent to the date of this Agreement, whose election or nomination
for election by the Company's stockholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act) or
other actual or threatened solicitation of proxies or contest by or on behalf of
a Person other than the Board of Directors.

                                       39
<PAGE>
      CHANGE IN CONTROL NOTICE EVENT -- means

            (a) the execution of any written agreement which, when fully
      performed by the parties thereto, would result in a Change in Control; or

            (b) the making of any written offer by any person (as such term is
      used in section 13(d) and section 14(d)(2) of the Exchange Act as in
      effect on the Closing Date) or related persons constituting a group (as
      such term is used in Rule 13d-5 under the Exchange Act as in effect on the
      Closing Date) to the holders of the Common Stock which offer, if accepted
      by the requisite number of such holders, would result in a Change in
      Control.

      CHANGE IN CONTROL PAYMENT DATE -- Section 0.

      CLOSING DATE -- means the first date any Notes are sold.

      COMMON STOCK -- means the Common Stock, par value $.01 per share, of the
Company.

      COMPANY -- the introductory paragraph.

      CONSOLIDATED ADJUSTED DEBT -- means, at any time, an amount equal to
Adjusted Debt of the Company and the Restricted Subsidiaries, determined on a
consolidated basis at such time.

      CONSOLIDATED DEPRECIATION EXPENSE -- means, for any Persons for any
period, the amount of depreciation and amortization expense of the such Persons,
determined on a consolidated basis for such Persons for such period, but only to
the extent deducted from revenues of such Persons in the determination of
Consolidated Net Income of such Persons for such period.

      CONSOLIDATED EBITDA -- means, for any Persons for any period, the sum of:

            (a)   Consolidated Net Income of such Persons; PLUS

            (b)   Consolidated Interest Expense of such Persons;
      PLUS

            (c)   Consolidated Tax Expense of such Persons; PLUS

            (d)   Consolidated Depreciation Expense of such Persons;

determined in respect of such period.

      CONSOLIDATED FIXED CHARGES -- means, for any Persons for any period, an
amount equal to the sum of:

            (a)   Consolidated Interest Expense of such Persons;
      PLUS

            (b)   Consolidated Rental Expense of such Persons;

determined in respect of such period.

                                       40
<PAGE>
      CONSOLIDATED INTEREST EXPENSE -- means, for any Persons for any period,
the amount of interest accrued on, or with respect to, interest bearing
obligations of such Persons for such period, including, without limitation,
amortization of debt discount, imputed interest on Capital Leases and (in the
case of the Company) interest on the Notes, determined on a consolidated basis
for such period, but, in each case, only to the extent deducted from the
revenues of such Persons in the determination of Consolidated Net Income of such
Persons for such period.

      CONSOLIDATED NET COMPANY INCOME -- means, for any period, net income of
the Company and the Restricted Subsidiaries determined on a consolidated basis
for such period, but excluding:

            (a) any gain or net loss (net of any tax effect) arising from the
      sale of capital assets or any write-up or write-down of assets, other than
      in the ordinary course of business;

            (b) earnings or losses of any Restricted Subsidiary accrued prior to
      the date it became a Restricted Subsidiary;

            (c) earnings or losses of any Person, substantially all the assets
      of which have been acquired in any manner by the Company or a Subsidiary,
      realized by such Person prior to the date of such acquisition;

            (d) earnings or losses of any Person (other than a Restricted
      Subsidiary) in which the Company or any Restricted Subsidiary shall have
      an ownership interest unless such net earnings shall have actually been
      received by the Company or such Restricted Subsidiary in the form of cash
      distributions;

            (e) any portion of the net earnings of any Restricted Subsidiary
      that for any reason is unavailable for payment of dividends to the Company
      or any other Restricted Subsidiary or that cannot be freely converted into
      United States dollars;

            (f) the earnings or losses of any Person to which assets of the
      Company shall have been sold, transferred or disposed of, or into which
      the Company shall have merged, prior to the date of such transaction;

            (g)   any gain or loss arising from the acquisition of
      any Securities of the Company or any Restricted Subsidiary;

            (h)   proceeds of any life insurance policy;

            (i) reversal of any extraordinary, unusual or nonrecurring
      contingency reserves not created during such period; and

            (j)   other extraordinary gains or losses.

      CONSOLIDATED NET INCOME -- means, for the Company and the Restricted
Subsidiaries, Consolidated Net Company Income, and for any other Persons for any
period, net income of the such Persons determined 

                                       41
<PAGE>
on a consolidated basis for such period, but excluding:

            (a) any gain or net loss (net of any tax effect) arising from the
      sale of capital assets or any write-up or write-down of assets, other than
      in the ordinary course of business;

            (b) earnings or losses of any other Person, substantially all the
      capital stock or Property of which have been acquired in any manner by
      such Persons, realized by such other Person prior to the date of such
      acquisition;

            (c) earnings or losses of any other Person in which such Persons
      shall have an ownership interest unless such net earnings shall have
      actually been received by the one or more of such Persons in the form of
      cash distributions;

            (e) any portion of the net earnings of any of such Persons that for
      any reason is unavailable for payment of the obligations of such Person or
      that cannot be freely converted into United States dollars;

            (f) the earnings or losses of any other Person to which assets of
      any of such Persons shall have been sold, transferred or disposed of, or
      into which any of such Persons shall have merged, prior to the date of
      such transaction;

            (g)   any gain or loss arising from the acquisition of
      any Securities of any of such Persons;

            (h)   proceeds of any life insurance policy;

            (i) reversal of any extraordinary, unusual or nonrecurring
      contingency reserves not created during such period; and

            (j)   other extraordinary gains or losses.

      CONSOLIDATED NET WORTH -- means, at any time, the Net Worth of the Company
and the Restricted Subsidiaries determined on a consolidated basis at such time.

      CONSOLIDATED RENTAL EXPENSE -- means, for any Persons for any period, an
amount equal to Operating Rental Expense of such Persons, determined on a
consolidated basis for such period, but only to the extent deducted from
revenues in determining Consolidated Net Income of such Persons for such period.

      CONSOLIDATED SENIOR DEBT -- means, at any time, the amount of Adjusted
Debt of the Company and the Restricted Subsidiaries, determined on a
consolidated basis at such time, other than the Notes and other than any
Adjusted Debt which is not by its terms validly and expressly subordinated to
the Subordinated Debt.

      CONSOLIDATED TAX EXPENSE -- means, for any Persons for any period, the
amount of tax expense of

                                       42
<PAGE>
such Persons in respect of federal and state taxes imposed on or measured by
income or excess profits, to the extent, but only to the extent, deducted from
revenues of such Persons in determining Consolidated Net Income of such Persons
for such period.

      CONSOLIDATED TOTAL ASSETS -- means, at any time, an amount equal to the
book value of all assets of the Company and the Restricted Subsidiaries,
determined on a consolidated basis at such time.

      CONTROL PERSON -- means

            (a) any person (as such term is used in section 13(d) and section
      14(d)(2) of the Exchange Act as in effect on the Closing Date); or

            (b) related Persons constituting a group (as such term is used in
      Rule 13d-5 under the Exchange Act as in effect on the Closing Date);

PROVIDED, HOWEVER, that an Initial Manager Affiliate or a group constituted
entirely of Initial Manager Affiliates shall not be a Control Person so long as,
after giving effect to such event which would (if such Initial Manager Affiliate
or group of Initial Manager Affiliates were deemed to be Control Persons)
otherwise have constituted a Change of Control, at least a majority of the
Initial Managers at such time remain employed by the Company having duties
commensurate with those of one or more of the Initial Managers immediately prior
to such event.

      DEBT -- with respect to any Person, means, without duplication, the
liabilities of such Person with respect to:

            (A)   BORROWED MONEY -- borrowed money;

            (B) DEFERRED PURCHASE PRICE OF PROPERTY -- the deferred purchase
      price of Property acquired by such Person (excluding accounts payable
      arising in the ordinary course of business but including all liabilities
      created or arising under any conditional sale or other title retention
      agreement with respect to any such Property);

            (C) SECURED LIABILITIES -- borrowed money secured by any Lien
      existing on Property owned by such Person (whether or not such liabilities
      have been assumed);

            (D)   CAPITAL LEASES -- Capital Leases of such Person;

            (E) LETTERS OF CREDIT -- letters of credit or instruments serving a
      similar function issued or accepted by banks and other financial
      institutions for the account of such Person (whether or not representing
      obligations for borrowed money), other than undrawn trade letters of
      credit in the ordinary course of business;

            (F)   SWAPS -- Swaps of such Person; and

            (G) GUARANTEES -- any Guaranty of such Person of any obligation or
      liability of another Person of obligations of the type listed in clause
      (a) through clause (f) of this definition of Debt.

