Document:

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                                                                     Exhibit 4.6

                                                                  EXECUTION COPY

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                    COLLATERAL PLEDGE AND SECURITY AGREEMENT

                           Dated as of March 27, 2001

                                     Among

                        MICHAEL FOODS ACQUISITION CORP.,

                                  as Pledgor,

                        BANC OF AMERICA SECURITIES LLC,

                           BNY MIDWEST TRUST COMPANY

                                  as Trustee,

                                      and

                           BNY MIDWEST TRUST COMPANY

               as Collateral Agent and as Securities Intermediary

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                    COLLATERAL PLEDGE AND SECURITY AGREEMENT

            This COLLATERAL PLEDGE AND SECURITY AGREEMENT (this "Pledge
Agreement") is made and entered into as of March 27, 2001 by MICHAEL FOODS
ACQUISITION CORP., a Minnesota corporation (the "Pledgor"), c/o Vestar Capital
Partners IV, L.P., 1225 Seventeenth Street, Suite 1600, Denver, Colorado 80202,
BANC OF AMERICA SECURITIES LLC ("Banc of America Securities"), having an office
at 100 North Tryon Street, Charlotte, North Carolina 28255, BNY MIDWEST TRUST
COMPANY, an Illinois banking corporation ("BNY"), having an office at 2 North
LaSalle Street, Suite 1020, Chicago, Illinois 60602, as trustee (in such
capacity, the "Trustee") under the Indenture referred to below, and BNY MIDWEST
TRUST COMPANY, as (A) collateral agent (in such capacity, the "Collateral
Agent") for the Secured Parties (as hereinafter defined) and (B) securities
intermediary (in such capacity, the "Securities Intermediary") for the
Collateral Agent and the Pledgor hereunder.

                              W I T N E S S E T H

            WHEREAS, the Pledgor and Banc of America Securities and Bear Stearns
& Co. Inc., each acting as an Initial Purchaser (collectively, the "Initial
Purchasers"), are parties to a Purchase Agreement dated March 27, 2001 (the
"Purchase Agreement"), pursuant to which the Pledgor is issuing and selling to
the Initial Purchasers $200,000,000 aggregate principal amount of 11 3/4% Senior
Subordinated Notes due 2011 (the "Notes"); and

            WHEREAS, the Pledgor and the Trustee have entered into that certain
indenture dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
Pledgor is issuing the Notes on the date hereof; and

            WHEREAS, pursuant to the Purchase Agreement and the Indenture, the
Pledgor is required to deposit on the Closing Date (as defined in the Purchase
Agreement) gross proceeds from the offering of the Notes in the amount of
U.S.$200,000,000 (the "Funds") with the Trustee to be held by the Trustee for
the benefit of the registered holders (the "Holders") of the Notes, to secure
the Pledgor's obligation to redeem on the terms specified in the Indenture all
of the Notes at 101% of their aggregate principal amount, plus interest accrued
thereon to the Special Redemption Date, on the Special Redemption Date (as
defined herein) in the event that the merger of the Pledgor with and into
Michael Foods, Inc. ("Michael Foods"), a Minnesota corporation, pursuant to that
certain Agreement and Plan of Merger dated as of December 21, 2000 (the
"Merger") is not consummated by May 31, 2001 (the "Termination Date") (such
obligation to redeem such Notes being the "Obligations"), and the Pledgor has
agreed (a) to pledge to the Trustee for its benefit and the ratable benefit of
the Holders of the Notes, a security interest in the Collateral (as defined
herein) and (b) to execute and deliver this Pledge Agreement in order to secure
the payment and performance by the Pledgor of all the Obligations; and

            WHEREAS, the Collateral Agent has security entitlements with respect
to all the financial assets credited from time to time to the Pledgor's account,
Account No. 881040 (the

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"Collateral Account") with BNY at its office at 2 North LaSalle Street, Suite
1020, Chicago, Illinois 60602; and

            WHEREAS, it is a condition precedent to the initial purchase of the
Notes by the Initial Purchasers pursuant to the Purchase Agreement that the
Pledgor shall have granted the security interest and made the pledge
contemplated by this Pledge Agreement; and

            WHEREAS, unless otherwise defined herein or in the Indenture, terms
defined in Articles 8 or 9 of the Uniform Commercial Code as in effect in the
State of New York ("NYUCC") and/or the Federal Book Entry Regulations (as
defined below) are used in this Agreement as such terms are defined in such
Article 8 or 9 and/or Federal Book Entry Regulations. The term "Federal
Book-Entry Regulations" means (a) the federal regulations contained in Subpart B
("Treasury/Reserve Automated Debt Entry System (TRADES)") governing book-entry
securities consisting of U.S. Treasury bonds, notes and bills and Subpart D
("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R. ss. 357.2, ss. 357.10
through ss. 357.14 and ss. 357.41 through ss. 357.44 and (b) to the extent
substantially identical to the federal regulations referred to in clause (a)
above (as in effect from time to time), the federal regulations governing other
book-entry securities.

                                   AGREEMENT

            NOW, THEREFORE, in consideration of the mutual promises herein
contained, and in order to induce the Holders of the Notes to purchase the
Notes, the Pledgor hereby agrees with the Trustee, for the benefit of the
Trustee and for the ratable benefit of the Holders of the Notes, as follows:

            SECTION 1. Certain Definitions; Appointment of the Collateral Agent;
Pledge and Grant of Security Interest; Deposit of Funds.

                  1.1 (a) Certain Definitions. Capitalized terms used herein
will have the respective meanings described to them below:

            "Cash Equivalents" means, to the extent owned free and clear of all
      Liens other than Liens created hereunder, Government Securities.

            "Government Securities" means direct obligations of or obligations
      fully guaranteed by the United States of America for the payment of which
      guarantee or obligations the full faith and credit of the United States of
      America is pledged and which are not callable or redeemable at the option
      of the issuer thereof, or any money market fund that invests solely in the
      foregoing.

            "Lien" means any mortgage, lien, pledge, claim, charge, security
      interest or encumbrance of any kind, whether or not filed, recorded or
      otherwise perfected under applicable law.

            "Offering Memorandum" means the Offering Memorandum dated March 16,
      2001 relating to the offering of the Notes issued on the Closing Date.

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            "Vestar Agreement" means the agreement between Vestar Capital
      Partners IV, L.P., a Delaware limited partnership and BNY, as Trustee
      under the Indenture and as Collateral Agent hereunder dated as of the date
      hereof, substantially in the form set forth on Exhibit A attached hereto.

            (b) Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed thereto in the Indenture.

                  1.2 Appointment of the Collateral Agent. The Pledgor hereby
appoints BNY as Collateral Agent for the benefit of the Secured Parties in
accordance with the terms and conditions set forth herein and the Collateral
Agent hereby accepts such appointment.

                  1.3 Pledge and Grant of Security Interest. The Pledgor hereby
pledges to the Collateral Agent for its benefit pursuant to this Pledge
Agreement and for the ratable benefit of the Trustee and the Holders of the
Notes (the "Secured Parties"), and hereby grants to the Secured Parties, a
continuing first priority security interest in and to all of the Pledgor's
right, title and interest in, to and under the following (collectively, the
"Collateral"):

            (a) the Collateral Account, all "financial assets" (as defined in
      Article 8 of the NYUCC and in the Federal Book Entry Regulations)
      (collectively, the "Pledged Financial Assets") credited to the Collateral
      Account from time to time and all "security entitlements" (as defined in
      Article 8 of the NYUCC and in the Federal Book Entry Regulations) of the
      Pledgor with respect to the Pledged Financial Assets (all such security
      entitlements collectively the "Pledged Security Entitlements"), including,
      without limitation, all dividends, if any, interest, cash, instruments, if
      any, and other property from time to time received, receivable or
      otherwise distributed in respect of or in exchange for any or all of such
      Pledged Security Entitlements or such Pledged Financial Assets;

            (b) all proceeds of any and all of the Collateral (including,
      without limitation, proceeds that constitute property of the types
      described in clause (a) of this Section 1.3 and this clause (b)); and

            (c) to the extent not otherwise included, all cash.

                  1.4 Deposit of Funds. On the Closing Date, the Pledgor shall
deposit all Funds into the Collateral Account.

            SECTION 2. Security for Obligations. This Pledge Agreement and the
grant of a security interest in the Collateral hereunder secures the prompt
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of all the Obligations. Without limiting the generality of the
foregoing, this Pledge Agreement and the grant of a security interest in the
Collateral hereunder secures the payment of all amounts that constitute part of
the Obligations and would be owed by the Pledgor to the Trustee or the Holders
under the Notes or the Indenture but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Pledgor.

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            SECTION 3. Delivery of Security Collateral. (a) All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Collateral Agent pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
sufficient to establish and maintain in favor of the Collateral Agent a valid
security interest in such Collateral, and shall be credited to the Collateral
Account. In addition, the Collateral Agent shall have the right but shall not be
obligated at any time to exchange security certificates or instruments
representing or evidencing the Collateral for security certificates or
instruments of smaller or larger denominations.

            (b) With respect to any Collateral that constitutes an
uncertificated security, the Pledgor will cause the issuer thereof either (i) to
register the Collateral Agent as the registered owner of such security or (ii)
to agree in writing with the Pledgor and the Collateral Agent that such issuer
will comply with instructions with respect to such security originated by the
Collateral Agent without further consent from the Pledgor, such agreement to be
in form and substance satisfactory to the Collateral Agent.

            SECTION 4. Creation and Maintenance of the Collateral Account.
(a)Concurrently with or prior to the Closing Date, the Collateral Agent shall
have established (and at all times until the Obligations shall have been paid in
full and this Agreement shall have been terminated, the Securities Intermediary
shall maintain and administer in accordance with this Agreement), the Collateral
Account with BNY at its office at 2 North LaSalle Street, Suite 1020, Chicago,
Illinois 60602.

            (b) The Securities Intermediary shall cause the Collateral Account
to be, and the Collateral Account shall be, separate from all other accounts
(including any other Collateral Account) held by or under the control and
dominion of the Collateral Agent, the Securities Intermediary or BNY. It shall
be a term and condition of the Collateral Account, notwithstanding any term or
condition to the contrary in any other agreement relating to the Collateral
Account, and except as otherwise provided by the provisions of Sections 7 and
13, that no amount (including interest on Collateral Investments) shall be paid
or released to or for the account of, or withdrawn by or for the account of, the
Pledgor or any other Person from such account.

            (c) To the extent that the assets, property and items from time to
time carried in the Collateral Account consist of cash (other than cash proceeds
of Collateral Investments), the Securities Intermediary shall carry such cash
in, and credit such cash to, the Collateral Account. The Securities Intermediary
shall carry all other property, assets and items in, and credit such other
assets, property and items, to, the Collateral Account.

            (d) The Collateral Account shall be subject to such applicable laws,
and such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other applicable banking or governmental authority, as may now
or hereafter be in effect.

            SECTION 5. Investing of Amounts in the Collateral Account. On the
Closing Date, the Collateral Agent will, subject to the provisions of Section 7
and Section 14 hereof, direct the Securities Intermediary (a) to invest amounts
on deposit in the Collateral Account in

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Cash Equivalents, each in the name of the Securities Intermediary and (b) to
invest interest paid on the Cash Equivalents referred to in clause (a) above,
and reinvest other proceeds of any such Cash Equivalents that may mature or be
sold, in each case in such Cash Equivalents, each in the name of the Securities
Intermediary; provided, however, that in no event shall such Cash Equivalents
have a maturity more than 7 days from the date of acquisition thereof by the
Securities Intermediary or later than May 31, 2001 or, if applicable, the
Business Day prior to any Special Redemption Date (the Cash Equivalents referred
to in clauses (a) and (b) above and subject to the limitation set forth in the
foregoing proviso being collectively "Collateral Investments"). Interest and
proceeds that are not invested or reinvested in Collateral Investments as
provided above shall be deposited and held in the Collateral Account. None of
the Collateral Agent or the Securities Intermediary shall have any liability in
respect of losses incurred as a result of the liquidation of any Cash Equivalent
prior to its stated maturity unless such losses are caused by the Collateral
Agent's or Securities Intermediary's own gross negligence or willful misconduct.

            SECTION 6. Securities Intermediary. BNY represents and warrants to,
and agrees with, the Pledgor and the Collateral Agent as follows:

            (a) The Securities Intermediary maintains the Collateral Account for
      the Pledgor, and all property held by the Securities Intermediary for the
      account of the Pledgor is, and will continue to be, credited to the
      Collateral Account.

            (b) The Collateral Account is a securities account. The Securities
      Intermediary is the securities intermediary with respect to the property
      credited from time to time to the Collateral Account. The Pledgor is the
      entitlement holder with respect to the property credited from time to time
      to the Collateral Account.

            (c) The Securities Intermediary (i) has identified (and will
      continue to identify) in its records the Collateral Agent as the sole
      Person having a security entitlement against the Securities Intermediary
      with respect to the Collateral Agent and any and all assets, property and
      items from time to time carried in the Collateral Account; and (ii) has
      credited and will continue to credit such assets, property and items to
      the Collateral Account in accordance with instructions given in accordance
      with the terms and conditions of this Agreement.

            (d) To the maximum extent permitted by applicable law, all assets,
      property and items from time to time carried in the Collateral Account
      shall constitute financial assets under Article 8 of the NYUCC, and the
      Securities Intermediary shall treat all such assets, property and items as
      financial assets.

            (e) The securities intermediary's jurisdiction with respect to the
      Collateral Account is, and will continue for so long as the security
      interest credited hereunder shall be in effect, the State of New York.

            (f) The Securities Intermediary will comply with all notifications
      it receives directing it to transfer or redeem any property in the
      Collateral Account (each an "Entitlement Order") or other directions
      concerning the Collateral Account (including,

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      without limitation, directions to distribute to the Collateral Agent
      proceeds of any such transfer or redemption or interest or dividends on
      property in the Collateral Account) originated by the Collateral Agent
      without further consent by the Pledgor or any other Person.

            (g) The Securities Intermediary will comply with Entitlement Orders
      and other direction concerning the Collateral Account originated by, and
      only by, the Collateral Agent, except as otherwise permitted by Section
      5(a) in respect of investment instructions originated by the Pledgor.

            (h) The Securities Intermediary has not entered into and will not
      enter into any agreement with any other Person relating to the Collateral
      Account and/or any financial assets credited thereto pursuant to which it
      has agreed to comply with Entitlement Orders of such Person. The
      Securities Intermediary has not entered into any other agreement with the
      Pledgor or any other Person purporting to limit or condition the
      obligation of the Securities Intermediary to comply with Entitlement
      Orders originated by the Collateral Agent as set forth in paragraph (e)
      above.

            (i) The Collateral Agent is and shall remain the sole Person having
      dominion and control of the Collateral Account.

            (j) The Securities Intermediary hereby waives and releases any Lien,
      right of set-off or other right it may have against the Collateral Account
      or any financial asset carried in the Collateral Account or any credit
      balance in the Collateral Account (except that the Securities Intermediary
      may set off the face amount of any checks which have been credited to the
      Collateral Account but are subsequently returned unpaid because of
      uncollected or insufficient funds) and agrees that it will not assert any
      such Lien or right against the Collateral Account or any financial asset
      carried in the Collateral Account or any credit balance in the Collateral
      Account.

            (k) Anything herein to the contrary notwithstanding, the Securities
      Intermediary will not be required to follow any instruction that would
      violate any applicable law, decree, regulation or order of any government
      or governmental body (including any court or tribunal).

            SECTION 7. Disbursements. The Collateral Agent shall hold the assets
in the Collateral Account and release the same, or a portion thereof, only as
follows:

            (a) If the Collateral Agent receives, prior to 2:00 P.M., New York
      City time, on any date prior to the Termination Date, (i) a certificate
      signed by the President or any Vice President of the Pledgor stating that
      (A) the Merger has been consummated or will be consummated on
      substantially the same terms as described in the Offering Memorandum
      promptly upon the release of the funds held in the Collateral Account to
      the Pledgor), (B) the Supplemental Indenture, in substantially the form
      attached hereto as Exhibit B (the "Supplemental Indenture"), has been duly
      authorized, executed and delivered (or will be delivered contemporaneously
      with the consummation of the Merger) by Michael Foods and each of its
      Domestic Subsidiaries in existence on the date hereof

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      (collectively, the "Guarantors"), (C) the Guarantors have duly authorized,
      executed and delivered (or will deliver contemporaneously with the
      consummation of the Merger) the Registration Rights Agreement dated as of
      the date of this Pledge Agreement between the Initial Purchasers and the
      Pledgor with respect to the Notes (the "Registration Rights Agreement"),
      (D) no Event of Default described in clause (i) or (j) of Section 6.01 of
      the Indenture exists and (E) immediately after the consummation of the
      Merger, the capitalization of Michael Foods, pro forma for the Merger, as
      of December 31, 2000, will be substantially the same as set forth in the
      Offering Memorandum (such certificate being referred to herein as the
      "Merger Officers' Certificate") and (ii) an opinion of Kirkland & Ellis
      substantially in the form attached hereto as Exhibit C (the "Merger
      Opinion of Counsel"), the Collateral Agent shall as soon as practicable
      (1) liquidate and disburse by the close of business of such date to Banc
      of America Securities the Collateral in an amount, in immediately
      available funds, equal to 3% of the aggregate principal amount of the
      Notes issued on the Issue Date and (2) thereafter, disburse by the close
      of business on such date, or at such other time after the receipt of the
      Merger Officer's Certificate and the Merger Opinion of Counsel as may be
      agreed upon in writing by the Collateral Agent and the Pledgor, all other
      funds and/or Cash Equivalents and/or Collateral Investments from the
      Collateral Account to the Pledgor; provided, however, that if the Merger
      Officer's Certificate and the Merger Opinion of Counsel referred to above
      are received by the Collateral Agent (i) on a day other than a Business
      Day or (ii) after 2:00 P.M. New York City time on any date, then, in
      either instance, the Collateral Agent may disburse the proceeds by the
      close of business on the next Business Day, or at such other time after
      the receipt of the Merger Officer's Certificate and the Merger Opinion of
      Counsel as may be agreed upon in writing by the Collateral Agent and the
      Pledgor.

            (b) (i) On the Termination Date (or, in the event that at any time
      prior to the Termination Date the Trustee and the Collateral Agent receive
      a certificate signed by the President or any Vice President of the Pledgor
      stating that, in the sole judgment of Pledgor, the Merger will not be
      consummated, as soon as practicable but in no event later than on the
      second Business Day following the date of receipt by the Collateral Agent
      of such certificate), if the conditions required for release of funds
      and/or Cash Equivalents as provided in clause (a) above have not been
      satisfied, the Pledgor shall mail a notice by first class mail to each
      Holder's last address as it appears on the Security Register (as
      determined in the Indenture) stating that all of the outstanding Notes
      shall be redeemed 5 Business Days after the date of such notice (the
      "Special Redemption Date"), at 101% of the aggregate principal amount on
      the Notes, plus interest accrued thereon to the Special Redemption Date,
      in accordance with the terms of the Indenture, on the Special Redemption
      Date (the "Special Redemption Price"), and shall state that the Notes must
      be surrendered to the Trustee in order to collect the Special Redemption
      Price.

            (ii) On or prior to the Business Day prior to the Special Redemption
      Date, the Collateral Agent shall accept funds from Vestar in accordance
      with the Vestar Agreement and deposit the funds received therefrom into
      the Collateral Account, and then shall release such funds and liquidate
      and release all Collateral to the Paying Agent.

            (iii) On the Special Redemption Date, the Notes shall be redeemed as
      specified in the Indenture.

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            (c) If the Pledgor is required to effect a Special Redemption
      contemplated by clause (b) above and for any reason the amount of
      Collateral to be released is insufficient to pay the aggregate Special
      Redemption Price, the Pledgor agrees to pay to the Paying Agent, on or
      prior to the Special Redemption Date, the amount of funds necessary to
      permit the payment of the aggregate Special Redemption Price.

            (d) Upon the release of any Collateral from the Collateral Account
      in accordance with the terms of this Pledge Agreement, the security
      interest evidenced by this Pledge Agreement in such released Collateral
      will automatically terminate and be of no further force and effect.

            (e) The Collateral Agent shall not be required to liquidate any
      Collateral Investment in order to make any payment hereunder unless: (i)
      instructed to do so pursuant to the Merger Officers' Certificate; (ii) to
      effect a Special Redemption; or (iii) pursuant to Section 14 hereof.

            (f) Nothing contained in Section 1, Section 5, Section 6, this
      Section 7 or any other provision of this Pledge Agreement shall (i) afford
      the Pledgor any right to issue Entitlement Orders with respect to any
      security entitlement to any of the Collateral Investments or any
      securities account in which any such security entitlement may be carried,
      or otherwise afford the Pledgor control of any such security entitlement
      or (ii) otherwise give rise to any rights of the Pledgor with respect to
      any of the Collateral Investments, any security entitlement thereto or any
      securities account in which any such security entitlement may be carried,
      other than the Pledgor's beneficial interest under this Pledge Agreement
      in Collateral pledged to and subject to the exclusive dominion and control
      (consistent with this Pledge Agreement) of the Collateral Agent in its
      capacity as such (and not as a securities intermediary). The Pledgor
      acknowledges, confirms and agrees that the Collateral Agent holds a
      security entitlement to the Collateral Investments solely as Collateral
      Agent for the Holders of the Notes and not as a securities intermediary or
      financial intermediary.

            (g) Nothing in this Section 7 shall affect the Collateral Agent's
      rights, upon instruction from the Trustee, to release Collateral for
      application thereof to payment of amounts due on the Notes upon
      acceleration thereof.

            SECTION 8. Representations and Warranties. The Pledgor hereby
represents and warrants that:

            (a) The execution and delivery by the Pledgor of, and the
      performance by the Pledgor of its obligations under, this Pledge Agreement
      will not contravene any provision of applicable law or the certificate of
      incorporation or by-laws of the Pledgor, or any material agreement or
      other material instrument binding upon the Pledgor or any of its
      subsidiaries or any judgment, order or decree of any governmental body,
      agency or court having jurisdiction over the Pledgor or any of its
      subsidiaries, or result in the creation or imposition of any Lien on any
      assets of the Pledgor, except for the security interests granted under
      this Pledge Agreement.

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            (b) No consent of any other Person and no approval, authorization,
      order of, or filing, declaration or qualification with, any governmental
      body or agency or other third party is required (i) for the execution,
      delivery or performance by the Pledgor of its obligations under this
      Pledge Agreement, (ii) for the grant by the Pledgor of the security
      interest created hereby or (iii) for the pledge by the Pledgor of the
      Collateral pursuant to this Pledge Agreement or for the perfection and
      maintenance of such pledge, except for any such consents, approvals,
      authorizations or orders as may be required to be obtained by the
      Collateral Agent (or the Holders) for the exercise by the Collateral Agent
      of the rights provided for in this Pledge Agreement or the remedies in
      respect of the Collateral pursuant to this Pledge Agreement.

            (c) The Pledgor is the legal and beneficial owner of the Collateral,
      free and clear of any Lien or claims of any Person (except for the
      security interests created by this Pledge Agreement). No financing
      statement or instrument similar in effect covering all or any part of the
      Pledgor's interest in the Collateral is on file in any public or recording
      office, other than the financing statements filed pursuant to this Pledge
      Agreement. The Pledgor has no trade names.

            (d) This Pledge Agreement has been duly authorized, validly executed
      and delivered by the Pledgor and (assuming due authorization, execution
      and delivery by the Collateral Agent) constitutes a valid and binding
      agreement of the Pledgor, enforceable against the Pledgor in accordance
      with its terms, except as the enforceability hereof may be limited by (i)
      applicable bankruptcy, insolvency or similar laws affecting creditors'
      rights generally, or (ii) general principles of equity, whether considered
      at law or at equity, including, without limitation, concepts or
      materiality, reasonableness, good faith and fair dealing.

            (e) All of the Collateral consisting of certificated securities and
      instruments has been delivered to the Collateral Agent. All filings and
      other actions necessary or desirable to perfect and protect the security
      interest in the Collateral created under this Agreement have been duly
      made or taken and are in full force and effect, and this Agreement creates
      in favor of the Collateral Agent for the benefit of the Trustee and the
      Holders of the Notes a valid and, together with such filings and other
      actions, perfected first priority security interest in such Collateral,
      securing the payment of the Obligations enforceable as such against all
      creditors of the Pledgor (and any Persons purporting to purchase any of
      the Collateral from the Pledgor).

            (f) There are no legal or governmental proceedings pending or, to
      the best of the Pledgor's knowledge, threatened to which the Pledgor or
      any of its subsidiaries is a party or to which any of the properties of
      the Pledgor or any such subsidiary is subject that would materially
      adversely affect the power or ability of the Pledgor to perform its
      obligations under this Pledge Agreement or to consummate the transactions
      contemplated hereby.

            (g) The pledge of the Collateral pursuant to this Pledge Agreement
      is not prohibited by law or governmental regulation (including, without
      limitation, Regulations

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                                       10

      T, U and X of the Board of Governors of the Federal Reserve System)
      applicable to the Pledgor.

            (h) No Event of Default (as defined herein) exists.

            (i) The chief place of business and chief executive office of the
      Pledgor are located at c/o Vestar Capital Partners IV, L.P., 1225
      Seventeenth Street, Suite 1660, Denver, Colorado 80202, and the Pledgor
      keeps its records concerning the Collateral at such location.

            SECTION 9. Filing; Further Assurances. (a) Promptly following the
execution and delivery of this Pledge Agreement, the Pledgor shall deliver to
the Trustee acknowledgment copies or stamped receipt copies of proper financing
statements, duly filed on or before the Closing Date in accordance with the
NYUCC, covering the categories of Collateral described in this Pledge Agreement.

            (b) The Pledgor agrees that from time to time, at the expense of the
Pledgor, the Pledgor will, promptly as necessary or as requested by the
Collateral Agent (which request the Collateral Agent may submit at the direction
of the Holders of a majority in principal amount at maturity of the Notes then
outstanding), execute and deliver or cause to be executed and delivered, or use
its reasonable best efforts to procure, all assignments, instruments and other
documents deliver any instruments to the Collateral Agent and take any other
actions that may be necessary to perfect, continue the perfection of, or protect
the first priority of the Secured Parties' security interest in and to the
Collateral, including the filing of all necessary financing and continuation
statements, to protect the Collateral against the rights, claims, or interests
of third persons (other than any such rights, claims or interests created by or
arising through the Collateral Agent) or to effect the purposes of this Pledge
Agreement.

            (c) The Pledgor hereby authorizes the Collateral Agent to file any
financing or continuation statements in the United States with respect to the
Collateral without the signature of the Pledgor (to the extent permitted by
applicable law); provided, however, that the Collateral Agent shall have no duty
or obligation to perform any of the foregoing actions. A photocopy or other
reproduction of this Pledge Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.

            (d) The Pledgor will pay all costs incurred in connection with this
Pledge Agreement within 30 days of receipt of an invoice therefor.

            (e) The Pledgor agrees, whether or not requested by the Collateral
Agent, to use its best efforts to perfect or continue the perfection of, or to
protect the first priority of, the Secured Parties' security interest in the
Collateral, and to protect the Collateral against the rights, claims or
interests of third persons (other than any such rights, claims or interests
created by or arising through the Collateral Agent).

<PAGE>
                                       11

            SECTION 10. Covenants. The Pledgor covenants and agrees with the
Trustee and the Holders of the Notes from and after the date of this Pledge
Agreement until the Termination Date:

            (a) that (i) it will not (and will not purport to) sell or otherwise
      dispose of, or grant any option or warrant with respect to, any of the
      Collateral or its beneficial interest therein, and (ii) it will not create
      or permit to exist any Lien or other adverse interest in or with respect
      to its beneficial interest in any of the Collateral (except for the
      security interests granted under this Pledge Agreement) and at all times
      will be the sole beneficial owner of the Collateral;

            (b) that it will not (i) enter into any agreement or understanding
      that restricts or inhibits or purports to restrict or inhibit the
      Trustee's or the Collateral Agent's rights or remedies hereunder,
      including, without limitation, the Collateral Agent's right to sell or
      otherwise dispose of the Collateral or (ii) fail to pay or discharge any
      tax, assessment or levy of any nature with respect to its beneficial
      interest in the Collateral not later than five days prior to the date of
      any proposed sale under any judgment, writ or warrant of attachment with
      respect to such beneficial interest; and

            (c) that it will keep its chief place of business, chief executive
      office and the place where it keeps its records concerning the Collateral
      at the location therefor specified in Section 8(i), or upon 30 days' prior
      written notice to the Collateral Agent, at such other locations in a
      jurisdiction where all actions required by Section 9 have been taken with
      respect to the Collateral.

            SECTION 11. Power of Attorney; Collateral Agent May Perform. Subject
to the terms of this Pledge Agreement, the Pledgor hereby appoints and
constitutes the Collateral Agent as the Pledgor's attorney-in-fact (with full
power of substitution), with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to time to take
any action and to execute any instrument that is necessary or advisable or that
the Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Pledge Agreement, including, without limitation:

            (a) to ask for, demand, collect, sue for, recover, compromise,
      receive and give acquittance and receipts for moneys due and to become due
      under or in respect of any of the Collateral,

            (b) to receive, indorse and collect any drafts or other instruments,
      documents and chattel paper, in connection with clause (a) above,

            (c) to file any claims or take any action or institute any
      proceedings that are necessary or desirable or that the Collateral Agent
      may deem necessary or desirable for the collection of any of the
      Collateral or otherwise to enforce the rights of the Trustee with respect
      to any of the Collateral,

            (d) to pay or discharge taxes or Liens levied or placed upon the
      Collateral, the legality or validity thereof and the amounts necessary to
      discharge the same to be determined by the Collateral Agent, and such
      payments made by the Collateral Agent to

<PAGE>
                                       12

      become part of the Obligations of the Pledgor to the Trustee, due and
      payable immediately upon demand, and

            (e) to convey any item of Collateral to any purchaser thereof and
      give any notices or recordings of any Liens under Section 6 hereof;

provided, however, that the Collateral Agent shall have no duty or obligation to
perform any of the foregoing actions. The Collateral Agent's authority under
this Section 11 shall include, without limitation, the authority to execute or
endorse (a) any checks or instruments representing proceeds of Collateral in the
name of the Pledgor, (b) any receipts for any certificate of ownership or any
document constituting Collateral or transferring title to any item of
Collateral, (c) any financing statements (to the extent permitted by applicable
law) or (d) any other documents deemed necessary or appropriate by the
Collateral Agent or otherwise to preserve, protect or perfect the security
interest in the Collateral and to file the same, prepare, file and sign the
Pledgor's name on any notice of Lien, and to take any other actions arising from
or incident to the powers granted to the Collateral Agent in this Pledge
Agreement. This power of attorney is coupled with an interest and is irrevocable
by the Pledgor.

            SECTION 12. No Assumption of Duties; Reasonable Care. The rights and
powers conferred on the Collateral Agent hereunder are solely to preserve and
protect the security interest of the Secured Parties in and to the Collateral
granted hereby and shall not be interpreted to, and shall not impose any duties
or obligations on the Collateral Agent in connection therewith other than those
expressly provided herein or imposed under applicable law. Except as provided by
applicable law or by the Indenture, the Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which the Collateral Agent accords similar property held by the Collateral
Agent for its own account, it being understood that the Collateral Agent in its
capacity as such shall not have any responsibility for (a) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities or other
matters relative to any Collateral, whether or not the Collateral Agent has or
is deemed to have knowledge of such matters, (b) taking any necessary steps to
preserve rights against any parties with respect to any Collateral or (c)
investing or reinvesting any of the Collateral or any loss on any investment.

            SECTION 13. Indemnity; Collateral Agent's Limitation of Liability to
Pledgor. (a) The Pledgor shall indemnify, reimburse, hold harmless and defend
the Collateral Agent, the Securities Intermediary and their affiliates and their
directors, officers, agents and employees, from and against any and all claims,
actions, obligations, liabilities and expenses, including reasonable defense
costs, reasonable investigative fees and costs, and reasonable legal fees and
damages arising from the Collateral Agent's or Securities Intermediary's
performance or lack of performance as Collateral Agent or Securities
Intermediary, respectively, under this Pledge Agreement, except to the extent
that such claim, action, obligation, liability or expense is directly caused by
the bad faith, gross negligence or willful misconduct of such indemnified
person; provided, however, that the Securities Intermediary (a) shall not be
excused from, and shall not be excused from liability for, acting or refraining
from acting and (b) shall not be indemnified or held harmless under this Section
13 for the taking or the failure to take any action, in each case hereunder in
its capacity as Securities Intermediary to the extent the taking or the failure
to take

<PAGE>
                                       13

any such action violates the duties and obligations expressly imposed upon the
Securities Intermediary under or in accordance with this Agreement or imposed
upon a Securities Intermediary under the Federal Book-Entry Regulations or
Article 8, Part 5 of the NYUCC. This indemnity shall be a continuing obligation
of the Pledgor, its respective successors and assigns, notwithstanding the
termination of this Pledge Agreement and the resignation or removal of the
Collateral Agent or the Securities Intermediary.

            (b) If at any time the Collateral Agent is served with any judicial
or administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects Collateral (including, but not
limited to, orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of Collateral), the Collateral
Agent is authorized to comply therewith in any manner as it or its legal counsel
of its own choosing deems appropriate and if the Collateral Agent complies with
any such judicial or administrative order, judgment, decree, writ or other form
of judicial or administrative process, the Collateral Agent shall not be liable
to the Pledgor even though such order, judgment, decree, writ or process may be
subsequently modified or vacated or otherwise determined to have been without
legal force or effect.

            (c) The Collateral Agent shall not incur any liability to the
Pledgor for not performing any act or fulfilling any duty, obligation or
responsibility hereunder by reason of any occurrence beyond the control of the
Collateral Agent (including, but not limited to, any act or provision or any
present or future law or regulation or governmental authority, any act of God or
war, or the unavailability of the Federal Reserve Bank wire or telex or other
wire or communication facility).

            (d) The Collateral Agent shall not be responsible in any respect for
the form, execution, validity, value or genuineness of documents or securities
deposited hereunder, or for any description therein, or for the identity,
authority or rights of persons executing or delivering or purporting to execute
or deliver any such document, security or endorsement.

            SECTION 14. Remedies upon Event of Default. If any Event of Default
under the Indenture shall have occurred and be continuing or if a material
default hereunder for a period of five business days after notice to the Pledgor
by the Collateral Agent or the Trustee shall have occurred and be continuing
(any such Event of Default or material default being referred to in this Pledge
Agreement as an "Event of Default"):

            (a) The Trustee, the Collateral Agent and the Holders of the Notes
      may exercise, in addition to all other rights given by law or by this
      Pledge Agreement or the Indenture, all of the rights and remedies with
      respect to the Collateral of a secured party under the NYUCC at that time
      and also may (i) require the Pledgor to, and the Pledgor hereby agrees
      that it will at its expense and upon request of the Collateral Agent
      forthwith, assemble all or part of the Collateral as directed by the
      Collateral Agent and make it available to the Collateral Agent at a place
      to be designated by the Collateral Agent that is reasonably convenient to
      both parties and (ii) without notice except as specified below, sell the
      Collateral or any part thereof in one or more parcels at any broker's
      board or at public or private sale, in one or more sales or lots, at any
      of the Collateral Agent's offices or elsewhere, for cash, on credit or for
      future delivery, and

<PAGE>
                                       14

      upon such other terms as the Collateral Agent may deem, and which the
      Pledgor shall accept as, commercially reasonable. Unless any of the
      Collateral threatens, in the reasonable judgment of the Collateral Agent,
      to decline speedily in value, the Collateral Agent will give the Pledgor
      reasonable notice of the time and place of any public sale thereof, or of
      the time after which any private sale other intended disposition is to be
      made. The Collateral Agent shall not be obligated to make any sale of
      Collateral regardless of notice of sale having been given. The Collateral
      Agent may adjourn any public or private sale from time to time by
      announcement at the time and place fixed therefor, and such sale may,
      without further notice, be made at the time and place to which it was so
      adjourned. The purchaser of any or all Collateral so sold shall thereafter
      hold the same absolutely, free from any claim, encumbrance or right of any
      kind whatsoever created by or through the Pledgor. Any sale of the
      Collateral conducted in conformity with reasonable commercial practices of
      banks, insurance companies, commercial finance companies, or other
      financial institutions disposing of property similar to the Collateral
      shall be deemed to be commercially reasonable. The Trustee, the Collateral
      Agent or any Holder of Notes may, in its own name or in the name of a
      designee or nominee, buy any of the Collateral at any public sale and, if
      permitted by applicable law, at any private sale. All expenses (including
      court costs and reasonable attorneys' fees, expenses and disbursements)
      of, or incident to, the enforcement of any of the provisions hereof shall
      be recoverable from the proceeds of the sale or other disposition of the
      Collateral.

            (b) All cash proceeds received by the Collateral Agent in respect of
      any sale of, collection from, or other realization upon all or any part of
      the Collateral may, in the discretion of the Collateral Agent, be held by
      the Collateral Agent as collateral for, and/or then or at any time
      thereafter applied (after payment of any amounts payable to the Collateral
      Agent or the Trustee pursuant to Section 15) in whole or in part by the
      Collateral Agent for the ratable benefit of the Secured Parties against,
      all or any part of the Obligations in such order as the Collateral Agent
      shall elect consistent with the Indenture. Any surplus of such cash or
      cash proceeds held by the Collateral Agent and remaining after payment in
      full of all the Obligations shall be paid over to the Pledgor.

            (c) The Pledgor further agrees to use its reasonable best efforts to
      do or cause to be done all such other acts as may be necessary to make
      such sale or sales of all or any portion of the Collateral pursuant to
      this Section 14 valid and binding and in compliance with any and all other
      applicable requirements of law. The Pledgor further agrees that a breach
      of any of the covenants contained in this Section 14 will cause
      irreparable injury to the Trustee and the Holders of the Notes, that the
      Trustee and the Holders of the Notes have no adequate remedy at law in
      respect of such breach and, as a consequence, that each and every covenant
      contained in this Section 14 shall be specifically enforceable against the
      Pledgor, and the Pledgor hereby waives and agrees not to assert any
      defenses against an action for specific performance of such covenants
      except for a defense that no Event of Default has occurred.

            (d) The Collateral Agent may but is not obligated to exercise any
      and all rights and remedies of the Pledgor in respect of the Collateral.

<PAGE>
                                       15

            (e) Subject to and in accordance with the terms of this Pledge
      Agreement, all payments received by the Pledgor in respect of the
      Collateral shall be received in trust for the benefit of the Collateral
      Agent, shall be segregated from other funds of the Pledgor and shall be
      forthwith paid over to the Collateral Agent in the same form as so
      received (with any necessary endorsement).

            SECTION 15. Expenses. The Pledgor agrees to pay to the Collateral
Agent the fees as may be agreed upon from time to time. The Pledgor will upon
demand pay to the Trustee and the Collateral Agent the amount of any and all
expenses, including, without limitation, the reasonable fees, expenses and
disbursements of its counsel, experts and agents retained by the Trustee and the
Collateral Agent, that the Trustee and the Collateral Agent may incur in
connection with (a) the review, negotiation and administration of this Pledge
Agreement, (b) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (c) the exercise or
enforcement of any of the rights of the Trustee, the Collateral Agent or the
Secured Parties hereunder or (d) the failure by the Pledgor to perform or
observe any of the provisions hereof.

            SECTION 16. Security Interest Absolute. All rights of the Trustee,
the Collateral Agent and the Holders of the Notes and security interests
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:

            (a) any lack of validity or enforceability of the Indenture or Notes
      or any other agreement or instrument relating thereto;

            (b) any change in the time, manner or place of payment of, or in any
      other term of, all or any of the Obligations, or any other amendment or
      waiver of or any consent to any departure from the Indenture;

            (c) any taking, exchange, surrender, release or non-perfection of
      any Liens on any other collateral for all or any of the Obligations;

            (d) any manner of application of collateral, or proceeds thereof, to
      all or any of the Obligations, or any manner of sale or other disposition
      of any collateral for all or any of the Obligations or any other assets of
      the Pledgor;

            (e) any change, restructuring or termination of the corporate
      structure or existence of the Pledgor; or

            (f) to the extent permitted by applicable law, any other
      circumstance which might otherwise constitute a defense available to, or a
      discharge of, the Pledgor in respect of the Obligations or of this Pledge
      Agreement.

            SECTION 17. Miscellaneous Provisions.

            17.1 Notices. Any notice, direction or communication given hereunder
and any deliveries made hereunder shall be sufficiently given if in writing and
delivered in person or mailed by first class mail, commercial courier service or
telecopier communication, addressed as follows:

<PAGE>
                                       16

                  if to the Pledgor:

                           Michael Foods Acquisition Corp.
                           c/o Vestar Capital Partners IV, L.P.
                           1225 Seventeenth Street,
                           Suite 1660
                           Denver, Colorado 80202
                           Fax:  (303) 292-6639
                           Attention: J. Christopher Henderson

                  if to the Trustee:

                           BNY Midwest Trust Company
                           2 North LaSalle Street, Suite 1020,
                           Chicago, Illinois 60602
                           Fax: 312 827 8542
                           Attention: Dan Donovan

                  if to the Collateral Agent:

                           BNY Midwest Trust Company
                           2 North LaSalle Street, Suite 1020,
                           Chicago, Illinois 60602
                           Fax: 312 827 8542
                           Attention: Dan Donovan

                  if to the Securities Intermediary:

                           BNY Midwest Trust Company
                           2 North LaSalle Street, Suite 1020,
                           Chicago, Illinois 60602
                           Fax:  312 827 8542
                           Attention: Dan Donovan

or, as to any such party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery with the
terms of this Section. All such notices and other communications shall be deemed
to have been duly given: at the time delivered by hand, if personally delivered;
three Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt is confirmed, if telecopied; and on the next Business Day
if timely delivered to an air courier guaranteeing overnight delivery.

                  17.2 No Adverse Interpretation of Other Agreements. This
Pledge Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement (other than the Indenture) may be used to interpret this Pledge
Agreement.

                  17.3 Severability. The provisions of this Pledge Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole

<PAGE>
                                       17

or in part in any jurisdiction, then such invalidity or unenforceability shall
affect in that jurisdiction only such clause or provision, or part thereof, and
shall not in any manner affect such clause or provision in any other
jurisdiction or any other clause or provision of this Pledge Agreement in any
jurisdiction.

                  17.4 Headings. The headings in this Pledge Agreement have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.

                  17.5 Counterpart Originals. This Pledge Agreement may be
signed in two or more counterparts, each of which shall be deemed an original,
but all of which shall together constitute one and the same agreement.

                  17.6 Benefits of Pledge Agreement. Nothing in this Pledge
Agreement, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders of the Notes, any benefit
or any legal or equitable right, remedy or claim under this Pledge Agreement.

                  17.7 Amendments, Waivers and Consents. Any amendment or waiver
of any provision of this Pledge Agreement and any consent to any departure by
the Pledgor from any provision of this Pledge Agreement shall be effective only
if made in writing and signed by the Collateral Agent and otherwise made or duly
given in compliance with all of the terms and provisions of the Indenture, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. None of the Trustee, the Collateral
Agent or any Holder of Notes shall be deemed, by any act, delay, indulgence,
omission or otherwise, to have waived any right or remedy hereunder or to have
acquiesced in any default or Event of Default or in any breach of any of the
terms and conditions hereof. Failure of the Trustee, the Collateral Agent or any
Holder of Notes to exercise, or delay in exercising, any right, power or
privilege hereunder shall not preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Trustee,
the Collateral Agent or any Holder of Notes of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy that the
Trustee, the Collateral Agent or such Holder of Notes would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.

                  17.8 Interpretation of Agreement. To the extent a term or
provision of this Pledge Agreement conflicts with the Indenture, the Indenture
shall control with respect to the subject matter of such term or provision.
Notwithstanding the foregoing and any other provision of this Pledge Agreement
or the Indenture, the Trustee shall have no fiduciary responsibility under this
Pledge Agreement.

                  17.9 Continuing Security Interest; Termination. (a) This
Pledge Agreement shall create a continuing security interest in and to the
Collateral and shall, unless otherwise provided in this Pledge Agreement, remain
in full force and effect until the payment in full in cash of the Obligations.
This Pledge Agreement shall be binding upon the Pledgor, its transferees,
successors and assigns, and shall inure, together with the rights and remedies
of the

<PAGE>
                                       18

Trustee and the Collateral Agent hereunder, to the benefit of the Trustee, the
Collateral Agent, the Holders of the Notes and their respective successors,
transferees and assigns.

            (b) So long as no Event of Default shall have occurred and be
continuing, this Pledge Agreement (other than Pledgor's obligations under
Sections 13 and 15) shall terminate upon the payment in full in cash of the
Obligations. At such time, the Collateral Agent shall, pursuant to a written
order of the Pledgor, reassign and redeliver to the Pledgor all of the
Collateral hereunder that has not been sold, disposed of, retained or applied by
the Collateral Agent in accordance with the terms of this Pledge Agreement and
the Indenture and take all actions requested by the Pledgor that are necessary
to release the security interest created by this Pledge Agreement in and to the
Collateral, including the execution of all termination statements provided to it
necessary to terminate any financing or continuation statements filed with
respect to the Collateral. Such reassignment and redelivery shall be without
warranty by or recourse to the Collateral Agent or the Trustee in its capacity
as such and shall be at the reasonable expense of the Pledgor.

                  17.10 Survival of Representations and Covenants. All
representations, warranties and covenants of the Pledgor contained herein shall
survive the execution and delivery of this Pledge Agreement, and shall terminate
only upon the termination of this Pledge Agreement. The obligations of the
Pledgor under Sections 13 and 15 hereof shall survive the termination of this
Agreement.

                  17.11 Waivers. The Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.

                  17.12 Authority of the Collateral Agent. (a) The Collateral
Agent shall have and be entitled to exercise all powers hereunder that are
specifically granted to the Collateral Agent by the terms hereof, together with
such powers as are reasonably incident thereto but no duties, obligations or
powers shall be inferred or implied. The Collateral Agent may perform any of its
duties hereunder or in connection with the Collateral by or through agents,
attorneys, experts, accountants, advisors or employees and shall not be
responsible for any misconduct or negligence by any such person appointed with
due care by it hereunder. The Collateral Agent shall be entitled to retain
counsel and to act in reliance upon the advice of counsel concerning any matters
arising hereunder. Except as otherwise expressly provided in this Pledge
Agreement or the Indenture, neither the Collateral Agent nor any director,
officer, employee, attorney or agent of the Collateral Agent shall be liable to
the Pledgor for any action taken or omitted to be taken by the Collateral Agent,
in its capacity as Collateral Agent, hereunder, except for its own bad faith,
gross negligence or willful misconduct, and the Collateral Agent shall not be
responsible for the validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. The Collateral Agent and its
directors, officers, employees, attorneys and agents shall be entitled to
conclusively rely on any communication, instrument or document (whether in its
original or facsimile form believed by it or them to be genuine and correct and
to have been signed or sent by the proper person or persons.

<PAGE>
                                       19

            (b) The Pledgor acknowledges that the rights and responsibilities of
the Collateral Agent under this Pledge Agreement with respect to any action
taken by the Collateral Agent or the exercise or non-exercise by the Collateral
Agent of any option, right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Pledge Agreement shall, as
between the Collateral Agent and the Holders of the Notes, be governed by the
Indenture and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Collateral Agent and the Pledgor,
the Collateral Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and the Pledgor shall not be obligated or entitled to make any inquiry
respecting such authority.

                  17.13 Successor Collateral Agent by Merger, etc. If the
Collateral Agent consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Collateral
Agent.

                  17.14 Final Expression. This Pledge Agreement, together with
the Indenture and any other agreement executed in connection herewith, is
intended by the parties as a final expression of this Pledge Agreement and is
intended as a complete and exclusive statement of the terms and conditions
thereof.

                  17.15 Rights of Holders of the Notes. No Holder of Notes shall
have any independent rights hereunder other than those rights granted to
individual Holders of the Notes pursuant to Section 6.07 of the Indenture;
provided that nothing in this subsection shall limit any rights granted to the
Trustee under the Notes or the Indenture.

                  17.16 Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial; Waiver of Damages. (a) This Pledge Agreement shall be governed by
and interpreted under the laws of the State of New York, and any dispute arising
out of, connected with, related to, or incidental to the relationship
established between the Pledgor, the Trustee, the Collateral Agent and the
Holders of the Notes in connection with this Pledge Agreement, and whether
arising in contract, tort, equity or otherwise, shall be resolved in accordance
with the laws of the State of New York.

