Document:

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                                                                     EXHIBIT 4.9

                              BBC CAPITAL TRUST II

                              AMENDED AND RESTATED

                                 TRUST AGREEMENT

                                      AMONG

                    BANKATLANTIC BANCORP, INC., AS DEPOSITOR

                  WILMINGTON TRUST COMPANY, AS PROPERTY TRUSTEE

                                       AND

                    THE ADMINISTRATIVE TRUSTEES NAMED HEREIN

                         DATED AS OF ___________, _____

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                        PAGE
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<S>                        <C>                                                          <C>
ARTICLE I                  DEFINED TERMS
Section 101.               Definitions

ARTICLE II                 ESTABLISHMENT OF THE TRUST
Section 201.               Name
Section 202.               Office of the Property Trustee;
                           Principal Place of Business
Section 203.               Initial Contribution of Trust Property;
                           Organizational Expenses
Section 204.               Issuance of the Preferred Securities.
Section 205.               Issuance of the Common Securities;
                           Subscription and Purchase of Debentures.
Section 206.               Declaration of Trust
Section 207.               Authorization to Enter into Certain
                           Transactions.
Section 208.               Assets of Trust
Section 209.               Title to Trust Property

ARTICLE III                PAYMENT ACCOUNT
Section 301.               Payment Account

ARTICLE IV                 DISTRIBUTIONS; REDEMPTION
Section 401.               Distributions
Section 402.               Redemption.
Section 403.               Subordination of Common Securities.
Section 404.               Payment Procedures
Section 405.               Tax Returns and Reports
Section 406.               Payment of Taxes, Duties, etc. of the
                           Trust
Section 407.               Payments Under Indenture.

ARTICLE V                  TRUST SECURITIES CERTIFICATES
Section 501.               Initial Ownership
Section 502.               The Trust Securities Certificates
Section 503.               Execution and Delivery of Trust
                           Securities Certificates
Section 504.               Registration of Transfer and Exchange of
                           Preferred Securities Certificates
Section 505.               Mutilated, Destroyed, Lost or Stolen
                           Trust Securities Certificates
Section 506.               Persons Deemed Securityholders
Section 507.               Access to List of Securityholders' Names
                           and Addresses
Section 508.               Maintenance of Office or Agency
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<TABLE>
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<S>                        <C>                                                          <C>
Section 509.               Appointment of Paying Agent
Section 510.               Ownership of Common Securities by
                           Depositor
Section 511.               Preferred Securities Certificates
Section 512.               Global Preferred Security
Section 513.               Notice to Clearing Agency
Section 514.               Rights of Securityholders

ARTICLE VI.                ACTS OF SECURITYHOLDERS; MEETINGS;
                           VOTING
Section 601.               Limitations on Voting Rights
Section 602.               Notice of Meetings
Section 603.               Meetings of Preferred Securityholders
Section 604.               Voting Rights
Section 605.               Proxies, etc.
Section 606.               Securityholder Action by Written
                           Consent
Section 607.               Record Date for Voting and Other
                           Purposes
Section 608.               Acts of Securityholders
Section 609.               Inspection of Records

ARTICLE VII.               REPRESENTATIONS AND WARRANTIES.
Section 701.               Representations and Warranties of the
                           Bank and the Property Trustee
Section 702.               Representations and Warranties of
                           Depositor

ARTICLE VIII.              TRUSTEES.
Section 801.               Certain Duties and Responsibilities
Section 802.               Certain Notices
Section 803.               Certain Rights of Property Trustee
Section 804.               Not Responsible for Recitals or Issuance
                           of Securities
Section 805.               May Hold Securities
Section 806.               Compensation; Indemnity; Fees
Section 807.               Corporate Property Trustee Required;
                           Eligibility of Trustees
Section 808.               Conflicting Interests
Section 809.               Co-Trustees and Separate Trustee.
Section 810.               Resignation and Removal; Appointment of
                           Successor
Section 811.               Acceptance of Appointment by Successor
Section 812.               Merger, Conversion, Consolidation or
                           Succession to Business
Section 813.               Preferential Collection of Claims Against
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<TABLE>
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                                                                                        PAGE
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<S>                        <C>                                                          <C>
                           Depositor or Trust
Section 814.               Reports by Property Trustee
Section 815.               Reports to the Property Trustee
Section 816.               Evidence of Compliance with Conditions
                           Precedent
Section 817.               Number of Trustees
Section 818.               Delegation of Power
Section 819.               Voting

ARTICLE IX.                TERMINATION, LIQUIDATION AND MERGER
Section 901.               Termination Upon Expiration Date
Section 902.               Early Termination
Section 903.               Termination
Section 904.               Liquidation
Section 905.               Mergers, Consolidations, Amalgamations or
                           Replacements of the Trust

ARTICLE X.                 MISCELLANEOUS PROVISIONS.
Section 1001.              Limitation of Rights of Securityholders
Section 1002.              Amendment
Section 1003.              Separability
Section 1004.              Governing Law
Section 1005.              Payments Due on Non-Business Day
Section 1006.              Successors
Section 1007.              Headings
Section 1008.              Reports, Notices and Demands
Section 1009.              Agreement Not to Petition
Section 1010.              Trust Indenture Act; Conflict with Trust
                           Indenture Act
Section 1011.              Acceptance of Terms of Trust Agreement,
                           Guarantee and Indenture

Exhibit A                  Certificate of Trust
Exhibit B                  Form of Certificate Depository Agreement
Exhibit C                  Form of Common Securities Certificate
Exhibit D                  Form of Expense Agreement
Exhibit E                  Form of Preferred Securities Certificate
</TABLE>