                                       43
<PAGE>
As used in this definition,

            SWAPS -- means, with respect to any Person, obligations with respect
      to interest rate swaps and currency swaps and similar obligations
      obligating such Person to make payments, whether periodically or upon the
      happening of a contingency, except that if any agreement relating to such
      obligation provides for the netting of amounts payable by and to such
      Person thereunder or if any such agreement provides for the simultaneous
      payment of amounts by and to such Person, then in each such case, the
      amount of such obligations shall be the net amount thereof. The aggregate
      net obligation of Swaps at any time shall be the aggregate amount of the
      obligations of such Person under all Swaps assuming all such Swaps had
      been terminated by such Person as of the end of the then most recently
      ended fiscal quarter of such Person. If such net aggregate obligation
      shall be an amount owing to such Person, then the amount shall be deemed
      to be Zero Dollars ($0).

Unless the context otherwise requires, "Debt" means Debt of the Company or of a
Restricted Subsidiary.

      DEFAULT -- means any event which, with the giving of notice or the passage
of time, or both, would become an Event of Default.

      DOL -- means the United States Department of Labor and any successor
agency.

      ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

      ERISA AFFILIATE -- means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.

      EVENT OF DEFAULT -- Section 6.1.

      EXCHANGE ACT -- means the Securities Exchange Act of 1934, as amended,
together with the rules and regulations of the SEC thereunder.

      EXCLUDED TRANSFERS -- means and includes Transfers referred to in any of
clauses (i), (ii), (iii), (iv) or (vi) of Section 0.

      FAIR MARKET VALUE -- means, with respect to any Property, the sale value
of such Property that would be realized in an arm's-length sale at such time
between an informed and willing buyer, and an informed and willing seller, under
no compulsion to buy or sell, respectively.

      FINANCING DOCUMENTS -- means and includes this Agreement, the Securities
Purchase Agreement, the Notes, the Warrant Agreement, the Warrant certificates,
each Subsidiary Guarantee and the other agreements, certificates and instruments
to be executed pursuant to the terms of each of the foregoing, as each may be
amended, restated or otherwise modified from time to time.

                                       44
<PAGE>
      FISCAL YEAR END DATE -- means the first Friday in January of each year;
PROVIDED, HOWEVER, that if the Company shall elect to change its fiscal year to
a calendar year end, the Fiscal Year End Date shall mean December 31 of each
such fiscal year.

      FOREIGN PENSION PLAN -- means any plan, fund or other similar program:

            (a) established or maintained outside of the United States of
      America by the Company or any Restricted Subsidiary primarily for the
      benefit of the employees (substantially all of whom are aliens not
      residing in the United States of America) of the Company or such
      Restricted Subsidiary, which plan, fund or other similar program provides
      for retirement income for such employees or results in a deferral of
      income for such employees in contemplation of retirement; and

            (b)   not otherwise subject to ERISA.

      GAAP -- means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.

      GUARANTY -- means with respect to any Person (for the purposes of this
definition, the "GUARANTOR") any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend
or other obligation of any other Person (the "PRIMARY OBLIGOR") in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by the Guarantor:

            (a)   to purchase such indebtedness or obligation or
      any Property constituting security therefor;

            (b)   to advance or supply funds

                  (i)   for the purchase or payment of such
            indebtedness, dividend or obligation; or

                  (ii) to maintain working capital or other balance sheet
            condition or any income statement condition of the Primary Obligor
            or otherwise to advance or make available funds for the purchase or
            payment of such indebtedness, dividend or obligation;

            (c) to lease Property or to purchase securities or other Property or
      services primarily for the purpose of assuring the owner of such
      indebtedness or obligation of the ability of the Primary Obligor to make
      payment of the indebtedness or obligation; or

            (d) otherwise to assure the owner of the indebtedness or obligation
      of the Primary Obligor against loss in respect thereof.

                                       45
<PAGE>
For purposes of computing the amount of any Guaranty, in connection with any
computation of indebtedness or other liability:

            (i) in each case where the obligation that is the subject of such
      Guaranty is in the nature of indebtedness for money borrowed it shall be
      assumed that the amount of the Guaranty is the amount of the direct
      obligation then outstanding; and

            (ii) in each case where the obligation that is the subject of such
      Guaranty is not in the nature of indebtedness for money borrowed it shall
      be assumed that the amount of the Guaranty is the amount (if any) of the
      direct obligation that is then due.

      INITIAL MANAGER AFFILIATE -- means and includes:

            (a)   any Initial Manager;

            (b)   any spouse, child, lineal descendant or sibling
      of an Initial Manager;

            (c) a trust for the sole benefit of one or more of the spouse,
      children or lineal descendants of one or more of the Initial Managers, so
      long as any Person described in clause (a) or (b) above has the right to
      control such trust;

            (d) upon the death or incompetency of any Initial Manager, the
      executor, administrator, conservator or other personal representative of
      the person or Property of such Initial Manager; and

            (e) a corporation, partnership, limited liability company or other
      similar business entity directly or indirectly controlled by one or more
      of the Initial Managers.

      INITIAL MANAGERS -- means and includes David I. Sheinfeld,
Thomas M. Hubbard, Steve R. Grinstead, Sheldon I. Stein, Robert
C. Kiehnle, Lawrence Jackson and Colon Washburn.

      INTANGIBLE ASSETS - with respect to any Person, at any time, means the
following:

            (a) deferred assets, other than prepaid expenses which are
      refundable (including, without limitation, insurance and prepaid taxes);

            (b) patents, copyrights, trademarks, trade names, service marks,
      brand names, franchises, goodwill, experimental expenses and other similar
      intangibles;

            (c)   unamortized debt discount and expense;

            (d)   contract rights;

                                       46
<PAGE>
            (e)   computer software; and

            (e) all other Property which would be considered to be intangible
      under GAAP.

      INVESTMENTS -- means all investments, made in cash or by delivery of
Property, by the Company and the Subsidiaries:

            (a) in any Person, whether by acquisition of stock, Debt or other
      obligation or Security, or by loan, guaranty, advance or capital
      contribution, or otherwise; or

            (b)   in any Property.

      IRC -- means the Internal Revenue Code of 1986, together with all rules
and regulations promulgated pursuant thereto, as amended from time to time.

      LIEN -- means any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property (for purposes of this
definition, the "OWNER"), whether such interest is based on the common law,
statute or contract, and includes but is not limited to:

            (a) the security interest lien arising from a mortgage, encumbrance,
      pledge, conditional sale or trust receipt or a lease, consignment or
      bailment for security purposes, and the filing of any financing statement
      under the Uniform Commercial Code of any jurisdiction, or an agreement to
      give any of the foregoing;

            (b) reservations, exceptions, encroachments, easements,
      rights-of-way, covenants, conditions, restrictions, leases and other title
      exceptions and encumbrances affecting real Property; and

            (c) any interest in any Property held by the Owner evidenced by a
      conditional sale agreement, Capital Lease or other arrangement pursuant to
      which title to such Property has been retained by or vested in some other
      Person for security purposes.

The term "Lien" does not include negative pledge clauses in loan agreements and
equal and ratable security clauses in loan agreements.

      MANAGEMENT - means, with respect to any Restricted Subsidiary, means any
Senior Officer and any senior officer or director of such Restricted Subsidiary.

      MATERIAL ADVERSE EFFECT -- means, with respect to any event or
circumstance (either individually or in the aggregate with all other events and
circumstances), an effect caused thereby or resulting therefrom that would be
materially adverse as to, or in respect of:

            (a) the business, operations, profits, financial condition or
      Properties of the Company and the Restricted Subsidiaries, taken as a
      whole;

                                       47
<PAGE>
            (b)   the ability of the Company to perform its
      obligations under any Financing Document; or

            (c)   the validity or enforceability of any of the
      Financing Documents.