            (b) The Pledgor hereby waives personal service of process in any
suit, action or proceeding with respect to this Pledge Agreement and for actions
brought under the U.S. Federal or state securities laws brought in any Federal
or state court located in the City of New York (each a "New York Court") and
consents that all service of process in any such suit, action or proceeding
shall be made by registered mail, return receipt requested, directed to the
Pledgor at the address indicated in Section 17.1. Each of the parties hereto
submits to the jurisdiction of any New York Court and to the courts of its
corporate domicile with respect to any actions brought against it as defendant
in any suit, action or proceeding arising out of, connected with, related to, or
incidental to the relationship established among the Pledgor, the Trustee, the
Collateral Agent and the Holders in connection with this Pledge Agreement, and
each of the parties hereto waives any objection that it may have to the laying
of venue, including any pleading of forum non conveniens, with respect to any
such action and waives any right to which it may be entitled on account of place
of residence or domicile.

<PAGE>
                                       20

            (c) The Pledgor agrees that the Trustee shall, in its capacity as
Trustee or in the name and on behalf of any Holder of Notes, have the right, to
the extent permitted by applicable law, to proceed against the Pledgor or the
Collateral in a court in any location reasonably selected in good faith (and
having personal or in rem jurisdiction over the Pledgor or the Collateral, as
the case may be) to enable the Trustee to realize on such Collateral, or to
enforce a judgment or other court order entered in favor of the Trustee. The
Pledgor agrees that it will not assert any counterclaims, setoffs or crossclaims
in any proceeding brought by the Trustee to realize on such property or to
enforce a judgment or other court order in favor of the Trustee, except for such
counterclaims, setoffs or crossclaims which, if not asserted in any such
proceeding, could not otherwise be brought or asserted.

            (d) The Pledgor agrees that neither any Holder of Notes nor (except
as otherwise provided in this Pledge Agreement or the Indenture) the Collateral
Agent in its capacity as Collateral Agent shall have any liability to the
Pledgor (whether arising in tort, contract or otherwise) for losses suffered by
the Pledgor in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by this Pledge
Agreement, or any act, omission or event occurring in connection therewith,
unless it is determined by a final and nonappealable judgment of a court that is
binding on the Collateral Agent or such Holder of Notes, as the case may be,
that such losses were the result of acts or omissions on the part of the
Collateral Agent or such Holders of Notes, as the case may be, constituting bad
faith, gross negligence or willful misconduct.

            (e) To the extent permitted by applicable law, the Pledgor waives
the posting of any bond otherwise required of the Trustee, the Collateral Agent
or any Holder of Notes in connection with any judicial process or proceeding to
enforce any judgment or other court order pertaining to this Pledge Agreement or
any related agreement or document entered in favor of the trustee, the
Collateral Agent or any Holder of Notes, or to enforce by specific performance,
temporary restraining order or preliminary or permanent injunction, this Pledge
Agreement or any related agreement or document between the Pledgor on the one
hand and the Trustee, the Collateral Agent and/or the Holders of the Notes on
the other hand.

                    [REMAINDER OF PAGE INTENTIONALLY BLANK]

<PAGE>
                                       21

            IN WITNESS WHEREOF, the parties hereto have each caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.

                                   Pledgor:

                                   MICHAEL FOODS, ACQUISITION CORP.

                                   By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                   Trustee:

                                   BNY MIDWEST TRUST COMPANY

                                   By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                   Collateral Agent:

                                   BNY MIDWEST TRUST COMPANY

                                   By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                   Securities Intermediary:

                                   BNY MIDWEST TRUST COMPANY

                                   By:
                                        ----------------------------------------
                                        Name:
                                        Title:

<PAGE>
                                       22

                                   BANC OF AMERICA SECURITIES LLC

                                   By:
                                        ----------------------------------------
                                        Name:
                                        Title:

<PAGE>

                                                                       EXHIBIT A

                           [Form of Vestar Agreement]

<PAGE>

                                                                       EXHIBIT B

                     [Form of First Supplemental Indenture]

<PAGE>

                                                                       EXHIBIT C

                      [Draft Opinion of Kirkland & Ellis]

            1. The Supplemental Indenture has been duly authorized, executed and
delivered by Michael Foods and each of the Guarantors (as defined in the
Purchase Agreement) and, when executed and delivered by each of the other
parties thereto, will be enforceable against Michael Foods and each of the
Guarantors in accordance with its terms, except as the same may be limited by
(A) applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' right generally, including without limitation the effect of
statutory or other laws regarding fraudulent conveyances or transfers,
preferential transferor distributions by corporations to shareholders, or (B)
general principles of equity, whether considered at law or at equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing.

            2. The Registration Rights Agreements has been duly authorized,
executed and delivered by each of the Guarantors and is enforceable against each
of the Guarantors in accordance with its terms, except as the same may be
limited by (A) applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' right generally, including without limitation
the effect of statutory or other laws regarding fraudulent conveyances or
transfers, preferential transferor distributions by corporations to
shareholders, or (B) general principles of equity, whether considered at law or
at equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing.<PAGE>

                                                                EXHIBIT 10.1

                                                                EXECUTION COPY

                                CREDIT AGREEMENT

                           Dated as of April 10, 2001

                                      among

                               MICHAEL FOODS, INC.
                                  as Borrower,

                             M-FOODS HOLDINGS, INC.

                                       and

                        THE SUBSIDIARIES OF THE BORROWER
                         FROM TIME TO TIME PARTY HERETO,
                                 as Guarantors,

                                   THE LENDERS
                         FROM TIME TO TIME PARTY HERETO,

                             BANK OF AMERICA, N. A.,
                                    as Agent,

                         BANC OF AMERICA SECURITIES LLC,
              as Sole Lead Arranger and Sole Book Running Manager,

                                       and

                              BEAR, STEARNS & CO.,
                              as Syndication Agent

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

<S>                                                                                               <C>
SECTION 1  DEFINITIONS..............................................................................1
         1.1      DEFINITIONS.......................................................................1
         1.2      COMPUTATION OF TIME PERIODS......................................................33
         1.3      ACCOUNTING TERMS.................................................................33
SECTION 2  CREDIT FACILITIES.......................................................................34
         2.1      REVOLVING LOANS..................................................................34
         2.2      LETTER OF CREDIT SUBFACILITY.....................................................36
         2.3      SWINGLINE LOAN SUBFACILITY.......................................................41
         2.4      TRANCHE A TERM LOAN..............................................................44
         2.5      TRANCHE B TERM LOAN..............................................................46
SECTION 3  OTHER PROVISIONS RELATING TO CREDIT FACILITIES..........................................48
         3.1      DEFAULT RATE.....................................................................48
         3.2      EXTENSION AND CONVERSION.........................................................48
         3.3      PREPAYMENTS......................................................................49
         3.4      TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT..........................52
         3.5      FEES.............................................................................52
         3.6      CAPITAL ADEQUACY.................................................................54
         3.7      LIMITATION ON EURODOLLAR LOANS...................................................54
         3.8      ILLEGALITY.......................................................................55
         3.9      REQUIREMENTS OF LAW..............................................................55
         3.10     TREATMENT OF AFFECTED LOANS......................................................56
         3.11     TAXES............................................................................57
         3.12     COMPENSATION.....................................................................59
         3.13     PRO RATA TREATMENT...............................................................60
         3.14     SHARING OF PAYMENTS..............................................................61
         3.15     PAYMENTS, COMPUTATIONS, ETC......................................................61
         3.16     EVIDENCE OF DEBT.................................................................63
         3.17     REPLACEMENT OF AFFECTED LENDERS..................................................63
SECTION 4  GUARANTY................................................................................64
         4.1      THE GUARANTY.....................................................................64
         4.2      OBLIGATIONS UNCONDITIONAL........................................................65
         4.3      REINSTATEMENT....................................................................66
         4.4      CERTAIN ADDITIONAL WAIVERS.......................................................66
         4.5      REMEDIES.........................................................................66
         4.6      RIGHTS OF CONTRIBUTION...........................................................67
         4.7      GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.......................................68
SECTION 5  CONDITIONS..............................................................................68
         5.1      CLOSING CONDITIONS...............................................................68
         5.2      CONDITIONS TO ALL EXTENSIONS OF CREDIT...........................................73
SECTION 6  REPRESENTATIONS AND WARRANTIES..........................................................73
         6.1      FINANCIAL CONDITION..............................................................73
         6.2      NO MATERIAL CHANGE...............................................................74
         6.3      ORGANIZATION AND GOOD STANDING...................................................75
         6.4      POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS....................................75

<PAGE>

         6.5      NO CONFLICTS.....................................................................75
         6.6      NO DEFAULT.......................................................................76
         6.7      OWNERSHIP........................................................................76
         6.8      INDEBTEDNESS.....................................................................76
         6.9      LITIGATION.......................................................................76
         6.10     TAXES............................................................................76
         6.11     COMPLIANCE WITH LAW..............................................................77
         6.12     ERISA............................................................................77
         6.13     CORPORATE STRUCTURE; CAPITAL STOCK, ETC..........................................78
         6.14     GOVERNMENTAL REGULATIONS, ETC....................................................78
         6.15     PURPOSE OF LOANS AND LETTERS OF CREDIT...........................................79
         6.16     ENVIRONMENTAL MATTERS............................................................79
         6.17     INTELLECTUAL PROPERTY............................................................80
         6.18     SOLVENCY.........................................................................80
         6.19     INVESTMENTS......................................................................80
         6.20     BUSINESS LOCATIONS...............................................................81
         6.21     DISCLOSURE.......................................................................81
         6.22     BROKERS' FEES....................................................................81
         6.23     LABOR MATTERS....................................................................81
         6.24     NATURE OF BUSINESS...............................................................81
SECTION 7  AFFIRMATIVE COVENANTS...................................................................81
         7.1      INFORMATION COVENANTS............................................................82
         7.2      PRESERVATION OF EXISTENCE AND FRANCHISES.........................................85
         7.3      BOOKS AND RECORDS................................................................85
         7.4      COMPLIANCE WITH LAW..............................................................85
         7.5      PAYMENT OF TAXES AND OTHER CLAIMS................................................85
         7.6      INSURANCE........................................................................86
         7.7      MAINTENANCE OF PROPERTY..........................................................86
         7.8      USE OF PROCEEDS..................................................................87
         7.9      AUDITS/INSPECTIONS...............................................................87
         7.10     FINANCIAL COVENANTS..............................................................87
         7.11     ADDITIONAL GUARANTORS............................................................88
         7.12     PLEDGED ASSETS...................................................................88
         7.13     INTEREST RATE PROTECTION.........................................................90
         7.14     FURTHERANCE ASSURANCES...........................................................90
SECTION 8  NEGATIVE COVENANTS......................................................................90
         8.1      INDEBTEDNESS.....................................................................91
         8.2      LIENS............................................................................92
         8.3      NATURE OF BUSINESS...............................................................95
         8.4      CONSOLIDATION, MERGER, DISSOLUTION, ETC..........................................95
         8.5      ASSET DISPOSITIONS...............................................................95
         8.6      INVESTMENTS......................................................................96
         8.7      RESTRICTED PAYMENTS..............................................................99
         8.8      OTHER INDEBTEDNESS..............................................................100
         8.9      TRANSACTIONS WITH AFFILIATES....................................................100
         8.10     FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; DAIRY RESTRUCTURING DOCUMENTS............101

<PAGE>

         8.11     LIMITATION ON RESTRICTED ACTIONS................................................101
         8.12     OWNERSHIP OF SUBSIDIARIES.......................................................101
         8.13     SALE LEASEBACKS.................................................................102
         8.14     NO FURTHER NEGATIVE PLEDGES.....................................................102
SECTION 9  EVENTS OF DEFAULT......................................................................103
         9.1      EVENTS OF DEFAULT...............................................................103
         9.2      ACCELERATION; REMEDIES..........................................................105
SECTION 10  AGENCY PROVISIONS.....................................................................106
         10.1     APPOINTMENT, POWERS AND IMMUNITIES..............................................106
         10.2     RELIANCE BY AGENT...............................................................107
         10.3     DEFAULTS........................................................................107
         10.4     RIGHTS AS A LENDER..............................................................107
         10.5     INDEMNIFICATION.................................................................108
         10.6     NON-RELIANCE ON AGENT AND OTHER LENDERS.........................................108
         10.7     SUCCESSOR AGENT.................................................................109
         10.8     SYNDICATION AGENT...............................................................109
SECTION 11  MISCELLANEOUS.........................................................................109
         11.1     NOTICES.........................................................................109
         11.2     RIGHT OF SET-OFF; ADJUSTMENTS...................................................111
         11.3     BENEFIT OF AGREEMENT............................................................111
         11.4     NO WAIVER; REMEDIES CUMULATIVE..................................................113
         11.5     EXPENSES; INDEMNIFICATION.......................................................114
         11.6     AMENDMENTS, WAIVERS AND CONSENTS................................................115
         11.7     COUNTERPARTS....................................................................116
         11.8     HEADINGS........................................................................116
         11.9     SURVIVAL........................................................................117
         11.10    GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE................................117
         11.11    SEVERABILITY....................................................................117
         11.12    ENTIRETY........................................................................118
         11.13    BINDING EFFECT; TERMINATION.....................................................118
         11.14    CONFIDENTIALITY.................................................................118
         11.15    SOURCE OF FUNDS.................................................................119
         11.16    REGULATION D....................................................................119
         11.17    CONFLICT........................................................................119
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                               SCHEDULES

<S>                   <C>
Schedule 1.1A         Scheduled Financial Information
Schedule 1.1B         Existing Letters of Credit
Schedule 2.1(a)       Lenders
Schedule 6.1          Undisclosed Liabilities
Schedule 6.4          Required Consents, Authorizations, Notices and Filings
Schedule 6.9          Litigation
Schedule 6.12         ERISA
Schedule 6.13A        Corporate Structure
Schedule 6.13B        Subsidiaries
Schedule 6.16         Environmental Disclosures
Schedule 6.17         Intellectual Property
Schedule 6.20(a)      Mortgaged Properties
Schedule 6.20(b)      Collateral Locations
Schedule 6.20(c)      Chief Executive Offices/Jurisdiction of
                      Incorporation/Principal Places of Business
Schedule 6.22         Broker's Fees
Schedule 6.23         Labor Matters
Schedule 7.6          Insurance
Schedule 8.1          Indebtedness
Schedule 8.2          Liens
Schedule 8.6          Investments
Schedule 8.9          Affiliate Transactions

                               EXHIBITS

Exhibit 1.1A          Form of Investor Pledge Agreement
Exhibit 1.1B          Form of Pledge Agreement
Exhibit 1.1C          Form of Security Agreement
Exhibit 2.1(b)(i)     Form of Notice of Borrowing
Exhibit 2.1(e)        Form of Revolving Note
Exhibit 2.3(d)        Form of Swingline Note
Exhibit 2.4(f)        Form of Tranche A Term Note
Exhibit 2.5(f)        Form of Tranche B Term Note
Exhibit 3.2           Form of Notice of Extension/Conversion
Exhibit 7.1(d)        Form of Officer's Compliance Certificate
Exhibit 7.11          Form of Joinder Agreement
Exhibit 11.3(b)       Form of Assignment and Acceptance

</TABLE>

<PAGE>

                                CREDIT AGREEMENT

         THIS CREDIT AGREEMENT, dated as of April 10, 2001 (as amended,
modified, restated or supplemented from time to time, the "CREDIT AGREEMENT"),
is by and among MICHAEL FOODS, INC., a Minnesota corporation (the "BORROWER"),
M-FOODS HOLDINGS, INC., a Delaware corporation (the "PARENT"), the Subsidiary
Guarantors (as defined herein), the Lenders (as defined herein), BANK OF
AMERICA, N. A., as Agent for the Lenders (in such capacity, the "AGENT") and
BEAR, STEARNS & CO., as Syndication Agent for the Lenders (in such capacity, the
"SYNDICATION AGENT").

                               W I T N E S S E T H

         WHEREAS, the Borrower has requested that the Lenders provide credit
facilities in an aggregate principal amount of $470,000,000 (the "CREDIT
FACILITIES") for the purposes hereinafter set forth; and

         WHEREAS, the Lenders have agreed to make the requested Credit
Facilities available to the Borrower on the terms and conditions hereinafter set
forth;

         NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

                                    SECTION 1

                                   DEFINITIONS

                  1.1      DEFINITIONS.

         As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:

                  "ACQUIRED COMPANY" means Michael Foods, Inc., a Minnesota
         corporation and, prior to the Closing Date, a public company listed on
         NASDAQ National Market.

                  "ACQUIRED NON-CORE ASSET DISPOSITION" means an Asset
         Disposition (other than an Excluded Asset Disposition) of Property
         acquired after the Closing Date in a Permitted Acquisition, provided
         that (i) such Asset Disposition is consummated within 540 days
         following the date of the related Permitted Acquisition and (ii) the
         aggregate fair market value of the Property subject to such Asset
         Disposition (or series of related Asset Dispositions) is less than
         $5,000,000; PROVIDED, HOWEVER, that the term "Acquired Non-Core Asset
         Disposition" shall not include any Asset Disposition which is an "Asset
         Sale" (or any comparable term) under, and as defined in, any Junior
         Financing Documentation.

                  "ACQUISITION", by any Person, means the acquisition by such
         Person of at least a majority of the Capital Stock or all or
         substantially all of the Property or a line of business or

<PAGE>

         division of another Person, whether or not such acquisition involves a
         merger or consolidation by the acquiring Person with or into the
         acquired Person.

                  "ADJUSTED BASE RATE" means, with respect to Revolving Loans,
         Swingline Loans which are Base Rate Loans and Tranche A Term Loans, the
         Base Rate PLUS the Applicable Percentage.

                  "ADJUSTED EURODOLLAR RATE" means, with respect to Revolving
         Loans and Tranche A Term Loans which are Eurodollar Loans, the
         Eurodollar Rate PLUS the Applicable Percentage.

                  "AFFILIATE" means, with respect to any Person, any other
         Person (i) directly or indirectly controlling or controlled by or under
         direct or indirect common control with such Person or (ii) directly or
         indirectly owning or holding ten percent (10%) or more of the Capital
         Stock in such Person. For purposes of this definition, "control" when
         used with respect to any Person means the power to direct the
         management and policies of such Person, directly or indirectly, whether
         through the ownership of voting securities, by contract or otherwise;
         and the terms "controlling" and "controlled" have meanings correlative
         to the foregoing.

                  "AGENCY MANAGEMENT ADDRESS" means Bank of America, N.A.,
         Agency Management, Mail Code: CA5-701-12-09, 1455 Market Street, San
         Francisco, CA 94103, Attn: Christine Cordi, or such other address as
         may be identified by written notice from the Agent to the Borrower.

                  "AGENT" shall have the meaning assigned to such term in the
         heading hereof, together with any successors or assigns.

                  "AGENT'S FEE LETTER" means that certain fee letter agreement,
         dated as of February 15, 2001, between Bank of America, Banc of America
         Securities LLC, Banc of America Bridge LLC and the Sponsor, as amended,
         modified, restated or supplemented from time to time.

                  "APPLICABLE LENDING OFFICE" means, for each Lender, the office
         of such Lender (or of an Affiliate of such Lender) as such Lender may
         from time to time specify to the Agent and the Borrower by written
         notice as the office by which its Eurodollar Loans are made and
         maintained.

                  "APPLICABLE PERCENTAGE" means, for purposes of calculating the
         applicable interest rate for any day for any Revolving Loan, Swingline
         Loan or Tranche A Term Loan, the applicable rate of the Unused Fee for
         any day for purposes of Section 3.5(a), the applicable rate of the
         Standby Letter of Credit Fee for any day for purposes of Section
         3.5(b)(i) or the applicable rate of the Trade Letter of Credit Fee for
         any day for purposes of Section 3.5(b)(ii), the appropriate applicable
         percentage corresponding to the Leverage Ratio in effect as of the most
         recent Calculation Date:

                                       2
<PAGE>

<TABLE>
<CAPTION>

===========================================================================================================
                                                           APPLICABLE PERCENTAGES
                                  -------------------------------------------------------------------------
                                      FOR REVOLVING LOANS,
                                  SWINGLINE LOANS AND TRANCHE
                                          A TERM LOANS
                                  ----------------------------
                                                                 FOR STANDBY     FOR TRADE     FOR UNUSED
   PRICING         LEVERAGE        EURODOLLAR      BASE RATE      LETTER OF      LETTER OF        FEE
    LEVEL           RATIO             LOANS          LOANS        CREDIT FEE     CREDIT FEE
<S>             <C>                <C>             <C>           <C>             <C>           <C>
  ---------------------------------------------------------------------------------------------------------
      I         > 4.25 to 1.00        3.00%          2.00%          3.00%          1.50%         0.50%
  ---------------------------------------------------------------------------------------------------------
                < 4.25 to 1.00
                -
      II             but              2.75%          1.75%          2.75%          1.375%        0.50%
                > 3.75 to 1.00
  ---------------------------------------------------------------------------------------------------------
                < 3.75 to1.00
              -
     III             but              2.50%          1.50%          2.50%          1.25%         0.50%
                > 3.25 to 1.00
  ---------------------------------------------------------------------------------------------------------
              < 3.25 to 1.00 but
              -
      IV        > 2.75 to 1.00        2.25%          1.25%          2.25%          1.125%        0.375%
  ---------------------------------------------------------------------------------------------------------
      V         < 2.75 to 1.0         2.00%          1.00%          2.00%          1.00%         0.375%
===========================================================================================================
</TABLE>

         The Applicable Percentages shall be determined and adjusted quarterly
         on the date (each a "CALCULATION DATE") five Business Days after the
         date by which the Credit Parties are required to provide the officer's
         certificate in accordance with the provisions of Section 7.1(d) for the
         most recently ended fiscal quarter of the Consolidated Parties or, in
         the case of the fourth fiscal quarter of any fiscal year, five Business
         Days after such earlier date as the Credit Parties shall have delivered
         to the Agent financial statements for such fiscal quarter meeting the
         requirements of Section 7.1(b) together with a related officer's
         certificate meeting the requirements of Section 7.1(d), PROVIDED,
         HOWEVER, that (i) the initial Applicable Percentages shall be based on
         Pricing Level I and shall remain at Pricing Level I until the
         Calculation Date for the fiscal quarter of the Consolidated Parties
         ending on September 30, 2001, on and after which time the Pricing Level
         shall be determined by the Leverage Ratio as of the last day of the
         most recently ended fiscal quarter of the Consolidated Parties
         preceding the applicable Calculation Date and (ii) if the Credit
         Parties fail to provide the officer's certificate to the Agency
         Management Address as required by Section 7.1(d) for the last day of
         the most recently ended fiscal quarter of the Consolidated Parties
         preceding the applicable Calculation Date, the Applicable Percentage
         from such Calculation Date shall be based on Pricing Level I until such
         time as an appropriate officer's certificate is provided, whereupon the
         Pricing Level shall be determined by the Leverage Ratio as of the last
         day of the most recently ended fiscal quarter of the Consolidated
         Parties preceding such Calculation Date. Each Applicable Percentage
         shall be effective from one Calculation Date until the next Calculation
         Date. Any adjustment in the Applicable Percentages shall be applicable
         to all existing Loans and Letters of Credit as well as any new Loans
         and Letters of Credit made or issued.

                  "APPLICATION PERIOD" means (i) in respect of the Net Cash
         Proceeds of any Asset Disposition (other than an Acquired Non-Core
         Asset Disposition), the period of 365 days (or such earlier date as
         provided for reinvestment of such proceeds under any Junior

                                       3
<PAGE>

         Financing Documentation) following the consummation of such Asset
         Disposition and (ii) in respect of the Net Cash Proceeds of any Equity
         Issuance (other than an Excluded Equity Issuance or a Qualifying IPO),
         the period of 365 days (or such earlier date as provided for
         reinvestment of such proceeds under any Junior Financing Documentation)
         following the consummation of such Equity Issuance.

                  "ASSET DISPOSITION" means any disposition (including pursuant
         to a Sale and Leaseback Transaction) (a) by a Consolidated Party of any
         or all of the Property (including without limitation the Capital Stock
         of a Subsidiary) of any Consolidated Party whether by sale, lease,
         licensing, transfer or otherwise, other than pursuant to any
         Involuntary Disposition and (b) by Dairy Holdco of all of the Capital
         Stock of Dairy LLC or Dairy TXCT LLC owned by Dairy Holdco; PROVIDED,
         HOWEVER, that the term "Asset Disposition" (i) shall not be deemed to
         include any Equity Issuance and (ii) shall be deemed to include any
         "Asset Sale" (or any comparable term) under, and as defined in, any
         Junior Financing Documentation.

                  "ASSET DISPOSITION PREPAYMENT EVENT" means, (i) with respect
         to any Asset Disposition other than an Excluded Asset Disposition or an
         Acquired Non-Core Asset Disposition, the failure of the Credit Parties
         to apply (or cause to be applied) the Net Cash Proceeds of such Asset
         Disposition to Eligible Reinvestments during the Application Period for
         such Asset Disposition and (ii) the occurrence of an Acquired Non-Core
         Asset Disposition.

                  "ASSIGNMENT AND ACCEPTANCE" shall have the meaning to such
         term in Section 11.3(b).

                  "BANK OF AMERICA" means Bank of America, N. A. and its
         successors.

                  "BANKRUPTCY CODE" means the Bankruptcy Code in Title 11 of the
         United States Code, as amended, modified, succeeded or replaced from
         time to time.

                  "BANKRUPTCY EVENT" means, with respect to any Person, the
         occurrence of any of the following: (i) the entry of a decree or order
         for relief by a court or governmental agency having jurisdiction over
         such Person in an involuntary case under any applicable bankruptcy,
         insolvency or other similar law now or hereafter in effect, or the
         appointment by a court or governmental agency of a receiver,
         liquidator, assignee, custodian, trustee, sequestrator (or similar
         official) of such Person or for any substantial part of its Property or
         the ordering of the winding up or liquidation of its affairs by a court
         or governmental agency; or (ii) the commencement against such Person of
         an involuntary case under any applicable bankruptcy, insolvency or
         other similar law now or hereafter in effect, or of any case,
         proceeding or other action for the appointment of a receiver,
         liquidator, assignee, custodian, trustee, sequestrator (or similar
         official) of such Person or for any substantial part of its Property or
         for the winding up or liquidation of its affairs, and such involuntary
         case or other case, proceeding or other action shall remain undismissed
         for a period of sixty (60) consecutive days; or (iii) such Person shall
         commence a voluntary case under any applicable bankruptcy, insolvency
         or other similar law now or hereafter in effect, or consent to the
         entry of an order for relief in an involuntary case under any such law,
         or consent to the appointment of or the taking possession by a
         receiver, liquidator, assignee, secured creditor,

                                       4
<PAGE>

         custodian, trustee, sequestrator (or similar official) of such Person
         or for any substantial part of its Property or make any general
         assignment for the benefit of creditors; or (iv) such Person shall be
         unable to, or shall admit in writing its inability to, pay its debts
         generally as they become due.

                  "BASE RATE" means, for any day, the rate per annum equal to
         the higher of (a) the Federal Funds Rate for such day plus one-half of
         one percent (0.5%) and (b) the Prime Rate for such day. Any change in
         the Base Rate due to a change in the Prime Rate or the Federal Funds
         Rate shall be effective on the effective date of such change in the
         Prime Rate or Federal Funds Rate.

                  "BASE RATE LOAN" means any Loan bearing interest at a rate
         determined by reference to the Base Rate.

                  "BORROWER" means the Person identified as such in the heading
         hereof, together with any permitted successors and assigns.

                  "BUSINESS DAY" means a day other than a Saturday, Sunday or
         other day on which commercial banks in Charlotte, North Carolina or New
         York, New York are authorized or required by law to close, EXCEPT THAT,
         when used in connection with a Eurodollar Loan, such day shall also be
         a day on which dealings between banks are carried on in Dollar deposits
         in London, England.

                  "BUSINESSES" means, at any time, a collective reference to the
         businesses operated by the Consolidated Parties at such time.

                  "CALCULATION DATE" shall have the meaning assigned to such
         term in the definition of "Applicable Percentage" set forth in this
         Section 1.1.

                  "CAPITAL LEASE" means, as applied to any Person, any lease of
         any Property (whether real, personal or mixed) by that Person as lessee
         which, in accordance with GAAP, is required to be accounted for as a
         capital lease on the balance sheet of that Person.

                  "CAPITAL STOCK" means (i) in the case of a corporation,
         capital stock, (ii) in the case of an association or business entity,
         any and all shares, interests, participations, rights or other
         equivalents (however designated) of capital stock, (iii) in the case of
         a partnership, partnership interests (whether general or limited) and
         (iv) in the case of a limited liability company, membership interests.

                  "CASH EQUIVALENTS" means, as at any date, (1) with respect to
         any Consolidated Party, (a) securities issued or directly and fully
         guaranteed or insured by the United States or any agency or
         instrumentality thereof (provided that the full faith and credit of the
         United States is pledged in support thereof) having maturities of not
         more than twelve months from the date of acquisition, (b) Dollar
         denominated time deposits and certificates of deposit of (i) any
         Lender, (ii) any domestic commercial bank of recognized standing having
         capital and surplus in excess of $500,000,000 or (iii) any bank whose
         short-term commercial paper rating from S&P is at least A-1 or the
         equivalent thereof or from Moody's is at least P-1 or the equivalent
         thereof (any such bank being an "APPROVED DOMESTIC BANK"), in each case

                                       5
<PAGE>

         with maturities of not more than twelve (12) months from the date of
         acquisition, (c) commercial paper and variable or fixed rate notes
         issued by any Approved Domestic Bank (or by the parent company thereof)
         or any variable rate notes issued by, or guaranteed by, any domestic
         corporation rated A-1 (or the equivalent thereof) or better by S&P or
         P-1 (or the equivalent thereof) or better by Moody's and maturing
         within twelve (12) months of the date of acquisition, (d) repurchase
         agreements entered into by any Person with a bank or trust company
         (including any of the Lenders) or recognized securities dealer having
         capital and surplus in excess of $500,000,000 for direct obligations
         issued by or fully guaranteed by the United States in which such Person
         shall have a perfected first priority security interest (subject to no
         other Liens) and having, on the date of purchase thereof, a fair market
         value of at least 100% of the amount of the repurchase obligations and
         (e) Investments, classified in accordance with GAAP as current assets,
         in money market investment programs registered under the Investment
         Company Act of 1940, as amended, which are administered by reputable
         financial institutions having capital of at least $500,000,000 and the
         portfolios of which are limited such that 95% of such Investments are
         of the character described in the foregoing subdivisions (a) through
         (d) and (2) solely with respect to any Foreign Subsidiary, non-Dollar
         denominated (a) certificates of deposit of, bankers acceptances of, or
         time deposits with, any commercial bank which is organized and existing
         under the laws of the country in which such Foreign Subsidiary
         maintains its chief executive office and principal place of business
         provided such country is a member of the Organization for Economic
         Cooperation and Development, and whose short-term commercial paper
         rating from S&P is at least A-1 or the equivalent thereof or from
         Moody's is at least P-1 or the equivalent thereof (any such bank being
         an "APPROVED FOREIGN BANK") and maturing within twelve (12) months of
         the date of acquisition and (b) equivalents of demand deposit accounts
         which are maintained with an Approved Foreign Bank.

                  "CHANGE OF CONTROL" means any of the following events: (a)
         prior to a Qualifying IPO, (1) the failure of the Parent to own
         directly all of the Capital Stock of the Borrower, (2) the failure of
         the Sponsor (A) to own beneficially, directly or indirectly, at least
         51% of the outstanding Capital Stock of the Parent initially acquired
         in the Transaction and (B) to have the right, directly or indirectly,
         by beneficial ownership, contract or otherwise, to elect at least a
         majority in number of the members of the Parent's Board of Directors or
         (3) less than a majority in number of the sitting members of the
         Parent's Board of Directors shall have been elected by the Sponsor, (b)
         after a Qualifying IPO, (1) if the IPO Issuer is the Parent, the
         failure of the Parent to own directly all of the Capital Stock of the
         Borrower, (2) the failure of the Equity Investors to own beneficially,
         directly or indirectly, at least 30% of the outstanding Voting Stock of
         the IPO Issuer, (3) a person or any group, and any affiliate of any
         such person other than the Equity Investors shall beneficially own,
         directly or indirectly, an amount of the outstanding Voting Stock of
         the IPO Issuer greater than the amount owned by the Equity Investors or
         (4) during any period of up to 24 consecutive months, commencing after
         the Closing Date, individuals who at the beginning of such 24 month
         period were directors of the Parent (or, after a Qualifying IPO, the
         IPO Issuer) (together with any new director whose election by the
         Parent's (or the IPO Issuer's, as applicable) Board of Directors or
         whose nomination for election by the Parent's (or the IPO Issuer's, as
         applicable) shareholders was approved by the Equity Investors or a vote
         of at least two-thirds of the directors then still in office who either
         were directors at the beginning of such period or whose election or
         nomination for election was previously so approved) cease for any
         reason to constitute a majority of the directors of the

                                       6
<PAGE>

         Parent (or the IPO Issuer, as applicable) then in office or (c) if any
         Subordinated Debt or Qualified Preferred Stock shall have been issued,
         the occurrence of a "Change of Control" (or any comparable term) under,
         and as defined in, any Junior Financing Documentation. As used herein,
         "beneficial ownership" shall have the meaning provided in Rule 13d-3 of
         the Securities and Exchange Commission under the Securities Exchange
         Act.

                  "CLOSING DATE" means the date hereof.

                  "CODE" means the Internal Revenue Code of 1986, as amended,
         and any successor statute thereto, as interpreted by the rules and
         regulations issued thereunder, in each case as in effect from time to
         time. References to sections of the Code shall be construed also to
         refer to any successor sections.

                  "COLLATERAL" means a collective reference to all real and
         personal Property (other than Excluded Property) with respect to which
         Liens in favor of the Agent are purported to be granted pursuant to and
         in accordance with the terms of the Collateral Documents.

                  "COLLATERAL DOCUMENTS" means a collective reference to the
         Investor Pledge Agreement, the Pledge Agreement, the Security Agreement
         and the Mortgage Instruments.

                  "COMMITMENT" means (i) with respect to each Lender, the
         Revolving Commitment of such Lender, the Tranche A Term Loan Commitment
         and the Tranche B Term Loan Commitment of such Lender, (ii) with
         respect to the Issuing Lender, the LOC Commitment and (iii) with
         respect to the Swingline Lender, the Swingline Commitment.

                  "CONSOLIDATED CAPITAL EXPENDITURES" means, for the applicable
         period, all capital expenditures of the Consolidated Parties on a
         consolidated basis for such period, as determined in accordance with
         GAAP; PROVIDED, HOWEVER, that Consolidated Capital Expenditures shall
         not include any such expenditures which constitute (a) a Permitted
         Acquisition, (b) capital expenditures relating to the construction or
         acquisition of any Property which has been transferred to a Person that
         is not a Consolidated Party pursuant to a Sale and Leaseback
         Transaction permitted under Section 8.13 or (c) to the extent permitted
         by this Credit Agreement, an Eligible Reinvestment of the Net Cash
         Proceeds of any Asset Disposition (other than an Asset Dispositions of
         the type described in clauses (i), (viii) and (ix) of the definition of
         "Excluded Asset Disposition"), Involuntary Disposition or Equity
         Issuance; PROVIDED, FURTHER, that Consolidated Capital Expenditures for
         each of the fiscal quarters ending on September 30, 2000 and December
         31, 2000 shall be equal to the amount indicated for Consolidated
         Capital Expenditures for such quarter on SCHEDULE 1.1A.

                  "CONSOLIDATED CASH INTEREST EXPENSE" means, as of any date for
         the applicable period ending on such date with respect to the
         Consolidated Parties on a consolidated basis, interest expense
         (including the amortization of debt discount and premium, the interest
         component under Capital Leases and the implied interest component under
         Synthetic Leases, but excluding, to the extent included in interest
         expense, (i) fees and expenses associated with the consummation of the
         Transaction, (ii) annual agency fees described in the Agent's Fee
         Letter, (iii) costs associated with obtaining Hedging Agreements and

                                       7
<PAGE>

         (iv) fees and expenses associated with any Permitted Investment, Equity
         Issuance or Debt Issuance (whether or not consummated)), as determined
         in accordance with GAAP, to the extent the same are payable in cash
         with respect to such period; PROVIDED, HOWEVER, that Consolidated Cash
         Interest Expense for each of the fiscal quarters ending on September
         30, 2000, December 31, 2000 and March 31, 2001 shall be equal to the
         amount indicated for Consolidated Cash Interest Expense for such
         quarter on SCHEDULE 1.1A.

                  "CONSOLIDATED CASH TAXES" means, as of any date for the
         applicable period ending on such date with respect to the Consolidated
         Parties on a consolidated basis, the aggregate of all income, franchise
         and similar taxes, as determined in accordance with GAAP, to the extent
         the same are payable in cash with respect to such period; PROVIDED,
         HOWEVER, that Consolidated Cash Taxes for each of the fiscal quarters
         ending on September 30, 2000, December 31, 2000 and March 31, 2001
         shall be equal to the amount indicated for Consolidated Cash Taxes for
         such quarter on SCHEDULE 1.1A.

                  "CONSOLIDATED EBITDA" means, as of any date for the applicable
         period ending on such date with respect to the Consolidated Parties on
         a consolidated basis, the sum of (i) Consolidated Net Income, PLUS (ii)
         an amount which, in the determination of Consolidated Net Income for
         such period, has been deducted for, without duplication, (A) total
         interest expense, (B) income, franchise and similar taxes and any tax
         distributions permitted to be made pursuant to Section 8.7(c), (C)
         depreciation and amortization expense, (D) letter of credit fees, (E)
         non-cash expenses resulting from any employee benefit or management
         compensation plan or the grant of stock and stock options to employees
         of the Parent, the Borrower or any of their respective Subsidiaries
         pursuant to a written plan or agreement or the treatment of such
         options under variable plan accounting, (F) all extraordinary charges,
         (G) non-cash amortization of financing costs of the Borrower and its
         Subsidiaries, (H) one-time cash expenses incurred in connection with
         the Transaction or, to the extent permitted hereunder, any Permitted
         Investment, Equity Issuance or Debt Issuance (whether or not
         consummated), (I) any losses (or minus any gains) realized upon the
         disposition of Property outside of the ordinary course of business, (J)
         to the extent actually reimbursed, expenses incurred to the extent
         covered by indemnification provisions in any agreement in connection
         with a Permitted Acquisition (or in any similar agreement related to
         any other Acquisition consummated prior to the Closing Date), (K) to
         the extent covered by insurance, expenses with respect to liability or
         casualty events, business interruption or product recalls, (L)
         management fees, (M) any non-cash purchase accounting adjustment and
         any step-ups with respect to re-valuing assets and liabilities in
         connection with the Transaction or any Permitted Investment, (N) other
         non-cash expenses (excluding any non-cash expense to the extent that it
         represents an accrual of or reserve for cash expenses in any future
         period), (O) non-cash losses from Joint Ventures and non-cash minority
         interest reductions, (P) fees and expenses in connection with the
         exchange of the Subordinated Notes for notes with identical terms as
         permitted by Section 8.8, (Q) non-cash, non-recurring charges, (R)
         other non-recurring charges in an aggregate amount not to exceed
         $2,000,000 during any four consecutive fiscal quarter period, (S)
         expenses representing the implied principal component under Synthetic
         Leases, and (T) expenses in connection with payments made by any
         Consolidated Party with respect to industrial revenue bond financings
         and Guaranty Obligations in respect thereof MINUS (iii) an amount
         which, in the determination of Consolidated Net Income, has been
         included for (A) all extraordinary gains and non-cash

                                       8
<PAGE>

         income during such period and (B) any gains realized upon the
         disposition of Property outside of the ordinary course of business
         PLUS/MINUS (iv) unrealized losses/gains in respect of Hedging
         Agreements, all as determined in accordance with GAAP; PROVIDED,
         HOWEVER, that, notwithstanding any other provision to the contrary
         contained in this Credit Agreement, for purposes of any calculation
         made under the financial covenants set forth in Section 7.10 (including
         for purposes of the definition of "Pro Forma Basis" set forth in
         Section 1.1, but excluding for purposes of the definition of
         "Applicable Percentage" set forth in Section 1.1), no more than 15% of
         total Consolidated EBITDA for the applicable period shall be
         attributable to the Foreign Subsidiaries and/or Investments in Joint
         Ventures.

                  "CONSOLIDATED NET INCOME" means, as of any date for the
         applicable period ending on such date with respect to the Consolidated
         Parties on a consolidated basis, net income (excluding, without
         duplication, (i) extraordinary items and (ii) any amounts attributable
         to Investments in any Joint Venture to the extent that either (x) such
         amounts have not been distributed in cash to the Consolidated Parties
         during the applicable period, (y) such amounts were not earned by such
         Joint Venture during the applicable period or (z) there exists in
         respect of any future period any encumbrance or restriction on the
         ability of such Joint Venture to pay dividends or make any other
         distributions in cash on the Capital Stock of such Joint Venture held
         by the Consolidated Parties), as determined in accordance with GAAP.

                  "CONSOLIDATED PARTIES" means a collective reference to the
         Parent and its Subsidiaries, and "CONSOLIDATED PARTY" means any one of
         them.

                  "CONSOLIDATED SCHEDULED FUNDED DEBT PAYMENTS" means, as of any
         date for the applicable period ending on such date with respect to the
         Consolidated Parties on a consolidated basis, the sum of all scheduled
         payments of principal on Funded Indebtedness during such period
         (including the implied principal component of payments due on Capital
         Leases during such period and Synthetic Leases, less the reduction for
         all voluntary prepayments or mandatory prepayments required pursuant to
         Section 3.3, in each case as applied pursuant to Section 3.3), as
         determined in accordance with GAAP; PROVIDED, HOWEVER, that
         Consolidated Scheduled Funded Debt Payments for each of the fiscal
         quarters ending on September 30, 2000, December 31, 2000 and March 31,
         2001 shall be equal to the amount indicated for Consolidated Scheduled
         Funded Debt Payments for such quarter on SCHEDULE 1.1A.

                  "CONSOLIDATED TOTAL ASSETS" means, as of any date with respect
         to the Consolidated Parties on a consolidated basis, total assets, as
         determined in accordance with GAAP.

                  "CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the
         continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from
         one Interest Period to the next Interest Period.

                  "CONVERT", "CONVERSION" and "CONVERTED" shall refer to a
         conversion pursuant to Section 3.2 or Sections 3.7 through 3.12,
         inclusive, of a Base Rate Loan into a Eurodollar Loan.

                                       9
<PAGE>

                  "CREDIT DOCUMENTS" means a collective reference to this Credit
         Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
         Agent's Fee Letter and the Collateral Documents (in each case as the
         same may be amended, modified, restated, supplemented, extended,
         renewed or replaced from time to time), and "CREDIT DOCUMENT" means any
         one of them.

                  "CREDIT FACILITIES" shall have the meaning assigned to such
         term in the recitals hereto.

                  "CREDIT PARTIES" means a collective reference to the Borrower
         and the Guarantors, and "CREDIT PARTY" means any one of them.

                  "CREDIT PARTY OBLIGATIONS" means, without duplication, (i) all
         of the obligations of the Credit Parties to the Lenders (including the
         Issuing Lender) and the Agent, whenever arising, under this Credit
         Agreement or any of the other Credit Documents (including, but not
         limited to, any interest accruing after the occurrence of a Bankruptcy
         Event with respect to any Credit Party, regardless of whether such
         interest is an allowed claim under the Bankruptcy Code) and (ii) all
         liabilities and obligations, whenever arising, owing from any Credit
         Party to any Lender, or any Affiliate of a Lender, arising under any
         Hedging Agreement.

                  "DAIRY HOLDCO" means M-Foods Dairy Holdings, LLC, a Delaware
         limited liability company.

                  "DAIRY LLC" means M-Foods Dairy, LLC, a Delaware limited
         liability company.

                  "DAIRY RESTRUCTURING" means a collective reference to (i) the
         transfer by certain of the Consolidated Parties to Dairy LLC and Dairy
         TXCT LLC on or prior to the Closing Date of substantially all of the
         assets constituting the dairy division of the Borrower and its
         subsidiaries pursuant to the terms of the Dairy Restructuring
         Documents, (ii) the issuance by Dairy LLC and Dairy TXCT LLC to Dairy
         Holdco on the Closing Date of non-voting common Capital Stock
         constituting 95% of all of the common Capital Stock of Dairy LLC and
         Dairy TXCT LLC, as applicable, (iii) the issuance by Dairy LLC on or
         prior to the Closing Date to certain of the Credit Parties of 100% of
         all of the voting preferred Capital Stock of Dairy LLC and (iv) the
         issuance by Dairy TXCT LLC on or prior to the Closing Date to certain
         of the Credit Parties of 100% of all of the voting preferred Capital
         Stock of Dairy TXCT LLC.

                  "DAIRY RESTRUCTURING DOCUMENTS" means a collective reference
         to (a) that certain Dairy Contribution Agreement dated April 10, 2001
         among Dairy Holdco, Dairy LLC, and Kohler Mix Specialties, Inc., (b)
         that certain Bill of Sale dated April 10, 2001 between Dairy LLC and
         Kohler Mix Specialties, Inc., (c) that certain Instrument of Assumption
         dated April 10, 2001 between Dairy LLC and Kohler Mix Specialties,
         Inc., (d) that certain Dairy Contribution Agreement dated April 10,
         2001 among Dairy Holdco, Dairy TXCT LLC, Kohler Mix Specialties of
         Connecticut, Inc., and Midwest Mix, Inc., (e) that certain Bill of Sale
         dated April 10, 2001 among Dairy TXCT LLC, Kohler Mix Specialties of
         Connecticut, Inc., and Midwest Mix, Inc., (f) that certain Instrument
         of Assumption dated April 10, 2001 among Dairy TXCT LLC, Kohler Mix
         Specialties of

                                       10
<PAGE>

         Connecticut, Inc., and Midwest Mix, Inc., and (g) that certain Letter
         of Direction dated April 10, 2001 among by Dairy Holdco, Dairy LLC and
         Dairy TXCT LLC.

                  "DAIRY TXCT LLC" means M-Foods Dairy TXCT, LLC, a Delaware
         limited liability company.

                  "DEBT ISSUANCE" means the issuance by any Consolidated Party
         of any Indebtedness for borrowed money.

                  "DEBT ISSUANCE PREPAYMENT EVENT" means the receipt by any
         Consolidated Party of proceeds from any Debt Issuance other than an
         Excluded Debt Issuance.

                  "DEFAULT" means any event, act or condition which with notice
         or lapse of time, or both, would constitute an Event of Default.

                  "DEFAULTING LENDER" means, at any time, any Lender that (a)
         has failed to make a Loan or purchase a Participation Interest required
         pursuant to the terms of this Credit Agreement within one Business Day
         of when due, (b) other than as set forth in (a) above, has failed to
         pay to the Agent or any Lender an amount owed by such Lender pursuant
         to the terms of this Credit Agreement within one Business Day of when
         due, unless such amount is subject to a good faith dispute or (c) has
         been deemed insolvent or has become subject to a bankruptcy or
         insolvency proceeding or with respect to which (or with respect to any
         of the assets of which) a receiver, trustee or similar official has
         been appointed.

                  "DOLLARS" and "$" means dollars in lawful currency of the
         United States.

                  "DOMESTIC SUBSIDIARY" means any direct or indirect Subsidiary
         of the Borrower that was formed under the laws of the United States or
         any state thereof or the District of Columbia.

                  "EGG PRODUCTS INSPECTION ACT" means the Egg Products
         Inspection Act, as amended, 21 U.S.C. Section 1031, ET SEQ., and its
         implementing regulations.

                  "ELIGIBLE ASSIGNEE" means (i) a Lender; (ii) unless an
         assignment to such Person would result in any increased cost to the
         Borrower under Section 3.6, 3.9 or 3.11, an Affiliate of a Lender or,
         with respect to any Lender that is a fund that invests in bank loans,
         any other fund that invests in bank loans which is an "accredited
         investor" and is managed or advised by the same investment advisor that
         manages or advises such Lender or by an Affiliate of such investment
         advisor; and (iii) any other Person approved by the Agent and, unless
         an Event of Default under Section 9.1(a), (c)(i) or (f) exists at the
         time any assignment is effected in accordance with Section 11.3, the
         Borrower (such approval by the Agent or the Borrower not to be
         unreasonably withheld or delayed and such approval to be deemed given
         by the Borrower if no objection is received by the assigning Lender and
         the Agent from the Borrower within two (2) Business Days after
         confirmation (such confirmation not to be unreasonably withheld or
         delayed) by an Executive Officer of the Borrower of receipt of notice
         of such proposed assignment by the assigning Lender); PROVIDED,
         HOWEVER, that neither the Borrower nor an Affiliate of the Borrower
         shall qualify as an Eligible Assignee and in no event shall a
         competitor,

                                       11
<PAGE>

         customer or supplier of any Consolidated Party or Affiliate thereof be
         an Eligible Assignee.

                  "ELIGIBLE REINVESTMENT" means (i) any acquisition (whether or
         not constituting a capital expenditure, but not constituting an
         Acquisition) by a Consolidated Party of assets or any business (or any
         substantial part thereof) used or useful in the same or a substantially
         similar line of business as the Consolidated Parties were engaged in on
         the Closing Date (or any reasonable extensions or expansions thereof)
         and (ii) any Permitted Acquisition. If any Subordinated Debt or
         Qualified Preferred Stock shall have been issued, the term "Eligible
         Reinvestment" shall not include any item which is not a permitted
         application of proceeds of an "Asset Sale" (or any comparable term)
         under, and as defined in, any Junior Financing Documentation.

                  "ENVIRONMENTAL LAWS" means any and all lawful and applicable
         Federal, state, local and foreign statutes, laws (including, without
         limitation, the Comprehensive Environmental Response, Compensation and
         Liability Act of 1980 ("CERCLA"), the Resource Conservation and
         Recovery Act of 1976, the Toxic Substances Control Act, the Water
         Pollution Control Act, the Clean Air Act and the Hazardous Materials
         Transportation Act), regulations, ordinances, rules, judgments, orders,
         decrees, permits, concessions, grants, franchises, licenses, agreements
         or other governmental restrictions relating to the environment or to
         emissions, discharges, releases or threatened releases of pollutants,
         contaminants, chemicals, or industrial, toxic or hazardous substances
         or wastes into the environment including, without limitation, ambient
         air, surface water, ground water, or land, or otherwise relating to the
         manufacture, processing, distribution, use, treatment, storage,
         disposal, transport, or handling of pollutants, contaminants,
         chemicals, or industrial, toxic or hazardous substances or wastes.

                  "EQUITY INVESTORS" means a collective reference to (i) the
         Sponsor, (ii) Marathon Fund Limited Partnership IV and (iii) certain
         executives and beneficial and record shareholders of the Acquired
         Company described in the Merger Agreement, and "EQUITY INVESTOR" means
         any one of them.

                  "EQUITY ISSUANCE" means any issuance for cash by any
         Consolidated Party to any Person of (a) shares of its Capital Stock,
         (b) any shares of its Capital Stock pursuant to the exercise of options
         or warrants, (c) any shares of its Capital Stock pursuant to the
         conversion of any debt securities to equity or (d) any options or
         warrants relating to its Capital Stock. An "Asset Disposition" shall
         not be deemed to be an Equity Issuance.

                  "EQUITY ISSUANCE PREPAYMENT EVENT" means, (i) with respect to
         any Equity Issuance other than an Excluded Equity Issuance or an Equity
         Issuance constituting a Qualifying IPO, the failure of the Credit
         Parties to apply (or cause to be applied) the Net Cash Proceeds of such
         Equity Issuance to Eligible Reinvestments during the Application Period
         for such Equity Issuance and (ii) with respect to any Equity Issuance
         constituting a Qualifying IPO, the receipt by any Consolidated Party of
         Net Cash Proceeds from such Equity Issuance.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended, and any successor statute thereto, as interpreted by
         the rules and regulations

                                       12
<PAGE>

         thereunder, all as the same may be in effect from time to time.
         References to sections of ERISA shall be construed also to refer to any
         successor sections.

                  "ERISA AFFILIATE" means an entity which is under common
         control with any Consolidated Party within the meaning of Section
         4001(a)(14) of ERISA, or is a member of a group which includes any
         Consolidated Party and which is treated as a single employer under
         Sections 414(b) or (c) of the Code.

                  "ERISA EVENT" means (i) with respect to any Plan, the
         occurrence of a Reportable Event or the substantial cessation of
         operations (within the meaning of Section 4062(e) of ERISA); (ii) the
         withdrawal by any Consolidated Party or any ERISA Affiliate from a
         Multiple Employer Plan during a plan year in which it was a substantial
         employer (as such term is defined in Section 4001(a)(2) of ERISA), or
         the termination of a Multiple Employer Plan; (iii) the distribution of
         a notice of intent to terminate or the actual termination of a Plan
         pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution
         of proceedings to terminate or the actual termination of a Plan by the
         PBGC under Section 4042 of ERISA; (v) any event or condition which
         might constitute grounds under Section 4042 of ERISA for the
         termination of, or the appointment of a trustee to administer, any
         Plan; (vi) the complete or partial withdrawal of any Consolidated Party
         or any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions
         for imposition of a lien under Section 302(f) of ERISA exist with
         respect to any Plan; or (viii) the adoption of an amendment to any Plan
         requiring the provision of security to such Plan pursuant to Section
         307 of ERISA.

                  "EURODOLLAR LOAN" means any Loan that bears interest at a rate
         based upon the Eurodollar Rate.

                  "EURODOLLAR RATE" means, for any Eurodollar Loan for any
         Interest Period therefor, the rate per annum (rounded upwards, if
         necessary, to the nearest 1/100 of 1%) determined by the Agent to be
         equal to the quotient obtained by dividing (a) the Interbank Offered
         Rate for such Eurodollar Loan for such Interest Period by (b) 1 minus
         the Eurodollar Reserve Requirement for such Eurodollar Loan for such
         Interest Period.

                  "EURODOLLAR RESERVE REQUIREMENT" means, at any time, the
         maximum rate at which reserves (including, without limitation, any
         marginal, special, supplemental, or emergency reserves) are required to
         be maintained under regulations issued from time to time by the Board
         of Governors of the Federal Reserve System (or any successor) by member
         banks of the Federal Reserve System against "Eurocurrency liabilities"
         (as such term is used in Regulation D). Without limiting the effect of
         the foregoing, the Eurodollar Reserve Requirement shall reflect any
         other reserves required to be maintained by such member banks with
         respect to (i) any category of liabilities which includes deposits by
         reference to which the Eurodollar Rate is to be determined, or (ii) any
         category of extensions of credit or other assets which include
         Eurodollar Loans. The Eurodollar Rate shall be adjusted automatically
         on and as of the effective date of any change in the Eurodollar Reserve
         Requirement.

                  "EVENT OF DEFAULT" shall have the meaning assigned to such
         term in Section 9.1.

                                       13
<PAGE>

                  "EXCESS CASH FLOW" means, with respect to any fiscal year
         period of the Consolidated Parties on a consolidated basis, an amount
         equal to (i) Consolidated EBITDA MINUS (ii) without duplication, (A)
         Consolidated Capital Expenditures, (B) Consolidated Cash Interest
         Expense, (C) Consolidated Cash Taxes, including cash payments for
         Federal, state and other income tax liabilities incurred prior to the
         Closing Date, (D) Consolidated Scheduled Funded Debt Payments, (E)
         without duplication of any item included under clause (B) above,
         Restricted Payments made by the Consolidated Parties other than with
         the proceeds of any Equity Issuance, to the extent that such Restricted
         Payments are permitted to be made under Section 8.7, (F) voluntary
         prepayments of any Indebtedness (other than the Credit Party
         Obligations), PROVIDED that (1) such prepayments are otherwise
         permitted hereunder and (2) if such Indebtedness consists of a
         revolving line of credit, the commitments under such line of credit are
         permanently reduced by the amount of such prepayment, (G) letter of
         credit fees, (H) proceeds received by the Consolidated Parties from
         insurance claims with respect to casualty events, business interruption
         or product recalls which reimburse prior business expenses, (I) all
         extraordinary cash charges, (J) cash payments made in satisfaction of
         non-current liabilities, (K) one-time cash expenses incurred in
         connection with the Transaction or, to the extent permitted hereunder,
         any Permitted Investment, Equity Issuance or Debt Issuance (whether or
         not consummated), (L) fees and expenses in connection with the exchange
         of the Subordinated Notes for notes with identical terms as permitted
         by Section 8.8, (M) cash indemnity payments received pursuant to
         indemnification provisions in any agreement in connection with a
         Permitted Acquisition (or in any similar agreement related to any other
         Acquisition consummated prior to the Closing Date), (N) non-cash,
         non-recurring charges, (O) other non-recurring charges in an aggregate
         amount not to exceed $2,000,000 during any four consecutive fiscal
         quarter period, (P) expenses in connection with payments made by any
         Consolidated Party with respect to industrial revenue bond financings
         and Guaranty Obligations in respect thereof, (Q) expenses incurred in
         connection with deferred compensation arrangements in connection with
         the Transaction, (R) management fees permitted to be made under Section
         8.9 and (S) expenses representing the implied principal component under
         Synthetic Leases PLUS/MINUS (iii) changes in working capital; PROVIDED,
         HOWEVER, solely with respect to the calculation of Excess Cash Flow for
         fiscal year 2001, the applicable period for measuring the components
         thereof shall commence on the Closing Date and end on December 31,
         2001).

                  "EXCESS PROCEEDS" shall have the meaning assigned to such term
         in Section 7.6(b).

                  "EXCLUDED ASSET DISPOSITION" means, with respect to any
         Consolidated Party, any Asset Disposition consisting of (i) the sale,
         lease, license, transfer or other disposition of inventory or other
         assets in the ordinary course of such Consolidated Party's business,
         (ii) the sale, lease, license, transfer or other disposition of
         Property no longer used or useful in the conduct of such Consolidated
         Party's business, (iii) any Involuntary Disposition by such
         Consolidated Party, (iv) any sale, lease, license, transfer or other
         disposition of Property by such Consolidated Party to any Credit Party,
         PROVIDED that the Credit Parties shall cause to be executed and
         delivered such documents, instruments and certificates as the Agent may
         reasonably request so as to cause the Credit Parties to be in
         compliance with the terms of Section 7.12 after giving effect to such
         transaction, (v) any portion of an Asset Disposition by such
         Consolidated Party constituting a Permitted Investment, (vi) if such
         Consolidated Party is not a Credit Party, any sale, lease, license,

                                       14
<PAGE>

         transfer or other disposition of Property by such Consolidated Party to
         any Consolidated Party that is not a Credit Party, (vii) the sale or
         disposition of Cash Equivalents for fair market value, (viii) any sale
         of accounts receivable in connection with the compromise thereof, (ix)
         the assignment of past due accounts for collection or (x) the licensing
         of Intellectual Property to third Persons on customary terms as
         determined by the licensor's board of directors in good faith;
         PROVIDED, HOWEVER, that the term "Excluded Asset Disposition" shall not
         include any Asset Disposition to the extent of the portion of the
         proceeds of such Asset Disposition that would be required under any
         Junior Financing Documentation to be applied to permanently retire
         Indebtedness of the Consolidated Parties.

                  "EXCLUDED DEBT ISSUANCE" means any Debt Issuance permitted by
         Section 8.1.

                  "EXCLUDED EQUITY ISSUANCE" means (i) any Equity Issuance by
         any Consolidated Party to any other Consolidated Party, the Sponsor or
         its Affiliates or designated co-investors or any of the officers,
         directors or employees of a Consolidated Party, (ii) any Equity
         Issuance by the Parent to the seller of a business acquired in a
         Permitted Acquisition, (iii) any Equity Issuance by the Parent the
         proceeds of which are used to finance a Permitted Acquisition or an
         Investment in Joint Ventures and Foreign Subsidiaries permitted under
         Section 8.6, (iv) any issuance of directors' qualifying shares or any
         similar issuance, (v) any Equity Issuance to a lender in connection
         with a related financing permitted hereunder, (vi) any Equity Issuance
         pursuant to the exercise of options or warrants or conversion of any
         debt securities to equity, (vii) any Equity Issuance in connection with
         a contemporaneous repurchase of Capital Stock or (viii) any Equity
         Issuance by the Parent, Dairy LLC or Dairy TXCT LLC to Dairy Holdco;
         PROVIDED, HOWEVER, that the term "Excluded Equity Issuance" shall not
         include any Equity Issuance to the extent of the portion of the
         proceeds of such Equity Issuance that would be required under any
         Junior Financing Documentation to be applied to permanently retire
         Indebtedness of the Consolidated Parties.

                  "EXCLUDED PROPERTY" means, with respect to any Credit Party,
         including any Person that becomes a Credit Party after the Closing Date
         as contemplated by Section 7.11, (i) any owned or leased real or
         personal Property of such Credit Party which is located outside of the
         United States (other than that portion of the Capital Stock of Material
         Foreign Subsidiaries required to be pledged to the Agent pursuant to
         Section 7.12), (ii) any owned real Property of such Credit Party which
         has a net book value of less than $1,000,000, PROVIDED that the
         aggregate net book value of all real Property of all of the Credit
         Parties excluded pursuant to this clause (ii) shall not exceed
         $10,000,000, (iii) any leased real Property of such Credit Party which
         (a) is designated as an "Excluded Property" on SCHEDULE 6.20(a) or (b)
         at the written request of the Borrower, the Agent has agreed in writing
         in its reasonable discretion is not material, (iv) any leased personal
         Property of such Credit Party, (v) any Property of such Credit Party
         which, subject to the terms of Section 8.11 and Section 8.14, is
         subject to a Lien of the type described in Section 8.2(g), Section
         8.2(q) or, to the extent constituting a Lien of the type described in
         Section 8.2(g) or Section 8.2(q), Section 8.2(x) pursuant to documents
         which prohibit such Credit Party from granting any other Liens in such
         Property, (vi) owned motor vehicles of such Credit Party, PROVIDED that
         the aggregate net book value of all owned motor vehicles of all of the
         Credit Parties excluded pursuant to this clause (vi) shall not exceed
         $7,500,000, (vii) contract rights (and related assets) under contracts

                                       15
<PAGE>

         pertaining to the provision of goods or services to a Consolidated
         Party and in respect of which the granting of a Lien is prohibited
         under customary non-assignment provisions (to the extent that such
         provisions have not been waived) and (viii) Capital Stock of Joint
         Ventures and Foreign Subsidiaries which are not Material Foreign
         Subsidiaries.

                  "EXECUTIVE OFFICER" of any Person means any of the chief
         executive officer, chief operating officer, president, vice presidents,
         chief financial officer, treasurer or assistant treasurer of such
         Person.

                  "EXISTING LETTERS OF CREDIT" means the letters of credit
         described by date of issuance, letter of credit number, undrawn amount,
         name of beneficiary and date of expiry on SCHEDULE 1.1B.

                  "EXISTING NOTES" means the 7.58% Senior Promissory Notes due
         2009 of the Acquired Company.

                  "FEDERAL FUNDS RATE" means, for any day, the rate per annum
         (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
         the weighted average of the rates on overnight Federal funds
         transactions with members of the Federal Reserve System arranged by
         Federal funds brokers on such day, as published by the Federal Reserve
         Bank of New York on the Business Day next succeeding such day; PROVIDED
         that (a) if such day is not a Business Day, the Federal Funds Rate for
         such day shall be such rate on such transactions on the next preceding
         Business Day as so published on the next succeeding Business Day, and
         (b) if no such rate is so published on such next succeeding Business
         Day, the Federal Funds Rate for such day shall be the average rate
         charged to the Agent (in its individual capacity) on such day on such
         transactions as determined by the Agent.

                  "FEES" means all fees payable pursuant to Section 3.5.

                  "FIXED CHARGE COVERAGE RATIO" means, as of the end of any
         fiscal quarter of the Consolidated Parties for the four fiscal quarter
         period ending on such date with respect to the Consolidated Parties on
         a consolidated basis, the ratio of (a) the sum of (i) Consolidated
         EBITDA MINUS (ii) Consolidated Capital Expenditures MINUS (iii)
         Consolidated Cash Taxes to (b) the sum of (i) Consolidated Cash
         Interest Expense PLUS (ii) Consolidated Scheduled Funded Debt Payments.

                  "FOOD, DRUG, AND COSMETIC ACT" means the Food, Drug, and
         Cosmetic Act, as amended, 21 U.S.C. Section 301, et seq., and its
         implementing regulations.

                  "FOOD SECURITY ACT" means the Food Security Act of 1985, as
         amended, and any successor statute thereto, including all rules and
         regulations thereunder, all as the same may be in effect from time to
         time.

                  "FOREIGN BORROWING BASE " means, as of any date, an amount
         equal to (i) 80% of the aggregate face amount of accounts receivable of
         Foreign Subsidiaries not more than 90 days past due as of the end of
         the most recent fiscal quarter preceding such date PLUS (ii) 50% of the
         aggregate book value of the inventory of Foreign Subsidiaries as of the

                                       16
<PAGE>

         end of the most recent fiscal quarter preceding such date, all
         calculated on a consolidated basis and in accordance with GAAP.

                  "FOREIGN SUBSIDIARY" means any direct or indirect Subsidiary
         of the Borrower which is not a Domestic Subsidiary.

                  "FULLY SATISFIED" means, with respect to the Credit Party
         Obligations as of any date, that, as of such date, (a) all principal of
         and interest accrued to such date which constitute Credit Party
         Obligations shall have been paid in full in cash, (b) all fees,
         expenses and other amounts then due and payable which constitute Credit
         Party Obligations shall have been paid in cash, (c) all outstanding
         Letters of Credit shall have been (i) terminated, (ii) fully cash
         collateralized or (iii) secured by one or more letters of credit on
         terms and conditions, and with one or more financial institutions,
         reasonably satisfactory to the Issuing Lender and (d) the Commitments
         shall have been expired or terminated in full.

                  "FUNDED INDEBTEDNESS" means, with respect to any Person,
         without duplication, (a) all obligations of such Person for borrowed
         money, (b) all obligations of such Person evidenced by bonds,
         debentures, notes or similar instruments, (c) all obligations of such
         Person under conditional sale or other title retention agreements
         relating to Property purchased by such Person (other than customary
         reservations or retentions of title under agreements with suppliers
         entered into in the ordinary course of business), (d) all obligations
         of such Person issued or assumed as the deferred purchase price of
         Property or services purchased by such Person (other than accrued
         expenses and trade debt incurred in the ordinary course of business and
         due within six months of the incurrence thereof) which would appear as
         liabilities on a balance sheet of such Person and to the extent
         constituting contingent obligations, (e) all Funded Indebtedness of
         others secured by (or for which the holder of such Funded Indebtedness
         has an existing right, contingent or otherwise, to be secured by) any
         Lien on, or payable out of the proceeds of production from, Property
         owned or acquired by such Person, whether or not the obligations
         secured thereby have been assumed, (f) all Guaranty Obligations of such
         Person with respect to Funded Indebtedness of another Person, (g) the
         implied principal component of all obligations of such Person under
         Capital Leases, (h) the maximum amount of all standby letters of credit
         issued or bankers' acceptances facilities created for the account of
         such Person and, without duplication, all drafts drawn thereunder (to
         the extent unreimbursed), (i) unless the holder thereof is a Credit
         Party or, if the issuer thereof is a Consolidated Party which is not a
         Credit Party, any other Consolidated Party, all preferred Capital Stock
         issued by such Person and which by the terms thereof could be (at the
         request of the holders thereof or otherwise) subject to mandatory
         sinking fund payments, redemption or other acceleration (other than as
         a result of a Change of Control or an Asset Disposition that does not
         in fact result in a redemption of such preferred Capital Stock) at any
         time prior to the Maturity Date, (j) the principal portion of all
         obligations of such Person under Synthetic Leases and (k) the Funded
         Indebtedness of any partnership or unincorporated joint venture in
         which such Person is a general partner or a joint venturer to the
         extent such Funded Indebtedness is recourse to such Person.
         Notwithstanding any other provision of this Credit Agreement to the
         contrary, (i) the term "Funded Indebtedness" shall not be deemed to
         include (x) any earn-out obligation until such obligation becomes a
         liability on the balance sheet of the applicable Person, (y) any
         deferred compensation arrangements or (z) any non-compete or

                                       17
<PAGE>

         consulting obligations incurred in connection with Permitted
         Acquisitions and (ii) the amount of Funded Indebtedness for which
         recourse is limited either to a specified amount or to an identified
         asset of such Person shall be deemed to be equal to such specified
         amount (or, if less, the fair market value of such identified asset).

                  "GAAP" means generally accepted accounting principles in the
         United States applied on a consistent basis and subject to the terms of
         Section 1.3 (except, in respect of (i) Joint Ventures of the type
         described in clause (ii) of the definition thereof set forth in this
         Section 1.1, (ii) the designation of Dairy LLC, Dairy TXCT LLC and
         their respective Subsidiaries as Subsidiaries of the Borrower and (iii)
         Synthetic Leases, as otherwise treated herein).

                  "GOVERNMENTAL AUTHORITY" means any Federal, state, local or
         foreign court or governmental agency, authority, instrumentality or
         regulatory body.

                  "GUARANTORS" means a collective reference to the Parent and
         each of the Subsidiary Guarantors, together with their successors and
         permitted assigns, and "GUARANTOR " means any one of them.

                  "GUARANTY OBLIGATIONS" means, with respect to any Person,
         without duplication, any obligations of such Person (other than
         endorsements in the ordinary course of business of negotiable
         instruments for deposit or collection) guaranteeing or intended to
         guarantee any Indebtedness of any other Person in any manner, whether
         direct or indirect, and including without limitation any obligation,
         whether or not contingent, (i) to purchase any such Indebtedness or any
         Property constituting security therefor, (ii) to advance or provide
         funds or other support for the payment or purchase of any such
         Indebtedness or to maintain working capital, solvency or other balance
         sheet condition of such other Person (including without limitation keep
         well agreements, maintenance agreements, comfort letters or similar
         agreements or arrangements) for the benefit of any holder of
         Indebtedness of such other Person, (iii) to lease or purchase Property,
         securities or services primarily for the purpose of assuring the holder
         of such Indebtedness, or (iv) to otherwise assure or hold harmless the
         holder of such Indebtedness against loss in respect thereof. The amount
         of any Guaranty Obligation hereunder shall (subject to any limitations
         set forth therein) be deemed to be an amount equal to the outstanding
         principal amount (or maximum principal amount, if larger) of the
         Indebtedness in respect of which such Guaranty Obligation is made (or,
         if less, the maximum amount of such principal amount for which such
         Person may be liable under the terms of the instrument(s) evidencing
         such Guaranty Obligation).

                  "HEDGING AGREEMENTS" means any interest rate protection
         agreement, commodities purchase agreement or foreign currency exchange
         agreement.

                  "INDEBTEDNESS" means, with respect to any Person, without
         duplication, (a) all obligations of such Person for borrowed money, (b)
         all obligations of such Person evidenced by bonds, debentures, notes or
         similar instruments, (c) all obligations of such Person under
         conditional sale or other title retention agreements relating to
         Property purchased by such Person (other than customary reservations or
         retentions of title under agreements with suppliers entered into in the
         ordinary course of business), (d) all obligations of such Person issued
         or assumed as the deferred purchase price of Property or services
         purchased by such

                                       18
<PAGE>

         Person (other than accrued expenses and trade debt incurred in the
         ordinary course of business and due within six months of the incurrence
         thereof) which would appear as liabilities on a balance sheet of such
         Person, (e) all Indebtedness of others secured by (or for which the
         holder of such Indebtedness has an existing right, contingent or
         otherwise, to be secured by) any Lien on, or payable out of the
         proceeds of production from, Property owned or acquired by such Person,
         whether or not the obligations secured thereby have been assumed, (f)
         all Guaranty Obligations of such Person with respect to Indebtedness of
         another Person, (g) the implied principal component of all obligations
         of such Person under Capital Leases, (h) all net obligations of such
         Person (or, if less, the exposure of such Person) under Hedging
         Agreements, (i) the maximum amount of all standby letters of credit
         issued or bankers' acceptances facilities created for the account of
         such Person and, without duplication, all drafts drawn thereunder (to
         the extent unreimbursed), (j) unless the holder thereof is a Credit
         Party or, if the issuer thereof is a Consolidated Party which is not a
         Credit Party, any other Consolidated Party, all preferred Capital Stock
         issued by such Person and which by the terms thereof could be (at the
         request of the holders thereof or otherwise) subject to mandatory
         sinking fund payments, redemption or other acceleration (other than as
         a result of a Change of Control or an Asset Disposition that does not
         in fact result in a redemption of such preferred Capital Stock) at any
         time prior to the Maturity Date, (k) the principal portion of all
         obligations of such Person under Synthetic Leases and (l) the
         Indebtedness of any partnership or unincorporated joint venture in
         which such Person is a general partner or a joint venturer to the
         extent such Indebtedness is recourse to such Person. Notwithstanding
         any other provision of this Credit Agreement to the contrary, (i) the
         term "Indebtedness" shall not be deemed to include any earn-out
         obligation until such obligation becomes a liability on the balance
         sheet of the applicable Person and (ii) the amount of Indebtedness for
         which recourse is limited either to a specified amount or to an
         identified asset of such Person shall be deemed to be equal to such
         specified amount (or, if less, the fair market value of such identified
         asset).

                  "INDEMNIFIED PARTY" shall have the meaning assigned to such
         term in Section 11.5(b).

                  "INTELLECTUAL PROPERTY" shall have the meaning assigned to
         such term in Section 6.17.

                  "INTERBANK OFFERED RATE" means, for any Eurodollar Loan for
         any Interest Period therefor, the rate per annum (rounded upwards, if
         necessary, to the nearest 1/100 of 1%) appearing on Page 3750 (or any
         successor page) of the Dow Jones Market Service as the London interbank
         offered rate for deposits in Dollars at approximately 11:00 a.m.
         (London time) two Business Days prior to the first day of such Interest
         Period for a term comparable to such Interest Period. If for any reason
         such rate is not available, the term "Interbank Offered Rate" shall
         mean, for any Eurodollar Loan for any Interest Period therefor, the
         rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
         1%) appearing on Reuters Screen LIBO Page as the London interbank
         offered rate for deposits in Dollars at approximately 11:00 a.m.
         (London time) two Business Days prior to the first day of such Interest
         Period for a term comparable to such Interest Period; PROVIDED,
         HOWEVER, if more than one rate is specified on Reuters Screen LIBO
         Page, the applicable rate shall be the arithmetic mean of all such
         rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). If
         the rates referenced in the preceding two sentences are not available,
         the term "Interbank Offered Rate" shall mean, for any Eurodollar Loan
         for any Interest Period

                                       19
<PAGE>

         therefor, the rate per annum determined by the Agent as the rate of
         interest (rounded upwards, if necessary, to the nearest 1/100 of 1%) at
         which deposits in Dollars for delivery on the first day of such
         Interest Period in same day funds in the approximate amount of the
         Eurodollar Loan being made, continued or converted by Bank of America
         and with a term equivalent to such Interest Period would be offered by
         Bank of America's London Branch to major banks in the offshore Dollar
         market at their request at approximately 11:00 A.M. (London time) two
         Business Days prior to the first day of such Interest Period.

                  "INTEREST COVERAGE RATIO" means, as of the end of any fiscal
         quarter of the Consolidated Parties for the four fiscal quarter period
         ending on such date with respect to the Consolidated Parties on a
         consolidated basis, the ratio of (a) Consolidated EBITDA to (b)
         Consolidated Cash Interest Expense.

                  "INTEREST PAYMENT DATE" means (a) as to Base Rate Loans and
         Swingline Loans, the last Business Day of each March, June, September
         and December and the Maturity Date, and (b) as to Eurodollar Loans, the
         last day of each applicable Interest Period and the Maturity Date, and
         in addition where the applicable Interest Period for a Eurodollar Loan
         is greater than three months, then also the date three months from the
         beginning of the Interest Period and each three months thereafter.

                  "INTEREST PERIOD" means (i) as to Eurodollar Loans, a period
         of one, two, three or six (or to the extent available, nine or twelve)
         months' duration, as the Borrower may elect, commencing, in each case,
         on the date of the borrowing (including continuations and conversions
         thereof) and (ii) as to Quoted Rate Swingline Loans, a period
         commencing on the date of the borrowing and ending on the date agreed
         to by the Borrower and the Swingline Lender in accordance with Section
         2.3(b)(i); PROVIDED, HOWEVER, (a) if any Interest Period would end on a
         day which is not a Business Day, such Interest Period shall be extended
         to the next succeeding Business Day (except that where the next
         succeeding Business Day falls in the next succeeding calendar month,
         then on the next preceding Business Day), (b) no Interest Period shall
         extend beyond the Maturity Date and (c) where an Interest Period begins
         on a day for which there is no numerically corresponding day in the
         calendar month in which the Interest Period is to end, such Interest
         Period shall end on the last Business Day of such calendar month.

                  "INVESTMENT" in any Person means (a) the acquisition (whether
         for cash, property, services, assumption of Indebtedness, securities or
         otherwise) of Property (other than in the ordinary course of business
         and other than in a transaction constituting a Consolidated Capital
         Expenditure), Capital Stock, bonds, notes, debentures, partnership,
         joint ventures or other ownership interests or other securities of such
         other Person, (b) any deposit with, or advance, loan or other extension
         of credit to, such Person (other than deposits made in connection with
         leases or the purchase of equipment, inventory and other assets in the
         ordinary course of business) or (c) any other capital contribution to
         or investment in such Person, including, without limitation, any
         Guaranty Obligations (including any support for a letter of credit
         issued on behalf of such Person) incurred for the benefit of such
         Person and any portion of an Asset Disposition (other than an Excluded
         Asset Disposition) to such Person for consideration less than the fair
         market value of the Property disposed in such transaction, but
         excluding any Restricted Payment to such Person. Investments which are

                                       20
<PAGE>

         capital contributions or purchases of Capital Stock which have a right
         to participate in the profits of the issuer thereof shall be valued at
         the amount actually contributed or paid to purchase such Capital Stock
         as of the date of such contribution or payment less all cash
         distributions and returns of capital from the date such Investment is
         made through and including the date of calculation. Investments which
         are loans, advances, extensions of credit or Guaranty Obligations shall
         be valued at the principal amount of such loan, advance or extension of
         credit outstanding as of the date of determination or, as applicable,
         the principal amount of the loan or advance outstanding as of the date
         of determination actually guaranteed by such Guaranty Obligation.

                  "INVESTOR PLEDGE AGREEMENT" means the pledge agreement dated
         as of the Closing Date in the form of EXHIBIT 1.1A to be executed in
         favor of the Agent by Dairy Holdco, as amended, modified, restated or
         supplemented from time to time.

                  "INVOLUNTARY DISPOSITION" means any loss or casualty of,
         damage to or destruction of, or any condemnation or other taking for
         public use of, any Property of any Consolidated Party.

                  "INVOLUNTARY DISPOSITION PREPAYMENT EVENT" means, with respect
         to any Involuntary Disposition, the failure of the Credit Parties to
         apply (or cause to be applied) an amount equal to the Excess Proceeds
         of such Involuntary Disposition, if any, to either (i) prepay the Loans
         (and cash collateralize the LOC Obligations) in accordance with the
         terms of Section 3.3(b)(iii)(B) or (ii) make Eligible Reinvestments
         (including but not limited to the repair or replacement of the Property
         affected by such Involuntary Disposition) within the period of 540 days
         following the date of receipt of such Excess Proceeds (or such shorter
         period as specified in any Junior Financing Documentation), subject to
         the terms and conditions of Section 7.6(b).

                  "IPO ISSUER" means, in respect of a Qualifying IPO, the Person
         (as among the Parent or the Borrower and subject to the definition of
         the term "Change of Control" set forth in this Section 1.1) that is the
         issuer of the common Capital Stock offered in such Qualifying IPO.

                  "ISSUING LENDER" means Bank of America.

                  "JOINDER AGREEMENT" means a Joinder Agreement substantially in
         the form of EXHIBIT 7.11 hereto, executed and delivered by a new
         Guarantor in accordance with the provisions of Section 7.11.

                  "JOINT VENTURE" means (i) any Person which would constitute an
         "equity method investee" of a Consolidated Party and (ii) any other
         Person designated by the Credit Parties in writing to the Agent (which
         designation shall be irrevocable) as a "Joint Venture" for purposes of
         this Credit Agreement and more than 50% but less than 100% of whose
         Capital Stock is directly owned by any Consolidated Party; PROVIDED,
         HOWEVER, that no Person which is a Subsidiary of the Parent as of the
         Closing Date may be designated by the Consolidated Parties as a Joint
         Venture. As of the Closing Date, R&P Liquid Egg Technology Limited
         Partnership shall be deemed to be a Joint Venture pursuant to the terms
         of clause (i) above.

                                       21
<PAGE>

                  "JUNIOR FINANCING DOCUMENTATION" means (i) the Subordinated
         Debt Indenture, (ii) the Subordinated Notes, (iii) any other
         documentation governing any Subordinated Debt permitted to be incurred
         under Section 8.1(f) and (iv) any documentation governing any Qualified
         Preferred Stock.

                  "LENDER" means any of the Persons identified as a "Lender" on
         the signature pages hereto, and any Person which may become a Lender by
         way of assignment in accordance with the terms hereof, together with
         their successors and permitted assigns.

                  "LENDING PARTY" shall have the meaning assigned to such term
         in Section 11.14.

                  "LETTER OF CREDIT" means (i) any letter of credit issued by
         the Issuing Lender for the account of the Borrower in accordance with
         the terms of Section 2.2 and (ii) any Existing Letter of Credit, in
         each case including any amendments thereto.

                  "LEVERAGE RATIO" means, as of the end of any fiscal quarter of
         the Consolidated Parties for the four fiscal quarter period ending on
         such date with respect to the Consolidated Parties on a consolidated
         basis, the ratio of (a) Funded Indebtedness (net of cash and Cash
         Equivalents on hand) of the Consolidated Parties on a consolidated
         basis on the last day of such period to (b) Consolidated EBITDA.

                  "LIEN" means any mortgage, pledge, hypothecation, collateral
         assignment, deposit arrangement, security interest, encumbrance, lien
         (statutory or otherwise), preference, priority or charge of any kind
         (including any agreement to give any of the foregoing, any conditional
         sale or other title retention agreement, any financing or similar
         statement or notice filed under the Uniform Commercial Code as adopted
         and in effect in the relevant jurisdiction or other similar recording
         or notice statute, and any lease in the nature thereof).

                  "LOAN" or "LOANS" means the Revolving Loans, the Tranche A
         Term Loans, the Tranche B Term Loans (or a portion of any Revolving
         Loan, any Tranche A Term Loan or Tranche B Term Loan bearing interest
         at the Adjusted Base Rate or the Adjusted Eurodollar Rate and referred
         to as a Base Rate Loan or a Eurodollar Loan) and/or the Swingline Loans
         (or any Swingline Loan bearing interest at the Adjusted Base Rate or
         the Quoted Rate and referred to as a Base Rate Loan or a Quoted Rate
         Swingline Loan), individually or collectively, as appropriate.

                  "LOC COMMITMENT" means the commitment of the Issuing Lender to
         issue Letters of Credit in an aggregate face amount at any time
         outstanding (together with the amounts of any unreimbursed drawings
         thereon) of up to the LOC Committed Amount.

                  "LOC COMMITTED AMOUNT" shall have the meaning assigned to such
         term in Section 2.2.

                  "LOC DOCUMENTS" means, with respect to any Letter of Credit,
         such Letter of Credit, any amendments thereto, any application
         therefor, and any agreements, instruments, guarantees or other
         documents (whether general in application or applicable only to such

                                       22
<PAGE>

         Letter of Credit) governing or providing for the rights and obligations
         of the parties concerned or at risk.

                  "LOC OBLIGATIONS" means, at any time, the sum, without
         duplication, of (i) the maximum amount which is, or at any time
         thereafter may become, available to be drawn under Letters of Credit
         then outstanding, assuming compliance with all requirements for
         drawings referred to in such Letters of Credit PLUS (ii) the aggregate
         amount of all drawings under Letters of Credit honored by the Issuing
         Lender but not theretofore reimbursed by the Borrower.

                  "M-FOODS INVESTORS" means M-Foods Investors, LLC, a Delaware
         limited liability company.

                  "MANAGEMENT AGREEMENT" means that certain management agreement
         dated as of the Closing Date among Michael Foods, Inc., M-Foods
         Holdings, Inc., M-Foods Investors, LLC, the Sponsor and Goldner Hawn
         Johnson & Morrison Inc., as the same may be amended, modified, restated
         or supplemented from time to time to the extent not adverse to the
         Lenders.

                  "MASTER ASSIGNMENT AGREEMENT" means that certain Master
         Assignment Agreement to be dated on or about April 13, 2001 among Bank
         of America, as the Assigning Lender, the Persons identified therein as
         "New Lenders" and the Agent.

                  "MATERIAL ADVERSE EFFECT" means a material adverse effect on
         (i) the financial condition, operations, business, assets or
         liabilities of the Consolidated Parties taken as a whole, (ii) the
         ability of the Credit Parties (taken as a whole) to perform any
         material obligation under the Credit Documents or (iii) the material
         rights and remedies of the Agent and the Lenders under the Credit
         Documents.

                  "MATERIAL FOREIGN SUBSIDIARY" means, at any time, any Foreign
         Subsidiary (i) which is directly owned by the Borrower or any Domestic
         Subsidiary and (ii) with respect to which either (a) the portion of
         Consolidated EBITDA attributable to such Person and its Subsidiaries on
         a consolidated basis for the most recently ended twelve-month period is
         5% or more of total Consolidated EBITDA for such period or (b) the
         portion of Consolidated Total Assets owned by such Person and its
         Subsidiaries on a consolidated basis at such time is 5% or more of
         total Consolidated Total Assets at such time.

                  "MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or
         petroleum (including crude oil or any fraction thereof) or petroleum
         products or any hazardous or toxic substances, materials or wastes,
         defined or regulated as such in or under any Environmental Laws,
         including, without limitation, asbestos, polychlorinated biphenyls and
         urea-formaldehyde insulation.

                  "MATURITY DATE" means (i) as to the Revolving Loans, Letters
         of Credit (and the related LOC Obligations), Swingline Loans and the
         Tranche A Term Loan, April 10, 2007 and (ii) as to the Tranche B Term
         Loan, April 10, 2008.

                                       23
<PAGE>

                  "MERGER AGREEMENT" means the Agreement and Plan of Merger by
         and among M-Foods Holdings, Inc., a Delaware corporation, Mergersub,
         and Michael Foods, Inc., a Minnesota corporation, dated as of December
         21, 2000, as it may be amended on or prior to the Closing Date.

                  "MERGERSUB" means Michael Foods Acquisition Corp. (formerly
         known as Protein Acquisition Corp.), a Minnesota corporation and a
         wholly-owned Subsidiary of the Parent.

                  "MOODY'S" means Moody's Investors Service, Inc., or any
         successor or assignee of the business of such company in the business
         of rating securities.

                  "MORTGAGE INSTRUMENTS" shall have the meaning assigned such
         term in Section 5.1(e).

                  "MORTGAGED PROPERTIES" shall have the meaning assigned such
         term in Section 5.1(e).

                  "MULTIEMPLOYER PLAN" means a Plan which is a "multiemployer
         plan" as defined in Sections 3(37) or 4001(a)(3) of ERISA.

                  "MULTIPLE EMPLOYER PLAN" means a Plan (other than a
         Multiemployer Plan) which any Consolidated Party or any ERISA Affiliate
         and at least one employer other than the Consolidated Parties or any
         ERISA Affiliate are contributing sponsors.

                  "MWPDA" means the Minnesota Wholesale Produce Dealers Act as
         amended, (Minnesota Statutes, Ch. 27).

                  "NET CASH PROCEEDS" means the aggregate cash or Cash
         Equivalents proceeds received by any Consolidated Party or Dairy Holdco
         in respect of any Asset Disposition, Equity Issuance, Debt Issuance or
         Involuntary Disposition, net of (a) direct costs (including, without
         limitation, legal, accounting and investment banking fees, and sales
         commissions) (b) taxes paid or payable as a result thereof (including
         the amount of taxes payable by any Person resulting from an Asset
         Disposition of all of the Capital Stock in or all or substantially all
         of the assets of Dairy LLC and/or Dairy TXCT LLC, which amount of taxes
         shall be deemed to be for each such Person the amount of tax calculated
         by applying the highest federal, New York State and City individual
         income tax rates applicable to the type of income realized from such
         Asset Disposition) and (c) in the case of any Asset Disposition, (i)
         the amount necessary to retire any Indebtedness secured by a Permitted
         Lien (ranking senior to any Lien of the Agent) on the related Property,
         (ii) any reserve for adjustment in respect of (A) the sale price of
         such asset or assets established in accordance with GAAP and (B) any
         liabilities associated with such asset or assets and retained by the
         Consolidated Parties after such sale or other disposition thereof,
         including, without limitation, pension and other post-employment
         benefit liabilities and liabilities related to environmental matters or
         against any indemnification obligations associated with such
         transaction and (iii) reorganization, shut-down and severance costs
         incurred during the Application Period for such Asset Disposition; it
         being understood that "Net Cash Proceeds" shall include, without
         limitation, any cash or Cash Equivalents received upon (i) the sale or
         other disposition of any non-cash consideration received by any

                                       24
<PAGE>

         such Consolidated Party in any Asset Disposition, Equity Issuance, Debt
         Issuance or Involuntary Disposition or (ii) the reversal (without the
         satisfaction of expenses in cash in a corresponding amount) of any
         reserve described in clause (ii) of the preceding sentence. In
         addition, the "Net Cash Proceeds" of any Asset Disposition shall
         include any other amounts which constitute "Net Proceeds" (or any
         comparable term) of such transaction under, and as defined in, any
         Junior Financing Documentation.

                  "NOTE" or "NOTES" means the Revolving Notes, the Tranche A
         Term Notes, the Tranche B Term Notes and/or the Swingline Note,
         individually or collectively, as appropriate.

                  "NOTICE OF BORROWING" means a written notice of borrowing
         signed by an Executive Officer of the Borrower in substantially the
         form of EXHIBIT 2.1(b)(i), as required by Section 2.1(b)(i), Section
         2.4(b) or Section 2.5(b).

                  "NOTICE OF EXTENSION/CONVERSION" means the written notice of
         extension or conversion in substantially the form of EXHIBIT 3.2, as
         required by Section 3.2.

                  "OTHER TAXES" shall have the meaning assigned to such term in
         Section 3.11(b).

                  "PACA" means the Perishable Agricultural Commodities Act as
         amended, 7 U.S.C. Section 499a, et seq. and its implementing
         regulations.

                  "PARENT" means the Person identified as such in the heading
         hereof, together with any permitted successors and assigns.

                  "PARTICIPATION INTEREST" means a purchase by a Lender of a
         participation in Letters of Credit or LOC Obligations as provided in
         Section 2.2, in Swingline Loans as provided in Section 2.3 or in any
         Loans as provided in Section 3.14.

                  "PBGC" means the Pension Benefit Guaranty Corporation
         established pursuant to Subtitle A of Title IV of ERISA and any
         successor thereof.

                  "PERISHABLE AGRICULTURAL COMMODITIES" shall have the meaning
         assigned to such term by PACA.

                  "PERMITTED ACQUISITION" means, at any time, an Acquisition by
         the Borrower or any Subsidiary of the Borrower permitted at such time
         pursuant to the terms of Section 8.6(h).

                  "PERMITTED ASSET DISPOSITION" means, at any time, (i) any
         Asset Disposition permitted at such time by Section 8.5 and (ii) any
         Excluded Asset Disposition.

                  "PERMITTED INVESTMENTS" means, at any time, Investments by the
         Consolidated Parties permitted to exist at such time pursuant to the
         terms of Section 8.6.

                  "PERMITTED LIENS" means, at any time, Liens in respect of
         Property of the Consolidated Parties permitted to exist at such time
         pursuant to the terms of Section 8.2.

                                       25
<PAGE>

                  "PERSON" means any individual, partnership, joint venture,
         firm, corporation, limited liability company, association, trust or
         other enterprise (whether or not incorporated) or any Governmental
         Authority.

                  "PLAN" means any employee benefit plan (as defined in Section
         3(3) of ERISA) which is subject to Title IV of ERISA and with respect
         to which any Consolidated Party or any ERISA Affiliate is (or, if such
         plan were terminated at such time, would under Section 4069 of ERISA be
         deemed to be) an "employer" within the meaning of Section 3(5) of
         ERISA.

                  "PLEDGE AGREEMENT" means the pledge agreement dated as of the
         Closing Date in the form of EXHIBIT 1.1B to be executed in favor of the
         Agent by each of the Credit Parties, as amended, modified, restated or
         supplemented from time to time.

                  "PRIME RATE" means the per annum rate of interest established
         from time to time by Bank of America as its prime rate, which rate may
         not be the lowest rate of interest charged by Bank of America to its
         customers.

                  "PRINCIPAL AMORTIZATION PAYMENT" means a principal payment on
         the Tranche A Term Loans as set forth in Section 2.4(d) or on the
         Tranche B Term Loans as set forth in Section 2.5(d).

                  "PRINCIPAL AMORTIZATION PAYMENT DATE" means the date a
         Principal Amortization Payment is due.

                  "PRINCIPAL OFFICE" means the principal office of Bank of
         America, presently located at Charlotte, North Carolina.

                  "PRO FORMA BASIS" means, for purposes of calculating
         (utilizing the principles set forth in the second paragraph of Section
         1.3) compliance with each of the financial covenants set forth in
         Section 7.10(a) and (b) in respect of a proposed transaction, that such
         transaction shall be deemed to have occurred as of the first day of the
         four fiscal-quarter period ending as of the most recent fiscal quarter
         end preceding the date of such transaction with respect to which the
         Agent has received the Required Financial Information. As used herein,
         "TRANSACTION" shall mean (i) any Asset Disposition as referred to in
         Section 8.5, (ii) any Acquisition as referred to in Section 8.6(h) or
         (iii) any Investment (or series of related Investments) made pursuant
         to Section 8.6(p) to the extent consisting of the contribution(s) or
         other transfer(s) of Property (other than cash) to a Joint Venture for
         consideration less than the fair market value of such Property. In
         connection with any calculation of the financial covenants set forth in
         Section 7.10(a) and (b) upon giving effect to a transaction on a Pro
         Forma Basis:

         (A)      for purposes of any such calculation in respect of any Asset
                  Disposition as referred to in Section 8.5 or any Investment
                  (or series of related Investments) as referred to in Section
                  8.6(p), (1) income statement items (whether positive or
                  negative) attributable to the Property disposed of or
                  contributed or otherwise transferred, as applicable, shall be
                  excluded and (2) any Indebtedness which is

                                       26
<PAGE>

                  retired in connection with such transaction shall be excluded
                  and deemed to have been retired as of the first day of the
                  applicable period; and

         (B)      for purposes of any such calculation in respect of any
                  Acquisition as referred to in Section 8.6(h), (1) any
                  Indebtedness incurred by any Consolidated Party in connection
                  with such transaction (x) shall be deemed to have been
                  incurred as of the first day of the applicable period and (y)
                  if such Indebtedness has a floating or formula rate, shall
                  have an implied rate of interest for the applicable period for
                  purposes of this definition determined by utilizing the rate
                  which is or would be in effect with respect to such
                  Indebtedness as at the relevant date of determination, (2)
                  income statement items (whether positive or negative)
                  attributable to the Person or Property acquired shall be
                  included beginning as of the first day of the applicable
                  period and (3) pro forma adjustments may be included to the
                  extent that such adjustments are consistent with the
                  definition of "Consolidated EBITDA" set forth in this Section
                  1.1 and give effect to events that are (x) directly
                  attributable to such transaction, (y) expected to have a
                  continuing impact on the Consolidated Parties and (z)
                  factually supportable.

                  "PRO FORMA COMPLIANCE CERTIFICATE" means a certificate of an
         Executive Officer of the Borrower delivered to the Agent in connection
         with (i) any Asset Disposition as referred to in Section 8.5, (ii) any
         Acquisition as referred to in Section 8.6(h) or (iii) any Investment
         (or series of related Investments) made pursuant to Section 8.6(p) to
         the extent consisting of the contribution(s) or other transfer(s) of
         Property (other than cash) to a Joint Venture for consideration less
         than the fair market value of such Property, as applicable, and
         containing reasonably detailed calculations, upon giving effect to the
         applicable transaction on a Pro Forma Basis, of the financial covenants
         set forth in Section 7.10(a) and (b) as of the most recent fiscal
         quarter end preceding the date of the applicable transaction with
         respect to which the Agent shall have received the Required Financial
         Information.

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

                  "QUALIFIED PREFERRED STOCK" means any preferred Capital Stock
         issued by any Consolidated Party as a portion of consideration paid for
         a Permitted Acquisition which preferred Capital Stock is subordinated
         to the Credit Party Obligations on terms no less favorable to the
         Lenders than the Subordinated Debt Indenture.

                  "QUALIFYING IPO" means an Equity Issuance by the Parent (or,
         subject to the definition of the term "Change of Control" set forth in
         Section 1.1, of the common Capital Stock of the Borrower) consisting of
         an underwritten primary public offering (other than a public offering
         pursuant to a registration statement on Form S-8) of its common Capital
         Stock (i) pursuant to an effective registration statement filed with
         the Securities and Exchange Commission in accordance with the
         Securities Act (whether alone or in connection with a secondary public
         offering) and (ii) resulting in gross proceeds to the Parent (or the
         Borrower, as applicable) of at least $50,000,000.