      MAXIMUM LEGAL RATE OF INTEREST -- means the maximum rate of interest that
a holder of Notes may from time to time legally charge the Company by agreement
and in regard to which the Company would be prevented successfully from raising
the claim or defense of usury under the Applicable Interest Law as now or
hereafter construed by courts having appropriate jurisdiction.

      MODIFIED PREPAYMENT COMPENSATION AMOUNT -- means, with respect to Prepaid
Principal and the date the payment thereof is due, an amount equal to the
applicable percentage set out below of the Prepaid Principal:

================================================================================
      IF PREPAYMENT OCCURS DURING
      THE PERIOD SPECIFIED BELOW:           PERCENTAGE OF PREPAID PRINCIPAL:
================================================================================
    From and including May 2, 2001                        3.00%
     to and including May 1, 2002
--------------------------------------------------------------------------------
        On or after May 2, 2002                           0.00%
================================================================================

      MULTIEMPLOYER PLAN -- means any "multiemployer plan" (as defined in
section 3(37) of ERISA) in respect of which the Company or any ERISA Affiliate
is an "employer" (as such term is defined in section 3 of ERISA).

      NET WORTH -- means, with respect to any Person, at any time, the
stockholders' equity of such Person as would be reflected on a balance sheet of
such Person prepared in accordance with GAAP at such time.

      NONPAYMENT DEFAULT NOTICE -- Section 0.

      NOTE -- means and includes each 12% Senior Subordinated Note due May 1,
2003 issued pursuant to this Agreement.

      OFFERING MEMORANDUM -- means the confidential offering memorandum, dated
March 19, 1998, of BancAmerica Robertson Stephens relating to the offering of
the Notes and the Warrants of the Company, together with all exhibits thereto.

      ONTARIO -- means, collectively, Ontario Tree Fruits, Limited, an Ontario
corporation; Trio Importing (No. 2) Company, Ltd, an Ontario corporation;
1277649 Ontario Limited, an Ontario corporation; FOSAR, INC., a New Jersey
corporation; and SARFOG, INC., a New Jersey corporation.

      OPERATING LEASE -- means, with respect to any Person, any lease other than
a Capital Lease.

                                       48
<PAGE>
      OPERATING RENTAL EXPENSE -- means, for any Person for any period, all
fixed payments which the lessee is required to make by the terms of any
Operating Lease during such period but shall not include amounts required to be
paid in respect of maintenance, repairs, income taxes, property taxes,
insurance, assessments or other similar charges or additional rentals (in excess
of fixed minimums) based upon a percentage of gross receipts.

      PACA -- means the Perishable Agricultural Commodities Act of 1930, as
amended from time to time.

      PACA ADJUSTMENT -- means, in connection with the calculation of any
borrowing base amount under the Senior Credit Agreement or any Acceptable
Revolving Credit Facility, a deduction from such borrowing base formulation for
amounts owed to growers of agricultural products that may have statutory rights
against certain assets of the Company and the Subsidiaries under PACA or any
comparable state law.

      PAYMENT BLOCKAGE PERIOD -- Section 0.

      PAYMENT BLOCKAGE PERIOD TERMINATION DATE -- means, with respect to any
Significant Payment Default, the earliest of:

            (a) the date one hundred eighty (180) days after the earlier of:

                  (i)   the date upon which the Nonpayment Default
            Notice was given; and

                  (ii) the date that any Standstill Period arising out of such
            Significant Nonpayment Default commenced;

            (b) the date on which such Significant Nonpayment Default shall have
      been cured or waived in writing or shall have ceased to exist;

            (c) the date such Payment Blockage Period shall have been terminated
      by written notice to the Company from the Senior Agent;

            (d)   the date of the repayment in full in cash or cash
      equivalents of the Senior Debt; and

            (e) the date on which any holder or holders of the Senior Debt
      exercise any Remedies.

      PAYMENT DEFAULT NOTICE -- Section 0.

      PBGC -- means the Pension Benefit Guaranty Corporation, or any other
Person succeeding to the duties thereof.

      PERSON -- means an individual, partnership, corporation, limited liability
company, joint venture, trust, unincorporated organization, or a government or
agency or political subdivision thereof.

      PLAN -- means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding three (3) years, has been established or
maintained, or to which contributions are or, within 

                                       49
<PAGE>
the preceding three (3) years, have been made or required to be made, by the
Company or any ERISA Affiliate or with respect to which the Company or any ERISA
Affiliate may have any liability.

      PREPAID PRINCIPAL -- means any portion of the principal amount of the
Notes being paid for any reason (including, without limitation, acceleration,
optional payment or mandatory payment required because of the occurrence of a
contingency) prior to its regularly scheduled maturity date.

      PREPAYMENT COMPENSATION AMOUNT -- at any time, means:

            (a) if such time is on or prior to May 1, 2001, the Standard
      Prepayment Compensation Amount; and

            (b) if such time is after May 1, 2001, the Modified Prepayment
      Compensation Amount.

      PRO FORMA ADJUSTED BASIS -- means, with respect to any merger,
consolidation or sale of all or substantially all of the Property of the
Company, the measurement of any financial test or ratio assuming:

            (a) such merger, consolidation or sale of all or substantially all
      of the Property of the Company, and all related transactions (including,
      without limitation, the incurrence of any Debt in connection with any such
      transaction), occurred on the first day of the relevant measuring period
      of such financial ratio or test;

            (b) that any such Debt incurred in connection with such transaction
      which bears interest at a floating rate bore interest throughout such
      period at the rate in effect on the date of such transaction; and

            (c)   that "Consolidated Adjusted Debt," "Consolidated
      Senior Debt," and "Pro Forma Combined EBITDA" are measured
      for:

                  (i) the Surviving Corporation and those of its subsidiaries
            which, had they been Subsidiaries of the Company, would be
            Restricted Subsidiaries, on a consolidated basis; and

                  (ii)  the Company and the Restricted Subsidiaries,
            on a consolidated basis;

      on a combined basis.

      PRO FORMA BASIS -- means, in connection with the incurrence of any Debt,
the measurement of any financial test or ratio assuming:

            (a) such Debt was incurred on the first day of the relevant
      measuring period of such financial ratio or test; and

                                       50
<PAGE>
                        (B) THAT ANY SUCH DEBT IN CONNECTION WITH SUCH
            TRANSACTION WHICH BEARS INTEREST AT A FLOATING RATE BORE INTEREST
            THROUGHOUT SUCH PERIOD AT THE RATE IN EFFECT ON THE DATE OF SUCH
            TRANSACTION.

      PRO FORMA COMBINED EBITDA -- means, for any period, without duplication,
the sum of:

            (a)   Consolidated EBITDA of:

                  (i)   the Company and the Restricted Subsidiaries
            for such period; and

                  (ii)  each Acquired Business with respect to such
            period;

      on a pro forma combined basis, assuming that the Acquired Business became
      an Acquired Business on the first day of such period; PLUS

            (b)   the lesser of:

                   (i) the aggregate amount of transaction expenses incurred in
            connection with the acquisition by the Company of Ontario, but only
            to the extent deducted from the revenues of the Company and the
            Restricted Subsidiaries in the determination of Consolidated Net
            Company Income of the Company and the Restricted Subsidiaries for
            such period; and

                  (ii)  One Million Five Hundred Thousand Dollars
            ($1,500,000).

      PRO FORMA COMBINED FIXED CHARGE COVERAGE RATIO -- means, for any period,
the ratio of Pro Forma Combined Net Income Available for Fixed Charges to Pro
Forma Combined Fixed Charges, determined in each case in respect of such period.

      PRO FORMA COMBINED FIXED CHARGES -- means, for any period, without
duplication, Consolidated Fixed Charges of:

            (a)   the Company and the Restricted Subsidiaries for
      such period; and

            (b)   each Acquired Business with respect to such
      period;

on a pro forma combined basis, assuming that the Acquired Business became an
Acquired Business on the first day of such period.

      PRO FORMA COMBINED NET INCOME AVAILABLE FOR FIXED CHARGES -- means, for
any period, without duplication, the sum of:

                                       51
<PAGE>
            (a)   Pro Forma Combined EBITDA for such period; PLUS

            (b)   Consolidated Rental Expense of:

                  (i)   the Company and the Restricted Subsidiaries
            for such period; and

                  (ii)  each Acquired Business with respect to such
            period;

      on a pro forma combined basis, assuming that the Acquired Business became
      an Acquired Business on the first day of such period.