                                       27
<PAGE>

                  "QUOTED RATE" means, with respect to any Quoted Rate Swingline
         Loan, the fixed percentage rate per annum offered by the Swingline
         Lender and accepted by the Borrower with respect to such Swingline Loan
         as provided in accordance with the provisions of Section 2.3.

                  "QUOTED RATE SWINGLINE LOAN" means a Swingline Loan bearing
         interest at a Quoted Rate.

                  "REAL PROPERTIES" means, at any time, a collective reference
         to each of the real properties owned, leased or operated by the
         Consolidated Parties at such time.

                  "REGISTER" shall have the meaning assigned to such term in
         Section 11.3(c).

                  "REGULATION D, T, U, OR X" means Regulation D, T, U or X,
         respectively, of the Board of Governors of the Federal Reserve System
         as from time to time in effect and any successor to all or a portion
         thereof.

                  "REPORTABLE EVENT" means any of the events set forth in
         Section 4043(c) of ERISA, other than those events as to which the
         notice requirement has been waived by regulation.

                  "REQUIRED FINANCIAL INFORMATION" means, with respect to the
         applicable Calculation Date, (i) the financial statements of the
         Consolidated Parties required to be delivered pursuant to Section
         7.1(a) or (b) for the fiscal period or quarter ending as of such
         Calculation Date, and (ii) the certificate of an Executive Officer of
         the Borrower required by Section 7.1(d) to be delivered with the
         financial statements described in clause (i) above.

                  "REQUIRED LENDERS" means, at any time, Lenders (other than
         Defaulting Lenders) holding in the aggregate at least a majority of (i)
         the unfunded Commitments (and Participation Interests therein) and the
         outstanding Loans (and Participation Interests therein) or (ii) if all
         of the Commitments have been terminated, the outstanding Loans, LOC
         Obligations and Participation Interests (including the Participation
         Interests of the Issuing Lender in any Letters of Credit and the
         Participation Interests of the Swingline Lender in any Swingline
         Loans).

                  "REQUIREMENT OF LAW" means, as to any Person, the certificate
         of incorporation and by-laws or other organizational or governing
         documents of such Person, and any law, treaty, rule or regulation or
         determination of an arbitrator or a court or other Governmental
         Authority, in each case applicable to or binding upon such Person or to
         which any of its material property is subject.

                  "RESTRICTED PAYMENT" means (i) any dividend or other payment
         or distribution, direct or indirect, on account of any shares of any
         class of Capital Stock of any Consolidated Party, now or hereafter
         outstanding (including without limitation any payment in connection
         with any dissolution, merger, consolidation or disposition involving
         any Consolidated Party), or to the holders, in their capacity as such,
         of any shares of any class of Capital Stock of any Consolidated Party,
         now or hereafter outstanding (other than dividends or distributions
         (including distributions in connection with any restructure, merger,
         consolidation or

                                       28
<PAGE>

         disposition) payable (A) in Capital Stock of the applicable Person, (B)
         to any Credit Party (other than the Parent) or (C) except in the case
         of the Borrower or the Parent, ratably to minority shareholders of the
         applicable Person), (ii) any redemption, retirement, sinking fund or
         similar payment, purchase or other acquisition for value, direct or
         indirect, of any shares of any class of Capital Stock of any
         Consolidated Party, now or hereafter outstanding, (iii) any payment
         made to retire, or to obtain the surrender of, any outstanding
         warrants, options or other rights to acquire shares of any class of
         Capital Stock of any Consolidated Party, now or hereafter outstanding,
         (iv) any payment or prepayment of principal of, premium, if any, or
         interest on, including any redemption, purchase, retirement,
         defeasance, sinking fund or similar payment with respect to, any
         Subordinated Debt or Qualified Preferred Stock and (v) any dividend or
         other payment or distribution, direct or indirect, by Dairy LLC or
         Dairy TXCT LLC to any Person that is not a Credit Party. The
         cancellation of Indebtedness shall not be deemed to constitute a
         "Restricted Payment".

                  "REVOLVING COMMITMENT" means, with respect to each Lender, the
         commitment of such Lender in an aggregate principal amount at any time
         outstanding of up to such Lender's Revolving Commitment Percentage (if
         any) of the Revolving Committed Amount, (i) to make Revolving Loans in
         accordance with the provisions of Section 2.1(a), (ii) to purchase
         Participation Interests in Letters of Credit in accordance with the
         provisions of Section 2.2(c) and (iii) to purchase Participation
         Interests in Swingline Loans in accordance with the provisions of
         Section 2.3(b)(iii).

                  "REVOLVING COMMITMENT PERCENTAGE" means, for any Lender, the
         percentage identified as its Revolving Commitment Percentage on
         SCHEDULE 2.1(a), as such percentage may be modified in connection with
         any assignment made in accordance with the provisions of Section 11.3.

                  "REVOLVING COMMITTED AMOUNT" shall have the meaning assigned
         to such term in Section 2.1(a).

                  "REVOLVING LOANS" shall have the meaning assigned to such term
         in Section 2.1(a).

                  "REVOLVING NOTE" shall have the meaning assigned to such term
         in Section 2.1(e).

                  "S&P" means Standard & Poor's Ratings Group, a division of The
         McGraw Hill Companies, Inc., or any successor or assignee of the
         business of such division in the business of rating securities.

                  "SALE AND LEASEBACK TRANSACTION" means any direct or indirect
         arrangement with any Person or to which any such Person is a party,
         providing for the leasing to any Consolidated Party of any Property,
         whether owned by such Consolidated Party as of the Closing Date or
         later acquired, which has been or is to be sold or transferred by such
         Consolidated Party to such Person or to any other Person from whom
         funds have been, or are to be, advanced by such Person on the security
         of such Property.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended,
         and all regulations issued pursuant thereto.

                                       29
<PAGE>

                  "SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
         1934, as amended, and all regulations issued pursuant thereto.

                  "SECURITY AGREEMENT" means the security agreement dated as of
         the Closing Date in the form of EXHIBIT 1.1C to be executed in favor of
         the Agent by each of the Credit Parties, as amended, modified, restated
         or supplemented from time to time.

                  "SINGLE EMPLOYER PLAN" means any Plan which is covered by
         Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
         Employer Plan.

                  "SOLVENT" or "SOLVENCY" means, with respect to any Person as
         of a particular date, that on such date (i) such Person is able to pay
         its debts and other liabilities, contingent obligations and other
         commitments as they mature in the normal course of business, (ii) such
         Person does not intend to, and does not believe that it will, incur
         debts or liabilities beyond such Person's ability generally to pay its
         debts and liabilities as they mature in their ordinary course, (iii)
         such Person is not engaged in a business or a transaction, and is not
         about to engage in a business or a transaction, for which such Person's
         Property would constitute unreasonably small capital after giving due
         consideration to the prevailing practice in the industry in which such
         Person is engaged or is to engage, (iv) the fair value of the Property
         of such Person on a going concern basis is greater than the total
         amount of liabilities, including, without limitation, contingent
         liabilities, of such Person and (v) the present fair salable value of
         the assets of such Person is not less than the amount that will be
         required to pay the probable liability of such Person on its debts as
         they become absolute and matured. In computing the amount of contingent
         liabilities at any time, it is intended that such liabilities will be
         computed at the amount which, in light of all the facts and
         circumstances existing at such time, represents the amount that can
         reasonably be expected to become an actual or matured liability.

                  "SPONSOR" means Vestar Capital Partners IV, L.P. and its
         Affiliates.

                  "STANDBY LETTER OF CREDIT FEE" shall have the meaning assigned
         to such term in Section 3.5(b)(i).

                  "SUBORDINATED DEBT" means (i) any Indebtedness evidenced and
         governed by the Subordinated Debt Indenture and the Subordinated Notes,
         including any guarantees thereof by any Credit Party and (ii) any other
         Indebtedness which is subordinated to the Credit Party Obligations on
         terms no less favorable to the Lenders than the Subordinated Debt
         Indenture.

                  "SUBORDINATED DEBT INDENTURE" means that certain Indenture,
         dated as of March 27, 2001, by and among Borrower and BNY Midwest Trust
         Company, as such Indenture may be amended, modified, restated or
         supplemented and in effect from time to time in accordance with the
         terms hereof.

                  "SUBORDINATED NOTE" means any of the 11 3/4% subordinated
         promissory notes issued by the Borrower pursuant to the Subordinated
         Debt Indenture, as such subordinated promissory note may be amended,
         modified, exchanged, restated or supplemented and in effect from time
         to time in accordance with the terms hereof.

                                       30
<PAGE>

                  "SUBSIDIARY" means, as to any Person at any time, (a) any
         corporation more than 50% of whose Capital Stock of any class or
         classes having by the terms thereof ordinary voting power to elect a
         majority of the directors of such corporation (irrespective of whether
         or not at such time, any class or classes of such corporation shall
         have or might have voting power by reason of the happening of any
         contingency) is at such time owned or controlled by such Person
         directly or indirectly through Subsidiaries, and (b) any partnership,
         association, joint venture or other entity of which such Person
         directly or indirectly through Subsidiaries owns or controls at such
         time more than 50% of the Capital Stock; PROVIDED, HOWEVER, that,
         notwithstanding any other provision to the contrary contained in this
         Credit Agreement, (i) prior to any Asset Disposition of all of the
         Capital Stock or all or substantially all of the Property of Dairy LLC,
         Dairy LLC and its Subsidiaries shall be deemed to be a Subsidiaries of
         the Borrower, (ii) prior to any Asset Disposition of all of the Capital
         Stock or all or substantially all of the Property of Dairy TXCT LLC,
         Dairy TXCT LLC and its Subsidiaries shall be deemed to be Subsidiaries
         of the Borrower and (iii) a Joint Venture shall not constitute a
         Subsidiary.

                  "SUBSIDIARY GUARANTOR" means each of the Persons identified as
         a "Subsidiary Guarantor" on the signature pages hereto and each Person
         which may hereafter execute a Joinder Agreement pursuant to Section
         7.11, together with their successors and permitted assigns, and
         "SUBSIDIARY GUARANTOR" means any one of them. Notwithstanding any other
         provision to the contrary contained in this Credit Agreement, (i) prior
         to any Asset Disposition of all of the Capital Stock or all or
         substantially all of the Property of Dairy LLC, Dairy LLC shall be
         deemed to be a Subsidiary Guarantor and (ii) prior to any Asset
         Disposition of all of the Capital Stock or all or substantially all of
         the Property of Dairy TXCT LLC, Dairy TXCT LLC shall be deemed to be a
         Subsidiary Guarantor.

                  "SWINGLINE COMMITTED AMOUNT" shall have the meaning assigned
         to such term in Section 2.3(a).

                  "SWINGLINE LENDER" means Bank of America.

                  "SWINGLINE LOAN" shall have the meaning assigned to such term
         in Section 2.3(a).

                  "SWINGLINE NOTE" shall have the meaning assigned to such term
         in Section 2.3(d).

                  "SYNDICATION AGENT" shall have the meaning assigned to such
         term in the heading hereof, together with any successors or assigns.

                  "SYNTHETIC LEASE" means any synthetic lease, tax retention
         operating lease, off-balance sheet loan or similar off-balance sheet
         financing product where such transaction is considered borrowed money
         indebtedness for tax purposes but is classified as an operating lease
         under GAAP.

                  "TAXES" shall have the meaning assigned to such term in
         Section 3.11(a).

                  "TRADE LETTER OF CREDIT FEE" shall have the meaning assigned
         to such term in Section 3.5(b)(ii).

                                       31
<PAGE>

                  "TRANCHE A TERM LOAN" shall have the meaning assigned to such
         term in Section 2.4(a).

                  "TRANCHE A TERM LOAN COMMITMENT" means, with respect to each
         Lender, the commitment of such Lender to make its portion of the
         Tranche A Term Loan in a principal amount equal to such Lender's
         Tranche A Term Loan Percentage (if any) of the Tranche A Term Loan
         Committed Amount.

                  "TRANCHE A TERM LOAN COMMITTED AMOUNT" shall have the meaning
         assigned to such term in Section 2.4(a).

                  "TRANCHE A TERM LOAN PERCENTAGE" means, for any Lender, the
         percentage identified as its Tranche A Term Loan Percentage on SCHEDULE
         2.1(a), as such percentage may be modified in connection with any
         assignment made in accordance with the provisions of Section 11.3.

                  "TRANCHE A TERM NOTE" shall have the meaning assigned to such
         term in Section 2.4(f).

                  "TRANCHE B TERM LOAN" shall have the meaning assigned to such
         term in Section 2.5(a).

                  "TRANCHE B TERM LOAN COMMITMENT" means, with respect to each
         Lender, the commitment of such Lender to make its portion of the
         Tranche B Term Loan in a principal amount equal to such Lender's
         Tranche B Term Loan Percentage (if any) of the Tranche B Term Loan
         Committed Amount.

                  "TRANCHE B TERM LOAN COMMITTED AMOUNT" shall have the meaning
         assigned to such term in Section 2.5(a).

                  "TRANCHE B TERM LOAN PERCENTAGE" means, for any Lender, the
         percentage identified as its Tranche B Term Loan Percentage on SCHEDULE
         2.1(a), as such percentage may be modified in connection with any
         assignment made in accordance with the provisions of Section 11.3.

                  "TRANCHE B TERM NOTE" shall have the meaning assigned to such
         term in Section 2.5(f).

                  "TRANSACTION" means a collective reference to (i) the
         acquisition by Mergersub of all of the outstanding capital stock of the
         Acquired Company and the merger of Mergersub into the Acquired Company,
         all pursuant to, and in accordance with the terms of, the Merger
         Agreement; (ii) the refinancing of substantially all of the funded
         indebtedness of the Acquired Company and its Subsidiaries existing at
         the time of the events described in the foregoing clause (i); (iii) the
         Dairy Restructuring; and (iv) the related financings, equity
         contributions and other transactions referred to in Section 5.1(h).

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<PAGE>

                  "UNUSED FEE" shall have the meaning assigned to such term in
         Section 3.5(a).

                  "UNUSED FEE CALCULATION PERIOD" shall have the meaning
         assigned to such term in Section 3.5(a).

                  "UNUSED REVOLVING COMMITTED AMOUNT" means, for any period, the
         amount by which (a) the then applicable Revolving Committed Amount
         (other than any portion of the Revolving Committed Amount attributable
         to a Lender that was a Defaulting Lender during such period) exceeds
         (b) the daily average sum for such period of (i) the outstanding
         aggregate principal amount of all Revolving Loans (but not including
         any Swingline Loans) PLUS (ii) the outstanding aggregate principal
         amount of all LOC Obligations.

                  "VOTING STOCK" means, with respect to any Person, Capital
         Stock issued by such Person the holders of which are ordinarily, in the
         absence of contingencies, entitled to vote for the election of
         directors (or persons performing similar functions) of such Person,
         even though the right so to vote has been suspended by the happening of
         such a contingency.

                  "WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary
         100% of whose Voting Stock (other than director's qualifying shares or
         other shares required by law to be held by a third party) is at the
         time owned by such Person directly or indirectly through other
         Wholly-Owned Subsidiaries.

                  1.2      COMPUTATION OF TIME PERIODS.

         For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."

                  1.3      ACCOUNTING TERMS.

         Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis; PROVIDED, HOWEVER, that calculations of the implied principal component
of all obligations under any Synthetic Lease or the implied interest component
of any rent paid under any Synthetic Lease shall be made by the Borrower in
accordance with accepted financial practice and consistent with the terms of
such Synthetic Lease. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made by application of GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1 (or, prior to the delivery of the first financial statements
pursuant to Section 7.1, consistent with the financial statements as at December
31, 2000), but, in any event, unless otherwise expressly provided herein, after
elimination for minority interests; PROVIDED, HOWEVER, if (a) the Credit Parties
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) the Agent or the Required Lenders shall
so object in writing within 30 days after delivery of such financial statements,
then such calculations shall be made on a basis consistent with the most recent
financial statements delivered by the Credit Parties to the Lenders as to which
no such objection shall have been made; PROVIDED FURTHER, HOWEVER, that nothing
contained in this Section 1.3 shall be deemed to restrict the ability of the

                                       33
<PAGE>

Credit Parties to (i) make purchase accounting adjustments with respect to the
Transaction during the four-quarter period immediately succeeding the
consummation of the Transaction or (ii) make purchase accounting adjustments
with respect to any Permitted Acquisition during the four-quarter period
immediately succeeding the consummation of such transaction.

         Notwithstanding the above or the terms of any definition in Section
1.1, the parties hereto acknowledge and agree that, for purposes of all
calculations made under the financial covenants set forth in Section 7.10
(including without limitation for purposes of the definitions of "Applicable
Percentage" and "Pro Forma Basis" set forth in Section 1.1), (i) after
consummation of any Asset Disposition or any Investment (or series of related
Investments) made pursuant to Section 8.6(p) to the extent consisting of the
contribution(s) or other transfer(s) of Property (other than cash) to a Joint
Venture for consideration less than the fair market value of such Property, (A)
income statement items (whether positive or negative) and capital expenditures
attributable to the Property disposed of or contributed or otherwise
transferred, as applicable, shall be excluded to the extent relating to any
period occurring prior to the date of such transaction and (B) Indebtedness
which is retired shall be excluded and deemed to have been retired as of the
first day of the applicable period, (ii) after consummation of any Acquisition,
(A) income statement items (whether positive or negative) attributable to the
Person or Property acquired shall, to the extent not otherwise included in such
income statement items for the Consolidated Parties in accordance with GAAP or
in accordance with any defined terms set forth in Section 1.1, be included to
the extent relating to any period applicable in such calculations, (B) to the
extent not retired in connection with such Acquisition, Indebtedness of the
Person or Property acquired shall be deemed to have been incurred as of the
first day of the applicable period and (C) pro forma adjustments may be included
to the extent that such adjustments are consistent with the definition of
"Consolidated EBITDA" set forth in Section 1.1 and give effect to events that
are (x) directly attributable to such transaction, (y) expected to have a
continuing impact on the Consolidated Parties and (z) factually supportable and
(iii) the portion of Funded Indebtedness of the Consolidated Parties as of any
date consisting of Revolving Loans shall be deemed to be the monthly average
amount of Revolving Loans outstanding for the twelve-month period ended as of
such date.

                                    SECTION 2

                                CREDIT FACILITIES

                  2.1      REVOLVING LOANS.

                  (a)      REVOLVING COMMITMENT. Subject to the terms and
         conditions hereof and in reliance upon the representations and
         warranties set forth herein, each Lender severally agrees to make
         available to the Borrower such Lender's Revolving Commitment Percentage
         of revolving credit loans requested by the Borrower in Dollars
         ("REVOLVING LOANS") from time to time from the Closing Date until the
         Maturity Date, or such earlier date as the Revolving Commitments shall
         have been terminated as provided herein; PROVIDED, HOWEVER, that the
         sum of the aggregate outstanding principal amount of Revolving Loans
         shall not exceed ONE HUNDRED MILLION DOLLARS ($100,000,000) (as such
         aggregate maximum amount may be reduced from time to time as provided
         in Section 3.4, the "REVOLVING COMMITTED AMOUNT"); PROVIDED, FURTHER,
         (A) with regard to each Lender

                                       34
<PAGE>

         individually, such Lender's outstanding Revolving Loans shall not
         exceed such Lender's Revolving Commitment Percentage of the Revolving
         Committed Amount, and (B) the sum of the aggregate outstanding
         principal amount of Revolving Loans PLUS LOC Obligations PLUS Swingline
         Loans shall not exceed the Revolving Committed Amount. The initial
         advance of the Revolving Loans on the Closing Date shall consist solely
         of Base Rate Loans. Thereafter, Revolving Loans may consist of Base
         Rate Loans or Eurodollar Loans, or a combination thereof, as the
         Borrower may request; PROVIDED, HOWEVER, that no more than 15
         Eurodollar Loans shall be outstanding hereunder at any time (it being
         understood that, for purposes hereof, Eurodollar Loans with different
         Interest Periods shall be considered as separate Eurodollar Loans, even
         if they begin on the same date, although borrowings, extensions and
         conversions may, in accordance with the provisions hereof, be combined
         at the end of existing Interest Periods to constitute a new Eurodollar
         Loan with a single Interest Period). Revolving Loans hereunder may be
         repaid and reborrowed in accordance with the provisions hereof.

                  (b)      REVOLVING LOAN BORROWINGS.

                           (i)      NOTICE OF BORROWING. The Borrower shall
                  request a Revolving Loan borrowing by written notice (or
                  telephonic notice promptly confirmed in writing) to the Agent
                  not later than 12:30 P.M. (Charlotte, North Carolina time) on
                  the Business Day prior to the date of the requested borrowing
                  in the case of Base Rate Loans, and on the third Business Day
                  prior to the date of the requested borrowing in the case of
                  Eurodollar Loans. Each such request for borrowing shall be
                  irrevocable and shall specify (A) that a Revolving Loan is
                  requested, (B) the date of the requested borrowing (which
                  shall be a Business Day), (C) the aggregate principal amount
                  to be borrowed, and (D) whether the borrowing shall be
                  comprised of Base Rate Loans, Eurodollar Loans or a
                  combination thereof, and if Eurodollar Loans are requested,
                  the Interest Period(s) therefor. If the Borrower shall fail to
                  specify in any such Notice of Borrowing (I) an applicable
                  Interest Period in the case of a Eurodollar Loan, then such
                  notice shall be deemed to be a request for an Interest Period
                  of one month, or (II) the type of Revolving Loan requested,
                  then such notice shall be deemed to be a request for a Base
                  Rate Loan hereunder. The Agent shall give notice to each
                  affected Lender promptly upon receipt of each Notice of
                  Borrowing pursuant to this Section 2.1(b)(i), the contents
                  thereof and each such Lender's share of any borrowing to be
                  made pursuant thereto.

                           (ii)     MINIMUM AMOUNTS. Except for Revolving Loans
                  made for the purpose of reimbursing the Issuing Lender in
                  respect of a drawing under a Letter of Credit pursuant to
                  Section 2.2(e), each Eurodollar Loan or Base Rate Loan that is
                  a Revolving Loan shall be in a minimum aggregate principal
                  amount of $2,000,000 and integral multiples of $100,000 in
                  excess thereof (or the remaining amount of the Revolving
                  Committed Amount, if less).

                           (iii)    ADVANCES. Each Lender will make its
                  Revolving Commitment Percentage of each Revolving Loan
                  borrowing available to the Agent for the account of the
                  Borrower as specified in Section 3.15(a), or in such other
                  manner as the Agent may specify in writing, by 1:00 P.M.
                  (Charlotte, North Carolina time) on the date specified in the
                  applicable Notice of Borrowing in Dollars and in funds
                  immediately

                                       35
<PAGE>

                  available to the Agent. Such borrowing will then be made
                  available to the Borrower by the Agent either by disbursing
                  such funds pursuant to written instructions from the Borrower
                  or by crediting the account of the Borrower on the books of
                  such office with the aggregate of the amounts made available
                  to the Agent by the Lenders and in like funds as received by
                  the Agent.

                  (c) REPAYMENT. The Borrower hereby promises to pay the
         principal amount of all outstanding Revolving Loans in full on the
         Maturity Date, unless accelerated sooner pursuant to Section 9.2.

                  (d)      INTEREST.  Subject to the provisions of Section 3.1,

                           (i)      BASE RATE LOANS. During such periods as
                  Revolving Loans shall be comprised in whole or in part of Base
                  Rate Loans, such Base Rate Loans shall bear interest at a per
                  annum rate equal to the Adjusted Base Rate.

                           (ii)     EURODOLLAR LOANS. During such periods as
                  Revolving Loans shall be comprised in whole or in part of
                  Eurodollar Loans, such Eurodollar Loans shall bear interest at
                  a per annum rate equal to the Adjusted Eurodollar Rate.

         The Borrower hereby promises to pay interest on Revolving Loans in
         arrears on each applicable Interest Payment Date (or at such other
         times as may be specified herein).

                  (e)      REVOLVING NOTES. The Borrower hereby agrees that,
         upon the request to the Agent by any Lender, the Borrower will execute
         and deliver to such Lender a promissory note evidencing the Revolving
         Loans of such Lender, substantially in the form of EXHIBIT 2.1(e), with
         appropriate insertions as to date and principal amount (a "REVOLVING
         NOTE").

                  2.2      LETTER OF CREDIT SUBFACILITY.

                  (a)      ISSUANCE. Subject to the terms and conditions hereof
         and in reliance upon the representations and warranties set forth
         herein, the Issuing Lender agrees to issue, and each Lender severally
         agrees to participate in the issuance by the Issuing Lender of, standby
         and trade Letters of Credit in Dollars from time to time from the
         Closing Date until the date five (5) days prior to the Maturity Date as
         the Borrower may request, in a form acceptable to the Issuing Lender;
         PROVIDED, HOWEVER, that (i) the LOC Obligations outstanding shall not
         at any time exceed FIFTEEN MILLION DOLLARS ($15,000,000) (the "LOC
         COMMITTED AMOUNT") and (ii) the sum of the aggregate outstanding
         principal amount of Revolving Loans PLUS LOC Obligations PLUS Swingline
         Loans shall not at any time exceed the Revolving Committed Amount. No
         Letter of Credit shall (x) have an original expiry date more than one
         year from the date of issuance (provided that any such Letter of Credit
         may contain customary "evergreen" provisions pursuant to which the
         expiry date is automatically extended by a specific time period unless
         the Issuing Lender gives notice to the beneficiary of such Letter of
         Credit at least a specified time period prior to the expiry date then
         in effect) or (y) as originally issued or as extended, have an expiry
         date extending beyond the date five (5) days prior to the Maturity
         Date. The Issuing Lender shall not be required to issue any Letter of
         Credit which would violate any Requirement of Law applicable to the
         Issuing

                                       36
<PAGE>

         Lender. Each Letter of Credit shall comply with the related LOC
         Documents. The issuance and expiry dates of each Letter of Credit shall
         be a Business Day. For purposes of this Credit Agreement, the Existing
         Letters of Credit shall be deemed to have been issued on the Closing
         Date.

                  (b)      NOTICE AND REPORTS. The request for the issuance of a
         Letter of Credit shall be submitted by an Executive Officer of the
         Borrower to the Issuing Lender and the Agent at least three (3)
         Business Days prior to the requested date of issuance. The Issuing
         Lender will provide to the Agent, at least quarterly and more
         frequently upon request, who will in turn disseminate to each of the
         Lenders a detailed report specifying the Letters of Credit which are
         then issued and outstanding and any activity with respect thereto which
         may have occurred since the date of the prior report, and including
         therein, among other things, the beneficiary, the face amount and the
         expiry date, as well as any payment or expirations which may have
         occurred.

                  (c)      PARTICIPATION. Each Lender, upon issuance of a Letter
         of Credit (or, in the case of each Existing Letter of Credit, on the
         Closing Date), shall be deemed to have purchased without recourse a
         Participation Interest from the Issuing Lender in such Letter of Credit
         and the obligations arising thereunder and any collateral relating
         thereto, in each case in an amount equal to its pro rata share of the
         obligations under such Letter of Credit (based on the respective
         Revolving Commitment Percentages of the Lenders) and shall absolutely,
         unconditionally and irrevocably assume and be obligated to pay to the
         Issuing Lender and discharge when due, its pro rata share of the
         obligations arising under such Letter of Credit. Without limiting the
         scope and nature of each Lender's Participation Interest in any Letter
         of Credit, to the extent that the Issuing Lender has not been
         reimbursed as required hereunder or under any such Letter of Credit,
         each such Lender shall pay to the Agent for the account of the Issuing
         Lender its pro rata share of such unreimbursed drawing in same day
         funds on the day of notification by the Agent of an unreimbursed
         drawing pursuant to the provisions of subsection (d) below. The
         obligation of each Lender to so reimburse the Issuing Lender shall be
         absolute and unconditional and shall not be affected by the occurrence
         of a Default, an Event of Default or any other occurrence or event. Any
         such reimbursement shall not relieve or otherwise impair the obligation
         of the Borrower to reimburse the Issuing Lender under any Letter of
         Credit, together with interest as hereinafter provided.

                  (d)      REIMBURSEMENT. In the event of any drawing under any
         Letter of Credit, the Issuing Lender will promptly notify the Borrower
         and the Agent. Unless the Borrower shall immediately notify the Agent
         and the Issuing Lender that the Borrower intends to otherwise reimburse
         the Issuing Lender for such drawing, the Borrower shall be deemed to
         have requested that the Lenders make a Revolving Loan in the amount of
         the drawing as provided in subsection (e) below on the related Letter
         of Credit, the proceeds of which will be used to satisfy the related
         reimbursement obligations. The Borrower promises to reimburse the
         Issuing Lender on the day on which the Issuing Lender notifies the
         Borrower of a drawing under any Letter of Credit (either with the
         proceeds of a Revolving Loan obtained hereunder or deemed to have been
         requested hereunder or otherwise) in same day funds provided such
         notice is received by the Borrower from the Issuing Lender on or before
         2:00 P.M. (Charlotte, North Carolina time) (otherwise such payment
         shall be made on or before 12:00 Noon (Charlotte, North Carolina time)
         on the Business Day next succeeding the day such notice is received).
         The Borrower hereby promises to pay to the Issuing Lender interest on

                                       37
<PAGE>

         the unreimbursed amount of any drawing under a Letter of Credit at a
         per annum rate equal to (i) for the first two (2) Business Days
         following the date of the related drawing, the Adjusted Base Rate and
         (ii) thereafter, the Adjusted Base Rate PLUS 2%. The Borrower's
         reimbursement obligations hereunder shall be absolute and unconditional
         under all circumstances irrespective of any rights of setoff,
         counterclaim or defense to payment the Borrower may claim or have
         against the Issuing Lender (other than that the payment of such drawing
         by the Issuing Lender constituted gross negligence or willful
         misconduct on the part of the Issuing Lender), the Agent, the Lenders,
         the beneficiary of the Letter of Credit drawn upon or any other Person,
         including without limitation any defense based on any failure of the
         Borrower or any other Credit Party to receive consideration or the
         legality, validity, regularity or unenforceability of the Letter of
         Credit. The Issuing Lender will promptly notify the Agent, who shall in
         turn, promptly notify the other Lenders of the amount of any
         unreimbursed drawing and each Lender shall promptly pay to the Agent
         for the account of the Issuing Lender in Dollars and in immediately
         available funds, the amount of such Lender's pro rata share of such
         unreimbursed drawing. Such payment shall be made on the day such notice
         is received by such Lender from the Agent if such notice is received at
         or before 2:00 P.M. (Charlotte, North Carolina time), and otherwise
         such payment shall be made at or before 12:00 Noon (Charlotte, North
         Carolina time) on the Business Day next succeeding the day such notice
         is received. If such Lender does not pay such amount to the Agent for
         the account of the Issuing Lender in full upon such request, such
         Lender shall, on demand, pay to the Agent for the account of the
         Issuing Lender interest on the unpaid amount during the period from the
         date of such drawing until such Lender pays such amount to the Agent
         for the account of the Issuing Lender in full at a rate per annum equal
         to, if paid within two (2) Business Days of the date that such Lender
         is required to make payments of such amount pursuant to the preceding
         sentence, the Federal Funds Rate and thereafter at a rate equal to the
         Base Rate. Each Lender's obligation to make such payment to the Issuing
         Lender, and the right of the Issuing Lender to receive the same, shall
         be absolute and unconditional, shall not be affected by any
         circumstance whatsoever and without regard to the termination of this
         Credit Agreement or the Commitments hereunder, the existence of a
         Default or Event of Default or the acceleration of the obligations of
         the Borrower hereunder and shall be made without any offset, abatement,
         withholding or reduction whatsoever. Simultaneously with the making of
         each such payment by a Lender to the Agent for the account of the
         Issuing Lender, such Lender shall, automatically and without any
         further action on the part of the Issuing Lender or such Lender,
         acquire a Participation Interest in an amount equal to such payment
         (excluding the portion of such payment constituting interest owing to
         the Issuing Lender) in the related unreimbursed drawing portion of the
         LOC Obligation and in the interest thereon and in the related LOC
         Documents, and shall have a claim against the Borrower with respect
         thereto.

                  (e)      REPAYMENT WITH REVOLVING LOANS. On any day on which
         the Borrower shall have requested, or been deemed to have requested, a
         Revolving Loan advance to reimburse a drawing under a Letter of Credit,
         the Agent shall give notice to the Lenders that a Revolving Loan has
         been requested or deemed requested by the Borrower to be made in
         connection with a drawing under a Letter of Credit, in which case a
         Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
         Loans to the extent the Borrower has complied with the procedures of
         Section 2.1(b)(i) with respect thereto) shall be immediately made to
         the Borrower by all Lenders (notwithstanding any termination of the
         Commitments pursuant to Section 9.2) PRO RATA based on the respective
         Revolving Commitment

                                       38
<PAGE>

         Percentages of the Lenders (determined before giving effect to any
         termination of the Commitments pursuant to Section 9.2) and the
         proceeds thereof shall be paid directly to the Agent for the account of
         the Issuing Lender for application to the respective LOC Obligations.
         Each such Lender hereby irrevocably agrees to make its pro rata share
         of each such Revolving Loan immediately upon any such request or deemed
         request in the amount, in the manner and on the date specified in the
         preceding sentence NOTWITHSTANDING (i) the amount of such borrowing may
         not comply with the minimum amount for advances of Revolving Loans
         otherwise required hereunder, (ii) whether any conditions specified in
         Section 5.2 are then satisfied, (iii) whether a Default or an Event of
         Default then exists, (iv) failure for any such request or deemed
         request for Revolving Loan to be made by the time otherwise required
         hereunder, (v) whether the date of such borrowing is a date on which
         Revolving Loans are otherwise permitted to be made hereunder or (vi)
         any termination of the Commitments relating thereto immediately prior
         to or contemporaneously with such borrowing. In the event that any
         Revolving Loan cannot for any reason be made on the date otherwise
         required above (including, without limitation, as a result of the
         commencement of a proceeding under the Bankruptcy Code with respect to
         the Borrower or any other Credit Party), then each such Lender hereby
         agrees that it shall forthwith purchase (as of the date such borrowing
         would otherwise have occurred, but adjusted for any payments received
         from the Borrower on or after such date and prior to such purchase)
         from the Issuing Lender such Participation Interests in the outstanding
         LOC Obligations as shall be necessary to cause each such Lender to
         share in such LOC Obligations ratably (based upon the respective
         Revolving Commitment Percentages of the Lenders (determined before
         giving effect to any termination of the Commitments pursuant to Section
         9.2)), PROVIDED that at the time any purchase of Participation
         Interests pursuant to this sentence is actually made, the purchasing
         Lender shall be required to pay to the Agent for the account of the
         Issuing Lender, to the extent not paid to the Issuing Lender by the
         Borrower in accordance with the terms of subsection (d) above, interest
         on the principal amount of Participation Interests purchased for each
         day from and including the day upon which such borrowing would
         otherwise have occurred to but excluding the date of payment for such
         Participation Interests, at the rate equal to, if paid within two (2)
         Business Days of the date of the Revolving Loan advance, the Federal
         Funds Rate, and thereafter at a rate equal to the Base Rate.

                  (f)      DESIGNATION OF CONSOLIDATED PARTIES AS ACCOUNT
         PARTIES. Notwithstanding anything to the contrary set forth in this
         Credit Agreement, including without limitation Section 2.2(a), a Letter
         of Credit issued hereunder may contain a statement to the effect that
         such Letter of Credit is issued for the account of any Subsidiary of
         the Borrower, provided that notwithstanding such statement, the
         Borrower shall be the actual account party for all purposes of this
         Credit Agreement for such Letter of Credit and such statement shall not
         affect the Borrower's reimbursement obligations hereunder with respect
         to such Letter of Credit.

                  (g)      RENEWAL, EXTENSION. The renewal or extension of any
         Letter of Credit shall, for purposes hereof, be treated in all respects
         the same as the issuance of a new Letter of Credit hereunder.

                  (h)      UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender may
         have the Letters of Credit be subject to The Uniform Customs and
         Practice for Documentary Credits (the

                                       39
<PAGE>

         "UCP") or the International Standby Practices 1998 (the "ISP98"), in
         either case as published as of the date of issue by the International
         Chamber of Commerce, in which case the UCP or the ISP98, as applicable,
         may be incorporated therein and deemed in all respects to be a part
         thereof.

                  (i)      INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.

                           (i)      In addition to its other obligations under
                  this Section 2.2, the Borrower hereby agrees to pay, and
                  protect, indemnify and save each Lender harmless from and
                  against, any and all claims, demands, liabilities, damages,
                  actual losses, costs, charges and reasonable expenses
                  (including reasonable attorneys' fees) that such Lender may
                  incur or be subject to as a consequence, direct or indirect,
                  of (A) the issuance of any Letter of Credit or (B) the failure
                  of such Lender to honor a drawing under a Letter of Credit as
                  a result of any act or omission, whether rightful or wrongful,
                  of any present or future de jure or de facto government or
                  Governmental Authority (all such acts or omissions, herein
                  called "GOVERNMENT ACTS").

                           (ii)     As between the Borrower and the Lenders
                  (including the Issuing Lender), the Borrower shall assume all
                  risks of the acts, omissions or misuse of any Letter of Credit
                  by the beneficiary thereof. No Lender (including the Issuing
                  Lender) shall be responsible: (A) for the form, validity,
                  sufficiency, accuracy, genuineness or legal effect of any
                  document submitted by any party in connection with the
                  application for and issuance of any Letter of Credit, even if
                  it should in fact prove to be in any or all respects invalid,
                  insufficient, inaccurate, fraudulent or forged; (B) for the
                  validity or sufficiency of any instrument transferring or
                  assigning or purporting to transfer or assign any Letter of
                  Credit or the rights or benefits thereunder or proceeds
                  thereof, in whole or in part, that may prove to be invalid or
                  ineffective for any reason; (C) for errors, omissions,
                  interruptions or delays in transmission or delivery of any
                  messages, by mail, cable, telegraph, telex or otherwise,
                  whether or not they be in cipher; (D) for any loss or delay in
                  the transmission or otherwise of any document required in
                  order to make a drawing under a Letter of Credit or of the
                  proceeds thereof; and (E) for any consequences arising from
                  causes beyond the control of such Lender, including, without
                  limitation, any Government Acts. None of the above shall
                  affect, impair, or prevent the vesting of the Issuing Lender's
                  rights or powers hereunder.

                           (iii)    In furtherance and extension and not in
                  limitation of the specific provisions hereinabove set forth,
                  any action taken or omitted by any Lender (including the
                  Issuing Lender), under or in connection with any Letter of
                  Credit or the related certificates, if taken or omitted in
                  good faith and without gross negligence, shall not put such
                  Lender under any resulting liability to the Borrower or any
                  other Credit Party. It is the intention of the parties that
                  this Credit Agreement shall be construed and applied to
                  protect and indemnify each Lender (including the Issuing
                  Lender) against any and all risks involved in the issuance of
                  the Letters of Credit, all of which risks are hereby assumed
                  by the Borrower (on behalf of itself and each of the other
                  Credit Parties), including, without limitation, any and all
                  Government Acts. No Lender (including the Issuing Lender)
                  shall, in any way, be

                                       40
<PAGE>

                  liable for any failure by such Lender or anyone else to pay
                  any drawing under any Letter of Credit as a result of any
                  Government Acts or any other cause beyond the control of such
                  Lender.

                           (iv)     Nothing in this subsection (i) is intended
                  to limit the reimbursement obligations of the Borrower
                  contained in subsection (d) above. The obligations of the
                  Borrower under this subsection (i) shall survive the
                  termination of this Credit Agreement. No act or omission of
                  any current or prior beneficiary of a Letter of Credit shall
                  in any way affect or impair the rights of the Lenders
                  (including the Issuing Lender) to enforce any right, power or
                  benefit under this Credit Agreement.

                           (v)      Notwithstanding anything to the contrary
                  contained in this Section 2.2(i), no Credit Party shall have
                  any obligation to indemnify or reimburse any Lender (including
                  the Issuing Lender) in respect of any liability incurred by
                  such Lender (A) arising out of the gross negligence, bad faith
                  or willful misconduct of such Lender, or (B) caused by such
                  Lender's failure to pay under any Letter of Credit after
                  presentation to it of a request strictly complying with the
                  terms and conditions of such Letter of Credit unless such
                  payment is prohibited by any law, regulation, court order or
                  decree.

                  (j)      RESPONSIBILITY OF ISSUING LENDER. It is expressly
         understood and agreed that the obligations of the Issuing Lender
         hereunder to the Lenders are only those expressly set forth in this
         Credit Agreement and that the Issuing Lender shall be entitled to
         assume that the conditions precedent set forth in Section 5.2 have been
         satisfied unless it shall have acquired actual knowledge that any such
         condition precedent has not been satisfied; PROVIDED, HOWEVER, that
         nothing set forth in this Section 2.2 shall be deemed to prejudice the
         right of any Lender to recover from the Issuing Lender any amounts made
         available by such Lender to the Issuing Lender pursuant to this Section
         2.2 in the event that it is determined by a court of competent
         jurisdiction that the payment with respect to a Letter of Credit
         constituted gross negligence, bad faith or willful misconduct on the
         part of the Issuing Lender.

                  (k)      CONFLICT WITH LOC DOCUMENTS. In the event of any
         conflict between this Credit Agreement and any LOC Document (including
         any letter of credit application), this Credit Agreement shall control.

                  2.3      SWINGLINE LOAN SUBFACILITY.

                  (a)      SWINGLINE COMMITMENT. Subject to the terms and
         conditions hereof and in reliance upon the representations and
         warranties set forth herein, the Swingline Lender, in its individual
         capacity, agrees to make certain revolving credit loans requested by
         the Borrower in Dollars to the Borrower (each a "SWINGLINE LOAN" and,
         collectively, the "SWINGLINE LOANS") from time to time from the Closing
         Date until the Maturity Date for the purposes hereinafter set forth;
         PROVIDED, HOWEVER, (i) the aggregate principal amount of Swingline
         Loans outstanding at any time shall not exceed TEN MILLION DOLLARS
         ($10,000,000) (the "SWINGLINE COMMITTED AMOUNT"), and (ii) the sum of
         the aggregate outstanding principal amount of Revolving Loans PLUS LOC
         Obligations PLUS Swingline Loans shall not exceed the Revolving
         Committed Amount. Swingline Loans hereunder shall be made as

                                       41
<PAGE>

         Base Rate Loans or Quoted Rate Swingline Loans as the Borrower may
         request in accordance with the provisions of this Section 2.3 and may
         be repaid and reborrowed in accordance with the provisions hereof.

                  (b)      SWINGLINE LOAN ADVANCES.

                           (i)      NOTICES; DISBURSEMENT. Whenever the Borrower
                  desires a Swingline Loan advance hereunder it shall give
                  written notice from an Executive Officer of the Borrower (or
                  telephonic notice promptly confirmed in writing) to the
                  Swingline Lender not later than 1:00 P.M. (Charlotte, North
                  Carolina time) on the Business Day of the requested Swingline
                  Loan advance. Each such notice shall be irrevocable and shall
                  specify (A) that a Swingline Loan advance is requested, (B)
                  the date of the requested Swingline Loan advance (which shall
                  be a Business Day) and (C) the principal amount of the
                  Swingline Loan advance requested. Each Swingline Loan shall be
                  made as a Base Rate Loan or a Quoted Rate Swingline Loan and
                  shall have such maturity date as the Swingline Lender and the
                  Borrower shall agree upon receipt by the Swingline Lender of
                  any such notice from the Borrower. The Swingline Lender shall
                  initiate the transfer of funds representing the Swingline Loan
                  advance to the Borrower by 3:00 P.M. (Charlotte, North
                  Carolina time) on the Business Day of the requested borrowing.

                           (ii)     MINIMUM AMOUNTS. Each Swingline Loan advance
                  shall be in an integral multiples of $100,000 (or the
                  remaining amount of the Swingline Committed Amount, if less).

                           (iii)    REPAYMENT OF SWINGLINE LOANS. The Borrower
                  hereby promises to pay the outstanding principal amount of
                  each Swingline Loan on the earlier of (A) the maturity date
                  agreed to by the Swingline Lender and the Borrower with
                  respect to such Loan or (B) the Maturity Date. The Swingline
                  Lender may, at any time, in its sole discretion, by written
                  notice to the Borrower and the Lenders, demand repayment of
                  its Swingline Loans by way of a Revolving Loan advance, in
                  which case the Borrower shall be deemed to have requested a
                  Revolving Loan advance comprised solely of Base Rate Loans in
                  the amount of such Swingline Loans; PROVIDED, HOWEVER, that
                  any such demand shall be deemed to have been given one
                  Business Day prior to the Maturity Date and on the date of the
                  occurrence of any Event of Default described in Section 9.1
                  and upon acceleration of the indebtedness hereunder and the
                  exercise of remedies in accordance with the provisions of
                  Section 9.2. Each Lender hereby irrevocably agrees to make its
                  pro rata share of each such Revolving Loan in the amount, in
                  the manner and on the date specified in the preceding sentence
                  NOTWITHSTANDING (I) the amount of such borrowing may not
                  comply with the minimum amount for advances of Revolving Loans
                  otherwise required hereunder, (II) whether any conditions
                  specified in Section 5.2 are then satisfied, (III) whether a
                  Default or an Event of Default then exists, (IV) failure of
                  any such request or deemed request for a Revolving Loan to be
                  made by the time otherwise required hereunder, (V) whether the
                  date of such borrowing is a date on which Revolving Loans are
                  otherwise permitted to be made hereunder or (VI) any
                  termination of the Commitments relating thereto immediately
                  prior to or contemporaneously with such borrowing. In the
                  event that any Revolving Loan

                                       42
<PAGE>

                  cannot for any reason be made on the date otherwise required
                  above (including, without limitation, as a result of the
                  commencement of a proceeding under the Bankruptcy Code with
                  respect to the Borrower or any other Credit Party), then each
                  Lender hereby agrees that it shall forthwith purchase (as of
                  the date such borrowing would otherwise have occurred, but
                  adjusted for any payments received from the Borrower on or
                  after such date and prior to such purchase) from the Swingline
                  Lender such Participation Interests in the outstanding
                  Swingline Loans as shall be necessary to cause each such
                  Lender to share in such Swingline Loans ratably based upon its
                  Revolving Commitment Percentage of the Revolving Committed
                  Amount (determined before giving effect to any termination of
                  the Commitments pursuant to Section 3.4), PROVIDED that (A)
                  all interest payable on the Swingline Loans shall be for the
                  account of the Swingline Lender until the date as of which the
                  respective Participation Interest is purchased and (B) at the
                  time any purchase of Participation Interests pursuant to this
                  sentence is actually made, the purchasing Lender shall be
                  required to pay to the Swingline Lender, to the extent not
                  paid to the Swingline Lender by the Borrower in accordance
                  with the terms of subsection (c)(ii) below, interest on the
                  principal amount of Participation Interests purchased for each
                  day from and including the day upon which such borrowing would
                  otherwise have occurred to but excluding the date of payment
                  for such Participation Interests, at the rate equal to the
                  Federal Funds Rate.

                  (c)      INTEREST ON SWINGLINE LOANS.

                           (i)      RATE OF INTEREST . Subject to the provisions
                  of Section 3.1, each Swingline Loan shall bear interest as
                  follows:

                                    (A)      BASE RATE LOANS. If such Swingline
                           Loan is a Base Rate Loan, at a per annum rate equal
                           to the Adjusted Base Rate.

                                    (B)      QUOTED RATE SWINGLINE LOANS. If
                           such Swingline Loan is a Quoted Rate Swingline Loan,
                           at a per annum rate equal to the Quoted Rate
                           applicable thereto.

                           (ii)     PAYMENT OF INTEREST. The Borrower hereby
                  promises to pay interest on Swingline Loans in arrears on each
                  applicable Interest Payment Date (or at such other times as
                  may be specified herein).

                  Notwithstanding any other provision to the contrary set forth
                  in this Credit Agreement, in the event that the principal
                  amount of any Quoted Rate Swingline Loan is not repaid on the
                  last day of the Interest Period for such Loan, then such Loan
                  shall be automatically converted into a Base Rate Loan at the
                  end of such Interest Period.

                  (d)      SWINGLINE NOTE. The Borrower hereby agrees that, upon
         the request to the Agent by the Swingline Lender, the Borrower will
         execute and deliver to the Swingline Lender a promissory note
         evidencing the Swingline Loans of the Swingline Lender, substantially
         in the form of EXHIBIT 2.3(d), with appropriate insertions as to date
         and principal amount (a "SWINGLINE NOTE").

                                       43
<PAGE>

                  2.4      TRANCHE A TERM LOAN.

                  (a)      TRANCHE A TERM COMMITMENT. Subject to the terms and
         conditions hereof and in reliance upon the representations and
         warranties set forth herein, each Lender severally agrees to make
         available to the Borrower on the Closing Date such Lender's Tranche A
         Term Loan Percentage of a term loan in Dollars (the "TRANCHE A TERM
         LOAN") in the aggregate principal amount of ONE HUNDRED MILLION DOLLARS
         ($100,000,000) (the "TRANCHE A TERM LOAN COMMITTED AMOUNT"). The full
         principal amount of the Tranche A Term Loan shall be disbursed on the
         Closing Date as a Base Rate Loan. Thereafter, the Tranche A Term Loan
         may consist of Base Rate Loans or Eurodollar Loans, or a combination
         thereof, as the Borrower may request; PROVIDED, HOWEVER, that no more
         than 15 Eurodollar Loans shall be outstanding hereunder at any time (it
         being understood that, for purposes hereof, Eurodollar Loans with
         different Interest Periods shall be considered as separate Eurodollar
         Loans, even if they begin on the same date, although borrowings,
         extensions and conversions may, in accordance with the provisions
         hereof, be combined at the end of existing Interest Periods to
         constitute a new Eurodollar Loan with a single Interest Period).
         Amounts repaid on the Tranche A Term Loan may not be reborrowed.

                  (b)      BORROWING PROCEDURES. The Borrower shall submit an
         appropriate Notice of Borrowing for the Tranche A Term Loan to the
         Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the
         Closing Date. Such Notice of Borrowing shall be irrevocable and shall
         specify (i) that the funding of the Tranche A Term Loan is requested
         and (ii) that the funding of the Tranche A Term Loan shall be comprised
         of Base Rate Loans. Each Lender shall make its Tranche A Term Loan
         Percentage of the Tranche A Term Loan available to the Agent for the
         account of the Borrower at the office of the Agent specified in
         SCHEDULE 2.1(a), or at such other office as the Agent may designate in
         writing, by 1:00 P.M. (Charlotte, North Carolina time) on the Closing
         Date in Dollars and in funds immediately available to the Agent.

                  (c)      MINIMUM AMOUNTS. Each Eurodollar Loan or Base Rate
         Loan that is part of the Tranche A Term Loan shall be in an aggregate
         principal amount that is not less than $2,000,000 and integral
         multiples of $100,000 (or the then remaining principal balance of the
         Tranche A Term Loan).

                  (d)      REPAYMENT OF TRANCHE A TERM LOAN. The Borrower hereby
         promises to pay the outstanding principal amount of the Tranche A Term
         Loan in twenty-four (24) consecutive quarterly installments as follows
         (as such installments may hereafter be adjusted as a result of
         prepayments made pursuant to Section 3.3), unless accelerated sooner
         pursuant to Section 9.2:

<TABLE>
<CAPTION>

      ================================ ==============================
                                           TRANCHE A TERM LOAN
         PRINCIPAL AMORTIZATION          PRINCIPAL AMORTIZATION
            PAYMENT  DATES                       PAYMENT

     <S>                                 <C>

                                       44
<PAGE>

     -------------------------------- ------------------------------
      June 30, 2001, September 30,
        2001, December 31, 2001,
     March 31, 2002, June 30, 2002,
      September 30, 2002, December
       31, 2002 and March 31, 2003
                                               $3,000,000
     -------------------------------- ------------------------------
      June 30, 2003, September 30,
     2003, December 31, 2003, March
        31, 2004, June 30, 2004,
      September 30, 2004, December
       31, 2004 and March 31, 2005
                                               $4,000,000
     -------------------------------- ------------------------------
      June 30, 2005, September 30,
       2005, December 31, 2005 and
             March 31, 2006                    $5,000,000
     -------------------------------- ------------------------------
      June 30, 2006, September 30,
       2006, December 31, 2006 and
             March 31, 2007                    $6,000,000
     ================================ ==============================
</TABLE>

                  (e)      INTEREST. Subject to the provisions of Section 3.1,
         the outstanding Tranche A Term Loan shall bear interest at a per annum
         rate equal to:

                           (i)      BASE RATE LOANS. During such periods as the
                  Tranche A Term Loan shall be comprised in whole or in part of
                  Base Rate Loans, such Base Rate Loans shall bear interest at a
                  per annum rate equal to the Adjusted Base Rate.

                           (ii)     EURODOLLAR LOANS. During such periods as the
                  Tranche A Term Loan shall be comprised in whole or in part of
                  Eurodollar Loans, such Eurodollar Loans shall bear interest at
                  a per annum rate equal to the Adjusted Eurodollar Rate.

         The Borrower hereby promises to pay interest on the Tranche A Term Loan
         in arrears on each applicable Interest Payment Date (or at such other
         times as may be specified herein).

                  (f)      TRANCHE A TERM NOTES. The Borrower hereby agrees
         that, upon the request to the Agent by any Lender, the Borrower will
         execute and deliver to such Lender a promissory note evidencing the
         Tranche A Term Loans of such Lender, substantially in the form of
         EXHIBIT 2.4(f), with appropriate insertions as to date and principal
         amount (a "TRANCHE A TERM NOTE").

                                       45

<PAGE>

                  2.5      TRANCHE B TERM LOAN.

                  (a)      TRANCHE B TERM COMMITMENT. Subject to the terms and
         conditions hereof and in reliance upon the representations and
         warranties set forth herein, each Lender severally agrees to make
         available to the Borrower on the Closing Date such Lender's Tranche B
         Term Loan Percentage of a term loan in Dollars (the "TRANCHE B TERM
         LOAN") in the aggregate principal amount of TWO HUNDRED SEVENTY MILLION
         DOLLARS ($270,000,000) (the "TRANCHE B TERM LOAN COMMITTED AMOUNT").
         The full principal amount of the Tranche B Term Loan shall be disbursed
         on the Closing Date as a Base Rate Loan, and no portion of the Tranche
         B Term Loan shall consist of a Eurodollar Loan until the date which is
         10 Business Days after the Closing Date (or, if earlier, the date which
         is three (3) Business Days following the date that the primary
         syndication of the Tranche B Term Loan has been completed (as
         determined by the Agent)). Thereafter, the Tranche B Term Loan may
         consist of Base Rate Loans or Eurodollar Loans, or a combination
         thereof, as the Borrower may request; PROVIDED, HOWEVER, that no more
         than 15 Eurodollar Loans shall be outstanding hereunder at any time (it
         being understood that, for purposes hereof, Eurodollar Loans with
         different Interest Periods shall be considered as separate Eurodollar
         Loans, even if they begin on the same date, although borrowings,
         extensions and conversions may, in accordance with the provisions
         hereof, be combined at the end of existing Interest Periods to
         constitute a new Eurodollar Loan with a single Interest Period).
         Amounts repaid on the Tranche B Term Loan may not be reborrowed.

                  (b)      BORROWING PROCEDURES. The Borrower shall submit an
         appropriate Notice of Borrowing for the Tranche B Term Loan to the
         Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the
         Closing Date. Such Notice of Borrowing shall be irrevocable and shall
         specify (i) that the funding of the Tranche B Term Loan is requested
         and (ii) that the funding of the Tranche B Term Loan shall be comprised
         of Base Rate Loans. Each Lender shall make its Tranche B Term Loan
         Percentage of the Tranche B Term Loan available to the Agent for the
         account of the Borrower at the office of the Agent specified in
         SCHEDULE 2.1(a), or at such other office as the Agent may designate in
         writing, by 1:00 P.M. (Charlotte, North Carolina time) on the Closing
         Date in Dollars and in funds immediately available to the Agent.

                  (c)      MINIMUM AMOUNTS. Each Eurodollar Loan or Base Rate
         Loan that is part of the Tranche B Term Loan shall be in an aggregate
         principal amount that is not less than $2,000,000 and integral
         multiples of $100,000 (or the then remaining principal balance of the
         Tranche B Term Loan).

                  (d)      REPAYMENT OF TRANCHE B TERM LOAN. The Borrower hereby
         promises to pay the outstanding principal amount of the Tranche B Term
         Loan in twenty-eight (28) consecutive quarterly installments as follows
         (as such installments may hereafter be adjusted as a result of
         prepayments made pursuant to Section 3.3), unless accelerated sooner
         pursuant to Section 9.2:

                                       46
<PAGE>

<TABLE>
<CAPTION>

     ================================ ==============================
                                           TRANCHE B TERM LOAN
     PRINCIPAL AMORTIZATION PAYMENT      PRINCIPAL AMORTIZATION
                  DATES                          PAYMENT
     -------------------------------- ------------------------------
     <S>                                 <C>
         June 30, 2001,
       September 30, 2001,
       December 31, 2001,
         March 31, 2002,
         June 30, 2002,
       September 30, 2002,
       December 31, 2002,
         March 31, 2003,
         June 30, 2003,                   $675,000
       September 30, 2003,
       December 31, 2003,
         March 31, 2004,
         June 30, 2004,
       September 30, 2004,
       December 31, 2004,
         March 31, 2005,
         June 30, 2005,
       September 30, 2005,
       December 31, 2005,
         March 31, 2006,
         June 30, 2006,
       September 30, 2006,
      December 31, 2006 and
         March 31, 2007
     -------------------------------- ------------------------------
          June 30, 2007,
       September 30, 2007,
      December 31, 2007 and                $63,450,000
          March 31, 2008
     ================================ ==============================
</TABLE>

                  (e)      INTEREST. Subject to the provisions of Section 3.1,
         the outstanding Tranche B Term Loan shall bear interest at a per annum
         rate equal to:

                           (i)      BASE RATE LOANS. During such periods as the
                  Tranche B Term Loan shall be comprised in whole or in part of
                  Base Rate Loans, such Base Rate Loans shall bear interest at a
                  per annum rate equal to the Base Rate PLUS 2.00%.

                           (ii)     EURODOLLAR LOANS. During such periods as the
                  Tranche B Term Loan shall be comprised in whole or in part of
                  Eurodollar Loans, such Eurodollar Loans shall bear interest at
                  a per annum rate equal to the Eurodollar Rate PLUS 3.00%.

                                       47
<PAGE>

         The Borrower hereby promises to pay interest on the Tranche B Term Loan
         in arrears on each applicable Interest Payment Date (or at such other
         times as may be specified herein).

                  (f)      TRANCHE B TERM NOTES. The Borrower hereby agrees
         that, upon the request to the Agent by any Lender, the Borrower will
         execute and deliver to such Lender a promissory note evidencing the
         Tranche B Term Loans of such Lender, substantially in the form of
         EXHIBIT 2.5(f), with appropriate insertions as to date and principal
         amount (a "TRANCHE B TERM NOTE").

                                    SECTION 3

                 OTHER PROVISIONS RELATING TO CREDIT FACILITIES

                  3.1      DEFAULT RATE.

         Upon the occurrence, and during the continuance, of a default in the
payment of any amount hereunder or under any of the other Credit Documents, such
overdue amount shall bear interest, payable on demand, at a per annum rate 2%
greater than the rate which would otherwise be applicable (or if no rate is
applicable, whether in respect of interest, fees or other amounts, then the
Adjusted Base Rate PLUS 2%).

                  3.2      EXTENSION AND CONVERSION.

         The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; PROVIDED, HOWEVER, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto unless the Borrower makes payment of any
amounts then due and owing pursuant to Section 3.12, (ii) Loans extended as, or
converted into, Eurodollar Loans shall be subject to the terms of the definition
of "INTEREST PERIOD" set forth in Section 1.1 and shall be in such minimum
amounts as provided in, with respect to Revolving Loans, Section 2.1(b)(ii),
with respect to the Tranche A Term Loan, Section 2.4(c), or, with respect to the
Tranche B Term Loan, Section 2.5(c), (iii) no more than 15 Eurodollar Loans
shall be outstanding hereunder at any time (it being understood that, for
purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
although borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period), (iv) any
request for extension or conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month and (v) Swingline Loans may not be extended or converted
pursuant to this Section 3.2. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the Agent
specified in SCHEDULE 2.1(a), or at such other office as the Agent may designate
in writing, prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business
Day of, in the case of the conversion of a Eurodollar Loan into a Base Rate
Loan, and on the third Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan,
the date of the proposed extension or conversion, specifying the date of the

                                       48
<PAGE>

proposed extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if appropriate,
the applicable Interest Periods with respect thereto. In the event the Borrower
fails to request extension or conversion of any Eurodollar Loan in accordance
with this Section 3.2, or any such conversion or extension is not permitted or
required by this Section 3.2, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Loan.

                  3.3      PREPAYMENTS.

                  (a)      VOLUNTARY PREPAYMENTS. The Borrower shall have the
         right to prepay Loans in whole or in part from time to time upon
         providing at least three (3) Business Days' notice to the Agent (which
         notice may be waived by the Agent) other than in connection with
         Revolving Loans; PROVIDED, HOWEVER, that (i) each partial prepayment of
         Loans (other than Swingline Loans) shall be in a minimum principal
         amount of $2,000,000 (or $500,000 in the case of Revolving Loans) and
         integral multiples of $100,000 in excess thereof (or the then remaining
         principal balance of the Revolving Loans, the Tranche A Term Loan or
         the Tranche B Term Loan, as applicable, if less) and (ii) any
         prepayment of the Tranche A Term Loan or the Tranche B Term Loan shall
         be applied ratably to the Tranche A Term Loan and the Tranche B Term
         Loan, with, in each case, 25% of such prepayment being applied to the
         remaining Principal Amortization Payments in direct order of maturities
         thereof and 75% of such prepayment being applied ratably to the
         remaining Principal Amortization Payments thereof. Subject to the
         foregoing terms, amounts prepaid under this Section 3.3(a) shall be
         applied as the Borrower may elect; PROVIDED that if the Borrower shall
         fail to specify with respect to any voluntary prepayment, such
         voluntary prepayment shall be applied first to Revolving Loans and then
         ratably to the Tranche A Term Loan and the Tranche B Term Loan, in each
         case first to Base Rate Loans and then to Eurodollar Loans in direct
         order of Interest Period maturities. All prepayments under this Section
         3.3(a) shall be subject to Section 3.12, but otherwise without premium
         or penalty, and, in the case of Eurodollar Loans, shall be accompanied
         by interest on the principal amount prepaid through the date of
         prepayment.

                  (b)      MANDATORY PREPAYMENTS.

                           (i)      (A) REVOLVING COMMITTED AMOUNT. If at any
                  time, the sum of the aggregate outstanding principal amount
                  of Revolving Loans PLUS LOC Obligations PLUS Swingline Loans
                  shall exceed the Revolving Committed Amount, the Borrower
                  immediately shall prepay the Revolving Loans and (after all
                  Revolving Loans have been repaid) cash collateralize the LOC
                  Obligations, in an amount sufficient to eliminate such excess.

                                    (B)      LOC COMMITTED AMOUNT. If at any
                  time, the sum of the aggregate principal amount of LOC
                  Obligations shall exceed the LOC Committed Amount, the
                  Borrower immediately shall cash collateralize the LOC
                  Obligations in an amount sufficient to eliminate such excess.

                           (ii)     EXCESS CASH FLOW. Within 105 days after the
                  end of each fiscal year (commencing with the fiscal year
                  ending December 31, 2001), the Borrower shall

                                       49
<PAGE>

                  prepay the Loans in an amount equal to (A) 75% (if the
                  Leverage Ratio as of the end of such fiscal year is equal to
                  or greater than 3.50 to 1.00) or 50% (if the Leverage Ratio as
                  of the end of such fiscal year is less than 3.50 to 1.00) of
                  Excess Cash Flow for such prior fiscal year MINUS (B) the
                  amount of any voluntary prepayments made during such fiscal
                  year of the Tranche A Term Loan, the Tranche B Term Loan or
                  (to the extent accompanied by a permanent reduction in the
                  Revolving Committed Amount) the Revolving Loans (such
                  prepayment to be applied as set forth in clause (vi) below).

                           (iii)    (A) ASSET DISPOSITIONS. Immediately upon the
                  occurrence of any Asset Disposition Prepayment Event, the
                  Borrower shall prepay the Loans in an aggregate amount equal
                  to (1) if the related Asset Disposition is not an Acquired
                  Non-Core Asset Disposition, 100% of the Net Cash Proceeds of
                  such Asset Disposition not applied (or caused to be applied)
                  by the Credit Parties during the related Application Period to
                  make Eligible Reinvestments or (2) if the related Asset
                  Disposition is an Acquired Non-Core Asset Disposition, 100% of
                  the Net Cash Proceeds of such Asset Disposition (in each case,
                  such prepayment to be applied as set forth in clause (vi)
                  below).

                                    (B)      INVOLUNTARY DISPOSITIONS.
                  Immediately upon the occurrence of an Involuntary Disposition
                  Prepayment Event, the Borrower shall prepay the Loans in an
                  aggregate amount equal to 100% of the Excess Proceeds (such
                  prepayment to be applied as set forth in clause (vi) below).

                           (iv)     DEBT ISSUANCES. Immediately upon the
                  occurrence of a Debt Issuance Prepayment Event, the Borrower
                  shall prepay the Loans in an aggregate amount equal to 100% of
                  the Net Cash Proceeds of the related Debt Issuance (such
                  prepayment to be applied as set forth in clause (vi) below).

                           (v)      EQUITY ISSUANCES. Immediately upon the
                  occurrence of an Equity Issuance Prepayment Event, the
                  Borrower shall prepay the Loans in an aggregate amount equal
                  to the lesser of (A) 50% of the Net Cash Proceeds of the
                  related Equity Issuance or (B) except in the case of a
                  Qualifying IPO, the Net Cash Proceeds not applied to make
                  Eligible Reinvestments during the Application Period (such
                  prepayment to be applied as set forth in clause (vi) below).

                           (vi)     APPLICATION OF MANDATORY PREPAYMENTS. All
                  amounts required to be paid pursuant to this Section 3.3(b)
                  shall be applied as follows: (A) with respect to all amounts
                  prepaid pursuant to Section 3.3(b)(i)(A), to Revolving Loans
                  and (after all Revolving Loans have been repaid) to a cash
                  collateral account in respect of LOC Obligations, (B) with
                  respect to all amounts prepaid pursuant to Section
                  3.3(b)(i)(B), to a cash collateral account in respect of LOC
                  Obligations, (C) with respect to all amounts prepaid pursuant
                  to Section 3.3(b)(ii), FIRST, pro rata to the Tranche A Term
                  Loan and the Tranche B Term Loan (with, in each case, 25% of
                  such prepayment being applied to the remaining Principal
                  Amortization Payments in direct order of maturities thereof
                  and 75% of such prepayment being applied ratably to the
                  remaining Principal Amortization Payments thereof) and SECOND,
                  to the Revolving

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<PAGE>

                  Loans and (after all Revolving Loans have been repaid) to a
                  cash collateral account in respect of LOC Obligations (without
                  any reduction in the Revolving Committed Amount), (D) with
                  respect to all amounts prepaid pursuant to Section
                  3.3(b)(iii)(A)(1) and 3.3(b)(iii)(B), FIRST, pro rata to the
                  Tranche A Term Loan and the Tranche B Term Loan (in each case
                  ratably to remaining Principal Amortization Payments) and
                  SECOND, to the Revolving Loans and (after all Revolving Loans
                  have been repaid) to a cash collateral account in respect of
                  LOC Obligations (with a corresponding reduction in the
                  Revolving Committed Amount in an amount equal to all amounts
                  applied pursuant to this clause (D)), (E) with respect to all
                  amounts prepaid pursuant to Section 3.3(b)(iii)(A)(2), FIRST,
                  to the Revolving Loans and (after all Revolving Loans have
                  been repaid) to a cash collateral account in respect of LOC
                  Obligations (without any reduction in the Revolving Committed
                  Amount) and SECOND, pro rata to the Tranche A Term Loan and
                  the Tranche B Term Loan (in each case ratably to remaining
                  Principal Amortization Payments), (F) with respect to all
                  amounts prepaid pursuant to Section 3.3(b)(iv), FIRST, pro
                  rata to the Tranche A Term Loan and the Tranche B Term Loan
                  (in each case to remaining Principal Amortization Payments in
                  inverse order of maturities thereof) and SECOND, to the
                  Revolving Loans (without any reduction in the Revolving
                  Committed Amount) and (G) with respect to all amounts prepaid
                  pursuant to Section 3.3(b)(v), FIRST, pro rata to the Tranche
                  A Term Loan and the Tranche B Term Loan (in each case ratably
                  to remaining Principal Amortization Payments thereof) and
                  SECOND, to the Revolving Loans (without any reduction in the
                  Revolving Committed Amount). Solely for purposes of
                  determining the pro rata share of the Lenders in connection
                  with any prepayment referred to in this subclause (D) of this
                  clause (vi), the outstanding principal amount of all Revolving
                  Loans and LOC Obligations of any Lender which then holds
                  outstanding Tranche A Term Loans shall be deemed to be
                  additional Tranche A Term Loan principal owing to such Lender.
                  Within the parameters of the applications set forth above,
                  prepayments shall be applied first to Base Rate Loans and then
                  to Eurodollar Loans in direct order of Interest Period
                  maturities. All prepayments under this Section 3.3(b) shall be
                  subject to Section 3.12, but otherwise without premium or
                  penalty, and shall, in the case of Eurodollar Loans, be
                  accompanied by interest on the principal amount prepaid
                  through the date of prepayment.

                           (vii)    PREPAYMENT ACCOUNT. If the Borrower is
                  required to make a mandatory prepayment of Eurodollar Loans
                  under this Section 3.3(b), the Borrower shall have the right,
                  in lieu of making such prepayment in full, to deposit an
                  amount equal to such mandatory prepayment with the Agent in a
                  cash collateral account maintained (pursuant to documentation
                  reasonably satisfactory to the Agent) by and in the sole
                  dominion and control of the Agent. Any amounts so deposited
                  shall be held by the Agent as collateral for the prepayment of
                  such Eurodollar Loans and shall be applied to the prepayment
                  of the applicable Eurodollar Loans at the end of the current
                  Interest Periods applicable thereto or, subject to the terms
                  of Section 3.12, as earlier requested in writing by the
                  Borrower. At the request of the Borrower, amounts so deposited
                  shall be invested by the Agent in Cash Equivalents maturing
                  prior to the date or dates on which it is anticipated that
                  such amounts will be applied to prepay such Eurodollar Loans;
                  any interest earned on such Cash Equivalents will be for the
                  account of the

                                       51
<PAGE>

                  Borrower and the Borrower will deposit with the Agent the
                  amount of any loss on any such Cash Equivalents to the extent
                  necessary in order that the amount of the prepayment to be
                  made with the deposited amounts may not be reduced.

                           (viii)   NOTICE OF MANDATORY PREPAYMENTS. The
                  Borrower agrees to use reasonable efforts to notify the Agent
                  of any mandatory prepayments of the Loans required to be made
                  pursuant to this Section 3.3(b).

                  3.4      TERMINATION AND REDUCTION OF REVOLVING COMMITTED
         AMOUNT.

                  (a)      VOLUNTARY REDUCTIONS. The Borrower may from time to
         time permanently reduce or terminate the Revolving Committed Amount in
         whole or in part (in minimum aggregate amounts of $2,500,000 or in
         integral multiples of $100,000 in excess thereof (or, if less, the full
         remaining amount of the then applicable Revolving Committed Amount))
         upon five Business Days' prior written notice to the Agent; PROVIDED,
         HOWEVER, no such termination or reduction shall be made which would
         cause the sum of the aggregate outstanding principal amount of
         Revolving Loans PLUS LOC Obligations PLUS Swingline Loans to exceed the
         Revolving Committed Amount, unless, concurrently with such termination
         or reduction, the Revolving Loans are repaid to the extent necessary to
         eliminate such excess. The Agent shall promptly notify each affected
         Lender of receipt by the Agent of any notice from the Borrower pursuant
         to this Section 3.4(a).

                  (b)      TERM LOAN COMMITMENTS. The Tranche A Term Loan
         Commitment of each Lender, if any, shall automatically terminate at
         such time as such Lender shall have made available to the Borrower such
         Lender's share of the Tranche A Term Loan, and the Tranche B Term Loan
         Commitment of each Lender, if any, shall automatically terminate at
         such time as such Lender shall have made available to the Borrower such
         Lender's share of the Tranche B Term Loan.

                  (c)      MANDATORY REDUCTIONS. The Revolving Committed Amount
         and the Swingline Committed Amount automatically shall be permanently
         reduced from time to time in accordance with the terms of Section
         3.3(b)(vi).

                  (d)      MATURITY DATE. Unless terminated sooner pursuant to
         Section 3.4(a) or Section 9.2, the Revolving Commitments of the Lenders
         and the LOC Commitment of the Issuing Lender shall automatically
         terminate on the Maturity Date.

                  (e) GENERAL. The Borrower shall pay to the Agent for the
         account of the Lenders (except to the extent that any Lender was a
         Defaulting Lender during the applicable period in which such fee
         accrued) in accordance with the terms of Section 3.5(a), on the date of
         each termination or reduction of the Revolving Committed Amount, the
         Unused Fee accrued through the date of such termination or reduction on
         the amount of the Revolving Committed Amount so terminated or reduced.

                  3.5      FEES.

                  (a)      UNUSED FEE. In consideration of the Revolving
         Commitments of the Lenders hereunder, the Borrower hereby promises to
         pay to the Agent for the account of each Lender

                                       52
<PAGE>

         (except to the extent that any Lender was a Defaulting Lender during
         the applicable period in which such fee accrued) a fee (the "UNUSED
         FEE") on the Unused Revolving Committed Amount computed at a per annum
         rate for each day during the applicable Unused Fee Calculation Period
         (hereinafter defined) at a rate equal to the Applicable Percentage in
         effect from time to time. The Unused Fee shall commence to accrue on
         the Closing Date and shall be due and payable in arrears on the last
         Business Day of each March, June, September and December (and on any
         date that the Revolving Committed Amount is reduced pursuant to Section
         3.4(a) and on the Maturity Date) for the immediately preceding quarter
         (or portion thereof) (each such quarter or portion thereof for which
         the Unused Fee is payable hereunder being herein referred to as an
         "UNUSED FEE CALCULATION PERIOD"), beginning with the first of such
         dates to occur after the Closing Date.

                  (b)      LETTER OF CREDIT FEES.

                           (i)      STANDBY LETTER OF CREDIT ISSUANCE FEE. In
                  consideration of the issuance of standby Letters of Credit
                  hereunder, the Borrower hereby promises to pay to the Agent
                  for the account of each Lender (except to the extent that any
                  Lender was a Defaulting Lender during the applicable period in
                  which such fee accrued) a fee (the "STANDBY LETTER OF CREDIT
                  FEE") on such Lender's Revolving Commitment Percentage of the
                  average daily maximum amount available to be drawn under each
                  such standby Letter of Credit computed at a per annum rate for
                  each day from the date of issuance to the date of expiration
                  equal to the Applicable Percentage. The Standby Letter of
                  Credit Fee will be payable quarterly in arrears on the last
                  Business Day of each March, June, September and December for
                  the immediately preceding quarter (or a portion thereof).

                           (ii)     TRADE LETTER OF CREDIT DRAWING FEE. In
                  consideration of the issuance of trade Letters of Credit
                  hereunder, the Borrower hereby promises to pay to the Agent
                  for the account of each Lender (except to the extent that any
                  Lender was a Defaulting Lender during the applicable period in
                  which such fee accrued) a fee (the "TRADE LETTER OF CREDIT
                  FEE") on such Lender's Revolving Commitment Percentage of the
                  average daily maximum amount available to be drawn under each
                  such trade Letter of Credit computed at a per annum rate for
                  each day from the date of issuance to the date of expiration
                  equal to the Applicable Percentage. The Trade Letter of Credit
                  Fee will be payable quarterly in arrears on the last Business
                  Day of each March, June, September and December for the
                  immediately preceding quarter (or a portion thereof).

                           (iii)    ISSUING LENDER FEES. In addition to the
                  Standby Letter of Credit Fee payable pursuant to clause (i)
                  above and the Trade Letter of Credit Fee payable pursuant to
                  clause (ii) above, the Borrower hereby promises to pay to the
                  Agent for the account of the Issuing Lender without sharing by
                  the other Lenders (i) a letter of credit fronting fee of
                  0.125% on the average daily maximum amount available to be
                  drawn under each Letter of Credit computed at a per annum rate
                  for each day from the date of issuance to the date of
                  expiration (which fronting fee shall be payable quarterly in
                  arrears on the last Business Day of each March, June,
                  September and December for the immediately preceding quarter
                  (or a portion thereof)) and (ii) the customary charges from
                  time to time of the Issuing Lender with respect to the

                                       53
<PAGE>

                  issuance, amendment, transfer, administration, cancellation
                  and conversion of, and drawings under, such Letters of Credit.

                  (c)      AGENT'S FEES. The Borrower hereby (i) absolutely
         accepts and assumes all of the duties, obligations and liabilities of
         the Sponsor in, to and under the Agent's Fee Letter to the same extent
         as if the Borrower had executed the Agent's Fee Letter and (ii)
         promises to pay to the Agent, for its own account and for the account
         of Banc of America Securities LLC, as applicable, the fees referred to
         in the Agent's Fee Letter.

                  3.6      CAPITAL ADEQUACY.

                  (a)      If any Lender has determined, after the date hereof,
         that the adoption or the becoming effective of, or any change in, or
         any change by any Governmental Authority, central bank or comparable
         agency charged with the interpretation or administration thereof in the
         interpretation or administration of, any applicable law, rule or
         regulation regarding capital adequacy, or compliance by such Lender
         with any request or directive regarding capital adequacy (whether or
         not having the force of law) of any such authority, central bank or
         comparable agency, has or would have the effect of reducing the rate of
         return on such Lender's capital or assets as a consequence of its
         commitments or obligations hereunder to a level below that which such
         Lender could have achieved but for such adoption, effectiveness, change
         or compliance (taking into consideration such Lender's policies with
         respect to capital adequacy) by an amount deemed by such Lender to be
         material, then, upon notice from such Lender through the Agent to the
         Borrower setting forth in reasonable detail the charge and the
         calculation of such reduced rate of return to the Borrower, the
         Borrower shall be obligated to pay to such Lender such additional
         amount or amounts as will compensate such Lender for such reduction to
         the extent that such Lender reasonably determines that such additional
         amount is allocable to the existence of such Lender's commitments or
         obligations hereunder. Each determination by any such Lender of amounts
         owing under this Section shall, absent demonstrable error, be
         conclusive and binding on the parties hereto.

                  (b)      The Borrower shall not be required to compensate a
         Lender pursuant to this Section 3.6 for any additional amounts incurred
         more than 180 days prior to the date that such Lender notifies the
         Borrower of the change of law giving rise to such additional amounts
         and of such Lender's intention to claim compensation therefor; PROVIDED
         that, if the change of law giving rise to such additional amounts is
         retroactive, then such 180-day period referred to above shall be
         extended to include the period of retroactive effect thereof.

                  3.7      LIMITATION ON EURODOLLAR LOANS.

         If on or prior to the first day of any Interest Period for any
         Eurodollar Loan:

                  (a)      the Agent determines (which determination shall be
         conclusive) that by reason of circumstances affecting the relevant
         market, adequate and reasonable means do not exist for ascertaining the
         Eurodollar Rate for such Interest Period; or

                                       54
<PAGE>

                  (b)      the Required Lenders determine (which determination
         shall be conclusive) and notify the Agent that the Eurodollar Rate will
         not adequately and fairly reflect the cost to the Lenders of funding
         Eurodollar Loans for such Interest Period;

then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement. The Agent or the
Required Lenders, as the case may be, will withdraw such determination pursuant
to this Section promptly as circumstances allow.

                  3.8      ILLEGALITY.

         Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable). Each Lender will designate a different Applicable Lending Office if
such designation will permit such Lender to continue to make, maintain, or fund
Eurodollar Loans hereunder and will not, in the judgment of such Lender, be
otherwise materially disadvantageous to it.

                  3.9      REQUIREMENTS OF LAW.

                  (a)      If, after the date hereof, the adoption of any
         applicable law, rule, or regulation, or any change in any applicable
         law, rule, or regulation, or any change in the interpretation or
         administration thereof by any Governmental Authority, central bank, or
         comparable agency charged with the interpretation or administration
         thereof, or compliance by any Lender (or its Applicable Lending Office)
         with any request or directive (whether or not having the force of law)
         of any such Governmental Authority, central bank, or comparable agency:

                  (i)      shall subject such Lender (or its Applicable Lending
         Office) to any tax, duty, or other charge with respect to any
         Eurodollar Loans or its obligation to make Eurodollar Loans, or change
         the basis of taxation of any amounts payable to such Lender (or its
         Applicable Lending Office) under this Credit Agreement in respect of
         any Eurodollar Loans (other than Taxes defined in Section 3.11(a) and
         taxes imposed on the overall net income of such Lender by the
         jurisdiction in which such Lender has its principal office or such
         Applicable Lending Office);

                  (ii)     shall impose, modify, or deem applicable any reserve,
         special deposit, assessment, or similar requirement (other than the
         Eurodollar Reserve Requirement utilized in the determination of the
         Adjusted Eurodollar Rate) relating to any extensions of credit or other
         assets of, or any deposits with or other liabilities

                                       55
<PAGE>

         or commitments of, such Lender (or its Applicable Lending Office),
         including the Commitment of such Lender hereunder; or

                  (iii)    shall impose on such Lender (or its Applicable
         Lending Office) or the London interbank market any other condition
         affecting this Credit Agreement or any of such extensions of credit or
         liabilities or commitments;

         and the result of any of the foregoing is to increase, by an amount
         deemed by such Lender (or its Applicable Lending Office) to be
         material, the cost to such Lender (or its Applicable Lending Office) of
         making, Converting into, Continuing, or maintaining any Eurodollar
         Loans or to reduce any sum received or receivable by such Lender (or
         its Applicable Lending Office) under this Credit Agreement with respect
         to any Eurodollar Loans, then the Borrower shall pay to such Lender on
         demand such amount or amounts as will compensate such Lender for such
         increased cost or reduction. If any Lender requests compensation by the
         Borrower under this Section 3.9, the Borrower may, by notice to such
         Lender (with a copy to the Agent), suspend the obligation of such
         Lender to make or Continue Eurodollar Loans, or to Convert Base Rate
         Loans into Eurodollar Loans, until the event or condition giving rise
         to such request ceases to be in effect (in which case the provisions of
         Section 3.10 shall be applicable); PROVIDED that such suspension shall
         not affect the right of such Lender to receive the compensation so
         requested. Each Lender shall promptly notify the Borrower and the Agent
         of any event of which it has knowledge, occurring after the date
         hereof, which will entitle such Lender to compensation pursuant to this
         Section 3.9 and will designate a different Applicable Lending Office if
         such designation will avoid the need for, or reduce the amount of, such
         compensation and will not, in the judgment of such Lender, be otherwise
         materially disadvantageous to it. Any Lender claiming compensation
         under this Section 3.9 shall furnish to the Borrower and the Agent a
         statement setting forth in reasonable detail the additional amount or
         amounts to be paid to it hereunder which shall be conclusive in the
         absence of demonstrable error. In determining such amount, such Lender
         may use any reasonable averaging and attribution methods.

                  (c)      The Borrower shall not be required to compensate a
         Lender pursuant to this Section 3.9 for any increased costs or
         reductions incurred more than 180 days prior to the date that such
         Lender notifies the Borrower of the change of law giving rise to such
         increased costs or reductions and of such Lender's intention to claim
         compensation therefor; PROVIDED that, if the change of law giving rise
         to such increased costs or reductions is retroactive, then such 180-day
         period referred to above shall be extended to include the period of
         retroactive effect thereof.

                  3.10     TREATMENT OF AFFECTED LOANS.

         If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.7, 3.8 or 3.9 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for such Eurodollar Loans (or, in the
case of a Conversion required by Section 3.8, on such earlier date as required
by law as such Lender may specify to the Borrower with a copy to the Agent) and,
unless and until such Lender gives notice as provided below that the
circumstances specified in Section 3.7, 3.8 or 3.9 hereof that gave rise to such
Conversion no longer exist:

                                       56
<PAGE>

                  (a)      to the extent that such Lender's Eurodollar Loans
         have been so Converted, all payments and prepayments of principal that
         would otherwise be applied to such Lender's Eurodollar Loans shall be
         applied instead to its Base Rate Loans; and

                  (b)      all Loans that would otherwise be made or Continued
         by such Lender as Eurodollar Loans shall be made or Continued instead
         as Base Rate Loans, and all Base Rate Loans of such Lender that would
         otherwise be Converted into Eurodollar Loans shall remain as Base Rate
         Loans.

If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.7, 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.

                  3.11     TAXES.

                  (a)      Except as otherwise provided herein, any and all
         payments by any Credit Party to or for the account of any Lender or the
         Agent hereunder or under any other Credit Document shall be made free
         and clear of and without deduction for any and all present or future
         taxes, duties, levies, imposts, deductions, charges or withholdings,
         and all liabilities with respect thereto, EXCLUDING, in the case of
         each Lender and the Agent, taxes imposed on it as a result of a present
         or former connection between the Agent or such Lender and the
         jurisdiction of the Governmental Authority imposing such tax or any
         political subdivision or taxing authority thereof or therein (other
         than any such connection arising solely from the Agent or such Lender
         having executed, delivered or performed its obligations or received a
         payment under, or enforced this Credit Agreement or any other Credit
         Document) (all such non-excluded taxes, duties, levies, imposts,
         deductions, charges, withholdings, and liabilities being hereinafter
         referred to as "TAXES"). If any Credit Party shall be required by law
         to deduct any Taxes from or in respect of any sum payable under this
         Credit Agreement or any other Credit Document to any Lender or the
         Agent, (i) the sum payable shall be increased as necessary so that
         after making all required deductions of Taxes (including deductions
         applicable to additional sums payable under this Section 3.11) such
         Lender or the Agent receives an amount equal to the sum it would have
         received had no such deductions been made, (ii) such Credit Party shall
         make such deductions, (iii) such Credit Party shall pay the full amount
         deducted to the relevant taxation authority or other authority in
         accordance with applicable law, and (iv) such Credit Party shall
         furnish to the Agent, at its address referred to in Section 11.1, the
         original or a certified copy of a receipt evidencing payment thereof.
         Notwithstanding the foregoing, no additional sums shall be payable
         pursuant to this Section 3.11(a) with respect to Taxes (A) that are
         attributable to such Lender's failure to comply with Section 3.11(d),
         (B) that are United States withholding taxes imposed on amounts payable
         to such Lender at the time the Lender

                                       57
<PAGE>

         becomes a party to this Credit Agreement or (C) unless imposed as a
         result of a change in treaty, law or regulation.

                  (b)      In addition, the Borrower agrees to pay any and all
         present or future stamp or documentary taxes and any other excise or
         property taxes or charges or similar levies which arise from any
         payment made under this Credit Agreement or any other Credit Document
         or from the execution or delivery of, or otherwise with respect to,
         this Credit Agreement or any other Credit Document (hereinafter
         referred to as "OTHER TAXES").

                  (c)      The Borrower agrees to indemnify each Lender and the
         Agent for the full amount of Taxes and Other Taxes (including, without
         limitation, any Taxes or Other Taxes imposed or asserted by any
         jurisdiction on amounts payable under this Section 3.11) paid by such
         Lender or the Agent (as the case may be) and any liability (including
         penalties, interest, and expenses) arising therefrom or with respect
         thereto.

                  (d)      Each Lender that is not a United States person under
         Section 7701(a)(30) of the Code, on or prior to the date of its
         execution and delivery of this Credit Agreement in the case of each
         Lender listed on the signature pages hereof and on or prior to the date
         on which it becomes a Lender in the case of each other Lender, and from
         time to time thereafter if requested in writing by the Borrower or the
         Agent (but only so long as such Lender remains lawfully able to do so),
         shall provide the Borrower and the Agent with (i) Internal Revenue
         Service Form W-8 BEN or W-8 ECI, as appropriate, or any successor form
         prescribed by the Internal Revenue Service, certifying that such Lender
         is entitled to benefits under an income tax treaty to which the United
         States is a party which reduces to zero the rate of withholding tax on
         payments of interest or certifying that the income receivable pursuant
         to this Credit Agreement is effectively connected with the conduct of a
         trade or business in the United States, (ii) Internal Revenue Service
         Form W-8 or W-9, as appropriate, or any successor form prescribed by
         the Internal Revenue Service, and/or (iii) any other form or
         certificate required by any taxing authority (including any certificate
         required by Sections 871(h) and 881(c) of the Code), certifying that
         such Lender is entitled to an exemption from tax on payments pursuant
         to this Credit Agreement or any of the other Credit Documents. In
         addition, each Lender shall deliver such forms promptly upon the
         obsolescence or invalidity of any form previously delivered by such
         Lender. Each Lender shall promptly notify the Borrower at any time it
         determines that it is no longer in a position to provide any previously
         delivered form to the Borrower (or any other form adopted by the United
         States taxing authorities for such purposes).

                  (e)      For any period with respect to which a Lender has
         failed to provide the Borrower and the Agent with the appropriate form
         pursuant to Section 3.11(d) (unless such failure is due to a change in
         treaty, law, or regulation occurring subsequent to the date on which a
         form originally was required to be provided), such Lender shall not be
         entitled to indemnification under Section 3.11(a) or 3.11(b) with
         respect to Taxes imposed by the United States; PROVIDED, HOWEVER, that
         should a Lender, which is otherwise exempt from withholding tax, become
         subject to Taxes because of its failure to deliver a form required
         hereunder, the Borrower shall take such steps as such Lender shall
         reasonably request to assist such Lender to recover such Taxes.

                                       58
<PAGE>

                  (f)      If any Credit Party is required to pay additional
         amounts to or for the account of any Lender pursuant to this Section
         3.11, then such Lender will agree to use reasonable efforts to change
         the jurisdiction of its Applicable Lending Office so as to eliminate or
         reduce any such additional payment which may thereafter accrue if such
         change, in the judgment of such Lender, is not otherwise materially
         disadvantageous to such Lender.

                  (g)      Without prejudice to the survival of any other
         agreement of the Credit Parties hereunder, the agreements and
         obligations of the Credit Parties contained in this Section 3.11 shall
         survive the repayment of the Loans, LOC Obligations and other
         obligations under the Credit Documents and the termination of the
         Commitments hereunder.

                  (h)      If the Agent or any Lender receives a refund with
         respect to Taxes paid by the Borrower, which in the good faith judgment
         of such Lender is allocable to such payment, the Agent or Lender,
         respectively shall promptly pay such refund, together with any other
         amounts paid by the Borrower in connection with such refunded Taxes, to
         the Borrower, net of all out-of-pocket expenses of such Lender incurred
         in obtaining such refund, PROVIDED, HOWEVER, that the Borrower agrees
         to promptly return such refund to the Agent or the applicable Lender,
         as the case may be, if it receives notice from the Agent or applicable
         Lender that such Agent or Lender is required to repay such refund. Each
         of the Agent and each Lender agrees that it will contest such Taxes or
         liabilities if the Agent or such Lender determines, in its reasonable
         judgment, that it would not be materially disadvantaged or prejudiced
         as a result of such contest.

                  3.12     COMPENSATION.

         Upon the request of any Lender, the Borrower shall pay to such Lender
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (excluding loss of
anticipated profits) incurred by it as a result of:

                  (a)      any payment, prepayment, or Conversion of a
         Eurodollar Loan or Quoted Rate Swingline Loan for any reason (other
         than in connection with any assignment by any Lender pursuant to
         Section 11.3(b), but including acceleration of the Loans pursuant to
         Section 9.2) on a date other than the last day of the Interest Period
         for such Loan; or

                  (b)      any failure by the Borrower for any reason
         (including, without limitation, the failure of any condition precedent
         specified in Section 5 to be satisfied) to borrow, Convert, Continue,
         or prepay a Eurodollar Loan or Quoted Rate Swingline Loan on the date
         for such borrowing, Conversion, Continuation, or prepayment specified
         in the relevant notice of borrowing, prepayment, Continuation, or
         Conversion under this Credit Agreement.

With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest (other than the
Applicable Percentage) which would have accrued on the amount so prepaid, or not
so borrowed, Converted or Continued, for the period from the date of such
prepayment or of such failure to borrow, Convert or Continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, Convert
or Continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein (excluding, however, the Applicable

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Percentage included therein, if any) over (b) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. Any Lender claiming
compensation under this Section 3.12 shall furnish to the Borrower and the Agent
a statement setting forth in reasonable detail the calculation of the amounts to
be paid to it hereunder. The covenants of the Borrower set forth in this Section
3.12 shall survive the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder; PROVIDED, HOWEVER, the Borrower shall not be required to compensate a
Lender pursuant to this Section 3.12 for any such loss, cost or expense incurred
more than 180 days prior to the date that such Lender notifies the Borrower of
the incurrence of such loss, cost or expense.

                  3.13     PRO RATA TREATMENT.

         Except to the extent otherwise provided herein:

                  (a)      LOANS. Each Loan, each payment or (subject to the
         terms of Section 3.3) prepayment of principal of any Loan or
         reimbursement obligations arising from drawings under Letters of
         Credit, each payment of interest on the Loans or reimbursement
         obligations arising from drawings under Letters of Credit, each payment
         of Unused Fees, each payment of the Standby Letter of Credit Fee, each
         payment of the Trade Letter of Credit Fee, each reduction of the
         Revolving Committed Amount and each conversion or extension of any
         Loan, shall be allocated pro rata among the Lenders in accordance with
         the respective principal amounts of their outstanding Loans of the
         applicable type and Participation Interests in Loans of the applicable
         type and Letters of Credit.

                  (b)      ADVANCES. No Lender shall be responsible for the
         failure or delay by any other Lender in its obligation to make its
         ratable share of a borrowing hereunder; PROVIDED, HOWEVER, that the
         failure of any Lender to fulfill its obligations hereunder shall not
         relieve any other Lender of its obligations hereunder. Unless the Agent
         shall have been notified by any Lender prior to the date of any
         requested borrowing that such Lender does not intend to make available
         to the Agent its ratable share of such borrowing to be made on such
         date, the Agent may assume that such Lender has made such amount
         available to the Agent on the date of such borrowing, and the Agent in
         reliance upon such assumption, may (in its sole discretion but without
         any obligation to do so) make available to the Borrower a corresponding
         amount. If such corresponding amount is not in fact made available to
         the Agent, the Agent shall be able to recover such corresponding amount
         from such Lender. If such Lender does not pay such corresponding amount
         forthwith upon the Agent's demand therefor, the Agent will promptly
         notify the Borrower, and the Borrower shall promptly pay such
         corresponding amount to the Agent. The Agent shall also be entitled to
         recover from the Lender or the Borrower, as the case may be, interest
         on such corresponding amount in respect of each day from the date such
         corresponding amount was made available by the Agent to the Borrower to
         the date such corresponding amount is recovered by the Agent at a per
         annum rate equal to (i) from the Borrower at the applicable rate for
         the applicable borrowing pursuant to the Notice of Borrowing and (ii)
         from a Lender at the Federal Funds Rate.

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                  3.14     SHARING OF PAYMENTS.

         The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law and in a manner not inconsistent
with this Credit Agreement, exercise all rights of payment, including setoff,
banker's lien or counterclaim, with respect to such Participation Interest as
fully as if such Lender were a holder of such Loan, LOC Obligations or other
obligation in the amount of such Participation Interest. Except as otherwise
expressly provided in this Credit Agreement, if any Lender shall fail to remit
to the Agent or any other Lender an amount payable by such Lender to the Agent
or such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to
the Agent or such other Lender at a rate per annum equal to the Federal Funds
Rate. If under any applicable bankruptcy, insolvency or other similar law, any
Lender receives a secured claim in lieu of a setoff to which this Section 3.14
applies, such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders under this Section 3.14 to share in the benefits of any recovery on such
secured claim.