      PROPERTY -- means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.

      PURCHASERS -- the introductory paragraph.

      REMEDIES -- means and includes, with respect to any Debt (including,
without limitation, the Senior Debt and the Subordinated Debt):

            (a)   the acceleration of the maturity of any of such
      Debt;

            (b) the exercise of any put right or other similar right to require
      the Company or any Subsidiary to repurchase any of such Debt prior to the
      stated maturity thereof;

            (c) the collection or commencement of proceedings against the
      Company, any Subsidiary or any other Person obligated on such Debt or any
      of their respective Property, to enforce or collect any of such Debt;

            (d) taking possession of or foreclosing upon (whether by judicial
      proceedings or otherwise) any Liens or other collateral security for such
      Debt; or causing a marshalling of any Property of the Company or any
      Subsidiary;

            (e)   the making of a demand in respect of any Guaranty
      given by the Company or any Subsidiary of such Debt;

            (f) exercising any other remedies with respect to such Debt or any
      claim with respect thereto; or

            (g) the taking of any action against the Company, any Subsidiary or
      any other Person obligated on or for such Debt, or any of their respective
      assets, pursuant to the terms of the agreements governing such Debt.

      REQUIRED HOLDERS -- means, at any time, the holders of not less than
fifty-one percent (51%) in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by any one or more of the Company, any Restricted
Subsidiary or any Affiliate).

                                       52
<PAGE>
      REQUIRED PRINCIPAL PAYMENT -- Section 0.

      RESTRICTED INVESTMENT -- means, at any time, all Investments except the
following:

            (a) Investments in Property (including, without limitation, real
      Property and interests therein) to be used in the ordinary course of
      business and current assets arising from the sale of goods and services in
      the ordinary course of business of the Company and the Subsidiaries;

            (b) Investments in one or more Restricted Subsidiaries or any
      corporation that concurrently with such Investment becomes a Restricted
      Subsidiary;

            (c) Investments in direct obligations of the United States of
      America, any agency thereof or obligations guaranteed by the United States
      of America, so long as such obligations are backed by the full faith and
      credit of the United States of America; PROVIDED that such obligations
      mature within three (3) years from the date of acquisition thereof;

            (d) Investments in any obligation of any state of the United States
      or municipality thereof given either of the two (2) highest ratings by at
      least one credit rating agency of recognized national standing and
      maturing within three (3) years from the date of acquisition;

            (e) Investments in certificates of deposit or banker's acceptances
      either:

                  (i)   issued by Bank of America; or

                  (ii) given one (1) of the two (2) highest ratings by at least
            one credit rating agency of recognized national standing, issued by
            a bank or trust company organized under the laws of the United
            States of America or any state thereof having capital, surplus and
            undivided profits aggregating at least Two Hundred Fifty Million
            Dollars ($250,000,000);

            (f) Investments in money market mutual funds that invest solely in
      so-called "money market" instruments maturing not more than one year after
      the acquisition thereof and given one of the two (2) the highest ratings
      by at least one credit rating agency of recognized national standing and
      which are properly classified as current assets in accordance with GAAP;

            (g) Investments in commercial paper given either of the two (2)
      highest ratings by at least one credit rating agency of recognized
      national standing, that mature not more than two hundred seventy (270)
      days from the date of creation thereof;

            (h)   Investments existing as of the Closing Date and
      listed on PART 2.2(G) OF ANNEX 3;

            (i) payments made by the Company or any Restricted Subsidiary in the
      ordinary course of business to growers of fruits or vegetables in
      consideration of any such grower's promise to:

                                       53
<PAGE>
                  (i) provide such grower's crop (after harvest) to the Company
            or a Restricted Subsidiary for distribution and sale; and

                  (ii) reimburse the Company or such Restricted Subsidiary for
            payment from the proceeds of the sale by the Company or such
            Restricted Subsidiary of such crop;

      and

            (j) Investments made after the Closing Date not otherwise permitted
      in an aggregate amount not to exceed Two Million Dollars ($2,000,000).

Investments shall be valued at cost less any net return of capital through the
sale or liquidation thereof or other return of capital thereon.

      RESTRICTED PAYMENT -- means and includes:

            (a) any dividend or other distribution, direct or indirect, on
      account of any shares of Capital Stock or Rights of the Company
      (including, without limitation, the Common Stock), now or hereafter
      outstanding, except a dividend payable solely in shares of Specified Stock
      of the Company;

            (b) any dividend or other distribution, direct or indirect, on
      account of any shares of Capital Stock or Rights of any Restricted
      Subsidiary, now or hereafter outstanding, except:

                  (i)   a dividend payable solely in shares of
            Specified Stock of such Restricted Subsidiary; or

                  (ii) to the extent that such dividend or distribution is,
            directly or indirectly, payable to the Company;

            (c) any redemption, retirement, purchase or other acquisition,
      direct or indirect, of any shares of Capital Stock or Rights of the
      Company now or hereafter outstanding (other than, in the case of Rights,
      the retirement of such rights by virtue of the exercise or conversion
      thereof into Common Stock);

            (d) any redemption, retirement, purchase or other acquisition,
      direct or indirect, of any shares of Capital Stock or Rights of any
      Restricted Subsidiary now or hereafter outstanding, except to the extent
      that such redemption, retirement, purchase or other acquisition is made
      from, and the payment in respect of such redemption, retirement, purchase
      or other acquisition is paid, directly or indirectly, to the Company; and

            (e) any payment, whether in respect of principal, premium, interest,
      fees, expenses or otherwise, in respect of, or any redemption, retirement,
      purchase or other acquisition, direct or indirect, of, any Debt owed by
      the Company to any Affiliate.

                                       54
<PAGE>
      RESTRICTED SUBSIDIARY -- means, at any time, a Subsidiary:

            (a) that as of the Closing Date has been designated on Annex 3 as a
      "Restricted Subsidiary" or, after the Closing Date and pursuant to Section
      0, has been designated as a "Restricted Subsidiary";

            (b) organized under the laws of the United States of America or any
      jurisdiction thereof, Canada, any nation which is a member of the European
      Economic Community or Mexico;

            (c) that conducts substantially all of its business and has
      substantially all of its tangible Property within the United States of
      America, Canada, any nation of the European Common Market or Mexico; and

            (d) at least fifty percent (50%) (by number of votes) of each class
      of the Voting Stock of which is legally and beneficially owned by any one
      or more of the Company and its Wholly-Owned Restricted Subsidiaries;

at such time.

      RESTRICTED SUBSIDIARY STOCK -- Section 0.

      RIGHT -- means and includes:

            (a) any warrant (including, without limitation, any Warrant) or any
      option (including, without limitation, employee stock options) to acquire
      Common Stock;

            (b) any right issued to holders of the Common Stock, or any class
      thereof, permitting the holders thereof to subscribe to shares of Common
      Stock or Rights (pursuant to a rights offering or otherwise);

            (c) any right to acquire Common Stock pursuant to the provisions of
      any Security convertible or exchangeable into Common Stock; and

            (d) any similar right permitting the holder thereof to subscribe for
      or purchase shares of Common Stock.

      SALE-LEASEBACK TRANSACTIONS -- means transactions or series of related
transactions in which the Company or a Restricted Subsidiary sells any of its
Property to any Person (other than to the Company or to a Restricted Subsidiary)
and concurrently with, or after, such sale or transfer, rents or leases as
lessee such Property so sold from such Person.

      SEC -- means, at any time, the Securities and Exchange Commission or any
other federal agency at such time administering the Securities Act.

      SECURITIES ACT -- means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.

                                       55
<PAGE>
      SECURITIES PURCHASE AGREEMENT -- means, collectively, each of the
Securities Purchase Agreements, dated as of May 4, 1998, between the Company and
each of the Purchasers, relating to the offering and sale of the Notes and the
Warrants.

      SECURITY -- means "security" as defined by section 2(1) of the Securities
Act.

      SENIOR AGENT -- means, until the Company shall have delivered any contrary
written direction to the holders of the Notes, Bank of America, and thereafter,
any one agent or lender in respect of any Senior Credit Facility, or a
representative of either, designated in writing to each holder of Notes by the
Company as being the "Senior Agent".