                  3.15     PAYMENTS, COMPUTATIONS, ETC.

                  (a)      GENERALLY. Except as otherwise specifically provided
         herein, all payments hereunder shall be made to the Agent in Dollars in
         immediately available funds, without setoff, deduction, counterclaim or
         withholding of any kind, at the Agent's office specified in SCHEDULE
         2.1(a) not later than 2:00 P.M. (Charlotte, North Carolina time) on the
         date when due. Payments received after such time shall be deemed to
         have been received on the next succeeding Business Day. The Borrower
         shall, at the time it makes any payment under this Credit Agreement,
         specify to the Agent the Loans, LOC Obligations, Fees, interest or
         other amounts payable by the Borrower hereunder to which such payment
         is to be applied (and in the event that it fails so to specify, or if
         such application would be inconsistent with the terms hereof, the Agent
         shall distribute such payment to the Lenders in such manner as the
         Agent may determine to be appropriate in respect of obligations owing
         by the Borrower hereunder, subject to the terms of Sections 3.3 and
         3.13(a)). The Agent will distribute such

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         payments to such Lenders, if any such payment is received prior to 2:00
         P.M. (Charlotte, North Carolina time) on a Business Day in like funds
         as received prior to the end of such Business Day and otherwise the
         Agent will distribute such payment to such Lenders on the next
         succeeding Business Day. Whenever any payment hereunder shall be stated
         to be due on a day which is not a Business Day, the due date thereof
         shall be extended to the next succeeding Business Day (subject to
         accrual of interest and Fees for the period of such extension), except
         that in the case of Eurodollar Loans, if the extension would cause the
         payment to be made in the next following calendar month, then such
         payment shall instead be made on the next preceding Business Day.
         Except as expressly provided otherwise herein, all computations of
         interest and fees shall be made on the basis of actual number of days
         elapsed over a year of 360 days, except with respect to computation of
         interest on Base Rate Loans which shall be calculated based on a year
         of 365 or 366 days, as appropriate. Interest shall accrue from and
         include the date of borrowing, but exclude the date of payment.

                  (b)      ALLOCATION OF PAYMENTS AFTER ACCELERATION.
         Notwithstanding any other provision of this Credit Agreement to the
         contrary, after acceleration of the Credit Party Obligations pursuant
         to Section 9.2(d), all amounts collected or received by the Agent or
         any Lender on account of the Credit Party Obligations or in respect of
         the Collateral shall be paid over or delivered as follows:

                           FIRST, to the payment of all reasonable out-of-pocket
                  costs and expenses (including without limitation reasonable
                  attorneys' fees) of the Agent in connection with enforcing the
                  rights of the Lenders under the Credit Documents and any
                  protective advances made by the Agent with respect to the
                  Collateral under or pursuant to the terms of the Collateral
                  Documents;

                           SECOND, to payment of any fees payable to the Agent
                  then due and owing;

                           THIRD, to the payment of all of the Credit Party
                  Obligations consisting of accrued fees and interest;

                           FOURTH, to the payment of the outstanding principal
                  amount of the Credit Party Obligations (including the payment
                  or cash collateralization of the outstanding LOC Obligations);

                           FIFTH, to the payment of all reasonable out-of-pocket
                  costs and expenses (including without limitation, reasonable
                  attorneys' fees) of each of the Lenders in connection with
                  enforcing its rights under the Credit Documents or otherwise
                  with respect to the Credit Party Obligations owing to such
                  Lender;

                           SIXTH, to all other Credit Party Obligations and
                  other obligations which shall have become due and payable
                  under the Credit Documents or otherwise and not repaid
                  pursuant to clauses "FIRST" through "FIFTH" above; and

                           SEVENTH, to the payment of the surplus, if any, to
                  whomever may be lawfully entitled to receive such surplus.

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         In carrying out the foregoing, (i) amounts received shall be applied in
         the numerical order provided until exhausted prior to application to
         the next succeeding category; (ii) each of the Lenders shall receive an
         amount equal to its pro rata share (based on the proportion that the
         then outstanding Loans and LOC Obligations held by such Lender bears to
         the aggregate then outstanding Loans and LOC Obligations) of amounts
         available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
         and "SIXTH" above; and (iii) to the extent that any amounts available
         for distribution pursuant to clause "FIFTH" above are attributable to
         the issued but undrawn amount of outstanding Letters of Credit, such
         amounts shall be held by the Agent in a cash collateral account and
         applied (A) first, to reimburse the Issuing Lender from time to time
         for any drawings under such Letters of Credit and (B) then, following
         the expiration of all Letters of Credit, to all other obligations of
         the types described in clauses "FIFTH" and "SIXTH" above in the manner
         provided in this Section 3.15(b).

                  3.16     EVIDENCE OF DEBT.

                  (a)      Each Lender shall maintain an account or accounts
         evidencing each Loan made by such Lender to the Borrower from time to
         time, including the amounts of principal and interest payable and paid
         to such Lender from time to time under this Credit Agreement. Each
         Lender will make reasonable efforts to maintain the accuracy of its
         account or accounts and to promptly update its account or accounts from
         time to time, as necessary.

                  (b)      The Agent shall maintain the Register pursuant to
         Section 11.3(c), and a subaccount for each Lender, in which Register
         and subaccounts (taken together) shall be recorded (i) the amount, type
         and Interest Period of each such Loan hereunder, (ii) the amount of any
         principal or interest due and payable or to become due and payable to
         each Lender hereunder and (iii) the amount of any sum received by the
         Agent hereunder from or for the account of any Credit Party and each
         Lender's share thereof. The Agent will make reasonable efforts to
         maintain the accuracy of the subaccounts referred to in the preceding
         sentence and to promptly update such subaccounts from time to time, as
         necessary.

                  (c)      The entries made in the accounts, Register and
         subaccounts maintained pursuant to clause (b) of this Section 3.16
         (and, if consistent with the entries of the Agent, clause (a)) shall be
         prima facie evidence of the existence and amounts of the obligations of
         the Credit Parties therein recorded; PROVIDED, HOWEVER, that the
         failure of any Lender or the Agent to maintain any such account, such
         Register or such subaccount, as applicable, or any error therein, shall
         not in any manner affect the obligation of the Credit Parties to repay
         the Credit Party Obligations owing to such Lender.

                  3.17     REPLACEMENT OF AFFECTED LENDERS.

         If (i) any Lender having a Revolving Commitment becomes a Defaulting
Lender or otherwise defaults in its Revolving Commitment, (ii) any Credit Party
is required to make any payments to any Lender under Section 3.6, Section 3.8,
Section 3.9 or Section 3.11 in excess of the proportionate amount (based on the
respective Commitments and/or Loans of the Lenders) of corresponding payments
required to be made to the other Lenders or (iii) in the event of a refusal by a
Lender to consent to a proposed change, waiver, discharge or termination which
requires only the consent of the Required Lenders, the Borrower shall have the
right to replace such

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Lender (the "REPLACED LENDER") with one or more other Eligible Assignee or
Eligible Assignees, none of whom shall constitute a Defaulting Lender at the
time of such replacement (collectively, the "REPLACEMENT LENDER"), PROVIDED that
(a) except in the case of clause (iii) above, no Event of Default then exists,
(b) at the time of any replacement pursuant to this Section 3.17, the Replaced
Lender and Replacement Lender shall enter into an Assignment and Acceptance
pursuant to which the Replacement Lender shall acquire all or a portion, as the
case may be, of the Commitments and outstanding Loans of, and participation in
Letters of Credit by, the Replaced Lender and (c) all obligations of the
Borrower owing to the Replaced Lender relating to the Loans so replaced
(including, without limitation, such increased costs and excluding those
specifically described in clause (b) above in respect of which the assignment
purchase price has been, or is concurrently being paid) shall be paid in full to
such Replaced Lender concurrently with such replacement. Upon the execution of
the appropriate Assignment and Acceptance, the payment of amounts referred to in
clauses (b) and (c) above and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note or Notes executed by
the Borrower, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder with respect to
such replaced Loans, except with respect to indemnification provisions under
this Agreement, which shall survive as to such Replaced Lender. Notwithstanding
anything to the contrary contained above, (1) the Lender that acts as the
Issuing Lender may not be replaced hereunder at any time that it has Letters of
Credit outstanding hereunder unless arrangements satisfactory to the Issuing
Lender (including the furnishing of a back-up standby letter of credit in form
and substance, and issued by an issuer satisfactory to such Issuing Lender or
the depositing of cash collateral into a cash collateral account maintained with
the Agent in amounts and pursuant to arrangements satisfactory to such Issuing
Lender) have been made with respect to such outstanding Letters of Credit and
(2) the Lender that acts as the Agent may not be replaced hereunder except in
accordance with the terms of Section 10.7. The Replaced Lender shall be required
to deliver for cancellation its applicable Notes, if any, to be canceled on the
date of replacement, or if any such Note is lost or unavailable, such other
assurances or indemnification therefor as the Borrower may reasonably request.

                                    SECTION 4

                                    GUARANTY

                  4.1      THE GUARANTY.

         Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided, as primary obligor and not as surety, the prompt
payment of the Credit Party Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Credit Party Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Credit Party Obligations, the same
will be promptly paid in full when due

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(whether at extended maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise) in accordance with the terms of
such extension or renewal.

         Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor under this Credit Agreement and the other Credit Documents shall be
limited to an aggregate amount equal to the largest amount that would not render
such obligations subject to avoidance under Section 548 of the Bankruptcy Code
or any comparable provisions of any applicable state law.

                  4.2      OBLIGATIONS UNCONDITIONAL.

         The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the Credit Party Obligations have been Fully Satisfied. Without
limiting the generality of the foregoing, it is agreed that, to the fullest
extent permitted by law, the occurrence of any one or more of the following
shall not alter or impair the liability of any Guarantor hereunder which shall
remain absolute and unconditional as described above:

                  (a)      at any time or from time to time, without notice to
         any Guarantor, the time for any performance of or compliance with any
         of the Credit Party Obligations shall be extended, or such performance
         or compliance shall be waived;

                  (b)      any of the acts mentioned in any of the provisions of
         any of the Credit Documents, any Hedging Agreement between any
         Consolidated Party and any Lender, or any Affiliate of a Lender, or any
         other agreement or instrument referred to in the Credit Documents or
         such Hedging Agreements shall be done or omitted;

                  (c)      the maturity of any of the Credit Party Obligations
         shall be accelerated, or any of the Credit Party Obligations shall be
         modified, supplemented or amended in any respect, or any right under
         any of the Credit Documents, any Hedging Agreement between any
         Consolidated Party and any Lender, or any Affiliate of a Lender, or any
         other agreement or instrument referred to in the Credit Documents or
         such Hedging Agreements shall be waived or any other guarantee of any
         of the Credit Party Obligations or any security therefor shall be
         released, impaired or exchanged in whole or in part or otherwise dealt
         with;

                  (d)      any Lien granted to, or in favor of, the Agent or any
         Lender or Lenders as security for any of the Credit Party Obligations
         shall fail to attach or be perfected; or

                  (e)      any of the Credit Party Obligations shall be
         determined to be void or voidable (including, without limitation, for
         the benefit of any creditor of any Guarantor) or

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<PAGE>

         shall be subordinated to the claims of any Person (including, without
         limitation, any creditor of any Guarantor).

With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement between any Consolidated Party and any Lender, or any
Affiliate of a Lender, or any other agreement or instrument referred to in the
Credit Documents or such Hedging Agreements, or against any other Person under
any other guarantee of, or security for, any of the Credit Party Obligations.

                  4.3      REINSTATEMENT.

         The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.

                  4.4      CERTAIN ADDITIONAL WAIVERS.

         Without limiting the generality of the provisions of this Section 4,
each Guarantor hereby specifically waives the benefits of N.C. Gen. Stat.
Sections 26-7 through 26-9, inclusive, to the extent applicable. Each
Guarantor further agrees that such Guarantor shall have no right of recourse
to security for the Credit Party Obligations, except through the exercise of
rights of subrogation pursuant to Section 4.2 and through the exercise of
rights of contribution pursuant to Section 4.6.

                  4.5      REMEDIES.

         The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Collateral Documents and that the
Lenders may exercise their remedies thereunder in accordance with the terms
thereof.

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                  4.6      RIGHTS OF CONTRIBUTION.

         The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the Credit Party Obligations until such time
as the Credit Party Obligations have been Fully Satisfied, and none of the
Guarantors shall exercise any right or remedy under this Section 4.6 against any
other Guarantor until such Credit Party Obligations have been Fully Satisfied.
For purposes of this Section 4.6, (a) "EXCESS PAYMENT" shall mean the amount
paid by any Guarantor in excess of its Pro Rata Share of any Guaranteed
Obligations; (b) "PRO RATA SHARE" shall mean, for any Guarantor in respect of
any payment of Credit Party Obligations, the ratio (expressed as a percentage)
as of the date of such payment of Guaranteed Obligations of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of all of the Credit Parties exceeds the amount of all of the debts
and liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Credit Parties hereunder) of
the Credit Parties; PROVIDED, HOWEVER, that, for purposes of calculating the Pro
Rata Shares of the Guarantors in respect of any payment of Credit Party
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall be deemed to have been a Guarantor on the date of such
payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such payment; and (C) "CONTRIBUTION SHARE" shall mean, for any Guarantor in
respect of any Excess Payment made by any other Guarantor, the ratio (expressed
as a percentage) as of the date of such Excess Payment of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Credit Parties other than the maker of such Excess Payment
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Credit Parties) of the Credit Parties other than the maker of
such Excess Payment; PROVIDED, HOWEVER, that, for purposes of calculating the
Contribution Shares of the Guarantors in respect of any Excess Payment, any
Guarantor that became a Guarantor subsequent to the date of any such Excess
Payment shall be deemed to have been a Guarantor on the date of such Excess
Payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such Excess Payment. This Section 4.6 shall not be deemed to affect any
right of subrogation, indemnity, reimbursement or contribution that any
Guarantor may have under applicable law against the Borrower in respect of any
payment of Guaranteed Obligations. Notwithstanding the foregoing, all rights of
contribution against any Guarantor shall terminate from and after such time, if
ever, that such Guarantor shall be relieved of its obligations pursuant to
Section 8.5.

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                  4.7      GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.

         The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.

                                    SECTION 5

                                   CONDITIONS

                  5.1      CLOSING CONDITIONS.

         The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions:

                  (a)      EXECUTED CREDIT DOCUMENTS. Receipt by the Agent of
         duly executed copies of: (i) this Credit Agreement, (ii) the Collateral
         Documents and (iii) all other Credit Documents.

                  (b)      CORPORATE DOCUMENTS. Receipt by the Agent of the
         following:

                           (i)      CHARTER DOCUMENTS. Copies of the articles or
                  certificates of incorporation or other charter documents of
                  each Credit Party certified to be true and complete as of a
                  recent date by the appropriate Governmental Authority of the
                  state or other jurisdiction of its incorporation and certified
                  by a secretary or assistant secretary of such Credit Party to
                  be true and correct as of the Closing Date.

                           (ii)     BYLAWS. A copy of the bylaws of each Credit
                  Party certified by a secretary or assistant secretary of such
                  Credit Party to be true and correct as of the Closing Date.

                           (iii)    RESOLUTIONS. Copies of resolutions of the
                  Board of Directors of each Credit Party approving and adopting
                  the Credit Documents to which it is a party, the transactions
                  contemplated therein and authorizing execution and delivery
                  thereof, certified by a secretary or assistant secretary of
                  such Credit Party to be true and correct and in force and
                  effect as of the Closing Date.

                           (iv)     GOOD STANDING. Copies of (A) certificates of
                  good standing, existence or its equivalent with respect to
                  each Credit Party certified as of a recent date by the
                  appropriate Governmental Authorities of the state or other
                  jurisdiction of incorporation and each other jurisdiction in
                  which the failure to so qualify and be in good standing could
                  have a Material Adverse Effect and (B) to the extent
                  available, a certificate indicating payment of all corporate
                  or comparable franchise taxes certified as of a recent date by
                  the appropriate governmental taxing authorities.

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                           (v)      INCUMBENCY. An incumbency certificate of
                  each Credit Party certified by a secretary or assistant
                  secretary to be true and correct as of the Closing Date.

                  (c)      OPINIONS OF COUNSEL. The Agent shall have received,
         in each case dated as of the Closing Date and in form and substance
         reasonably satisfactory to the Agent:

                           (i)      a legal opinion of Kirkland & Ellis, counsel
                  for the Credit Parties;

                           (ii)     a legal opinion of special Minnesota counsel
                  for the Credit Parties; and

                           (iii)    a legal opinion of special local counsel for
                  the Credit Parties.

                  (d)      PERSONAL PROPERTY COLLATERAL. The Agent shall have
         received:

                           (i)      searches of Uniform Commercial Code filings
                  in the jurisdiction of the chief executive office of each
                  Credit Party and each jurisdiction where a filing would need
                  to be made in order to perfect the Agent's security interest
                  in the Collateral, copies of the financing statements on file
                  in such jurisdictions and evidence that no Liens on the
                  Collateral exist other than Permitted Liens;

                           (ii)     duly executed UCC financing statements for
                  each appropriate jurisdiction as is necessary, in the Agent's
                  reasonable discretion, to perfect the Agent's security
                  interest in the Collateral;

                           (iii)    searches of ownership of, and Liens on,
                  federally registered intellectual property of each Credit
                  Party in the appropriate governmental offices;

                           (iv)     all certificates evidencing any certificated
                  Capital Stock pledged to the Agent pursuant to the Pledge
                  Agreement, together with duly executed in blank, undated stock
                  powers attached thereto (unless, with respect to the pledged
                  Capital Stock of any Foreign Subsidiary, such stock powers are
                  deemed unnecessary by the Agent in its reasonable discretion
                  under the law of the jurisdiction of incorporation of such
                  Person);

                           (v)      duly executed notices of grant of security
                  interest in the form required by the Security Agreement as are
                  necessary, in the Agent's sole discretion, to perfect the
                  Agent's security interest in the Collateral;

                           (vi)     all instruments and chattel paper having a
                  value in excess of $100,000 in the possession of any of the
                  Credit Parties, together with allonges or assignments as may
                  be necessary or appropriate to perfect the Agent's security
                  interest in the Collateral; and

                           (vii)    in the case of any personal property
                  Collateral located at a premises leased by a Credit Party,
                  such estoppel letters, consents and waivers from the landlords
                  on such real property as may be (A) reasonably required by the

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                  Agent and (B) obtainable upon the exercise of commercially
                  reasonable efforts by the Credit Parties.

                  (e)      REAL PROPERTY COLLATERAL. Except with respect to the
         owned Real Properties identified as items 3, 4, 5, 6, 7 and 24 in
         subpart (1) of SCHEDULE 6.20(a), the Agent shall have received the
         following, in form and substance reasonably satisfactory to the Agent:

                           (i)      fully executed and notarized mortgages,
                  deeds of trust or deeds to secure debt (each, as the same may
                  be amended, modified, restated or supplemented from time to
                  time, a "MORTGAGE INSTRUMENT" and collectively the "MORTGAGE
                  INSTRUMENTS") encumbering the fee interest and/or, to the
                  extent available using commercially reasonable efforts,
                  leasehold interest of any Credit Party in each of the Real
                  Properties designated in SCHEDULE 6.20(a) which are not
                  identified on such Schedule as "Excluded Properties" (each a
                  "MORTGAGED PROPERTY" and collectively the "MORTGAGED
                  PROPERTIES");

                           (ii)     in the case of each real property leasehold
                  interest of any Credit Party constituting Mortgaged Property,
                  (a) such estoppel letters, consents and waivers from the
                  landlords on such real property as may be required by the
                  Agent, which estoppel letters shall be in the form and
                  substance reasonably satisfactory to the Agent and (b)
                  evidence that the applicable lease, a memorandum of lease with
                  respect thereto, or other evidence of such lease in form and
                  substance reasonably satisfactory to the Agent, has been or
                  will be recorded in all places to the extent necessary or
                  desirable, in the reasonable judgment of the Agent, so as to
                  enable the Mortgage Instrument encumbering such leasehold
                  interest to effectively create a valid and enforceable first
                  priority lien (subject to Permitted Liens) on such leasehold
                  interest in favor of the Agent (or such other Person as may be
                  required or desired under local law) for the benefit of
                  Lenders;

                           (iii)    with respect to each of the Real Properties
                  identified as items 2, 16, 17, 19, 21, 22, 23, 24, 26 and 27
                  on subpart (1) of SCHEDULE 6.20(a), maps or plats of an
                  as-built survey of the sites of the real property covered by
                  the Mortgage Instruments certified to the Agent and the Title
                  Insurance Company (hereinafter defined) in a manner reasonably
                  satisfactory to each of the Agent and the Title Insurance
                  Company, dated a date reasonably satisfactory to each of the
                  Agent and the Title Insurance Company by an independent
                  professional licensed land surveyor, which maps or plats and
                  the surveys on which they are based shall be sufficient to
                  delete any standard printed survey exception contained in the
                  applicable title policy and be made in accordance with the
                  Minimum Standard Detail Requirements for Land Title Surveys
                  jointly established and adopted by the American Land Title
                  Association and the American Congress on Surveying and Mapping
                  in 1999 with all items from Table A thereof completed, except
                  for Nos. 5, 12 and 17;

                           (iv)     ALTA mortgagee title insurance policies
                  issued by Chicago Title Insurance Company (the "TITLE
                  INSURANCE COMPANY") in amounts not less than the respective
                  amounts designated in SCHEDULE 6.20(a) with respect to any
                  particular Mortgaged Property, assuring the Agent that each of
                  the Mortgage Instruments

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                  creates a valid and enforceable first priority mortgage lien
                  on the applicable Mortgaged Property, free and clear of all
                  defects and encumbrances except Permitted Liens, which
                  policies shall otherwise be in form and substance reasonably
                  satisfactory to the Agent and shall include such endorsements
                  as are reasonably requested by the Agent to the extent such
                  endorsements are reasonably available in the jurisdictions in
                  which the Mortgaged Properties are located;

                           (v)      evidence as to (A) whether any Mortgaged
                  Property is in an area designated by the Federal Emergency
                  Management Agency as having special flood or mud slide hazards
                  (a "FLOOD HAZARD PROPERTY") and (B) if any Mortgaged Property
                  is a Flood Hazard Property, (1) whether the community in which
                  such Mortgaged Property is located is participating in the
                  National Flood Insurance Program, (2) the applicable Credit
                  Party's written acknowledgment of receipt of written
                  notification from the Agent (a) as to the fact that such
                  Mortgaged Property is a Flood Hazard Property and (b) as to
                  whether the community in which each such Flood Hazard Property
                  is located is participating in the National Flood Insurance
                  Program and (3) copies of insurance policies or certificates
                  of insurance of the Consolidated Parties evidencing flood
                  insurance satisfactory to the Agent and naming the Agent as
                  sole loss payee on behalf of the Lenders; and

                           (vi)     evidence reasonably satisfactory to the
                  Agent (which evidence the Agent agrees may be in the form of a
                  3.1 zoning endorsement to the mortgagee title insurance
                  policies referred to in clause (iv) above) that each of the
                  Mortgaged Properties, and the uses of the Mortgaged
                  Properties, are in compliance in all material respects with
                  all applicable zoning laws (the evidence submitted as to
                  zoning should include the zoning designation made for each of
                  the Mortgaged Properties, the permitted uses of each such
                  Mortgaged Properties under such zoning designation and, if
                  available, zoning requirements as to parking, lot size,
                  ingress, egress and building setbacks).

                  (f)      EVIDENCE OF INSURANCE. Receipt by the Agent of copies
         of insurance policies or certificates of insurance of the Consolidated
         Parties evidencing liability and casualty insurance meeting the
         requirements set forth in the Credit Agreement, including, but not
         limited to, naming the Agent as additional insured (in the case of
         liability insurance) or loss payee (in the case of hazard insurance) on
         behalf of the Lenders.

                  (g)      GOVERNMENT CONSENT. Receipt by the Agent of evidence
         that all material governmental, shareholder and third party consents
         (including Hart-Scott-Rodino clearance) and approvals necessary in
         connection with the Transaction and expiration of all applicable
         waiting periods without any action being taken by any authority that
         could restrain, prevent or impose any material adverse conditions on
         the Transaction or that could seek or threaten any of the foregoing.

                  (h)      CONSUMMATION OF TRANSACTION. The Transaction shall
         have been consummated in accordance in all material respects with the
         terms of the Merger Agreement and in compliance in all material
         respects with applicable law and regulatory approvals; all material
         conditions precedent to the obligations of the buyer under the Merger
         Agreement shall have been satisfied; and (i) the Equity Investors shall
         have

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         contributed (directly or indirectly) at least $150 million to the
         Parent (of which, at least $125 million shall have been contributed by
         the Sponsor) and that immediately thereafter the Parent shall have
         contributed such amount, net of reasonable expenses payable to third
         parties, in the Borrower in exchange for common Capital Stock of the
         Borrower, (ii) existing shareholders of the Acquired Company shall have
         rolled over not less than $48 million of common Capital Stock and
         option value of the Acquired Company into common Capital Stock of the
         Parent and deferred compensation arrangements of the Parent on terms
         and conditions reasonably acceptable to the Agent, (iii) the Borrower
         shall have received gross proceeds of at least $200 million from the
         issuance by the Borrower of the Subordinated Notes on terms that are
         reasonably satisfactory to the Agent and (iv) after giving effect to
         the Transaction, including the application on the Closing Date of the
         proceeds of the related financings and equity contributions, the
         Consolidated Parties shall have no Indebtedness except for Indebtedness
         permitted under Section 8.1. The Merger Agreement shall not have been
         altered, amended or otherwise changed or supplemented in any material
         respect or any material condition therein waived, without the prior
         written consent of the Agent. The Agent shall have received (i) a copy,
         certified by an Executive Officer of the Borrower as true and complete,
         of the Merger Agreement as originally executed and delivered, together
         with all exhibits and schedules and (ii) a copy, certified by an
         Executive Officer of the Parent as true and complete, of the
         Subordinated Debt Indenture as originally executed and delivered,
         together with all exhibits and schedules thereto.

                  (i)      SOLVENCY. Receipt by the Agent of (i) an opinion from
         an independent auditor or appraiser reasonably acceptable to the Agent
         as to the Solvency of the Credit Parties on a consolidated basis after
         giving effect to the Transaction and (ii) a certificate executed by the
         chief financial officer of the Parent as of the Closing Date, in form
         and substance satisfactory to the Agent, regarding the Solvency of the
         Credit Parties on a consolidated basis.

                  (j)      OFFICER'S CERTIFICATES. The Agent shall have received
         a certificate or certificates executed by an Executive Officer of the
         Borrower as of the Closing Date, in form and substance reasonably
         satisfactory to the Agent, stating that (A) each Credit Party is in
         compliance with all existing material financial obligations which are
         to remain outstanding, (B) all material governmental, shareholder and
         third party consents and approvals, if any, with respect to the Credit
         Documents and the transactions contemplated thereby have been obtained,
         (C) no action, suit, investigation or proceeding is pending or
         threatened in any court or before any arbitrator or governmental
         instrumentality that purports to affect any Credit Party or any
         transaction contemplated by the Credit Documents, if such action, suit,
         investigation or proceeding could reasonably be expected to have a
         Material Adverse Effect, (D) the transactions contemplated by the
         Merger Agreement have been consummated in accordance in all material
         respects with the terms thereof and (E) immediately after giving effect
         to the Transaction, (1) no Default or Event of Default exists and (2)
         all representations and warranties contained herein and in the other
         Credit Documents are true and correct in all material respects.

                  (k)      FEES AND EXPENSES. Payment by the Credit Parties to
         the Lenders and the Agent of all fees and expenses relating to the
         Credit Facilities which are due and payable on

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         the Closing Date, including, without limitation, payment to the Agent
         of the fees set forth in the Agent's Fee Letter.

                  (l)      EXISTING NOTES. The Agent shall be satisfied with the
         arrangement for the repayment on or before May 10, 2001 of any Existing
         Notes which shall remain outstanding after consummation of the
         Transaction on the Closing Date.

                  5.2      CONDITIONS TO ALL EXTENSIONS OF CREDIT.

         The obligations of each Lender to make any Loan and of the Issuing
Lender to issue or extend any Letter of Credit (including the initial Loans and
the initial Letter of Credit) are subject to satisfaction of the following
conditions in addition to satisfaction on the Closing Date of the conditions set
forth in Section 5.1:

                  (a)      The Borrower shall have delivered (i) in the case of
         any Revolving Loan, any portion of the Tranche A Term Loan or any
         portion of the Tranche B Term Loan, an appropriate Notice of Borrowing
         or (ii) in the case of any Letter of Credit, the Issuing Lender shall
         have received an appropriate request for issuance in accordance with
         the provisions of Section 2.2(b);

                  (b)      (i) the representations and warranties set forth in
         Section 6 shall, subject to the limitations set forth therein, be true
         and correct in all material respects as of such date (except for those
         which expressly relate to an earlier date) and (ii) no Default or Event
         of Default shall exist and be continuing either prior to or after
         giving effect thereto; and

                  (c)      In the case of a request for a Revolving Loan or a
         Letter of Credit, immediately after giving effect to the making of such
         Loan (and the application of the proceeds thereof) or to the issuance
         of such Letter of Credit, as the case may be, (i) the sum of the
         aggregate outstanding principal amount of Revolving Loans PLUS LOC
         Obligations PLUS Swingline Loans shall not exceed the Revolving
         Committed Amount, and (ii) the LOC Obligations shall not exceed the LOC
         Committed Amount.

The delivery of each Notice of Borrowing and each request for a Letter of Credit
pursuant to Section 2.2(b) shall constitute a representation and warranty by the
Credit Parties of the correctness of the matters specified in subsections (b)
and (c) above.

                                    SECTION 6

                         REPRESENTATIONS AND WARRANTIES

         The Credit Parties hereby represent to the Agent and each Lender that:

                  6.1      FINANCIAL CONDITION.

                  (a)      The audited consolidated balance sheets and income
         statements of the Consolidated Parties for the fiscal years ended
         December 31, 1998, December 31, 1999 and December 31, 2000 (including
         the notes thereto) (i) have been audited by Grant Thornton,

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         (ii) have been prepared in accordance with GAAP consistently applied
         throughout the periods covered thereby and (iii) present fairly (on the
         basis disclosed in the footnotes to such financial statements) in all
         material respects the consolidated financial condition, results of
         operations and cash flows of the Consolidated Parties as of such date
         and for such periods. The unaudited interim balance sheets of the
         Consolidated Parties as at the end of, and the related unaudited
         interim income statements for, each fiscal month ended in January and
         February 2001 (copies of which previously have been delivered to the
         Agent) (i) have been prepared in accordance with GAAP consistently
         applied throughout the periods covered thereby (except for the absence
         of footnotes and subject to year-end audit adjustments) and (ii)
         present fairly (on the basis disclosed in the footnotes to such
         financial statements) in all material respects the consolidated
         financial condition, results of operations and cash flows of the
         Consolidated Parties as of such date and for such periods. During the
         period from December 31, 2000 to and including the Closing Date, there
         has been no sale, transfer or other disposition by any Consolidated
         Party of any material part of the business or property of the
         Consolidated Parties, taken as a whole, and no purchase or other
         acquisition by any of them of any business or property (including any
         Capital Stock of any other Person) material in relation to the
         consolidated financial condition of the Consolidated Parties, taken as
         a whole, in each case, which is not reflected in the foregoing
         financial statements or in the notes thereto and has not otherwise been
         disclosed in writing to the Lenders on or prior to the Closing Date. As
         of the Closing Date, the Borrower and its Subsidiaries have no material
         liabilities (contingent or otherwise) that are not reflected (but
         required to be reflected) in the foregoing financial statements or in
         the notes thereto which could reasonably be expected to have a Material
         Adverse Effect except as described on SCHEDULE 6.1.

                  (b)      The pro forma consolidated balance sheet as of
         February 28, 2001 and the pro forma income statement of the
         Consolidated Parties for the twelve month period ending February 28,
         2001 giving effect to the Transaction (i) have been reviewed by Grant
         Thornton, (ii) meet the requirements of Regulation S-X of the
         Securities Act applicable to a Form S-1 registration statement under
         the Securities Act, (iii) are based upon reasonable assumptions made
         known to the Lenders and upon information not known to be incorrect or
         misleading in any material respect and (iv) evidence Consolidated
         EBITDA of not less than $134 million.

                  (c)      To the extent delivered, the financial statements
         delivered pursuant to Section 7.1(a) and (b) have been prepared in
         accordance with GAAP (except as may otherwise be permitted under
         Section 7.1(a) and (b)) and present fairly (on the basis disclosed in
         the footnotes to such financial statements) in all material respects
         the consolidated financial condition, results of operations and cash
         flows of the Consolidated Parties as of such date and for such periods
         (except for, in the case of the financial statements described in
         Section 7.10(b), the absence of footnotes and subject to year-end audit
         adjustments).

                  6.2      NO MATERIAL CHANGE.

         Since December 31, 2000, there has been no development or event
relating to or affecting a Consolidated Party which has had or could reasonably
be expected to have a Material Adverse Effect.

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<PAGE>

                  6.3      ORGANIZATION AND GOOD STANDING.

         Each of the Consolidated Parties (a) is duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not have a Material Adverse Effect.

                  6.4      POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.

         Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate or other
necessary action to authorize the borrowings and other extensions of credit on
the terms and conditions of this Credit Agreement and to authorize the
execution, delivery and performance of the Credit Documents to which it is a
party. No consent or authorization of, filing with, notice to or other similar
act by or in respect of, any Governmental Authority or any other Person is
required to be obtained or made by or on behalf of any Credit Party in
connection with the borrowings or other extensions of credit hereunder, with the
execution, delivery, performance, validity or enforceability of the Credit
Documents to which such Credit Party is a party or with the consummation of the
Transaction, except for (i) consents, authorizations, notices and filings
described in SCHEDULE 6.4, all of which have been obtained or made or have the
status described in such SCHEDULE 6.4, (ii) filings to release Liens to the
extent that the holders of such Liens have agreed in writing with the Agent to
release such Liens, (iii) filings to perfect the Liens created by the Collateral
Documents and (iv) consents, authorizations, filings, notices or other acts
which have been obtained as and when required or the failure to make or obtain
could not reasonably be expected to have a Material Adverse Effect. This Credit
Agreement has been, and each other Credit Document to which any Credit Party is
a party will be, duly executed and delivered on behalf of the Credit Parties.
This Credit Agreement constitutes, and each other Credit Document to which any
Credit Party is a party when executed and delivered will constitute, a legal,
valid and binding obligation of such Credit Party enforceable against such party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law) and by an implied covenant of good faith and
fair dealing.

                  6.5      NO CONFLICTS.

         Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any material
Requirement of Law or any other material law, regulation (including, without
limitation, Regulation U or Regulation X), order,

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<PAGE>

writ, judgment, injunction, decree or permit applicable to it, (c) violate,
contravene or conflict with contractual provisions of, or cause an event of
default under, any indenture, loan agreement, mortgage, deed of trust, contract
or other agreement or instrument to which it is a party or by which it may be
bound, the violation of which could reasonably be expected to have a Material
Adverse Effect, or (d) result in or require the creation of any Lien (other than
those contemplated in or created in connection with the Credit Documents) upon
or with respect to its properties.

                  6.6      NO DEFAULT.

         No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could reasonably be expected to have a Material Adverse
Effect.

                  6.7      OWNERSHIP.

         Each Consolidated Party is the owner of, and has good and marketable
title to, all of its respective assets owned by it necessary for the conduct of
its business, except for minor defects in title that do not materially interfere
with its ability to conduct its business or to utilize such assets for their
intended purposes and none of such assets is subject to any Lien other than
Permitted Liens.

                  6.8      INDEBTEDNESS.

         Except as otherwise permitted under Section 8.1, the Consolidated
Parties have no Indebtedness.

                  6.9      LITIGATION.

         Except as disclosed in SCHEDULE 6.9, there does not exist (i) any
order, decree, judgment, ruling or injunction which restrains the consummation
of the acquisition of the Acquired Company in the manner contemplated by the
Merger Agreement or (ii) any pending or, to the knowledge of any Consolidated
Party, threatened action, suit or legal, equitable, arbitration or
administrative proceeding against any Consolidated Party which could reasonably
be expected to have a Material Adverse Effect.

                  6.10     TAXES.

         Each Consolidated Party has filed, or caused to be filed, all material
tax returns (Federal, state, local and foreign) required to be filed and paid
(a) all amounts of taxes shown thereon to be due (including interest and
penalties) and (b) all other material taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent, (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP or (iii) the failure of which to pay could reasonably be
expected to result in a Material Adverse Effect. No Credit Party is aware as of
the Closing Date of any proposed tax assessments against it or any other
Consolidated Party that could reasonably be expected to have a Material Adverse
Effect.

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<PAGE>

                  6.11     COMPLIANCE WITH LAW.

                  Each Consolidated Party is in compliance with all Requirements
of Law applicable to it, or to its properties, unless such failure to comply
could not reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the preceding sentence, (i) the Consolidated Parties
have produced and distributed and are producing and distributing food products
that are in compliance with the Food Security Act, the Food, Drug, and Cosmetic
Act (21 U.S.C. 321 et seq.), the Egg Products Inspection Act, the Minnesota Food
Law (Minnesota Statutes, Ch. 31), MWPDA and all other applicable federal and
state laws governing the production of food, and all applicable regulations and
administrative interpretations promulgated under any such laws except for any
violations or failures which could not reasonably be expected to have a Material
Adverse Effect and (ii) none of the Consolidated Parties has violated or failed
to comply with PACA or MWPDA, except for any violation or failure which could
not reasonably be expected to have a Material Adverse Effect.

                  6.12     ERISA.

         Except as disclosed and described in SCHEDULE 6.12 attached hereto or
except as could not reasonably be expected to result in a Material Adverse
Effect:

                  (a)      During the five-year period prior to the date on
         which this representation is made or deemed made: (i) no ERISA Event
         has occurred, and, to the knowledge of the Executive Officers of the
         Credit Parties, no event or condition has occurred or exists as a
         result of which any ERISA Event could reasonably be expected to occur,
         with respect to any Plan; (ii) no "accumulated funding deficiency," as
         such term is defined in Section 302 of ERISA and Section 412 of the
         Code, whether or not waived, has occurred with respect to any Plan;
         (iii) each Plan has been maintained, operated, and funded in compliance
         with its own terms and in material compliance with the provisions of
         ERISA, the Code, and any other applicable Federal or state laws; and
         (iv) no Lien in favor of the PBGC or a Plan has arisen or is reasonably
         likely to arise on account of any Plan (other than a Permitted Lien).

                  (b)      The actuarial present value of all "benefit
         liabilities" (as defined in Section 4001(a)(16) of ERISA), whether or
         not vested, under each Single Employer Plan, as of the last annual
         valuation date prior to the date on which this representation is made
         or deemed made (determined, in each case, in accordance with Financial
         Accounting Standards Board Statement 87, utilizing the actuarial
         assumptions used in such Plan's most recent actuarial valuation
         report), did not exceed as of such valuation date the fair market value
         of the assets of such Plan by such amount as could reasonably be
         expected to have a Material Adverse Effect.

                  (c)      Neither any Consolidated Party nor any ERISA
         Affiliate has received any notification that any Multiemployer Plan is
         in reorganization (within the meaning of Section 4241 of ERISA), is
         insolvent (within the meaning of Section 4245 of ERISA), or has been
         terminated (within the meaning of Title IV of ERISA), and no
         Multiemployer Plan is, to the knowledge of the Executive Officers of
         the Credit Parties, reasonably expected to be in reorganization,
         insolvent, or terminated.

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<PAGE>

                  (d)      No prohibited transaction (within the meaning of
         Section 406 of ERISA or Section 4975 of the Code) or breach of
         fiduciary responsibility has occurred with respect to a Plan which has
         subjected or may subject any Consolidated Party or any ERISA Affiliate
         to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
         Section 4975 of the Code, or under any agreement or other instrument
         pursuant to which any Consolidated Party or any ERISA Affiliate has
         agreed or is required to indemnify any Person against any such
         liability.

                  (e)      Neither any Consolidated Party nor any ERISA
         Affiliate has any material liability with respect to "expected
         post-retirement benefit obligations" within the meaning of the
         Financial Accounting Standards Board Statement 106. Each Plan which is
         a welfare plan (as defined in Section 3(1) of ERISA) to which Sections
         601-609 of ERISA and Section 4980B of the Code apply has been
         administered in compliance in all material respects of such sections.

                  (f)      Neither the execution and delivery of this Credit
         Agreement nor the consummation of the financing transactions
         contemplated thereunder will involve any transaction which is subject
         to the prohibitions of Sections 404, 406 or 407 of ERISA or in
         connection with which a tax could be imposed pursuant to Section 4975
         of the Code. The representation by the Credit Parties in the preceding
         sentence is made in reliance upon and subject to the accuracy of the
         Lenders' representation in Section 11.15 with respect to their source
         of funds.

                  6.13     CORPORATE STRUCTURE; CAPITAL STOCK, ETC.

         The corporate capital and ownership structure of the Consolidated
Parties as of the Closing Date after giving effect to the Transaction is as
described in SCHEDULE 6.13A. Set forth on SCHEDULE 6.13B is a complete and
accurate list as of the Closing Date with respect to the Borrower and each of
its direct and indirect Subsidiaries of (i) jurisdiction of incorporation, (ii)
number of shares of each class of Capital Stock outstanding, (iii) number and
percentage of outstanding shares of each class owned (directly or indirectly) by
the Consolidated Parties and (iv) number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and all other
similar rights with respect thereto as of the Closing Date. As of the Closing
Date, the outstanding Capital Stock of all such Persons is validly issued, fully
paid and (to the extent such concept is applicable) non-assessable and is owned
by the Consolidated Parties, directly or indirectly, in the manner set forth on
SCHEDULE 6.13B, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents). Other than as set forth
in SCHEDULE 6.13B, as of the Closing Date neither the Borrower nor any of its
Subsidiaries has outstanding any securities convertible into or exchangeable for
its Capital Stock nor does any such Person have outstanding any rights to
subscribe for or to purchase or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to its Capital Stock.

                  6.14     GOVERNMENTAL REGULATIONS, ETC.

                  (a)      None of the transactions contemplated by this Credit
         Agreement (including, without limitation, the direct or indirect use of
         the proceeds of the Loans) will violate or result in a violation of the
         Securities Act, the Securities Exchange Act or any of

                                       78
<PAGE>

         Regulations U and X. If requested by any Lender or the Agent, the
         Borrower will furnish to the Agent and each Lender a statement, in
         conformity with the requirements of FR Form U-1 referred to in
         Regulation U, that no part of the Letters of Credit or proceeds of the
         Loans will be used, directly or indirectly, for the purpose of "buying"
         or "carrying" any "margin stock" within the meaning of Regulations U
         and X, or for the purpose of purchasing or carrying or trading in any
         securities.

                  (b)      None of the Consolidated Parties is (i) an
         "investment company", or a company "controlled" by "investment
         company", within the meaning of the Investment Company Act of 1940, as
         amended, (ii) a "holding company" as defined in, or otherwise subject
         to regulation under, the Public Utility Holding Company Act of 1935, as
         amended or (iii) subject to regulation under any other Federal or state
         statute or regulation which limits its ability to incur Indebtedness.

                  6.15     PURPOSE OF LOANS AND LETTERS OF CREDIT.

         The proceeds of the Loans hereunder shall be used solely by the
Borrower to effect the Transaction, to pay fees and expenses related to the
Transaction and to provide for working capital and general corporate purposes of
the Borrower and its Subsidiaries (including, without limitation, Permitted
Acquisitions). The Letters of Credit shall be used only for or in connection
with appeal bonds, reimbursement obligations arising in connection with surety
and reclamation bonds, reinsurance, domestic or international trade transactions
and obligations not otherwise aforementioned relating to transactions entered
into by the applicable account party in the ordinary course of business.

                  6.16     ENVIRONMENTAL MATTERS.

         Except as disclosed and described in SCHEDULE 6.16 attached hereto or
except as could not reasonably be expected to result in a Material Adverse
Effect:

                  (a)      Each of the Real Properties and all operations at the
         Real Properties are in compliance with all applicable Environmental
         Laws, there is no violation of any Environmental Law with respect to
         the Real Properties or the Businesses, and there are no conditions
         relating to the Real Properties or the Businesses that could give rise
         to liability under any applicable Environmental Laws.

                  (b)      None of the Real Properties contains, or has
         previously contained, any Materials of Environmental Concern at, on or
         under the Real Properties in amounts or concentrations that constitute
         or constituted a violation of, or could give rise to liability under,
         Environmental Laws.

                  (c)      No Consolidated Party has received any written or
         verbal notice of, or inquiry from any Governmental Authority regarding,
         any violation, alleged violation, non-compliance, liability or
         potential liability regarding environmental matters or compliance with
         Environmental Laws with regard to any of the Real Properties or the
         Businesses, nor does any Executive Officer of any Credit Party have
         knowledge or reason to believe that any such notice will be received or
         is being threatened.

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<PAGE>

                  (d)      Materials of Environmental Concern have not been
         transported or disposed of from the Real Properties, or generated,
         treated, stored or disposed of at, on or under any of the Real
         Properties or any other location, in each case by or on behalf of any
         Consolidated Party in violation of, or in a manner that could give rise
         to liability under, any applicable Environmental Law.

                  (e)      No judicial proceeding or governmental or
         administrative action is pending or, to the best knowledge of the
         Executive Officers of the Credit Parties, threatened, under any
         Environmental Law to which any Consolidated Party is or will be named
         as a party, nor are there any consent decrees or other decrees, consent
         orders, administrative orders or other orders, or other administrative
         or judicial requirements outstanding under any Environmental Law with
         respect to the Consolidated Parties, the Real Properties or the
         Businesses.

                  (f)      There has been no release, or threat of release, of
         Materials of Environmental Concern at or from the Real Properties, or
         arising from or related to the operations (including, without
         limitation, disposal) of any Consolidated Party in connection with the
         Real Properties or otherwise in connection with the Businesses, in
         violation of or in amounts or in a manner that could reasonably be
         expected to give rise to liability under Environmental Laws.

                  6.17     INTELLECTUAL PROPERTY.

         Each Consolidated Party owns, or has the legal right to use, all
trademarks, service marks, trade names, trade dress, patents, copyrights,
technology, know-how and processes (the "INTELLECTUAL PROPERTY") necessary for
each of them to conduct its business as currently conducted except for those the
failure to own or have such legal right to use could not reasonably be expected
to have a Material Adverse Effect. Set forth on SCHEDULE 6.17 as of the Closing
Date is a list of all Intellectual Property registered or pending registration
with the United States Copyright Office or the United States Patent and
Trademark Office and owned by each Consolidated Party. Except as provided on
SCHEDULE 6.17, no claim has been asserted and is pending by any Person
challenging or questioning the use of the Intellectual Property or the validity
or effectiveness of the Intellectual Property, nor does any Credit Party know of
any such claim, and, to the knowledge of the Executive Officers of the Credit
Parties, the use of the Intellectual Property by any Consolidated Party or the
granting of a right or a license in respect of the Intellectual Property from
any Consolidated Party does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

                  6.18     SOLVENCY.

         The Credit Parties are Solvent on a consolidated basis.

                  6.19     INVESTMENTS.

         All Investments of each Consolidated Party are Permitted Investments.

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<PAGE>

                  6.20     BUSINESS LOCATIONS.

         Set forth on SCHEDULE 6.20(a) is a list of all Real Properties located
in the United States as of the Closing Date. Set forth on SCHEDULE 6.20(b) is a
list of all owned or leased locations where any tangible personal property of a
Consolidated Party is located as of the Closing Date (other than vehicles and
assets temporarily in transit or sent for repair). Set forth on SCHEDULE 6.20(c)
is the chief executive office, jurisdiction of incorporation or formation and
principal place of business of each Consolidated Party as of the Closing Date.

                  6.21     DISCLOSURE.

         Neither this Credit Agreement nor any financial statements (other than
projections, budgets and other estimates) delivered to the Lenders nor any other
document, certificate or statement furnished to the Lenders by or on behalf of
any Consolidated Party in connection with the transactions contemplated hereby,
when taken as a whole, contains as of the applicable delivery date any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein or herein not materially
misleading in light of the circumstances under which such statements were made.

                  6.22     BROKERS' FEES.

         Except as set forth on SCHEDULE 6.22, no Consolidated Party has any
obligation to any Person in respect of any finder's, broker's, investment
banking or other similar fee in connection with any of the transactions
contemplated under the Credit Documents other than the Agent's Fee Letter.

                  6.23     LABOR MATTERS.

         Except as set forth on SCHEDULE 6.23, there are no collective
bargaining agreements or Multiemployer Plans covering the employees of a
Consolidated Party as of the Closing Date. None of the Consolidated Parties has
suffered any strikes, walkouts, work stoppages or other material labor
difficulty during the five years prior to the Closing Date except, with respect
to any of the foregoing, which could reasonably be expected to have a Material
Adverse Effect.

                  6.24     NATURE OF BUSINESS.

         As of the Closing Date, the Consolidated Parties are principally
engaged in the business of the production, distribution and sales of food
products in the areas of egg products, refrigerated distribution, dairy products
and potato products.