      SENIOR CREDIT AGREEMENT -- means the Restated Business Loan Agreement,
dated February 2, 1998, between the Company and Bank of America, as amended to
the date hereof and as thereafter amended in compliance with the provisions of
Section 0.

      SENIOR CREDIT FACILITY -- means and includes:

            (a)   the Senior Credit Agreement; and

            (b) any revolving credit agreement or agreement, any agreement or
      agreements in respect of long-term Debt for borrowed money, extended by
      banks or other institutional lenders (and excluding, without limitation,
      Capital Leases and other forms of credit not in the nature of Debt for
      borrowed money) designated in writing as such by the Company to the
      holders of the Notes.

      SENIOR DEBT -- means and includes all obligations, liabilities and
indebtedness of the Company now or hereafter existing, whether fixed or
contingent, and whether for principal, interest (including interest accruing
after the filing of a petition under the Bankruptcy Code, to the extent
allowed), fees, expenses, indemnification or otherwise, in respect of:

            (a) any Acceptable Revolving Credit Facility, in an aggregate amount
      for all such Acceptable Revolving Credit Facilities not exceeding at any
      time of incurrence or creation thereof, the greater of:

                  (i)   Fifty Million Dollars ($50,000,000); and

                  (ii)  the Borrowing Base; and

            (b) any other Debt for borrowed money or Capital Leases of the
      Company (including, without limitation, additional Debt for in respect of
      an Acceptable Revolving Credit Facility); PROVIDED, HOWEVER, that "Senior
      Debt" referred to in this clause (b) shall not include:

                  (i) Debt that, by its terms or the terms of any ancillary
            agreement with the

                                       56
<PAGE>
            holders of such Debt, is expressed to be subordinated in right of
            payment to any other Debt of the Company or any Subsidiary;

                  (ii)  Debt owing to the Company, any Affiliate or
            any Subsidiary; or

                  (iii) any such other Debt the incurrence or creation thereof
            would have caused the Company not to be in compliance with any
            provision of Section 0, if the financial ratio tests set forth in
            each of Section 0 through Section 0, inclusive, were tested
            immediately after, and after giving effect to, the incurrence of
            such Debt, assuming that:

                        (A) the entire amount of such Debt was included in both
                  Consolidated Adjusted Debt and Consolidated Senior Debt and
                  was considered outstanding in computing Consolidated Net Worth
                  as of the date of incurrence thereof; and

                        (B) for purposes of computing Consolidated Interest
                  Expense for any relevant period, the entire amount of such
                  Debt was incurred as of the first day of such period, remained
                  outstanding throughout such period and bore interest at the
                  rate in effect on the date of determination.

      SENIOR FINANCIAL OFFICER -- means any one of the chief financial officer,
the treasurer and the principal accounting officer of the Company.

      SENIOR OFFICER -- means any one of the chairman of the board of directors,
the president, the chief executive officer, the chief operating officer and the
chief financial officer of the Company.

      SENIOR PAYMENT DEFAULT -- Section 0.

      SIGNIFICANT NONPAYMENT DEFAULT -- means and includes any event of default
under any Senior Credit Facility in respect of the failure of the Company to
comply with any material covenant or agreement therein.

      SPECIAL PREPAYMENT COMPENSATION AMOUNT - means, with respect to Prepaid
Principal prepaid in connection with a Special Prepayment Event and the Special
Prepayment Date, the Standard Prepayment Compensation Amount as calculated with
respect thereto; PROVIDED, HOWEVER, that in calculating the Present Value of the
Prepaid Cash Flows, a discount rate PER ANNUM determined with respect to such
Prepaid Principal and the Special Prepayment Date, equal to the sum of:

            (a)   four percent (4.00%) per annum; PLUS

            (b) the PER ANNUM percentage rate (rounded to the nearest three (3)
      decimal places) equal to the bond equivalent yield to maturity derived
      from the Bloomberg Rate, or if the Bloomberg Rate is not then available,
      the Applicable H.15 Rate, determined as of the date that is two (2)
      Business Days prior to such Special Prepayment Date;

divided by two (2), and a discount period of six (6) months of thirty (30) days
each, shall be used.

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      Terms used in this definition and defined in the definition of "Standard
Prepayment Compensation Amount" have the respective meanings ascribed to such
terms therein.

      SPECIAL PREPAYMENT DATE -- means the date of the consummation of any
Special Prepayment Event.

      SPECIAL PREPAYMENT EVENT -- means the incurrence by the Company of any
Debt in connection with a Specified Acquisition, on the date of such Specified
Acquisition or within ninety (90) days thereafter, the proceeds of which Debt
are applied on the date of the incurrence thereof to:

            (a)   either:

                  (i)   pay a portion of the purchase price of such
            Specified Acquisition;

                  (ii) refinance all or a portion of the Debt of the acquired
            Person assumed in connection with such Specified Acquisition; or

                  (iii)       some combination of the uses specified
            in the immediately preceding clauses (i) and (ii);

      so long as a significant portion of the sum of the purchase price and the
      amount of such assumed Debt of the acquired Person so refinanced are paid
      with the proceeds of such newly incurred Debt; and

            (b) to fund all or a substantial portion of the prepayment of all of
      the Notes in accordance with Section 0.

      SPECIFIED ACQUISITION -- means and includes the acquisition by the Company
or any Restricted Subsidiary of all or substantially all of the Property of or
all or substantially all of the of the Capital Stock of, or the merger or
consolidation of the Company or a Restricted Subsidiary with or into, any, all
or any combination of those Persons previously specified to you in writing by
the Company as being potential acquisition targets, or any holding company all
or substantially all of the Property of which comprises all or substantially all
of the Capital Stock of any of them.

      SPECIFIED STOCK -- means and includes, with respect to any Person:

            (a)   its common stock; and

            (b)   any class of its Capital Stock which:

                  (i) does not, pursuant to its terms or the terms of any
            ancillary agreement or document, require the Company or any
            Subsidiary to redeem all or any portion thereof at any time, whether
            or not conditioned upon the happening of a contingency, prior to
            September 1, 2003; and

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                  (ii) does not, pursuant to its terms or the terms of any
            ancillary agreement or document, confer upon the holders thereof any
            right in respect of the failure of such Person to pay any dividend
            in respect thereof (other than cumulation of such dividends or the
            right to nominate or otherwise select or participate in the
            selection of one or more directors of such Person).

When used herein without reference to a particular Person, the term "Specified
Stock" means Specified Stock of the Company.

      STANDARD PREPAYMENT COMPENSATION AMOUNT -- means, with respect to Prepaid
Principal and the date the payment thereof is due (the "PAYMENT DATE") an amount
equal to the excess (if any) of the Present Value of the Prepaid Cash Flows over
the amount of such Prepaid Principal, determined in respect of such Prepaid
Principal as of such Payment Date. As used in this definition:

            PRESENT VALUE OF THE PREPAID CASH FLOWS -- means the sum of the
      present values of the then remaining scheduled payments of principal and
      interest that would have been payable in respect of such Prepaid Principal
      but that are no longer payable as a result of the early payment of such
      Prepaid Principal. In determining such present values:

                  (i) the amount of interest accrued through and including the
            day immediately preceding such Payment Date on such Prepaid
            Principal since the scheduled interest payment date immediately
            preceding such Payment Date shall be deducted from the first of such
            payments of interest; and

                  (ii) a discount rate PER ANNUM equal to the Make-Whole
            Discount Rate determined with respect to such Prepaid Principal and
            such Payment Date DIVIDED by two (2), and a discount period of six
            (6) months of thirty (30) days each, shall be used.

            MAKE-WHOLE DISCOUNT RATE -- means the sum of:

                  (i)   two and one-half percent (2.50%) PER ANNUM;
            PLUS

                  (ii) the PER ANNUM percentage rate (rounded to the nearest
            three (3) decimal places) equal to the bond equivalent yield to
            maturity derived from the Bloomberg Rate, or if the Bloomberg Rate
            is not then available, the Applicable H.15 Rate, determined as of
            the date that is two (2) Business Days prior to such Payment Date.

            APPLICABLE H.15 -- means, at any time, the United States Federal
      Reserve Statistical Release H.15(519) then most recently published and
      available to the public, or if such publication is not available, then any
      other source of current information in respect of interest rates on
      securities of the United States of America that is generally available
      and, in the judgment of the Required Holders, provides information
      reasonably comparable to the H.15(519) report.

            APPLICABLE H.15 RATE -- means, at any time, the then most current
      annual yield to maturity 

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      of the hypothetical United States Treasury obligation listed in the
      Applicable H.15 with a Treasury Constant Maturity (as such term is defined
      in such Applicable H.15) equal to the Weighted Average Life to Maturity of
      such Prepaid Principal. If no such United States Treasury obligation with
      a Treasury Constant Maturity corresponding exactly to such Weighted
      Average Life to Maturity is listed, then the yields for the two (2) then
      most current hypothetical United States Treasury obligations with Treasury
      Constant Maturities most closely corresponding to such Weighted Average
      Life to Maturity (one (1) with a longer maturity and one (1) with a
      shorter maturity, if available) shall be calculated pursuant to the
      immediately preceding sentence and the Make-Whole Discount Rate shall be
      interpolated or extrapolated from such yields on a straight-line basis.

            BLOOMBERG RATE -- means the PER ANNUM yield reported on the
      Bloomberg Financial Markets System at 10:00 a.m. (New York time) on the
      second (2nd) Business Day preceding such Payment Date for United States
      government securities having a maturity (rounded to the nearest month)
      corresponding to the Weighted Average Life to Maturity of such Prepaid
      Principal. Page USD shall be used as the source of such yields, or if not
      then available, such other screen available on the Bloomberg Financial
      Markets System as shall, in the opinion of the Required Holders, provide
      equivalent information.

            TREASURY CONSTANT MATURITY -- has the meaning specified in the
      Applicable H.15.

            WEIGHTED AVERAGE LIFE TO MATURITY -- means the number of years
      (calculated to the nearest one-twelfth (1/12th)) obtained by DIVIDING the
      Remaining Dollar-Years of such Prepaid Principal by such Prepaid
      Principal, determined as of such Payment Date.

            REMAINING DOLLAR-YEARS -- means the result obtained by:

                  (a) MULTIPLYING, in the case of each then remaining scheduled
            payment of principal that would have been payable in respect of
            Prepaid Principal but is no longer payable as a result of the
            payment of such Prepaid Principal;

                        (i)   an amount equal to such scheduled
                  payment of principal; by

                        (ii) the number of years (calculated to the nearest
                  one-twelfth) that will elapse between such Payment Date and
                  the date such scheduled principal payment would be due if such
                  Prepaid Principal had not been so prepaid; and

                  (b) calculating the sum of each of the products obtained in
            the preceding subsection (a).

      STANDSTILL PERIOD -- Section 0.

      SUBSIDIARY -- means a corporation of which the Company owns, directly or
indirectly, more than fifty percent (50%) (by number of votes) of each class of
Voting Stock.

      SUBSIDIARY GUARANTEE -- Section 0.

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      SUBSIDIARY GUARANTOR -- means and includes, for so long as such Subsidiary
is required to maintain a Subsidiary Guarantee pursuant to Section 0, each
Subsidiary identified on PART 2.3(C) OF ANNEX 3 and each other Subsidiary
required to enter into a Subsidiary Guaranty pursuant to Section 0.

      SUBORDINATED DEBT -- means and includes all obligations, liabilities and
indebtedness of the Company now or hereafter existing, whether fixed or
contingent, and whether for principal, interest (including interest accruing
after the filing of a petition under the Bankruptcy Code, to the extent
allowed), fees, expenses, indemnification or otherwise, in respect of this
Agreement and the Notes.

      SURVIVING CORPORATION -- Section 0.

      TANGIBLE PROPERTY -- means productive Property other than Intangible
Assets for use in the conduct of the business of the Company and the Restricted
Subsidiaries; PROVIDED, HOWEVER, that:

            (a) in the event that the Company or any Restricted Subsidiary
      acquires (by purchase of shares of Capital Stock, merger, consolidation or
      otherwise) any Person, the entire purchase price for such Person shall be
      deemed to have been expended upon "Tangible Property" so long as the sum,
      without duplication, of:

                  (i) all goodwill and other amounts attributable to the excess
            of acquisition cost over the book value of the acquired Person as a
            result of such acquisition; PLUS

                  (ii)  the book value of all Intangible Assets of
            such acquired Person;

      does not exceed twenty-five percent (25%) of the purchase
      price thereof; and

            (b) in the event of a purchase of a group of Property in a single or
      group of related transactions, not more than ten percent (10%) of the
      purchase price thereof shall be attributable to Intangible Assets.

      TRANSFERS -- means and includes, with respect to any Property, any sales,
leases, transfers or other dispositions of such Property; the term "TRANSFER,"
when used as a verb with respect to any Property, means to sell, lease as
lessor, transfer or otherwise dispose of such Property; and the term
"TRANSFERRED" has a correlative meaning.

      UNRESTRICTED SUBSIDIARY -- means any Subsidiary that is not a Restricted
Subsidiary.

      VOTING STOCK -- means, with respect to any corporation, any shares of
stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time any stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency), and, in the case of the Company, shall include the Common Stock.
Except as otherwise provided, references herein to "Voting Stock" shall mean
Voting Stock of the Company.

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<PAGE>
      WARRANT -- means each warrant to purchase Common Stock issued pursuant to
the Warrant Agreement.

      WARRANT AGREEMENT -- means the Warrant Agreement, dated as of May 4, 1998
among the Company and the Purchasers, pursuant to which the Warrants were
issued.

      WHOLLY-OWNED RESTRICTED SUBSIDIARY -- means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the equity Securities (except
directors' qualifying shares and except, in the case of 1277649 Ontario Limited,
an Ontario corporation, its exchangeable common stock exchangeable on a
one-for-one basis into shares of the Common Stock, issued to the sellers of
Ontario) and Voting Stock of which are owned by any one or more of the Company
and the Company's other Wholly-Owned Restricted Subsidiaries at such time.

      8.2   ACCOUNTING PRINCIPLES.

            (A) GENERALLY. Unless otherwise provided herein, all financial
      statements delivered in connection herewith will be prepared in accordance
      with GAAP. Where the character or amount of any asset or liability or item
      of income or expense, or any consolidation or other accounting computation
      is required to be made for any purpose hereunder, it shall be done in
      accordance with GAAP; PROVIDED, HOWEVER, that if any term defined herein
      includes or excludes amounts, items or concepts that would not be included
      in or excluded from such term if such term were defined with reference
      solely to GAAP, such term will be deemed to include or exclude such
      amounts, items or concepts as set forth herein.

            (B) CONSOLIDATION. Whenever accounting amounts of a group of Persons
      are to be determined "on a consolidated basis" it shall mean that, as to
      balance sheet amounts to be determined as of a specific time, the amount
      that would appear on a consolidated balance sheet of such Persons prepared
      as of such time, and as to income statement amounts to be determined for a
      specific period, the amount that would appear on a consolidated income
      statement of such Persons prepared in respect of such period, in each case
      with all transactions among such Persons eliminated, and prepared in
      accordance with GAAP except as otherwise required hereby.

            (C) CURRENCY. With respect to any determination, consolidation or
      accounting computation required hereby, any amounts not denominated in the
      currency in which this Agreement specifies shall be converted to such
      currency in accordance with the requirements of GAAP (as such requirements
      relate to such determination, consolidation or computation) and, if no
      such requirements shall exist, converted to such currency in accordance
      with normal banking procedures, at the closing rate as reported in THE
      WALL STREET JOURNAL published most recently as of the date of such
      determination, consolidation or computation or, if no such quotation shall
      then be available, as quoted on such date by any bank or trust company
      reasonably acceptable to the Required Holders.

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      8.3   DIRECTLY OR INDIRECTLY.

      Where any provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, including
actions taken by or on behalf of any partnership in which such Person is a
general partner.

      8.4   SECTION HEADINGS AND TABLE OF CONTENTS AND
CONSTRUCTION.

            (A) SECTION HEADINGS AND TABLE OF CONTENTS, ETC. The titles of the
      Sections of this Agreement and the Table of Contents of this Agreement
      appear as a matter of convenience only, do not constitute a part hereof
      and shall not affect the construction hereof. The words "herein,"
      "hereof," "hereunder" and "hereto" refer to this Agreement as a whole and
      not to any particular Section or other subdivision. References to Sections
      are, unless otherwise specified, references to Sections of this Agreement.
      References to Annexes and Exhibits are, unless otherwise specified,
      references to Annexes and Exhibits attached to this Agreement.