                                    SECTION 7

                              AFFIRMATIVE COVENANTS

         Each Credit Party hereby covenants and agrees that until such time as
the Credit Agreement has been terminated in accordance with the terms of Section
11.13:

                                       81
<PAGE>

                  7.1      INFORMATION COVENANTS.

         The Credit Parties will furnish, or cause to be furnished, to the
Agent:

                  (a)      ANNUAL FINANCIAL STATEMENTS. As soon as available,
         and in any event within 90 days after the close of each fiscal year of
         the Consolidated Parties, a consolidated balance sheet of the
         Consolidated Parties as of the end of such fiscal year, together with
         related consolidated statements of income and cash flows for such
         fiscal year, in each case setting forth in comparative form
         consolidated figures for the preceding fiscal year, all such financial
         information described above to be in reasonable form and detail and
         audited by Grant Thornton (or by any "Big Five" accounting firm or any
         other independent certified public accountants of recognized national
         standing reasonably acceptable to the Agent) and whose opinion shall be
         to the effect that such financial statements have been prepared in
         accordance with GAAP (except for changes with which such accountants
         concur) and shall not be limited as to the scope of the audit or
         qualified as to the status of the Consolidated Parties as a going
         concern or any other material qualifications or exceptions.

                  (b)      QUARTERLY FINANCIAL STATEMENTS. As soon as available,
         and in any event within 45 days (90 days in the case of the last fiscal
         quarter) after the close of each fiscal quarter of each fiscal year of
         the Consolidated Parties, a consolidated balance sheet of the
         Consolidated Parties as of the end of such fiscal quarter, together
         with related consolidated statements of income and cash flows for such
         fiscal quarter, in each case setting forth in comparative form
         consolidated figures for the corresponding period of the preceding
         fiscal year, all such financial information described above to be in
         reasonable form and detail and reasonably acceptable to the Agent, and
         accompanied by a certificate of an Executive Officer of the Borrower to
         the effect that such quarterly financial statements fairly present in
         all material respects the financial condition of the Consolidated
         Parties and have been prepared in accordance with GAAP, subject to
         changes resulting from audit and normal year-end audit adjustments and
         the absence of certain footnotes.

                  (c)      OTHER QUARTERLY FINANCIAL REPORTS. At the time of
         delivery of the financial statements provided for in Section 7.1(b)
         above, quarterly divisional income statements for the egg products
         division, the potato products division, the dairy division and the
         refrigerated distribution division prepared in accordance with past
         practices.

                  (d)      OFFICER'S CERTIFICATE. At the time of delivery of the
         financial statements provided for in Sections 7.1(a) and 7.1(b) above,
         a certificate of an Executive Officer of the Borrower substantially in
         the form of EXHIBIT 7.1(d), (i) providing a detailed calculation of
         Consolidated EBITDA (with a break-out of each of the components of the
         definition thereof set forth in Section 1.1) for the applicable fiscal
         period, (ii) demonstrating compliance with the financial covenants
         contained in Section 7.10 by calculation thereof as of the end of the
         applicable fiscal period and (iii) stating that no Default or Event of
         Default exists as of the end of the applicable fiscal period, or if any
         Default or Event of Default does exist, specifying the nature and
         extent thereof and what action the Credit Parties propose to take with
         respect thereto.

                  (e)      ANNUAL BUSINESS PLAN AND BUDGETS. Within 45 days
         after the end of each fiscal year of the Borrower, beginning with the
         fiscal year ending December 31, 2001, an

                                       82
<PAGE>

         annual business plan and budget of the Consolidated Parties containing,
         among other things, projected financial statements for the next fiscal
         year.

                  (f)      COMPLIANCE WITH CERTAIN PROVISIONS OF THE CREDIT
         AGREEMENT. Within 105 days after the end of each fiscal year of the
         Credit Parties, a certificate (i) providing a detailed calculation of
         Excess Cash Flow (with a break-out of each of the components of the
         definition thereof set forth in Section 1.1) and (ii) containing
         information regarding the amount of all Asset Dispositions, Debt
         Issuances and Equity Issuances that were made during the prior fiscal
         year.

                  (g)      ACCOUNTANT'S CERTIFICATE. Within the period for
         delivery of the annual financial statements provided in Section 7.1(a),
         a certificate of the accountants conducting the annual audit stating
         that they have reviewed this Credit Agreement as it relates to
         accounting matters and stating further whether, in the course of their
         audit, they have become aware of any Default or Event of Default with
         respect to such accounting matters and, if any such Default or Event of
         Default exists, specifying the nature and extent thereof, PROVIDED that
         such accountants shall not incur any liability to the Lenders by reason
         of any failure to obtain knowledge of any such Default or Event of
         Default that would not be disclosed in the course of their audit
         examination.

                  (h)      REPORTS. Promptly upon transmission or receipt
         thereof, (i) copies of any filings and registrations with, and reports
         to or from, the Securities and Exchange Commission, or any successor
         agency, and copies of all financial statements, proxy statements,
         notices and reports as any Consolidated Party shall send to its
         shareholders generally or to a holder of any Indebtedness owed by any
         Consolidated Party in its capacity as such a holder and (ii) upon the
         reasonable request of the Agent, all written reports and written
         information to and from the United States Environmental Protection
         Agency, or any state or local agency responsible for environmental
         matters, the United States Occupational Health and Safety
         Administration, or any state or local agency responsible for health and
         safety matters, or any successor agencies or authorities concerning
         environmental, health or safety matters.

                  (i)      NOTICES. Upon any Executive Officer of a Credit Party
         obtaining knowledge thereof, the Credit Parties will give written
         notice to the Agent immediately of (i) the occurrence of an event or
         condition consisting of a Default or Event of Default, specifying the
         nature and existence thereof and what action the Credit Parties propose
         to take with respect thereto, and (ii) the occurrence of any of the
         following with respect to any Consolidated Party (A) the pendency or
         commencement of any litigation, arbitral or governmental proceeding
         against such Person which is reasonably likely to have a Material
         Adverse Effect, (B) the institution of any proceedings against such
         Person with respect to, or the receipt of notice by such Person of
         potential liability or responsibility for violation, or alleged
         violation of any Federal, state or local law, rule or regulation,
         including but not limited to, Environmental Laws, where such liability
         or the violation of which could reasonably be expected to have a
         Material Adverse Effect or (C) the receipt by any Consolidated Party of
         notice from any regulatory agency or authority having jurisdiction in
         the matter regarding a material investigation of any of such Person
         under PACA or MWPDA.

                                       83
<PAGE>

                  (j)      ERISA. Upon any Executive Officer of a Credit Party
         obtaining knowledge thereof, the Credit Parties will give written
         notice to the Agent promptly (and in any event within thirty Business
         Days) of any of the following which could reasonably be expected to
         have a Material Adverse Effect: (i) any event or condition, including,
         but not limited to, any Reportable Event, that constitutes, or might
         reasonably lead to, an ERISA Event; (ii) with respect to any
         Multiemployer Plan, the receipt of notice as prescribed in ERISA or
         otherwise of any withdrawal liability assessed against the Credit
         Parties or any ERISA Affiliates, or of a determination that any
         Multiemployer Plan is in reorganization or insolvent (both within the
         meaning of Title IV of ERISA); (iii) the failure to make full payment
         on or before the due date (including extensions) thereof of all amounts
         which any Consolidated Party or any ERISA Affiliate is required to
         contribute to each Plan pursuant to its terms and as required to meet
         the minimum funding standard set forth in ERISA and the Code with
         respect thereto; or (iv) any change in the funding status of any Plan
         as of the end of the applicable Plan year that could have a Material
         Adverse Effect, together with a description of any such event or
         condition or a copy of any such notice and a statement by an Executive
         Officer of the Borrower briefly setting forth the details regarding
         such event, condition, or notice, and the action, if any, which has
         been or is being taken or is proposed to be taken by the Credit Parties
         with respect thereto. Promptly upon request, the Credit Parties shall
         furnish the Agent and the Lenders with such additional information
         concerning any Plan as may be reasonably requested, including, but not
         limited to, copies of each annual report/return (Form 5500 series), as
         well as all schedules and attachments thereto required to be filed with
         the Department of Labor and/or the Internal Revenue Service pursuant to
         ERISA and the Code, respectively, for each "plan year" (within the
         meaning of Section 3(39) of ERISA).

                  (k)      ENVIRONMENTAL. Upon the reasonable written request of
         the Agent following the occurrence of any event or the discovery of any
         condition which the Agent or the Required Lenders reasonably believe(s)
         has caused (or could cause) the representations and warranties set
         forth in Section 6.16 to be untrue, the Credit Parties will furnish or
         cause to be furnished to the Agent, at the Credit Parties' expense, a
         report of an environmental assessment of reasonable scope, form and
         depth, (including, where appropriate, invasive soil or groundwater
         sampling) by a consultant reasonably acceptable to the Agent as to the
         subject matter of such possible breach. If the Credit Parties fail to
         deliver such an environmental report within seventy-five (75) days
         after receipt of such written request then the Agent may arrange for
         same, and the Consolidated Parties hereby grant to the Agent and their
         representatives reasonable access to the Real Properties to reasonably
         undertake such an assessment (including, where appropriate, invasive
         soil or groundwater sampling). The reasonable cost of any assessment
         requested by the Agent pursuant to this provision will be payable by
         the Credit Parties on demand and added to the obligations secured by
         the Collateral Documents.

                  (l)      ADDITIONAL PATENTS AND TRADEMARKS. At the time of
         delivery of the financial statements and reports provided for in
         Section 7.1(a), a report signed by an Executive Officer of the Borrower
         setting forth (i) a list of registration numbers for all federally
         registered patents, trademarks, service marks, trade names and
         copyrights awarded to any Credit Party since the last day of the
         immediately preceding fiscal year and (ii) a list of all patent
         applications, trademark applications, service mark applications, trade
         name applications and copyright applications submitted by any Credit
         Party to the U.S. Patent and

                                       84
<PAGE>

         Trademark Office or the U.S. Copyright Office since the last day of the
         immediately preceding fiscal year and the status of each such
         application, all in such form as shall be reasonably satisfactory to
         the Agent.

                  (m)      OTHER INFORMATION. With reasonable promptness upon
         any such request, such other information regarding the business,
         properties or financial condition of any Consolidated Party as the
         Agent or the Required Lenders may reasonably request.

                  7.2      PRESERVATION OF EXISTENCE AND FRANCHISES.

         Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary not prohibited by Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.

                  7.3      BOOKS AND RECORDS.

         Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).

                  7.4      COMPLIANCE WITH LAW.

         Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions (including PACA, MWPDA, the Food Security Act, the Food, Drug, and
Cosmetic Act, the Egg Products Inspection Act, the Minnesota Food Law, all other
applicable federal and state laws governing the production of food, and all
applicable regulations and administrative interpretations promulgated under any
such laws) imposed by all Governmental Authorities, applicable to it and its
Property to the extent that noncompliance with any such law, rule, regulation,
order or restriction could reasonably be expected to have a Material Adverse
Effect.

                  7.5      PAYMENT OF TAXES AND OTHER CLAIMS.

         Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all material taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent and (b) all material lawful
claims (including claims for labor, materials and supplies) which, if unpaid,
might give rise to a Lien upon any of its properties (other than a Permitted
Lien); PROVIDED, HOWEVER, that no Consolidated Party shall be required to pay
any such tax, assessment, charge, levy or claim which is being contested in good
faith by appropriate proceedings and as to which adequate reserves therefor have
been established in accordance with GAAP, unless the failure to make any such
payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) could reasonably be expected to have a Material
Adverse Effect.

                                       85
<PAGE>

                  7.6      INSURANCE.

                  (a)      Each Credit Party will, and will cause each of its
         Subsidiaries to, at all times maintain in full force and effect
         insurance (including worker's compensation insurance, liability
         insurance, casualty insurance and business interruption insurance) in
         such amounts, covering such risks and liabilities and with such
         deductibles or self-insurance retentions as are in accordance with
         customary industry practice. The Agent shall be named as loss payee or
         mortgagee, as its interest may appear, and/or additional insured with
         respect to any such insurance providing coverage in respect of any
         Collateral, and each provider of any such insurance shall agree, by
         endorsement upon the policy or policies issued by it or by independent
         instruments furnished to the Agent, that it will give the Agent thirty
         (30) days prior written notice before any such policy or policies shall
         be altered in a manner adverse to the Lenders or canceled. The
         insurance coverage of the Consolidated Parties as of the Closing Date
         is outlined as to carrier, policy number, expiration date, type and
         amount on SCHEDULE 7.6.

                  (b)      In the event that the Consolidated Parties receive
         Net Cash Proceeds from property damage or casualty insurance in excess
         of $1,000,000 in aggregate amount during any fiscal year of the
         Consolidated Parties ("EXCESS PROCEEDS") on account of Involuntary
         Dispositions, the Credit Parties shall, within the period of 540 days
         following the date of receipt of such Excess Proceeds, either (i)
         prepay the Loans (and cash collateralize the LOC Obligations) in
         accordance with the terms of Section 3.3(b)(iii)(B) or (ii) apply (or
         cause to be applied) an amount equal to such Excess Proceeds to make
         Eligible Reinvestments (including but not limited to the repair or
         replacement of the related Property); PROVIDED, HOWEVER, that such
         Consolidated Party need not repair or replace the Property of such
         Consolidated Party so lost, damaged or destroyed to the extent the
         failure to make such repair or replacement (i) is desirable to the
         proper conduct of the business of such Consolidated Party and otherwise
         in the best interest of such Consolidated Party; and (ii) would not
         materially impair the rights and benefits of the Agent or the Lenders
         under the Collateral Documents or any other Credit Document.
         Notwithstanding the foregoing, no Consolidated Party shall undertake
         replacement or restoration of any such Property having a net book value
         in excess of $5,000,000 unless, after giving pro forma effect to any
         Funded Indebtedness to be incurred in connection with such replacement
         or restoration, the Credit Parties would be in compliance with the
         financial covenants set forth in Section 7.10(a) and Section 7.10(b) as
         of the most recent fiscal quarter end preceding the date of
         determination with respect to which the Agent has received the Required
         Financial Information (assuming, for purposes hereof, that such Funded
         Indebtedness was incurred as of the first day of the four
         fiscal-quarter period ending as of such fiscal quarter end). All
         property damage or casualty insurance proceeds shall be subject to the
         security interest of the Agent (for the ratable benefit of the Lenders)
         under the Collateral Documents. Pending final application of any Excess
         Proceeds, the Credit Parties may apply such Excess Proceeds to
         temporarily reduce the Revolving Loans or to make Permitted
         Investments.

                  7.7      MAINTENANCE OF PROPERTY.

         Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and Involuntary Disposition excepted, and will make, or cause to be

                                       86
<PAGE>

made, in such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
reasonably be needed or proper, to the extent and in the manner customary for
companies in similar businesses and to the extent necessary in the reasonable
business judgment of such Person.

                  7.8      USE OF PROCEEDS.

         The Borrower will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.15.

                  7.9      AUDITS/INSPECTIONS.

         Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records to the extent allowed by applicable law and regulation,
its accounts receivable and inventory, its facilities and its other business
assets, and to make photocopies or photographs thereof and to write down and
record any information such representative obtains and shall permit the Agent or
its representatives to investigate and verify the accuracy of information
provided to the Lenders and to discuss all such matters with the officers,
employees and representatives of such Person; PROVIDED, HOWEVER, that, unless an
Event of Default shall exist, the Agent shall not exercise its rights under this
sentence more often than two times during any calendar year and only one such
time shall be at the Credit Parties' expense. Notwithstanding the foregoing, no
material protected by an attorney-client privilege shall be required to be
disclosed pursuant to this Section 7.9; PROVIDED, HOWEVER, that, in the event
that any Credit Party claims that any materials requested for review,
investigation or discussion by the Agent or any of its representatives pursuant
to this Section 7.9 is protected by an attorney-client privilege, then such
Credit Party shall (i) provide the Agent with a reasonably acceptable basis for
the assertion of the privilege, (ii) remove or redact only those portions of the
related materials deemed to be privileged and (iii) in good faith cooperate with
the Agent to determine a method by which the information which the Agent deems
necessary to review, investigate or discuss may be obtained by the Agent in an
alternative manner which will not jeopardize any attorney-client privilege.

                  7.10     FINANCIAL COVENANTS.

                  (a)      LEVERAGE RATIO. The Leverage Ratio, as of the last
         day of each fiscal quarter of the Consolidated Parties set forth below,
         shall be less than or equal to:

<TABLE>
<CAPTION>

         ------------------------------------------------------------------------------------------------------------
              FISCAL YEAR             MARCH 31              JUNE 30           SEPTEMBER 30          DECEMBER 31
         ------------------------------------------------------------------------------------------------------------
              <S>                   <C>                  <C>                  <C>                  <C>
                  2001                   NA              5.00 to 1.00         5.00 to 1.00         4.75 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2002              4.75 to 1.00         4.75 to 1.00         4.75 to 1.00         4.50 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2003              4.50 to 1.00         4.50 to 1.00         4.50 to 1.00         4.00 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2004              4.00 to 1.00         4.00 to 1.00         4.00 to 1.00         3.50 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2005              3.50 to 1.00         3.50 to 1.00         3.50 to 1.00         3.25 to 1.00
         ------------------------------------------------------------------------------------------------------------
               THEREAFTER           3.25 to 1.00         3.25 to 1.00         3.25 to 1.00         3.25 to 1.00
         ------------------------------------------------------------------------------------------------------------
</TABLE>

                                       87
<PAGE>

                  (b)      INTEREST COVERAGE RATIO. The Interest Coverage Ratio,
         as of the last day of each fiscal quarter of the Consolidated Parties
         set forth below, shall be greater than or equal to:

<TABLE>
<CAPTION>

         ------------------------------------------------------------------------------------------------------------
              FISCAL YEAR             MARCH 31              JUNE 30           SEPTEMBER 30          DECEMBER 31
         ------------------------------------------------------------------------------------------------------------
              <S>                   <C>                  <C>                  <C>                  <C>
                  2001                   NA              2.00 to 1.00         2.00 to 1.00         2.00 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2002              2.00 to 1.00         2.00 to 1.00         2.00 to 1.00         2.00 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2003              2.00 to 1.00         2.00 to 1.00         2.00 to 1.00         2.25 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2004              2.25 to 1.00         2.25 to 1.00         2.25 to 1.00         2.50 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2005              2.50 to 1.00         2.50 to 1.00         2.50 to 1.00         2.75 to 1.00
         ------------------------------------------------------------------------------------------------------------
               THEREAFTER           2.75 to 1.00         2.75 to 1.00         2.75 to 1.00         2.75 to 1.00
         ------------------------------------------------------------------------------------------------------------
</TABLE>

                  (c)      FIXED CHARGE COVERAGE RATIO. The Fixed Charge
                           Coverage Ratio, as of the last day of each fiscal
         quarter of the Consolidated Parties set forth below, shall be greater
         than or equal to:

<TABLE>
<CAPTION>

         ------------------------------------------------------------------------------------------------------------
              FISCAL YEAR             MARCH 31              JUNE 30           SEPTEMBER 30          DECEMBER 31
         ------------------------------------------------------------------------------------------------------------
              <S>                   <C>                  <C>                  <C>                  <C>
                  2001                   NA              1.00 to 1.00         1.00 to 1.00         1.00 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2002              1.00 to 1.00         1.00 to 1.00         1.00 to 1.00         1.00 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2003              1.00 to 1.00         1.00 to 1.00         1.00 to 1.00         1.05 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2004              1.05 to 1.00         1.05 to 1.00         1.05 to 1.00         1.10 to 1.00
         ------------------------------------------------------------------------------------------------------------
               THEREAFTER           1.10 to 1.00         1.10 to 1.00         1.10 to 1.00         1.10 to 1.00
         ------------------------------------------------------------------------------------------------------------
</TABLE>

                  7.11     ADDITIONAL GUARANTORS.

         As soon as practicable and in any event within 30 days after (a) any
Person becomes a direct or indirect Domestic Subsidiary of the Parent or (b) any
direct or indirect Subsidiary of the Parent guarantees the Borrower's
obligations under any Junior Financing Documentation, the Credit Parties shall
(i) provide the Agent with written notice thereof and shall cause such Person to
execute a Joinder Agreement in substantially the same form as EXHIBIT 7.11, (ii)
deliver such other documentation as the Agent may reasonably request in
connection with the foregoing, including, without limitation, customary
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the Joinder
Agreement) and other items of the types required to be delivered pursuant to
Section 5.1(b), all in form, content and scope reasonably satisfactory to the
Agent and (iii) otherwise comply with Section 7.12 in respect of such Person.

                  7.12     PLEDGED ASSETS.

         Each Credit Party will (i) cause all of its owned real and personal
Property and shall use commercially reasonable efforts to cause all of its
leased real and personal Property, in each

                                       88
<PAGE>

case, other than Excluded Property to be subject at all times to first priority,
perfected and, in the case of real Property (whether leased or owned), title
insured Liens in favor of the Agent to secure the Credit Party Obligations
pursuant to the terms and conditions of the Collateral Documents or, with
respect to any such Property acquired subsequent to the Closing Date, such other
additional security documents as the Agent shall reasonably request, subject in
any case to Permitted Liens and (ii) deliver such other documentation as the
Agent may reasonably request in connection with the foregoing, including,
without limitation, appropriate UCC-1 financing statements, real estate title
insurance policies, surveys, environmental reports, landlord's waivers,
certified resolutions and other organizational and authorizing documents of such
Person, customary favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above and the perfection of the
Agent's liens thereunder) and other items of the types required to be delivered
pursuant to Section 5.1(d) and (e), all in form, content and scope reasonably
satisfactory to the Agent. Without limiting the generality of the above, the
Credit Parties will cause

         (A)      100% of the issued and outstanding Capital Stock of the
                  Borrower;

         (B)      100% of the issued and outstanding Capital Stock of each
                  Domestic Subsidiary owned by the Credit Parties (other than
                  Dairy LLC, Dairy TXCT LLC and their respective Subsidiaries);

         (C)      65% (or such greater percentage that, due to a change in an
                  applicable Requirement of Law after the date hereof, (1) could
                  not reasonably be expected to cause the undistributed earnings
                  of such Material Foreign Subsidiary as determined for United
                  States federal income tax purposes to be treated as a deemed
                  dividend to such Material Foreign Subsidiary's United States
                  parent and (2) could not reasonably be expected to cause any
                  material adverse tax consequences) of the issued and
                  outstanding Capital Stock entitled to vote (within the meaning
                  of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued
                  and outstanding Capital Stock not entitled to vote (within the
                  meaning of Treas. Reg. Section 1.956-2(c)(2)) owned by the
                  Credit Parties in each Material Foreign Subsidiary;

         (D)      prior to any Asset Disposition of all of the Capital Stock or
                  all or substantially all of the Property of Dairy LLC and its
                  Subsidiaries in one or more transactions permitted under
                  Section 8.5, 100% of the issued and outstanding Capital Stock
                  of Dairy LLC and its Subsidiaries; and

         (E)      prior to any Asset Disposition of all of the Capital Stock or
                  all or substantially all of the Property of Dairy TXCT LLC and
                  its Subsidiaries in one or more transactions permitted under
                  Section 8.5, 100% of the issued and outstanding Capital Stock
                  of Dairy TXCT LLC and its Subsidiaries,

to be delivered to the Agent (together with undated stock powers signed in blank
(unless, with respect to a Material Foreign Subsidiary, such stock powers are
deemed unnecessary by the Agent in its reasonable discretion under the law of
the jurisdiction of incorporation of such Person)) and pledged to the Agent
pursuant to an appropriate pledge agreement(s) in

                                       89
<PAGE>

substantially the form of the Pledge Agreement and otherwise in form reasonably
acceptable to the Agent.

                  7.13     INTEREST RATE PROTECTION.

         Within 60 days following the Closing Date, the Credit Parties shall
cause the Borrower to maintain protection against fluctuations in interest rates
until the third anniversary date of the Closing Date pursuant to one or more
interest rate protection agreements reasonably satisfactory to the Agent and
providing coverage in a notional amount, together with the amount of Funded
Indebtedness of the Consolidated Parties on a consolidated basis that is bearing
interest at a fixed rate, at least equal to 50% of the aggregate amount of all
Funded Indebtedness of the Consolidated Parties on a consolidated basis.

                  7.14     FURTHERANCE ASSURANCES.

                  (a)      If any Credit Party owns any of the Real Properties
         identified as items 3, 4, 5, 6 and 7 on subpart (1) of SCHEDULE 6.20(a)
         after the date 180 days following the Closing Date, then the Credit
         Parties shall deliver to the Agent with respect to such Real Properties
         such documents, instruments and other items of the types required to be
         delivered pursuant to Section 5.1(e).

                  (b)      To the extent not delivered on the Closing Date, the
         Borrower shall deliver to the Agent within 90 days after the Closing
         Date such documents, instruments and other items of the types required
         to be delivered pursuant to Section 5.1(e) with respect to the Real
         Property identified as item 24 on subpart (1) of SCHEDULE 6.20(a).

                  (c)      To the extent not delivered on the Closing Date and
         otherwise available using commercially reasonable efforts, the Borrower
         shall deliver to the Agent within 90 days after the Closing Date such
         documents, instruments and other items of the types required to be
         delivered pursuant to Section 5.1(e)(iii) with respect to each of the
         Real Properties identified as items 2, 16, 17, 19, 21, 22, 23, 24, 26
         and 27 on subpart (1) of SCHEDULE 6.20(a).

                  (d)      To the extent not delivered on the Closing Date and
         otherwise available using commercially reasonable efforts, the Borrower
         shall deliver to the Agent within 90 days after the Closing Date such
         documents, instruments and other items of the types required to be
         delivered pursuant to Section 5.1(e) with respect to each real property
         leasehold interest of the Credit Parties constituting a Mortgaged
         Property.

                                    SECTION 8

                               NEGATIVE COVENANTS

         Each Credit Party hereby covenants and agrees that until such time as
the Credit Agreement has been terminated in accordance with the terms of Section
11.13:

                                       90
<PAGE>

                  8.1      INDEBTEDNESS.

         The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:

                  (a)      Indebtedness arising under this Credit Agreement and
         the other Credit Documents;

                  (b)      Indebtedness of the Borrower and its Subsidiaries (i)
         set forth in SCHEDULE 8.1 (and renewals, refinancings and extensions
         thereof on terms and conditions no less favorable to such Person than
         such existing Indebtedness) and (ii) until May 10, 2001, the Existing
         Notes;

                  (c)      purchase money Indebtedness (including obligations in
         respect of Capital Leases, Synthetic Leases and mortgage, industrial
         revenue bond, industrial development bond and similar financings)
         hereafter incurred by the Borrower or any of its Subsidiaries to
         finance the purchase, repair or improvement of capital assets and real
         property or assumed or acquired by any of the Consolidated Parties in
         connection with a Permitted Investment, PROVIDED that (i) the total of
         all such Indebtedness for all such Persons taken together shall not
         exceed an aggregate principal amount of $20,000,000 at any one time
         outstanding; (ii) unless non-recourse to the Consolidated Parties, such
         Indebtedness when incurred shall not exceed the purchase price of the
         asset(s) financed; and (iii) no such Indebtedness shall be refinanced
         for a principal amount in excess of the principal balance outstanding
         thereon at the time of such refinancing;

                  (d)      obligations of any Consolidated Party in respect of
         Hedging Agreements entered into in order to manage existing or
         anticipated interest rate, exchange rate or commodity pricing risks and
         not for speculative purposes;

                  (e)      Guaranty Obligations and intercompany Indebtedness
         permitted under Section 8.6 and Section 8.7;

                  (f)      the Subordinated Debt in an aggregate principal
         amount (including any accumulated, pay-in-kind or capitalized interest
         thereon) not to exceed (i) $275,000,000 LESS (ii) the outstanding
         amount of all Qualified Preferred Stock issued under clause (o) below
         (including any accretion or accumulated or pay-in-kind dividends
         thereon);

                  (g)      Indebtedness of Foreign Subsidiaries in an aggregate
         principal amount at any time outstanding for all such Persons taken
         together not exceeding the greater of (i) the Foreign Borrowing Base as
         of the date of such incurrence or (ii) $20,000,000;

                  (h)      Indebtedness representing deferred compensation to
         employees of the Consolidated Parties;

                  (i)      Indebtedness consisting of promissory notes issued by
         any Consolidated Party to current or former officers, directors and
         employees, their respective estates, spouses or former spouses to
         finance the purchase or redemption of Capital Stock of the Parent
         and/or M-Foods Investors;

                                       91
<PAGE>

                  (j)      Indebtedness incurred by any Consolidated Party in
         connection with Permitted Acquisitions or Permitted Asset Dispositions
         under agreements providing for indemnification, adjustment of purchase
         price or similar obligations, or from guarantees or letters of credit,
         surety bonds or performance bonds securing the performance of such
         Credit Party pursuant to such agreements;

                  (k)      Indebtedness consisting of obligations of any
         Consolidated Party under incentive, non-compete, consulting, deferred
         compensation or other similar arrangements incurred by such Person in
         connection with the Transaction and Permitted Acquisitions;

                  (l)      Indebtedness incurred in connection with the
         financing of insurance premiums;

                  (m)      Indebtedness in respect of netting services,
         overdraft protections and similar arrangements in each case in
         connection with deposit accounts;

                  (n)      to the extent constituting Indebtedness, obligations
         incurred in respect of Liens permitted under Section 8.2(e);

                  (o)      Qualified Preferred Stock in an aggregate liquidation
         preference (including any accretion or accumulated or pay-in-kind
         dividends thereon) not to exceed (i) $275,000,000 LESS (ii) the
         outstanding principal amount of all Subordinated Debt incurred under
         clause (f) above (including any accumulated, pay-in-kind or capitalized
         interest thereon); and

                  (p)      other Indebtedness in the aggregate principal amount
         for all Consolidated Parties not to exceed $20,000,000 at any time
         outstanding.

                  8.2      LIENS.

         The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or hereafter acquired, except for:

                  (a)      Liens in favor of the Agent to secure the Credit
         Party Obligations;

                  (b)      Liens existing as of the Closing Date and set forth
         on SCHEDULE 8.2; PROVIDED that no such Lien shall at any time be
         extended to or cover any Property other than the Property subject
         thereto on the Closing Date;

                  (c)      Liens (other than Liens created or imposed under
         ERISA) for taxes, assessments or governmental charges or levies not yet
         delinquent or Liens for taxes being contested in good faith by
         appropriate proceedings for which adequate reserves determined in
         accordance with GAAP have been established (and as to which the
         Property subject to any such Lien is not yet subject to foreclosure,
         sale or loss on account thereof) or not otherwise required to be paid
         under Section 7;

                                       92
<PAGE>

                  (d)      statutory and contractual Liens of landlords and
         Liens of carriers, warehousemen, mechanics, materialmen and suppliers
         and other Liens imposed by law or pursuant to customary reservations or
         retentions of title arising in the ordinary course of business,
         PROVIDED that such Liens (i) secure only amounts not overdue by more
         than 30 days or (ii) if more than 30 days overdue, are unfiled and no
         other action has been taken to enforce the same or are being contested
         in good faith by appropriate proceedings for which adequate reserves
         determined in accordance with GAAP have been established (and as to
         which the Property subject to any such Lien is not yet subject to
         foreclosure, sale or loss on account thereof) or not otherwise required
         to be paid under Section 7;

                  (e)      Liens (other than Liens created or imposed under
         ERISA) incurred or deposits made by any Consolidated Party in the
         ordinary course of business in connection with workers' compensation,
         unemployment insurance and other types of social security, or to secure
         the performance of tenders, statutory obligations, bids, leases,
         government contracts, performance, surety, appeal and return-of-money
         bonds and other similar obligations (exclusive of obligations for the
         payment of borrowed money);

                  (f)      Liens in connection with attachments or judgments
         (including judgment or appeal bonds) PROVIDED that either (i) the
         judgments secured shall, within 30 days after the entry thereof, have
         been discharged or execution thereof stayed pending appeal, or shall
         have been discharged within 30 days after the expiration of any such
         stay or (ii) the judgments secured thereby do not constitute an Event
         of Default under Section 9.1(h);

                  (g)      easements, rights-of-way, covenants, restrictions
         (including zoning and building code restrictions), minor defects or
         irregularities in title and other similar charges or encumbrances not,
         in any material respect, impairing the use of the encumbered Property
         for its intended purposes;

                  (h)      Liens on Property of any Person securing purchase
         money Indebtedness (including obligations in respect of Capital Leases,
         Synthetic Leases and mortgage, industrial revenue bond, industrial
         development bond and similar financings) of such Person permitted under
         Section 8.1(c), PROVIDED that any such Lien attaches to such Property
         concurrently with or within 90 days after the acquisition, repair,
         replacement or improvement (as applicable) thereof;

                  (i)      leases, licenses, subleases or sublicenses granted to
         others not interfering in any material respect with the business of any
         Consolidated Party;

                  (j)      any interest of title of a lessor, licensor,
         sublessor or sublicensor under, and Liens arising from UCC financing
         statements (or equivalent filings, registrations or agreements in
         foreign jurisdictions) relating to, leases or licenses not prohibited
         by this Credit Agreement;

                  (k)      Liens in favor of customs and revenue authorities
         arising as a matter of law to secure payment of customs duties in
         connection with the importation of goods;

                  (l)      Liens deemed to exist in connection with Investments
         in repurchase agreements permitted under Section 8.6;

                                       93
<PAGE>

                  (m)      normal and customary rights of setoff upon deposits
         of cash in favor of banks or other depository institutions;

                  (n)      Liens of a collection bank arising under Section
         4-210 of the Uniform Commercial Code on items in the course of
         collection;

                  (o)      Liens arising from operation of the statutory trust
         under PACA or MWPDA, PROVIDED that such Liens do not secure past due
         account payable balances exceeding $10,000,000 in the aggregate at any
         one time outstanding, unless, in respect of any such account payables,
         (i) appropriate legal or administrative action has been commenced and
         is being diligently pursued or defended by the applicable Consolidated
         Party and (ii) the ability of the applicable vendor to enforce any such
         Lien provided under PACA or MWPDA has been stayed or otherwise legally
         prohibited during the pendency of such action;

                  (p)      Liens on "farm products" (as defined in the Food
         Security Act) to the extent, in the case of any such Lien, that such
         Lien (i) was created by the Person (but not a Consolidated Party) which
         sold such Property to the applicable Consolidated Party and (ii)
         follows the Property by reason of the provisions of the Food Security
         Act notwithstanding the transfer of title to such Property to such
         Consolidated Party;

                  (q)      Liens of sellers of goods to the Borrower and any of
         its Subsidiaries arising under Article 2 of the Uniform Commercial Code
         or similar provisions of applicable law in the ordinary course of
         business, covering only the goods sold and securing only the unpaid
         purchase price for such goods and related expenses;

                  (r)      Liens on Property of any Foreign Subsidiary securing
         Indebtedness of such Foreign Subsidiary to the extent permitted under
         Section 8.1(g);

                  (s)      Liens in favor of sellers of Property attaching
         solely to cash earnest money deposits in connection with any letter of
         intent or purchase agreement in connection with a Permitted
         Acquisition;

                  (t)      Liens arising from precautionary UCC financing
         statements regarding consignments;

                  (u)      Liens on insurance policies and the proceeds thereof
         to the extent securing the financing of the premium payment with
         respect thereto and to the extent such payment is not delinquent;

                  (v)      Liens encumbering customary initial deposits and
         margin deposits, and similar Liens and margin deposits, and similar
         Liens attaching to commodity trading accounts or other brokerage
         accounts incurred in the ordinary course of business;

                  (w)      Liens in favor of financial institutions securing
         reimbursement obligations in respect of documentary letters of credit
         or bankers' acceptances; PROVIDED that such Liens attach only to the
         goods covered thereby and the proceeds thereof;

                                       94
<PAGE>

                  (x)      any interest of title of a purchaser under, and Liens
         arising from UCC financing statements relating to, any sale of accounts
         receivable in connection with the compromise thereof;

                  (y)      Liens consisting of an agreement to sell, transfer or
         dispose of Property pursuant to a Permitted Asset Disposition;

                  (z)      Liens in favor of Dairy LLC or Dairy TXCT LLC
         encumbering distributions made in accordance with the terms of their
         respective operating agreements (or other similar agreements); and

                  (aa)     other Liens not described above, PROVIDED that such
         Liens do not secure obligations in excess of $20,000,000 at any one
         time outstanding.

                  8.3      NATURE OF BUSINESS.

         The Credit Parties will not permit any Consolidated Party to
substantively alter the character or conduct of the business conducted by such
Person as of the Closing Date, except for reasonable extensions thereof and
businesses ancillary or complementary thereto.

                  8.4      CONSOLIDATION, MERGER, DISSOLUTION, ETC.

         Except in connection with a Permitted Asset Disposition, the Credit
Parties will not permit any Consolidated Party to enter into any transaction of
merger or consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); PROVIDED that, notwithstanding the foregoing
provisions of this Section 8.4 but subject to the terms of Sections 7.11 and
7.12, (a) the Borrower may merge or consolidate with any of its Subsidiaries
PROVIDED that the Borrower shall be the continuing or surviving corporation, (b)
subject to the preceding clause (a), any Credit Party (other than the Parent or
the Borrower) may merge or consolidate with any other Credit Party (other than
the Parent or the Borrower), (c) any Consolidated Party which is not a Credit
Party may be merged or consolidated with or into any Credit Party other than the
Parent PROVIDED that such Credit Party shall be the continuing or surviving
corporation, (d) any Consolidated Party which is not a Credit Party may be
merged or consolidated with or into any other Consolidated Party which is not a
Credit Party, (e) any Subsidiary of the Borrower may merge with any Person that
is not a Credit Party in connection with an Asset Disposition permitted under
Section 8.5, (f) the Borrower or any Subsidiary of the Borrower may merge with
any Person other than a Consolidated Party in connection with a Permitted
Acquisition PROVIDED that, if such transaction involves the Borrower, the
Borrower shall be the continuing or surviving corporation and (g) any Subsidiary
of the Borrower may dissolve, liquidate or wind up its affairs at any time
provided that such dissolution, liquidation or winding up, as applicable, could
not have a Material Adverse Effect.

                  8.5      ASSET DISPOSITIONS.

         The Credit Parties will not permit any Consolidated Party or Dairy
Holdco to make any Asset Disposition other than an Excluded Asset Disposition
unless (a) at least 75% of the consideration paid in connection therewith
(excluding the assumption by the purchaser of liabilities associated with such
disposed Property) is cash or Cash Equivalents and shall be in an amount not

                                       95
<PAGE>

less than the fair market value of the Property disposed of, (b) if such
transaction is a Sale and Leaseback Transaction, such transaction is not
prohibited by the terms of Section 8.13, (c) such transaction does not involve a
sale or other disposition of receivables other than receivables owned by or
attributable to other Property concurrently being disposed of in a transaction
otherwise permitted under this Section 8.5, (d) the aggregate net book value of
all of the assets sold or otherwise disposed of by the Consolidated Parties in
all such transactions after the Closing Date (other than (i) any Asset
Disposition of all of the Capital Stock or all or substantially all of the
Property of Dairy LLC, Dairy TXCT LLC and/or any of their respective
Subsidiaries and (ii) any other Asset Disposition to the extent that 100% of the
consideration paid in connection therewith (excluding the assumption by the
purchaser of liabilities associated with such disposed Property) is cash or Cash
Equivalents) shall not exceed $50,000,000, (e) if the net book value of the
Property subject to such Asset Disposition exceeds $5,000,000, the Borrower
shall have delivered to the Agent (i) a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
the Credit Parties would be in compliance with the financial covenants set forth
in Section 7.10(a) and (b) and (ii) a certificate of an Executive Officer of the
Borrower specifying the anticipated date of such Asset Disposition, briefly
describing the assets to be sold or otherwise disposed of and setting forth the
net book value of such assets, the aggregate consideration and a reasonable
estimate of the Net Cash Proceeds to be received for such assets in connection
with such Asset Disposition, (f) the Credit Parties shall apply (or cause to be
applied) an amount equal to the Net Cash Proceeds of such Asset Disposition to
(i) make Eligible Reinvestments or (ii) prepay the Loans (and cash collateralize
LOC Obligations) in accordance with the terms of Section 3.3(b)(iii)(A) and (g)
such Asset Disposition is not prohibited by any Junior Financing Documentation.
Pending final application of the Net Cash Proceeds of any Asset Disposition, the
Consolidated Parties may apply such Net Cash Proceeds to temporarily reduce the
Revolving Loans or to make Investments in Cash Equivalents.

         Upon a sale of assets or the sale of Capital Stock of a Consolidated
Party permitted by this Section 8.5, such Collateral automatically shall be
released from the Liens created by the Credit Documents and the Agent shall (to
the extent applicable) deliver to the Credit Parties, upon the Credit Parties'
request and at the Credit Parties' expense, such documentation as is reasonably
necessary to evidence the release of the Agent's security interest, if any, in
such assets or Capital Stock, including, without limitation, amendments or
terminations of UCC financing statements, if any, the return of stock
certificates, if any, and, provided that such Consolidated Party is released
from all of its obligations, if any, under any Junior Financing Documentation,
the release of such Consolidated Party from all of its obligations, if any,
under the Credit Documents.

                  8.6      INVESTMENTS.

         The Credit Parties will not permit any Consolidated Party to make any
Investments, except for:

                  (a)      Investments consisting of cash and Cash Equivalents;

                  (b)      Investments consisting of accounts receivable
         created, acquired or made by any Consolidated Party in the ordinary
         course of business and payable or dischargeable in accordance with
         customary trade terms;

                                       96
<PAGE>

                  (c)      Investments consisting of Capital Stock, obligations,
         securities or other property received by any Consolidated Party (i) in
         settlement of accounts receivable (created in the ordinary course of
         business) from bankrupt or insolvent obligors or disputes with
         customers and (ii) as partial consideration for a Permitted Asset
         Disposition;

                  (d)      Investments existing as of the Closing Date and set
         forth in SCHEDULE 8.6;

                  (e)      Investments consisting of advances or loans to
         directors, officers, employees, agents, customers or suppliers that do
         not exceed $3,500,000 in the aggregate at any one time outstanding;

                  (f)      Investments in any Credit Party (other than the
         Parent) and Investments by Consolidated Parties which are not Credit
         Parties in other Consolidated Parties;

                  (g)      to the extent not required at such time to prepay the
         Loans pursuant to Section 3.3(b), any Eligible Reinvestment of the Net
         Cash Proceeds of (i) any Involuntary Disposition as contemplated by
         Section 7.6(b), (ii) any Asset Disposition as contemplated by Section
         8.5(g) or (iii) any Equity Issuance;

                  (h)      Investments consisting of an Acquisition by the
         Borrower or any Subsidiary of the Borrower, PROVIDED that (i) the
         Property acquired (or the Property of the Person acquired) in such
         Acquisition is used or useful in the same or a similar line of business
         as the Borrower and its Subsidiaries were engaged in on the Closing
         Date (and any reasonable extensions or expansions thereof or businesses
         ancillary or complementary thereto), (ii) the Agent shall have received
         all items in respect of the Capital Stock or Property acquired in such
         Acquisition required to be delivered by the terms of Section 7.11
         and/or Section 7.12, (iii) in the case of an Acquisition of the Capital
         Stock of another Person, the board of directors (or other comparable
         governing body) of such other Person shall have duly approved such
         Acquisition, (iv) the Borrower shall have delivered to the Agent (A) a
         Pro Forma Compliance Certificate demonstrating that, upon giving effect
         to such Acquisition on a Pro Forma Basis, the Credit Parties would be
         in compliance with the financial covenants set forth in Section 7.10(a)
         and (b) and (B) a certificate of an Executive Officer of the Borrower
         (1) demonstrating that, upon giving effect to such Acquisition, at
         least 90% of Consolidated EBITDA for the most recently ended fiscal
         year period for each of the Consolidated Parties and the acquired
         Person or Property preceding the date of such Acquisition with respect
         to which the Agent shall have received the Required Financial
         Information has been audited in accordance with GAAP, in the case of
         the Consolidated Parties, as required by Section 7.1(a) and, in the
         case of the acquired Person or Property, by independent certified
         public accountants of recognized national standing reasonably
         acceptable to the Agent (whose opinion shall not be limited as to the
         scope or qualified as to going concern status or any other material
         qualifications or exceptions) and (2) to the extent that audited
         financial information for the acquired Person or Property is required
         under the terms of the foregoing clause (1), certifying that the
         quarterly financial statements with respect to the Person or Property
         acquired for each fiscal quarter period ending after the date of the
         last audit and immediately prior to the date of such Acquisition have
         been prepared in accordance with GAAP (subject to audit adjustments and
         the absence of footnotes) and reviewed by independent certified public
         accountants of recognized national standing reasonably acceptable to
         the Agent, (v) the representations and warranties made by the

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         Credit Parties in Section 6 shall be true and correct in all material
         respects at and as if made as of the date of such Acquisition (after
         giving effect thereto) except to the extent such representations and
         warranties expressly relate to an earlier date, (vi) if such
         transaction involves the purchase of an interest in a partnership
         between the Borrower as a general partner and entities unaffiliated
         with the Borrower as the other partners, such transaction shall be
         effected by having such equity interest acquired by a corporate holding
         company directly or indirectly wholly-owned by the Borrower newly
         formed for the sole purpose of effecting such transaction, (vii) after
         giving effect to such Acquisition, there shall be at least $25,000,000
         of availability existing under the Revolving Committed Amount and
         (viii) the aggregate consideration (including cash and non-cash
         consideration and any assumption of Indebtedness, but excluding
         consideration consisting of (A) any Capital Stock of the Parent issued
         to the seller of the Capital Stock or Property acquired in such
         Acquisition, (B) consideration consisting of the Net Cash Proceeds of
         the issuance of Subordinated Debt and (C) to the extent not required at
         such time to prepay the Loans pursuant to Section 3.3(b), consideration
         consisting of the Net Cash Proceeds of any Equity Issuance by the
         Parent consummated subsequent to the Closing Date and the Net Cash
         Proceeds of any Asset Disposition (other than an Asset Dispositions of
         the type described in clauses (i), (viii) and (ix) of the definition of
         "Excluded Asset Disposition") or Involuntary Disposition consummated
         subsequent to the Closing Date) paid by the Consolidated Parties for
         all such Acquisitions occurring after the Closing Date shall not exceed
         $100,000,000;

                  (i)      Investments consisting of endorsements for collection
         or deposit in the ordinary course of business;

                  (j)      to the extent constituting Investments, (i) Guaranty
         Obligations permitted by Section 8.1(o), (ii) Permitted Liens and (iii)
         transactions permitted by Section 8.4;

                  (k)      Investments consisting of customary trade
         arrangements with customers in the ordinary course of business and
         consistent with past practices;

                  (l)      Investments consisting of obligations of directors
         and/or employee's of any Consolidated Party in connection with such
         Person's purchase of Capital Stock in the Parent or M-Foods Investors;

                  (m)      Investments made with the portion of Excess Cash Flow
         not required to prepay the Loans in accordance with Section 3.3(b)(ii);

                  (n)      to the extent constituting Investments, the licensing
         or contribution of Intellectual Property pursuant to joint marketing
         arrangements with Persons other than Consolidated Parties;

                  (o)      Investments consisting of advances or loans to the
         Parent in lieu of, and not exceeding the aggregate amount of,
         Restricted Payments to the Parent permitted under Section 8.7; or

                  (p)      other Investments not listed above (including,
         without limitation, Investments in Foreign Subsidiaries and Joint
         Ventures) in an aggregate net amount not to

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         exceed $65,000,000 at any one time; PROVIDED, HOWEVER, that, to the
         extent that any such Investment (or series of related Investments) made
         pursuant to this clause (p) consists of the contribution(s) or other
         transfer(s) of Property (other than cash) having an aggregate net book
         value in excess of $5,000,000 to a Joint Venture for consideration less
         than the fair market value of such Property, then the Borrower shall
         have delivered to the Agent a Pro Forma Compliance Certificate
         demonstrating that, upon giving effect on a Pro Forma Basis to such
         Investment(s), the Credit Parties would be in compliance with the
         financial covenants set forth in Section 7.10(a) and (b).