            (B) CONSTRUCTION. Each covenant contained herein shall be construed
      (absent an express contrary provision herein) as being independent of each
      other covenant contained herein, and compliance with any one covenant
      shall not (absent such an express contrary provision) be deemed to excuse
      compliance with one or more other covenants. The word "or," as used
      herein, is not exclusive.

      8.5   GOVERNING LAW.

      THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. IN
ADDITION, THE PARTIES HERETO SELECT, TO THE EXTENT THEY MAY LAWFULLY DO SO, THE
INTERNAL LAWS OF THE STATE OF NEW YORK AS THE APPLICABLE INTEREST LAW.

      8.6   GENERAL INTEREST PROVISIONS.

            (A) INTEREST IN RESPECT OF THE NOTES. It is the intention of the
      Company and the Purchasers to conform strictly to the Applicable Interest
      Law. Accordingly, it is agreed that, notwithstanding any provisions to the
      contrary in this Agreement or in the Notes, the aggregate of all interest,
      and any other charges or consideration constituting interest under the
      Applicable Interest Law that is taken, reserved, contracted for, charged
      or received pursuant to this Agreement or the Notes shall under no
      circumstances exceed the maximum amount of interest allowed by the
      Applicable Interest Law. If any such excess interest is ever charged,
      received or collected on account of or relating to this Agreement and the
      Notes (including any charge or amount which is not denominated as
      "interest" but is legally deemed to be interest under Applicable Interest
      Law), then in such event:

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<PAGE>
                  (i)   the provisions of this Section 0 shall
            govern and control;

                  (ii) the Company shall not be obligated to pay the amount of
            such interest to the extent that it is in excess of the maximum
            amount of interest allowed by the Applicable Interest Law;

                  (iii) any excess shall be deemed a mistake and cancelled
            automatically and, if theretofore paid, shall be credited to the
            principal amount of the Notes by the holders thereof, and if the
            principal balance of the Notes is paid in full, any remaining excess
            shall be forthwith paid to the Company; and

                  (iv) the effective rate of interest shall be automatically
            subject to reduction to the Maximum Legal Rate of Interest.

      If at any time thereafter, the Maximum Legal Rate of Interest is
      increased, then, to the extent that it shall be permissible under the
      Applicable Interest Law, the Company shall forthwith pay to the holders of
      the Notes, on a PRO RATA basis, all amounts of such excess interest that
      the holders of the Notes would have been entitled to receive pursuant to
      the terms of this Agreement and the Notes had such increased Maximum Legal
      Rate of Interest been in effect at all times when such excess interest
      accrued. To the extent permitted by the Applicable Interest Law, all sums
      paid or agreed to be paid to the holders of the Notes for the use,
      forbearance or detention of the indebtedness evidenced thereby shall be
      amortized, prorated, allocated and spread throughout the full term of the
      Notes.

            (B) EFFECT OF ISSUANCE OF NOTES TOGETHER WITH WARRANTS. The Company
      and the Purchasers agree, to the extent permitted by the Applicable
      Interest Law, that, for purposes of computing the interest in respect of
      the Notes under the Applicable Interest Law:

                  (i) the aggregate purchase price of the Notes shall equal the
            difference of:

                        (A)   the initial aggregate principal amount
                  of the Notes; and

                        (B) the amount of original issue discount attributable
                  to the Notes in respect of the issuance of the Warrants
                  together with the Notes;

                  (ii) the amount of original issue discount attributable to the
            Notes in respect of the issuance of the Warrants shall be deemed to
            be the purchase price of the Warrants;

                  (iii) the Warrants and the Notes shall be deemed to have been
            separately issued for the respective purchase prices set forth
            above; and

                  (iv) no portion of the return, if any, to the holders of the
            Warrants in respect of their investment therein shall be deemed to
            be interest in respect of the Notes.

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<PAGE>
9.    MISCELLANEOUS

      9.1   COMMUNICATIONS.

            (A) METHOD; ADDRESS. All communications hereunder or under the Notes
      shall be in writing and shall be delivered either by nationwide overnight
      courier or by facsimile transmission (confirmed by delivery by nationwide
      overnight courier sent on the day of the sending of such facsimile
      transmission). Communications to the Company shall be addressed as set
      forth on Annex 2, or at such other address of which the Company shall have
      notified each holder of Notes. Communications to the holders of the Notes
      shall be addressed as set forth on Annex 1 by such holder, or at such
      other address of which such holder shall have notified the Company (and
      the Company shall record such address in the register for the registration
      and transfer of Notes maintained pursuant to Section 0).

            (B) WHEN GIVEN. Any communication addressed and delivered as herein
      provided shall be deemed to be received when actually delivered to the
      address of the addressee (whether or not delivery is accepted) or received
      by the telecopy machine of the recipient. Any communication not so
      addressed and delivered shall be ineffective.

            (C) SERVICE OF PROCESS. Notwithstanding the foregoing provisions of
      this Section 0, service of process in any suit, action or proceeding
      arising out of or relating to this agreement or any document, agreement or
      transaction contemplated hereby, or any action or proceeding to execute or
      otherwise enforce any judgment in respect of any breach hereunder or under
      any document or agreement contemplated hereby, shall be delivered in the
      manner provided in Section 0(c).

      9.2   REPRODUCTION OF DOCUMENTS.

      This Agreement and all documents relating hereto, including, without
limitation, consents, waivers and modifications that may hereafter be executed,
documents received by any holder at the closing of its purchase of the Notes
(except the Notes themselves and Warrants), and financial statements,
certificates and other information previously or hereafter furnished to any
holder of Notes, may be reproduced by the Company or any holder of Notes by any
photographic, photostatic, microfilm, micro-card, miniature photographic,
digital or other similar process and each holder of Notes may destroy any
original document so reproduced. Any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by the Company or such holder of Notes in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. Nothing in this
Section 0 shall prohibit the Company or any holder of Notes from contesting the
accuracy or validity of any such reproduction.

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      9.3   SURVIVAL; ENTIRE AGREEMENT.

      All warranties, representations, certifications and covenants contained
herein, in the Securities Purchase Agreement or in any certificate or other
instrument delivered hereunder shall be considered to have been relied upon by
the other parties hereto and shall survive the delivery to any holder of Notes
regardless of any investigation made by or on behalf of any party hereto. All
statements in any certificate or other instrument delivered pursuant to the
terms hereof or of the Securities Purchase Agreement shall constitute warranties
and representations hereunder. All obligations hereunder (other than payment of
the Notes, but including, without limitation, reimbursement obligations in
respect of costs, expenses and fees) shall survive the payment of the Notes and
the termination hereof. Subject to the preceding sentence, this Agreement, the
Notes and the other Financing Documents embody the entire agreement and
understanding among the Company and the Purchasers, and supersede all prior
agreements and understandings, relating to the subject matter hereof.

      9.4   SUCCESSORS AND ASSIGNS.

      This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of Notes, and
shall be enforceable by any such holder whether or not an express assignment to
such holder of rights hereunder shall have been made by any predecessor holder.
Anything contained in this Section 0 notwithstanding, but subject to Section 0,
the Company may not assign any of its respective rights, duties or obligations
hereunder or under any of the other Financing Documents without the prior
written consent of all holders of Notes. For purposes of the avoidance of doubt,
any holder of a Note shall be permitted to pledge or otherwise grant a Lien in
and to such Note (including, without limitation, pledging such Note to a trustee
for the benefit of certain secured noteholders pursuant to documents relating to
the financing of such holder or to one or more banks or other institutions
providing financing in connection with the purchase by such holder of such
Note); PROVIDED, HOWEVER, that any such pledgee or holder of a Lien shall not be
considered a holder hereunder until it shall have foreclosed upon such Note in
accordance with applicable law and informed the Company, in writing, of the
same.

      9.5   AMENDMENT AND WAIVER.

            (A) REQUIREMENTS. This Agreement may be amended, and the observance
      of any term hereof may be waived, with (and only with) the written consent
      of the Company and the Required Holders; PROVIDED, HOWEVER, that no such
      amendment or waiver shall, without the written consent of the holders of
      all Notes (exclusive of Notes held by the Company, any Subsidiary or any
      Affiliate) at the time outstanding;

                  (i) change the amount or time of any prepayment or payment of
            principal or Prepayment Compensation Amount or the rate or time of
            payment of interest;

                  (ii) amend or waive the provisions of Section 0, Section 0,
            Section 0 or Section 0, or amend or waive any defined term to the
            extent used therein;

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<PAGE>
                  (iii) amend or waive the definition of "Required Holders" or
            otherwise amend the percentage of Notes required to be held by
            holders of Notes consenting to any action under this Agreement;

                  (iv) amend or waive this Section 0 or amend or waive any
            defined term to the extent used herein.

      The holder of any Note may specify that any such written consent executed
      by it shall be effective only with respect to a portion of the Notes held
      by it (in which case it shall specify, by dollar amount, the aggregate
      principal amount of Notes with respect to which such consent shall be
      effective) and in the event of any such specification such holder shall be
      deemed to have executed such written consent only with respect to the
      portion of the Notes so specified.

            No amendment, supplement or modification of the provisions of
      Section 0, or any defined term to the extent used therein, shall be
      effective as to any holder of Senior Debt who has not consented to such
      amendment, supplement or modification.

            (B)   SOLICITATION OF NOTEHOLDERS.

                  (I) SOLICITATION. Each holder of the Notes (irrespective of
            the amount of Notes then owned by it) shall be provided by the
            Company with all material information provided by the Company to any
            other holder of Notes with respect to any proposed waiver or
            amendment of any of the provisions hereof or the Notes. Executed or
            true and correct copies of any amendment or waiver effected pursuant
            to the provisions of this Section 0 shall be delivered by the
            Company to each holder of outstanding Notes forthwith following the
            date on which such amendment or waiver becomes effective.

                  (II) PAYMENT. The Company shall not, nor shall any Restricted
            Subsidiary or Affiliate, directly or indirectly, pay or cause to be
            paid any remuneration, whether by way of supplemental or additional
            interest, fee or otherwise, or grant any security, to any holder of
            Notes as consideration for or as an inducement to the entering into
            by any holder of Notes of any waiver or amendment of any of the
            provisions hereof or of the Notes unless such remuneration is
            concurrently paid, or security is concurrently granted, on the same
            terms, ratably to the holders of all Notes then outstanding.

                  (III) SCOPE OF CONSENT. Any amendment or waiver made pursuant
            to this Section 0 by a holder of Notes that has transferred or has
            agreed to transfer its Notes to the Company, any Restricted
            Subsidiary or any Affiliate and has provided or has agreed to
            provide such amendment or waiver as a condition to such transfer
            shall be void and of no force and effect except solely as to such
            holder, and any amendments effected or waivers granted that would
            not have been or would not be so effected or granted but for such
            amendment or waiver (and the amendments or waivers of all other
            holders of Notes that were acquired under the same or similar
            conditions) shall be void and of no force and effect, retroactive to
            the date such amendment or waiver initially took or takes effect,
            except solely as to such holder.

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            (C) BINDING EFFECT. Except as provided in Section 0, any amendment
      or waiver consented to as provided in this Section 0 shall apply equally
      to all holders of Notes and shall be binding upon them and upon each
      future holder of any Note and upon the Company whether or not such Note
      shall have been marked to indicate such amendment or waiver. No such
      amendment or waiver shall extend to or affect any obligation, covenant,
      agreement, Default or Event of Default not expressly amended or waived or
      impair any right consequent thereon.

      9.6   EXPENSES.

            (A) AMENDMENTS AND WAIVERS. The Company shall pay when billed the
      reasonable costs and expenses (including reasonable attorneys' fees)
      incurred by the holders of the Notes in connection with the consideration,
      negotiation, preparation or execution of any amendments, waivers,
      consents, standstill agreements and other similar agreements with respect
      to this Agreement or any other Financing Document (whether or not any such
      amendments, waivers, consents, standstill agreements or other similar
      agreements are executed).

            (B) RESTRUCTURING AND WORKOUT, INSPECTIONS. At any time when a
      Default or Event of Default exists, the Company shall pay when billed the
      reasonable costs and expenses (including reasonable attorneys' fees and
      the fees of professional advisors) incurred by the holders of the Notes in
      connection with the assessment, analysis or enforcement of any rights or
      remedies that are or may be available to the holders of Notes, including,
      without limitation, in connection with inspections made pursuant to
      Section 0; PROVIDED, HOWEVER, that at all other times inspections will be
      at the expense of the inspecting holder of Notes.

            (C) COLLECTION. If the Company shall fail to pay when due any
      principal of, or Prepayment Compensation Amount or interest on, any Note,
      the Company shall pay to each holder of Notes, to the extent permitted by
      law, such amounts as shall be sufficient to cover the costs and expenses,
      including but not limited to reasonable attorneys' fees, incurred by such
      holder in collecting any sums due on such Note.

      9.7   WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; ETC.

            (A) WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
      INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
      RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
      AGREEMENT OR ANY OF THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS
      CONTEMPLATED HEREBY.

            (B) CONSENT TO JURISDICTION. ANY SUIT, ACTION OR PROCEEDING ARISING
      OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OF THE DOCUMENTS, AGREEMENTS
      OR TRANSACTIONS CONTEMPLATED HEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE
      OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH UNDER THIS
      AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY MAY BE BROUGHT
      BY SUCH PARTY IN 

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      ANY FEDERAL DISTRICT COURT LOCATED IN NEW YORK CITY, NEW YORK, OR ANY NEW
      YORK STATE COURT LOCATED IN NEW YORK CITY, NEW YORK AS SUCH PARTY MAY IN
      ITS SOLE DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS
      AGREEMENT, THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO
      THE NON-EXCLUSIVE IN PERSONAM JURISDICTION OF EACH SUCH COURT, AND EACH OF
      THE PARTIES HERETO IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT IN ANY
      PROCEEDING BEFORE ANY TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR
      OTHERWISE, ANY CLAIM THAT IT IS NOT SUBJECT TO THE IN PERSONAM
      JURISDICTION OF ANY SUCH COURT. IN ADDITION, EACH OF THE PARTIES HERETO
      IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
      THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT,
      ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
      DOCUMENT, AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY BROUGHT IN ANY SUCH
      COURT, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION
      OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
      INCONVENIENT FORUM.

            (C) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY AGREES THAT
      PROCESS PERSONALLY SERVED OR SERVED BY U.S. REGISTERED MAIL AT THE
      ADDRESSES PROVIDED HEREIN FOR NOTICES SHALL CONSTITUTE, TO THE EXTENT
      PERMITTED BY LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUIT, ACTION OR
      PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT,
      AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY, OR ANY ACTION OR PROCEEDING
      TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH
      HEREUNDER OR UNDER ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY. RECEIPT
      OF PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A
      DELIVERY RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY
      COMMERCIAL DELIVERY SERVICE.

            (D) OTHER FORUMS. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
      THE ABILITY OF ANY HOLDER OF NOTES TO SERVE ANY WRITS, PROCESS OR
      SUMMONSES IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN
      JURISDICTION OVER THE COMPANY IN SUCH OTHER JURISDICTION, AND IN SUCH
      OTHER MANNER, AS MAY BE PERMITTED BY APPLICABLE LAW.

      9.8   EXECUTION IN COUNTERPART.

      This Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
hereto, and each set of counterparts that, collectively, show execution by each
party hereto shall constitute one duplicate original.

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      IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by one of its duly authorized officers or
representatives.

                                          FRESH AMERICA CORP.



                                         By:______________________________
                                                 Name:
                                                Title:

                                          JOHN HANCOCK MUTUAL LIFE
                                          INSURANCE COMPANY



                                         By:______________________________
                                                 Name:
                                                Title:


                                          JOHN HANCOCK VARIABLE LIFE
                                          INSURANCE COMPANY



                                         By:______________________________
                                                 Name:
                                                Title:

                                          SIGNATURE (1A) CAYMAN, LTD.
                                          By:   John Hancock Mutual Life
                                                Insurance Company,
                                                Portfolio Advisor


                                         By:______________________________
                                                 Name:
                                                Title:


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