                  8.7      RESTRICTED PAYMENTS.

         The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) Restricted Payments by any Consolidated Party
which is not a Credit Party to any other Consolidated Party, (b) to the extent
constituting Restricted Payments, transactions permitted by Section 8.4, Section
8.8 or Section 8.9, (c) Restricted Payments by any Consolidated Parties to the
Parent for its proportionate share of the tax liability of the affiliated group
of corporations that file consolidated federal income tax returns (or that file
state or local income tax returns on a consolidated basis), (d) Restricted
Payments made on the Closing Date to consummate the Transaction pursuant to the
Merger Agreement, (e) scheduled payments of Subordinated Debt or Qualified
Preferred Stock not in violation of the subordination provisions contained in
the applicable Junior Financing Documentation, (f) Restricted Payments by any
Consolidated Party to the Parent not to exceed an amount necessary to permit the
Parent to pay its costs (including all professional fees and expenses) incurred
to comply with its reporting obligations under federal or state laws or in
connection with reporting or other obligations under this Credit Agreement and
the Credit Documents, (g) Restricted Payments by any Consolidated Party to the
Parent not to exceed an amount necessary to permit the Parent to pay its interim
expenses incurred in connection with any public offering of equity securities
the net proceeds of which are specifically intended to be received by or
contributed or loaned to the Borrower, which, unless such offering shall have
been terminated by the board of directors of the Parent, shall be repaid to the
Borrower promptly out of the proceeds of such offering, (h) Restricted Payments
by any Consolidated Party to the Parent and/or M-Foods Investors to pay for
corporate, administrative and operating expenses (including indemnity payments)
in the ordinary course of business, (i) Restricted Payments by each of Dairy LLC
and Dairy TXCT LLC to Dairy Holdco to permit the holders of the Capital Stock of
Dairy Holdco to pay for income taxes attributable to their respective
Investments in Dairy Holdco in accordance with the terms of the operating
agreements (or other similar agreements) of Dairy Holdco, Dairy LLC, and Dairy
TXCT LLC, (j) Restricted Payments by each of Dairy LLC and Dairy TXCT LLC to
Dairy Holdco not to exceed an amount necessary to permit Dairy Holdco to pay for
corporate and administrative expenses in the ordinary course of business, (k)
Restricted Payments by each of Dairy LLC and Dairy TXCT LLC for the account of
Dairy Holdco to the extent that the proceeds of such Restricted Payments are
made directly to Credit Parties for the account of Dairy Holdco, (l) repurchases
by the Parent of its Capital Stock (and Restricted Payments by the Borrower,
Dairy LLC, Dairy TXCT LLC and/or the Parent) to the extent necessary to enable
the Parent, Dairy Holdings and/or M-Foods Investors to repurchase Capital Stock
from a former or current employee (and/or such employee's estate, spouse and/or
former spouse) of the Parent or the Borrower or any of its Subsidiaries in
connection with the termination of such employee's employment; PROVIDED that
such Restricted Payments shall not exceed $2,000,000 in cash during any fiscal
year PLUS (1) the unused amount available pursuant to this clause (l) for such
Restricted Payments from any previous year and (2) the

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proceeds of any key-man life insurance maintained by the Parent, the Borrower or
any of its Subsidiaries, (m) repurchases of Capital Stock of the Parent deemed
to occur upon the non-cash exercise of stock options and warrants and (n) other
Restricted Payments made with the Net Cash Proceeds of Equity Issuances which
are not required to be applied to the prepayment of the Loans pursuant to
Section 3.3(b)(v).

                  8.8      OTHER INDEBTEDNESS.

         The Credit Parties will not permit any Consolidated Party to (a) if any
Default or Event of Default has occurred and is continuing or would be directly
or indirectly caused as a result thereof, after the issuance thereof, amend or
modify any of the terms of any Indebtedness of such Consolidated Party if such
amendment or modification would add or change any terms in a manner adverse to
such Consolidated Party, or shorten the final maturity or average life to
maturity or require any payment to be made sooner than originally scheduled or
increase the interest rate applicable thereto, or, make (or give any notice with
respect thereto) any voluntary or optional payment or prepayment or redemption
or acquisition for value of (including without limitation, by way of depositing
money or securities with the trustee with respect thereto before due for the
purpose of paying when due), refund, refinance or exchange of any other
Indebtedness of such Consolidated Party, other than in connection with the
refinancing, repayment or retirement of any such Indebtedness with Capital Stock
or the Net Cash Proceeds from an Equity Issuance which are not required to
prepay the Loans pursuant to Section 3.3(b)(v), (b) after the issuance thereof,
amend or modify any of the terms of any Junior Financing Documentation if such
amendment or modification would add or change any terms in a manner adverse to
the Consolidated Parties, or shorten the final maturity or average life to
maturity thereof or require any payment to be made sooner than originally
scheduled or increase the interest rate applicable thereto or change any
subordination provision thereof, (c) make interest payments in respect of any
Subordinated Debt or Qualified Preferred Stock in violation of the subordination
provisions of the applicable Junior Financing Documentation or (d) make (or give
any notice with respect thereto) any voluntary or optional payment or
prepayment, redemption, acquisition for value or defeasance of (including
without limitation, by way of depositing money or securities with the trustee
with respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any Subordinated Debt except, (i) subject to the terms
of clause (a) above, for the exchange of the Subordinated Notes for notes with
identical terms registered pursuant to the registration rights agreement set
forth in the Subordinated Debt Indenture and (ii) provided that no Default or
Event of Default exists, the refinancing, repayment or retirement of any
Subordinated Debt with Capital Stock or the Net Cash Proceeds from Equity
Issuances which are not required to prepay the Loans pursuant to Section
3.3(b)(v).

                  8.9      TRANSACTIONS WITH AFFILIATES.

         The Credit Parties will not permit any Consolidated Party to enter into
or permit to exist any transaction or series of transactions with any officer,
director, Subsidiary or Affiliate of such Person other than (a) advances of
working capital to any Credit Party other than the Parent, (b) transfers of cash
and assets to any Credit Party other than the Parent, (c) transactions expressly
permitted by Section 8.1, Section 8.4, Section 8.5, Section 8.6 or Section 8.7,
(d) normal compensation, indemnification and reimbursement of expenses of
officers, employees and directors, (e) the payment of fees and expenses in
connection with the Transaction as contemplated by the Merger Agreement, the
Credit Documents and the Subordinated Debt Indenture, (f) the payment of fees
and

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reimbursement of expenses to the Equity Investors and any indemnities in
connection with the Transaction, (g) the transactions set forth on SCHEDULE 8.9,
(h) Equity Issuances to Affiliates, (i) the payment of fees and expenses of the
Equity Investors contemplated by the Management Agreement and (j) except as
otherwise specifically limited in this Credit Agreement, other transactions
which are entered into in the ordinary course of such Person's business on terms
and conditions substantially as favorable to such Person as would be obtainable
by it in a comparable arms-length transaction with a Person other than an
officer, director, shareholder, Subsidiary or Affiliate.

                  8.10     FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; DAIRY
         RESTRUCTURING DOCUMENTS.

         The Credit Parties will not permit any Consolidated Party to (a) amend,
modify or change its articles of incorporation (or other similar organizational
document) or bylaws (or other similar documents) in a manner adverse to the
rights of the Lenders or (b) change its fiscal year. The Credit Parties will not
permit any of Dairy Holdco, Dairy LLC or Dairy TXCT LLC to amend, modify or
change its articles of formation, operating agreement or any of the Dairy
Restructuring Documents in a manner adverse to the Lenders.

                  8.11     LIMITATION ON RESTRICTED ACTIONS.

         The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its Property (other than Capital Stock in Joint Ventures) to any
Credit Party, or (e) act as a Credit Party and pledge its Property (other than
Capital Stock in Joint Ventures) pursuant to and in accordance with the Credit
Documents or any renewals, refinancings, exchanges, refundings or extension
thereof, except (in respect of any of the matters referred to in clauses (a)-(d)
above) for such encumbrances or restrictions existing under or by reason of (i)
this Credit Agreement and the other Credit Documents, (ii) the Subordinated Debt
Indenture, as in effect as of the Closing Date, (iii) applicable law or
regulation, (iv) any document or instrument governing Indebtedness permitted
under Section 8.1, PROVIDED that the encumbrances and restrictions relating to
any Consolidated Party in such document or instrument are no more restrictive
than the corresponding encumbrances and restrictions contained in the Credit
Documents, (v) any Permitted Lien or any document or instrument governing any
Permitted Lien, PROVIDED that any such restriction contained therein relates
only to the asset or assets subject to such Permitted Lien, (vii) customary
restrictions and conditions contained in any agreement relating to the sale of
any Property permitted under Section 8.5 pending the consummation of such sale,
(viii) customary non-assignment provisions in contracts, (ix) the documentation
governing or evidencing the Existing Notes or (x) agreements entered into by
Foreign Subsidiaries.

                  8.12     OWNERSHIP OF SUBSIDIARIES.

         Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not (i) except in the case of Dairy LLC or
Dairy TXCT LLC, permit the Credit Parties (other than the Parent) to own
directly less than 90% of the Voting Stock of any of the Domestic

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Subsidiaries except as a result of or in connection with a dissolution, merger,
consolidation or disposition of a Subsidiary not prohibited by Section 8.4 or
Section 8.5, (ii) permit the Credit Parties to own directly or indirectly less
than 90% of the Voting Stock of any of the Foreign Subsidiaries except (A) to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock of
Foreign Subsidiaries or (B) as a result of or in connection with a dissolution,
merger, consolidation or disposition of a Subsidiary not prohibited by Section
8.4 or Section 8.5, (iii) prior to any Asset Disposition of all of the Capital
Stock or all or substantially all of the Property of Dairy LLC, permit any
Person other than the Credit Parties or Dairy Holdco to own any Capital Stock of
Dairy LLC, (iv) prior to any Asset Disposition of all of the Capital Stock or
all or substantially all of the Property of Dairy TXCT LLC, permit any Person
other than the Credit Parties or Dairy Holdco to own any Capital Stock of Dairy
TXCT LLC, (v) except as permitted by Section 8.6, permit any Subsidiary of the
Borrower to issue or have outstanding any shares of preferred Capital Stock
other than Qualified Preferred Stock or (vi) create, incur, assume or suffer to
exist any Lien on any Capital Stock of any Subsidiary of the Borrower required
to pledged to the Agent pursuant to the terms of Section 7.12, except for
Permitted Liens.

                  8.13     SALE LEASEBACKS.

         The Credit Parties will not permit any Consolidated Party to enter into
any Sale and Leaseback Transaction; PROVIDED, HOWEVER, the Borrower and its
Subsidiaries may enter into Sale and Leaseback Transactions so long as the fair
market value of all Properties subject to such transactions occurring on or
after the Closing Date does not exceed $25,000,000.

                  8.14     NO FURTHER NEGATIVE PLEDGES.

         The Credit Parties will not permit any Consolidated Party to enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the existence of any Lien upon any of its Property in favor of the
Agent (for the benefit of the Lenders) for the purpose of securing the Credit
Party Obligations, whether now owned or hereafter acquired, or requiring the
grant of any security for any obligation if such Property is given as security
for the Credit Party Obligations, except (a) in connection with any document or
instrument governing Indebtedness incurred pursuant to Section 8.1(c), PROVIDED
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (b) in connection with any
Permitted Lien or any document or instrument governing any Permitted Lien,
PROVIDED that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien, (c) pursuant to customary restrictions
and conditions contained in any agreement relating to any Permitted Asset
Disposition, pending the consummation of such sale, (d) customary non-assignment
provisions in contracts, (e) the documentation governing or evidencing the
Existing Notes, (f) agreements entered into by to Foreign Subsidiaries or (g)
Property consisting of Capital Stock in Joint Ventures.

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                                    SECTION 9

                                EVENTS OF DEFAULT

                  9.1      EVENTS OF DEFAULT.

         An Event of Default shall exist upon the occurrence and during the
continuance of any of the following specified events (each an "EVENT OF
DEFAULT"):

                  (a)      PAYMENT.  Any Credit Party shall

                           (i)      default in the payment when due of any
                  principal of any of the Loans or of any reimbursement
                  obligations arising from drawings under Letters of Credit, or

                           (ii)     default, and such default shall continue for
                  five (5) or more Business Days, in the payment when due of any
                  interest on the Loans or of any interest on reimbursement
                  obligations arising from drawings under Letters of Credit, or
                  of any Fees or other amounts owing hereunder, under any of the
                  other Credit Documents or in connection herewith or therewith;
                  or

                  (b)      REPRESENTATIONS. Any representation, warranty or
         statement made or deemed to be made by any Credit Party herein, in any
         of the other Credit Documents, or in any statement or certificate
         delivered or required to be delivered pursuant hereto or thereto shall
         prove untrue in any material respect on the date as of which it was
         deemed to have been made; or

                  (c)      COVENANTS.  Any Credit Party shall

                           (i)      default in the due performance or observance
                  of any term, covenant or agreement contained in Sections 7.2
                  (with respect to corporate existence), 7.8, 7.10, 7.11 or 7.12
                  or Section 8; or

                           (ii)     default in the due performance or observance
                  by it of any term, covenant or agreement (other than those
                  referred to in subsections (a), (b) or (c)(i) of this Section
                  9.1) contained in this Credit Agreement or any other Credit
                  Document and such default shall continue unremedied for a
                  period of at least 30 days after notice thereof by the Agent;
                  or

                  (d)      OTHER CREDIT DOCUMENTS. Except as a result of or in
         connection with a dissolution, merger or disposition of a Subsidiary
         not prohibited by Section 8.4 or Section 8.5, any Credit Document shall
         fail to be in full force and effect (other than in accordance with its
         terms) or to give the Agent and/or the Lenders the Liens, material
         rights, powers and privileges purported to be created thereby, or any
         Credit Party (or, in the case of the Investor Pledge Agreement, Dairy
         Holdco) shall so state in writing; or

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                  (e)      GUARANTIES. Except as the result of or in connection
         with a dissolution, merger or disposition of a Subsidiary not
         prohibited by Section 8.4 or Section 8.5, the guaranty given by any
         Guarantor hereunder (including any Person after the Closing Date in
         accordance with Section 7.11) or any provision thereof shall cease to
         be in full force and effect, or any Guarantor (including any Person
         after the Closing Date in accordance with Section 7.11) hereunder or
         any Person acting by or on behalf of such Guarantor shall deny or
         disaffirm such Guarantor's obligations under such guaranty, or any
         Guarantor shall default (beyond any applicable grace period) in the due
         performance or observance of any term, covenant or agreement on its
         part to be performed or observed pursuant to any guaranty; or

                  (f)      BANKRUPTCY, ETC. Any Bankruptcy Event shall occur
         with respect to any Consolidated Party; or

                  (g)      DEFAULTS UNDER OTHER INDEBTEDNESS. With respect to
         any Indebtedness (other than Indebtedness outstanding under this Credit
         Agreement and the Existing Notes) in excess of $10,000,000 in the
         aggregate principal amount for the Consolidated Parties taken as a
         whole, (A) either (1) default in any payment shall occur and continue
         (beyond the applicable grace period with respect thereto, if any) with
         respect to any such Indebtedness (other than as a result of
         subordination provisions invoked by the Lenders), or (2) a default in
         the observance or performance relating to such Indebtedness or
         contained in any instrument or agreement evidencing, securing or
         relating thereto, or any other event or condition shall occur or exist,
         the effect of which default or other event or condition is to cause, or
         permit, the holder or holders of such Indebtedness (or trustee or agent
         on behalf of such holders) to cause (determined without regard to
         whether any notice or lapse of time is required), any such Indebtedness
         to become due prior to its stated maturity; or (B) any such
         Indebtedness shall be declared due and payable, or required to be
         prepaid other than by a regularly scheduled required prepayment, prior
         to the stated maturity thereof; or

                  (h)      JUDGMENTS. One or more judgments or decrees shall be
         entered against one or more of the Consolidated Parties involving a
         liability of $10,000,000 or more in the aggregate (to the extent not
         paid or covered by insurance provided by a carrier who has not
         disclaimed coverage and has the ability to perform) and any such
         judgments or decrees shall not have been paid, vacated, discharged or
         stayed or bonded pending appeal within 60 days from the entry thereof;
         or

                  (i)      ERISA. Any of the following events or conditions, if
         such event or condition could reasonably be expected to result in
         liability that would have a Material Adverse Effect: (i) any
         "accumulated funding deficiency," as such term is defined in Section
         302 of ERISA and Section 412 of the Code, whether or not waived, shall
         exist with respect to any Plan, or any lien shall arise on the assets
         of any Consolidated Party or any ERISA Affiliate in favor of the PBGC
         or a Plan; (ii) an ERISA Event shall occur with respect to a Single
         Employer Plan, which is, in the reasonable opinion of the Agent, likely
         to result in the termination of such Plan for purposes of Title IV of
         ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer
         Plan or Multiple Employer Plan, which is, in the reasonable opinion of
         the Agent, likely to result in (A) the termination of such Plan for
         purposes of Title IV of ERISA, or (B) any Consolidated Party or any
         ERISA Affiliate incurring any liability in connection with a withdrawal
         from, reorganization of (within the

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         meaning of Section 4241 of ERISA), or insolvency (within the meaning of
         Section 4245 of ERISA) of such Plan; or (iv) any prohibited transaction
         (within the meaning of Section 406 of ERISA or Section 4975 of the
         Code) or breach of fiduciary responsibility shall occur which may
         subject any Consolidated Party or any ERISA Affiliate to any liability
         under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
         the Code, or under any agreement or other instrument pursuant to which
         any Consolidated Party or any ERISA Affiliate has agreed or is required
         to indemnify any person against any such liability; or

                  (j)      SUBORDINATED FINANCINGS. (i) There shall occur and be
         continuing any "Event of Default" (or any comparable term) under, and
         as defined in, any Junior Financing Documentation, (ii) any of the
         Credit Party Obligations for any reason shall cease to be "Designated
         Senior Debt" (or any comparable term) under, and as defined in, any
         Junior Financing Documentation, (iii) any Indebtedness other the Credit
         Party Obligations shall constitute "Designated Senior Debt" (or any
         comparable term) under, and as defined in, any Junior Financing
         Documentation or (iv) the subordination provisions set forth in Article
         10 and Section 11.02 of the Subordinated Debt Indenture (or comparable
         provisions in any other Junior Financing Documentation) shall, in whole
         or in part, terminate, cease to be effective or cease to be legally
         valid, binding and enforceable against any holder of the applicable
         Subordinated Debt or Qualified Preferred Stock (other than in
         accordance with their respective terms); or

                  (k)      OWNERSHIP. (i) There shall occur a Change of Control
         or (ii) prior to any Asset Disposition of all of the Capital Stock or
         all or substantially all of the Property of Dairy LLC and Dairy TXCT
         LLC in one or more transactions permitted under Section 8.5, the
         Capital Stock of Dairy Holdco shall fail to be owned, directly or
         indirectly, substantially by the same Persons that own, directly and
         indirectly, the Capital Stock of the Parent.

                  9.2      ACCELERATION; REMEDIES.

         Upon the occurrence and during the continuance of an Event of Default,
the Agent, upon the request and direction of the Required Lenders, shall, by
written notice to the Credit Parties take any of the following actions:

                  (a)      TERMINATION OF COMMITMENTS. Declare the Commitments
         terminated whereupon the Commitments shall be immediately terminated.

                  (b)      ACCELERATION. Declare the Credit Party Obligations to
         be due and payable, whereupon the same shall be immediately due and
         payable without presentment, demand, protest or other notice of any
         kind, all of which are hereby waived by the Credit Parties.

                  (c)      CASH COLLATERAL. Direct the Borrower to pay (and the
         Borrower hereby promises to pay, upon receipt of such notice) to the
         Agent additional cash, to be held by the Agent, for the benefit of the
         Lenders, in a cash collateral account as additional security for the
         LOC Obligations in respect of subsequent drawings under all then
         outstanding Letters of Credit in an amount equal to the maximum
         aggregate amount which may be drawn under all Letters of Credits then
         outstanding.

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                  (d)      ENFORCEMENT OF RIGHTS. Enforce any and all rights and
         interests created and existing under the Credit Documents including,
         without limitation, all rights and remedies existing under the
         Collateral Documents, all rights and remedies against a Guarantor and
         all rights of set-off.

         Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then, without the
giving of any notice or other action by the Agent or the Lenders, (i) the
Commitments automatically shall terminate, (ii) all of the outstanding Credit
Party Obligations automatically shall immediately become due and payable and
(iii) the Borrower automatically shall be obligated (and hereby promises) to pay
to the Agent additional cash, to be held by the Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then outstanding Letters
of Credit in an amount equal to the maximum aggregate amount which may be drawn
under all Letters of Credits then outstanding.

                                   SECTION 10

                                AGENCY PROVISIONS

                  10.1     APPOINTMENT, POWERS AND IMMUNITIES.

                  (a)      Each Lender hereby irrevocably appoints and
         authorizes the Agent to act as its agent under this Credit Agreement
         and the other Credit Documents with such powers and discretion as are
         specifically delegated to the Agent by the terms of this Credit
         Agreement and the other Credit Documents, together with such other
         powers as are reasonably incidental thereto. The Agent (which term as
         used in this sentence and in Section 10.5 and the first sentence of
         Section 10.6 hereof shall include its Affiliates and its own and its
         Affiliates' officers, directors, employees, and agents): (i) shall not
         have any duties or responsibilities except those expressly set forth in
         this Credit Agreement and shall not be a trustee or fiduciary for any
         Lender; (ii) shall not be responsible to the Lenders for any recital,
         statement, representation, or warranty (whether written or oral) made
         in or in connection with any Credit Document or any certificate or
         other document referred to or provided for in, or received by any of
         them under, any Credit Document, or for the value, validity,
         effectiveness, genuineness, enforceability, or sufficiency of any
         Credit Document, or any other document referred to or provided for
         therein or for any failure by any Credit Party or any other Person to
         perform any of its obligations thereunder; (iii) shall not be
         responsible for or have any duty to ascertain, inquire into, or verify
         the performance or observance of any covenants or agreements by any
         Credit Party or the satisfaction of any condition or to inspect the
         Property (including the books and records) of any Credit Party or any
         of its Subsidiaries or Affiliates; and (iv) shall not be responsible
         for any action taken or omitted to be taken by it under or in
         connection with any Credit Document, except for its own gross
         negligence, bad faith or willful misconduct. The Agent may employ
         agents and attorneys-in-fact and shall not be responsible for the
         negligence or misconduct of any such agents or attorneys-in-fact
         selected by it with reasonable care.

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                  (b)      The Issuing Lender shall act on behalf of the Lenders
         with respect to any Letters of Credit issued by it and the documents
         associated therewith until such time (and except for so long) as the
         Agent may agree at the request of the Required Lenders to act for the
         Issuing Lender with respect thereto; PROVIDED, HOWEVER, that the
         Issuing Lender shall have all of the benefits and immunities (i)
         provided to the Agent in this Section 10 with respect to any acts taken
         or omissions suffered by the Issuing Lender in connection with Letters
         of Credit issued by it or proposed to be issued by it and the
         application and agreements for letters of credit pertaining to the
         Letters of Credit as fully as if the term "Agent" as used in this
         Section 10 included the Issuing Lender with respect to such acts or
         omissions, and (ii) as additionally provided herein with respect to the
         Issuing Lender.

                  10.2     RELIANCE BY AGENT.

         The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; PROVIDED, HOWEVER,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking any such action.

                  10.3     DEFAULTS.

         The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or a Credit Party specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall (subject to Section 10.2 hereof) take such action with respect to such
Default or Event of Default as shall reasonably be directed by the Required
Lenders (or such other Lenders as required by Section 11.6), PROVIDED THAT,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.

                  10.4     RIGHTS AS A LENDER.

         With respect to its Commitment and the Loans made by it, Bank of
America (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and

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powers hereunder as any other Lender and may exercise the same as though it were
not acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. Bank
of America (and any successor acting as Agent) and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Credit Party or any of its
Subsidiaries or Affiliates as if it were not acting as Agent, and Bank of
America (and any successor acting as Agent) and its Affiliates may accept fees
and other consideration from any Credit Party or any of its Subsidiaries or
Affiliates for services in connection with this Credit Agreement or otherwise
without having to account for the same to the Lenders.

                  10.5     INDEMNIFICATION.

         The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Credit
Parties under such Section) ratably (in accordance with their respective (i)
Revolving Commitments (or, if the Revolving Commitments have been terminated,
the outstanding Revolving Loans and Participation Interests in Letters of Credit
(including the Participation Interests of the Issuing Lender in Letters of
Credit)), (ii) outstanding Tranche A Term Loans (and Participation Interests
therein) and (iii) outstanding Tranche B Term Loans (and Participation Interests
therein)) for, and hold the Agent harmless from and against, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Agent (including by any Lender) in any way relating to or arising out of any
Credit Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Credit Document; PROVIDED that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence, bad faith or willful misconduct of the Person to be indemnified.
Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs or expenses payable by
the Credit Parties under Section 11.5, to the extent that the Agent is not
promptly reimbursed for such costs and expenses by the Credit Parties. The
agreements in this Section 10.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.

                  10.6     NON-RELIANCE ON AGENT AND OTHER LENDERS.

         Each Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Credit Parties and
their Subsidiaries and decision to enter into this Credit Agreement and that it
will, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under the Credit Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Credit Party or any of its Subsidiaries
or Affiliates that may come into the possession of the Agent or any of its
Affiliates.

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                  10.7     SUCCESSOR AGENT.

         The Agent may resign at any time by giving 30 days prior notice thereof
to the Lenders and the Credit Parties. Upon any such resignation, the Required
Lenders shall have the right with, if no Event of Default under Section 9.1(a),
(c)(i) or (f) exists, the consent of the Borrower (not to be unreasonably
withheld) to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States having combined capital and surplus of at least $100,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges, and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent. If no
successor administrative agent has accepted appointment as Agent by the date
which is thirty (30) days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided
for above.

                  10.8     SYNDICATION AGENT.

         The Syndication Agent, in its capacity as such, shall have no rights,
powers, duties, liabilities, fiduciary relationships or obligations under this
Credit Agreement or any of the other Credit Documents.

                                   SECTION 11

                                  MISCELLANEOUS

                  11.1     NOTICES.

         Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid (or pursuant to an invoice arrangement) to a
reputable national overnight air courier service, or (d) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case to the respective parties at the address, in the
case of the Credit Parties and the Agent, set forth below, and, in the case of
the Lenders, set forth on SCHEDULE 2.1(a), or at such other address as such
party may specify by written notice to the other parties hereto:

         if to any Credit Party:

                  Michael Foods, Inc.
                  5353 Wayzata Blvd., Suite 324
                  Minneapolis, MN  55416

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                  Attn:  Gregg Ostrander, President
                  Telephone:  (952) 546-1500
                  Telecopy:    (952) 546-3711

         with copies to:

                  Vestar Capital Partners
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO  80202
                  Attn: Chris Henderson, Managing Director
                  Telephone:  (303) 294-1822
                  Telecopy:  (303) 292-6639

                  and

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, Illinois  60601
                  Attn:  Steve Ritchie
                  Telephone:  (312) 861-2210
                  Telecopy:    (312) 861-2200

         if to the Agent in respect of Notices of Borrowing, payments and
         prepayments:

                  Bank of America, N. A.
                  Independence Center, 15th Floor
                  NC1-001-15-04
                  101 North Tryon Street
                  Charlotte, North Carolina 28255
                  Attn:  Agency Services
                  Telephone:  (704) 386-9046
                  Telecopy:    (704) 409-0026

         if to the Agent in respect of all other communications:

                  Bank of America, N. A.
                  CA5-701-12-09
                  1455 Market Street
                  San Francisco, California  94103
                  Attn: Agency Management, Christine Cordi
                  Telephone:  (415) 436-2790
                  Telecopy:    (415) 436-5004

         in each case with a copy to:

                  Bank of America, N. A.
                  100 North Tryon Street

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<PAGE>

                  NC1-007-13-06
                  Charlotte, NC  28255
                  Attn:  John O'Neill
                  Telephone: (704) 388-5045
                  Telecopy: (704) 386-9607

                  11.2     RIGHT OF SET-OFF; ADJUSTMENTS.

         Upon the occurrence and during the continuance of any Event of Default
under Section 9.1(a), each Lender (and each of its Affiliates) is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final, other than payroll or trust accounts) at any time
held and other indebtedness at any time owing by such Lender (or any of its
Affiliates) to or for the credit or the account of any Credit Party against any
and all of the obligations of such Person then due and owing under this Credit
Agreement or under any other Credit Document, irrespective of whether such
Lender shall have made any demand hereunder or thereunder. Each Lender agrees
promptly to notify in writing any affected Credit Party after any such set-off
and application made by such Lender; PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 11.2 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Lender may have.

                  11.3     BENEFIT OF AGREEMENT.

                  (a)      This Credit Agreement shall be binding upon and inure
         to the benefit of and be enforceable by the respective successors and
         assigns of the parties hereto; PROVIDED that none of the Credit Parties
         may assign or transfer any of its interests and obligations without
         prior written consent of each of the Lenders; PROVIDED FURTHER that the
         rights of each Lender to transfer, assign or grant participations in
         its rights and/or obligations hereunder shall be limited as set forth
         in this Section 11.3.

                  (b)      Each Lender may assign to one or more Eligible
         Assignees all or a portion of its rights and obligations under this
         Credit Agreement (including, without limitation, all or a portion of
         its Loans and its Commitment); PROVIDED, HOWEVER, that

                           (i)      each such assignment shall be to an Eligible
                  Assignee;

                           (ii)     except in the case of an assignment to
                  another Lender, an Affiliate of an existing Lender or, with
                  respect to any Lender that is a fund that invests in bank
                  loans, any other fund that invests in bank loans and is
                  managed or advised by the same investment advisor as such
                  Lender or by an Affiliate of such investment advisor or an
                  assignment of all of a Lender's rights and obligations under
                  this Credit Agreement, any such partial assignment shall be in
                  an amount at least equal to $2,500,000 (or, if less, the
                  remaining amount of the Commitment being assigned by such
                  Lender) or an integral multiple of $1,000,000 in excess
                  thereof;

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                           (iii)    each such assignment by a Lender of any
                  portion of its Revolving Commitment and its Revolving Loans
                  shall be accompanied by an assignment of a constant, and not
                  varying, percentage of all of such Lender's Tranche A Term
                  Loans, and each such assignment by a Lender of any portion of
                  its Tranche A Term Loans shall be accompanied by an assignment
                  of a constant, and not varying, percentage of all of such
                  Lender's Revolving Commitment and its Revolving Loans; and

                           (iv)     the parties to such assignment shall execute
                  and deliver to the Agent for its acceptance an Assignment and
                  Acceptance in the form of EXHIBIT 11.3(b) (an "ASSIGNMENT AND
                  ACCEPTANCE"), together with a processing fee of $3,500.

         Upon execution, delivery, and acceptance of such Assignment and
         Acceptance, the assignee thereunder shall be a party hereto and, to the
         extent of such assignment, have the obligations, rights, and benefits
         of a Lender hereunder and the assigning Lender shall, to the extent of
         such assignment, relinquish its rights and be released from its
         obligations under this Credit Agreement. Upon the consummation of any
         assignment pursuant to this Section 11.3(b), the assignor, the Agent
         and the Credit Parties shall make appropriate arrangements so that, if
         required, new Notes are issued to the assignor and the assignee. If the
         assignee is not a United States person under Section 7701(a)(30) of the
         Code, it shall deliver to the Credit Parties and the Agent
         certification as to exemption from deduction or withholding of Taxes in
         accordance with Section 3.11.

                  (c)      The Agent shall maintain at its address referred to
         in Section 11.1 a copy of each Assignment and Acceptance delivered to
         and accepted by it and a register for the recordation of the names and
         addresses of the Lenders and the Commitment of, and principal amount of
         the Loans owing to, each Lender from time to time (the "REGISTER"). The
         entries in the Register shall be conclusive and binding for all
         purposes, absent manifest error, and the Credit Parties, the Agent and
         the Lenders may treat each Person whose name is recorded in the
         Register as a Lender hereunder for all purposes of this Credit
         Agreement. The Register shall be available for inspection by the Credit
         Parties or any Lender at any reasonable time and from time to time upon
         reasonable prior notice. Any assignment of any Loan or other Credit
         Party Obligations shall be effective only upon an entry with respect
         thereto being made in the Register.

                  (d)      Upon its receipt of an Assignment and Acceptance
         executed by the parties thereto and payment of the processing fee, the
         Agent shall, if such Assignment and Acceptance has been completed and
         is in substantially the form of Exhibit 11.3(b) hereto, (i) accept such
         Assignment and Acceptance, (ii) record the information contained
         therein in the Register and (iii) give prompt notice thereof to the
         parties thereto.

                  (e)      Each Lender may sell participations to one or more
         Persons in all or a portion of its rights, obligations or rights and
         obligations under this Credit Agreement (including all or a portion of
         its Commitment or its Loans); PROVIDED, HOWEVER, that (i) such Lender's
         obligations under this Credit Agreement shall remain unchanged, (ii)
         such Lender shall remain solely responsible to the other parties hereto
         for the performance of such obligations, (iii) the participant shall be
         entitled to the benefit of the

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         yield protection provisions contained in Sections 3.6 through 3.12,
         inclusive (but only to the extent that the selling Lender is so
         entitled), and the right of set-off contained in Section 11.2 (provided
         that, in the case of Section 3.11, such participant shall have complied
         with the provisions of said Section (except that any forms required to
         be delivered pursuant to Section 3.11 will be delivered to the Lender
         from whom the participation was purchased) and, provided, further, that
         no participant shall be entitled to receive any greater amount pursuant
         to Sections 3.9, 3.11 or 3.12 than the Lender from whom the
         participation was purchased would have been entitled to receive in
         respect of the amount of the participation transferred by such Lender
         to such participant had no such transfer occurred), and (iv) the Credit
         Parties shall continue to deal solely and directly with such Lender in
         connection with such Lender's rights and obligations under this Credit
         Agreement, and such Lender shall retain the sole right to enforce the
         obligations of the Credit Parties relating to the Credit Party
         Obligations owing to such Lender and to approve any amendment,
         modification, or waiver of any provision of this Credit Agreement
         (other than amendments, modifications, or waivers directly affecting
         such participant (A) decreasing the amount of principal of or the rate
         at which interest is payable on such Loans, (B) extending the Maturity
         Date or any scheduled Principal Amortization Payment Date or date fixed
         for the payment of interest on such Loans or (C) extending its
         Commitment.

                  (f)      Notwithstanding any other provision set forth in this
         Credit Agreement, any Lender may at any time collaterally assign and
         pledge all or any portion of its Loans and its Notes, if any, (i) to
         any Federal Reserve Bank as collateral security pursuant to Regulation
         A and any Operating Circular issued by such Federal Reserve Bank, (ii)
         in the case of any Lender which has made Tranche B Term Loans hereunder
         and is an investment fund, to the trustee under the indenture to which
         such fund is a party in support of its obligations to such trustee for
         the benefit of the applicable trust beneficiaries or (iii) to
         appropriate entities within the Farm Credit System as collateral
         security. No such assignment shall release the assigning Lender from
         its obligations hereunder.

                  (g)      Any Lender may furnish any information concerning the
         Consolidated Parties in the possession of such Lender from time to time
         to assignees and participants (including prospective assignees and
         participants), subject, however, to the provisions of Section 11.14
         hereof.

                  (h)      Notwithstanding anything to the contrary contained in
         any Credit Document, the Master Assignment Agreement shall be deemed to
         be an Assignment and Acceptance executed in compliance with this
         Section 11.3.

                  11.4     NO WAIVER; REMEDIES CUMULATIVE.

         No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Agent or any Lender and any of the
Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not

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<PAGE>

exclusive of any rights or remedies which the Agent or any Lender would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle the Credit Parties to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Agent or the
Lenders to any other or further action in any circumstances without notice or
demand.

                  11.5     EXPENSES; INDEMNIFICATION.

                  (a)      The Credit Parties jointly and severally agree to pay
         on demand all reasonable costs and expenses of the Agent in connection
         with the syndication, preparation, execution, delivery, administration,
         modification, and amendment of this Credit Agreement, the other Credit
         Documents, and the other documents to be delivered hereunder,
         including, without limitation, the reasonable fees and expenses of
         counsel for the Agent with respect thereto and with respect to advising
         the Agent as to its rights and responsibilities under the Credit
         Documents. The Credit Parties further jointly and severally agree to
         pay on demand all reasonable costs and expenses of the Agent and one
         counsel to all of the Lenders, if any, in connection with the
         enforcement (whether through negotiations, legal proceedings, or
         otherwise) of the Credit Documents and the other documents to be
         delivered hereunder, except to the extent such claim, damage, loss,
         liability, cost, or expense results from the gross negligence, bad
         faith, willful misconduct of the Person seeking reimbursement or a
         breach by such Person of its obligations hereunder.

                  (b)      The Credit Parties jointly and severally agree to
         indemnify and hold harmless the Agent and each Lender and each of their
         Affiliates and their respective officers, directors, employees and
         agents (each, an "INDEMNIFIED PARTY") from and against any and all
         claims, damages, actual losses, liabilities, costs, and expenses
         (including, without limitation, reasonable attorneys' fees of the Agent
         and one counsel to all of the Lenders and excluding taxes) that may be
         incurred by or awarded against any Indemnified Party, in each case
         arising out of or in connection with or by reason of (including,
         without limitation, in connection with any investigation, litigation,
         or proceeding or preparation of defense in connection therewith) the
         Credit Documents, any of the transactions contemplated herein or the
         actual or proposed use of the proceeds of the Loans, except to the
         extent such claim, damage, loss, liability, cost, or expense results
         from the gross negligence, bad faith or willful misconduct of such
         Indemnified Party (or any of its Affiliates or any their respective
         officers, directors, employees or agents) or from a breach by such
         Indemnified Party (or any of its Affiliates or any their respective
         officers, directors, employees or agents) of its obligations hereunder.
         In the case of an investigation, litigation or other proceeding to
         which the indemnity in this Section 11.5 applies, such indemnity shall
         be effective whether or not such investigation, litigation or
         proceeding is brought by any of the Credit Parties, their respective
         directors, shareholders or creditors or an Indemnified Party or any
         other Person or any Indemnified Party is otherwise a party thereto and
         whether or not the transactions contemplated hereby are consummated. No
         party hereto shall assert any claim against any other party hereto, any
         of their Affiliates, or any of their respective directors, officers,
         employees, attorneys, agents, and advisers, on any theory of liability,
         for special, indirect, consequential, or punitive damages arising out
         of or otherwise relating to the Credit Documents, any of the
         transactions contemplated herein or the actual or proposed use of the
         proceeds of the Loans.

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<PAGE>

                  (c)      Without prejudice to the survival of any other
         agreement of the Credit Parties hereunder, the agreements and
         obligations of the Credit Parties contained in this Section 11.5 shall
         survive the repayment of the Loans, LOC Obligations and other Credit
         Party Obligations and the termination of the Commitments hereunder.

                  11.6     AMENDMENTS, WAIVERS AND CONSENTS.

         Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, each of the Credit Parties
party thereto and the Required Lenders, PROVIDED, HOWEVER, that:

                  (a)      without the consent of each Lender affected thereby,
         neither this Credit Agreement nor any other Credit Document may be
         amended, changed, waived, discharged or terminated so as to

                           (i)      extend any Commitment or the final maturity
                  of any Loan or of any reimbursement obligation, or any portion
                  thereof, arising from drawings under Letters of Credit, or
                  extend or waive any Principal Amortization Payment of any
                  Loan, or any portion thereof,

                           (ii)     reduce the rate or extend the time of
                  payment of interest on any Loan or of any reimbursement
                  obligation, or any portion thereof, arising from drawings
                  under Letters of Credit (other than as a result of waiving the
                  applicability of any post-default increase in interest rates)
                  or of any Fees,

                           (iii)    reduce or waive the principal amount of any
                  Loan or of any reimbursement obligation, or any portion
                  thereof, arising from drawings under Letters of Credit,

                           (iv)     increase the Commitment of a Lender over the
                  amount thereof in effect (it being understood and agreed that
                  a waiver of any condition precedent set forth in Section 5.2
                  or of any Default or Event of Default or mandatory reduction
                  in the Commitments shall not constitute a change in the terms
                  of any Commitment of any Lender),

                           (v)      except as the result of or in connection
                  with an Asset Disposition not prohibited by Section 8.5,
                  release all or substantially all of the Collateral,

                           (vi)     except as the result of or in connection
                  with a dissolution, merger or disposition of a Consolidated
                  Party not prohibited by Section 8.4 or Section 8.5, release
                  the Borrower or substantially all of the other Credit Parties
                  from its or their obligations under the Credit Documents,

                           (vii)    amend, modify or waive any provision of this
                  Section 11.6 or Section 3.13(a),

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                           (viii)   reduce any percentage specified in the
                  definition of Required Lenders, or

                           (ix)     consent to the assignment or transfer by the
                  Borrower or all or substantially all of the other Credit
                  Parties of any of its or their rights and obligations under
                  (or in respect of) the Credit Documents except as permitted
                  hereby or thereby;

                  (b)      without the consent of Lenders (other than Defaulting
         Lenders) holding in the aggregate at least a majority of the
         outstanding Tranche A Term Loans (and Participation Interests therein)
         and Lenders (other than Defaulting Lenders) holding in the aggregate at
         least a majority of the outstanding Tranche B Term Loans (and
         Participation Interests therein), Section 3.3(b)(vi) may not be
         amended, changed, waived, discharged or terminated so as to extend the
         time for or change the amount or the manner of application of proceeds
         of any mandatory prepayment required by Section 3.3(b)(ii), (iii), (iv)
         or (v) hereof;

                  (c)      without the consent of the Agent, no provision of
         Section 10 may be amended, changed, waived, discharged or terminated;

                  (d)      without the consent of the Issuing Lender, no
         provision of Section 2.2 may be amended, changed, waived, discharged or
         terminated and

                  (e)      without the consent of the Swingline Lender, no
         provision of Section 2.3 may be amended.

         Notwithstanding the fact that the consent of all the Lenders is
         required in certain circumstances as set forth above, (x) each Lender
         is entitled to vote as such Lender sees fit on any bankruptcy
         reorganization plan that affects the Loans, and each Lender
         acknowledges that the provisions of Section 1126(c) of the Bankruptcy
         Code supersedes the unanimous consent provisions set forth herein and
         (y) the Required Lenders shall determine whether or not to allow a
         Credit Party to use cash collateral in the context of a bankruptcy or
         insolvency proceeding and such determination shall be binding on all of
         the Lenders.

                  11.7     COUNTERPARTS.

         This Credit Agreement may be executed in any number of counterparts,
each of which when so executed shall be an original, but all of which shall
constitute one and the same instrument. It shall not be necessary in making
proof of this Credit Agreement to produce or account for more than one such
counterpart for each of the parties hereto. Delivery by facsimile by any of the
parties hereto of an executed counterpart of this Credit Agreement shall be as
effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.

                  11.8     HEADINGS.

         The headings of the sections hereof are provided for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Credit Agreement.

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                  11.9     SURVIVAL.

         All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive until this Credit Agreement shall be terminated in
accordance with the terms of Section 11.13(b).

                  11.10    GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.

                  (a)      THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY
         PROVIDED THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
         OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
         BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
         STATE OF NEW YORK. Any legal action or proceeding with respect to this
         Credit Agreement or any other Credit Document may be brought in the
         courts of the State of New York in New York County, or of the United
         States for the Southern District of New York, and, by execution and
         delivery of this Credit Agreement, each of the Credit Parties hereby
         irrevocably accepts for itself and in respect of its property,
         generally and unconditionally, the nonexclusive jurisdiction of such
         courts. Each of the Credit Parties further irrevocably consents to the
         service of process out of any of the aforementioned courts in any such
         action or proceeding by the mailing of copies thereof by registered or
         certified mail, postage prepaid, to it at the address set out for
         notices pursuant to Section 11.1, such service to become effective
         three (3) days after such mailing. Nothing herein shall affect the
         right of the Agent or any Lender to serve process in any other manner
         permitted by law or to commence legal proceedings or to otherwise
         proceed against any Credit Party in any other jurisdiction.

                  (b)      Each of the Credit Parties hereby irrevocably waives
         any objection which it may now or hereafter have to the laying of venue
         of any of the aforesaid actions or proceedings arising out of or in
         connection with this Credit Agreement or any other Credit Document
         brought in the courts referred to in subsection (a) above and hereby
         further irrevocably waives and agrees not to plead or claim in any such
         court that any such action or proceeding brought in any such court has
         been brought in an inconvenient forum.

                  (c)      TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT,
         THE LENDERS, EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL
         RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
         ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER
         CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                  11.11    SEVERABILITY.

         If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in

                                      117
<PAGE>

full force and effect and shall be construed without giving effect to the
illegal, invalid or unenforceable provisions.

                  11.12    ENTIRETY.

         This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.

                  11.13    BINDING EFFECT; TERMINATION.

                  (a)      This Credit Agreement shall become effective at such
         time on or after the Closing Date when it shall have been executed by
         each Credit Party and the Agent, and the Agent shall have received
         copies hereof (telefaxed or otherwise) which, when taken together, bear
         the signatures of each Lender, and thereafter this Credit Agreement
         shall be binding upon and inure to the benefit of each Credit Party,
         the Agent and each Lender and their respective successors and assigns.

                  (b)      The term of this Credit Agreement shall be until the
         Credit Party Obligations are Fully Satisfied.

                  11.14    CONFIDENTIALITY.

         The Agent and each Lender (each, a "LENDING PARTY") agrees to keep
confidential any information furnished or made available to it by or on behalf
of the Credit Parties pursuant to this Credit Agreement; PROVIDED that nothing
herein shall prevent any Lending Party from disclosing such information (a) to
any other Lending Party or any Affiliate of any Lending Party, or any officer,
director, employee, agent, or advisor of any Lending Party or Affiliate of any
Lending Party, provided in each case that such Person is informed of the
confidential nature of such information, (b) to any other Person if reasonably
incidental to the administration of the Credit Facilities, provided in each case
that such Person is informed of the confidential nature of such information, (c)
as required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Lending Party, (f) that is or becomes
available to the public or that is or becomes available to any Lending Party
other than as a result of a disclosure by any Lending Party or other Person
bound by this Section 11.14 prohibited by this Credit Agreement, (g) in
connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, PROVIDED, such Lending Party will, to the extent
practical, use reasonable efforts to notify the Borrower prior to such
disclosure, (h) to the extent necessary in connection with the exercise of any
remedy under this Credit Agreement or any other Credit Document, (i) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender, (j) to any direct or indirect contractual counterparty
in swap agreements or such contractual counterparty's professional advisor (so
long as such contractual counterparty or professional advisor to such
contractual counterparty (i) has been approved in writing by the Borrower and
(ii) agrees in a writing enforceable by the Borrower to be bound by the
provisions of this Section 11.14) and

                                      118
<PAGE>

(k) subject to provisions substantially similar to those contained in this
Section 11.14, to any actual or proposed participant or assignee.

                  11.15    SOURCE OF FUNDS.

         Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:

                  (a)      no part of such funds constitutes assets allocated to
         any separate account maintained by such Lender in which any employee
         benefit plan (or its related trust) has any interest;

                  (b)      to the extent that any part of such funds constitutes
         assets allocated to any separate account maintained by such Lender,
         such Lender has disclosed to the Borrower the name of each employee
         benefit plan whose assets in such account exceed 10% of the total
         assets of such account as of the date of such purchase (and, for
         purposes of this clause (b), all employee benefit plans maintained by
         the same employer or employee organization are deemed to be a single
         plan);

                  (c)      to the extent that any part of such funds constitutes
         assets of an insurance company's general account, such insurance
         company has complied with all of the requirements of the regulations
         issued under Section 401(c)(1)(A) of ERISA; or

                  (d)      such funds constitute assets of one or more specific
         benefit plans which such Lender has identified in writing to the
         Borrower.

As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.

                  11.16    REGULATION D.

         Each of the Lenders hereby represents and warrants to the Borrower that
it is a commercial lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires or loans in
the ordinary course of business and that it will make or acquire Loans for its
own account in the ordinary course of business.

                  11.17    CONFLICT.

         To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.

                           [Signature Pages to Follow]

                                      119
<PAGE>

         IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.

BORROWER:                  MICHAEL FOODS, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

PARENT:                    M-FOODS HOLDINGS, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

SUBSIDIARY
GUARANTORS:                CRYSTAL FARMS REFRIGERATED
                           DISTRIBUTION COMPANY

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           NORTHERN STAR CO.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           KOHLER MIX SPECIALTIES, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           KOHLER MIX SPECIALTIES OF
                           CONNECTICUT, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           [Signatures Continued]

<PAGE>

                           M.G. WALDBAUM COMPANY

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           PAPETTI'S HYGRADE EGG PRODUCTS, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           CASA TRUCKING, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           WISCO FARM COOPERATIVE

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           WFC, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           FARM FRESH FOODS, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           MICHAEL FOODS OF DELAWARE, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           [Signatures Continued]

<PAGE>

                           MIDWEST MIX, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           MINNESOTA PRODUCTS, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           PAPETTI ELECTROHEATING CORPORATION

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           M-FOODS DAIRY, LLC

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           M-FOODS DAIRY TXCT, LLC

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           [Signatures Continued]

<PAGE>

AGENT:                     BANK OF AMERICA, N. A.,
                           in its capacity as Agent

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

SYNDICATION AGENT:         BEAR, STEARNS & CO.,
                           in its capacity as Syndication Agent

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

LENDERS:                   BANK OF AMERICA, N. A.,

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

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