                                     - iii -

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                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
         Section of                                                           Section of Amended
    Trust Indenture Act                                                         and Restated
    of 1939, as amended                                                        Trust Agreement
    -------------------                                                       ------------------
    <S>                                                                       <C>
         310(a)(1)                                                                         807
         310(a)(2)                                                                         807
         310(a)(3)                                                                         807
         310(a)(4)                                                                   207(a)(ii)
         310(b)                                                                            808
         311(a)                                                                            813
         311(b)                                                                            813
         312(a)                                                                            507
         312(b)                                                                            507
         312(c)                                                                            507
         313(a)                                                                          814(a)
         313(a)(4)                                                                       814(b)
         313(b)                                                                          814(b)
         313(c)                                                                           1008
         313(d)                                                                          814(c)
         314(a)                                                                            815
         314(b)                                                                 Not Applicable
         314(c)(1)                                                                         816
         314(c)(2)                                                                         816
         314(c)(3)                                                              Not Applicable
         314(d)                                                                 Not Applicable
         314(e)                                                                        101,816
         315(a)                                                                  801(a), 803(a)
         315(b)                                                                      802, 1008
         315(c)                                                                          801(a)
         315(d)                                                                       801, 803
         316(a)(2)                                                              Not Applicable
         316(b)                                                                 Not Applicable
         316(c)                                                                            607
         317(a)(1)                                                              Not Applicable
         317(a)(2)                                                              Not Applicable
         317(b)                                                                            509
         318(a)                                                                           1010
</TABLE>

Note:    This Cross-Reference Table does not constitute part of this Agreement
         and shall not affect any interpretation of any of its terms or
         provisions.

                                     - iv -

<PAGE>

                      AMENDED AND RESTATED TRUST AGREEMENT

AMENDED AND RESTATED TRUST AGREEMENT, dated as of __________, ____, among (i)
BankAtlantic Bancorp, Inc., a Florida corporation (including any successors or
assigns, the "Depositor"), (ii) Wilmington Trust Company, a banking corporation
duly organized and existing under the laws of the State of Delaware, as property
trustee (the "Property Trustee", the "Delaware Trustee" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) Alan B. Levan, an individual, James A. White, an individual, and Jarett S.
Levan, an individual, each of whose address is c/o BankAtlantic Bancorp, Inc.,
1750 East Sunrise Boulevard, Fort Lauderdale, Florida 33304 (each an
"Administrative Trustee" and collectively the "Administrative Trustees") (the
Property Trustee, the Delaware Trustee and the Administrative Trustees referred
to collectively as the "Trustees"), and (v) the several Holders (as hereinafter
defined).

                                    RECITALS

WHEREAS, the Depositor, the Delaware Trustee, and Alan B. Levan, James A. White
and Jarett S. Levan, each as an Administrative Trustee, have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into of that certain Trust Agreement, dated as of
October 12, 2001 (the "Original Trust Agreement"), and by the execution and
filing by the Delaware Trustee, the Depositor and the Administrative Trustees
with the Secretary of State of the State of Delaware of the Certificate of
Trust, filed on October 12, 2001, the form of which is attached as Exhibit A;
and

WHEREAS, the Depositor, the Delaware Trustee, the Property Trustee and the
Administrative Trustees desire to amend and restate the Original Trust Agreement
in its entirety as set forth herein to provide for, among other things, (i) the
issuance of the Common Securities (as defined herein) by the Trust (as defined
herein) to the Depositor; (ii) the issuance and sale of the Preferred Securities
(as defined herein) by the Trust pursuant to the Underwriting Agreement (as
defined herein); (iii) the acquisition by the Trust from the Depositor of all of
the right, title and interest in the Debentures (as defined herein); and (iv)
the appointment of the Trustees;

NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party for the benefit of the
other parties and for the benefit of the Securityholders (as defined herein)
hereby amends and restates the Original Trust Agreement in its entirety and
agrees as follows.

                                    ARTICLE I
                                  DEFINED TERMS

SECTION 101. DEFINITIONS.

For all purposes of this Trust Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

         (a)      the terms defined in this Article I have the meanings assigned
         to them in this Article I and include the plural as well as the
         singular;

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         (b)      all other terms used herein that are defined in the Trust
         Indenture Act, either directly or by reference therein, have the
         meanings assigned to them therein;

         (c)      unless the context otherwise requires, any reference to an
         "Article" or a "Section" refers to an Article or a Section, as the case
         may be, of this Trust Agreement; and

         (d)      the words "herein", "hereof' and "hereunder" and other words
         of similar import refer to this Trust Agreement as a whole and not to
         any particular Article, Section or other subdivision.

"Act" has the meaning specified in Section 608.

"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of additional interest
accrued on interest in arrears and paid by the Depositor on a Like Amount of
Debentures for such period.

"Additional Interest" has the meaning specified in Section ___ of the Indenture.

"Administrative Trustee" means each of Alan B. Levan, James A. White and Jarett
S. Levan, solely in his capacity as Administrative Trustee of the Trust formed
and continued hereunder and not in his individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.

"Affiliate" means, with respect to a specified Person, (a) any Person directly
or indirectly owning, controlling or holding with power to vote 10% or more of
the outstanding voting securities or other ownership interests of the specified
Person; (b) any Person 10% or more of whose outstanding voting securities or
other ownership interests are directly or indirectly owned, controlled or held
with power to vote by the specified Person; (c) any Person directly or
indirectly controlling, controlled by, or under common control with the
specified Person; (d) a partnership in which the specified person is a general
partner; (e) any officer or director of the specified Person; and (f) if the
specified Person is an individual, any entity of which the specified Person is
an officer, director or general partner.

"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Preferred Security or beneficial interest therein, the rules
and procedures of the Depositary for such Preferred Security, in each case to
the extent applicable to such transaction and as in effect from time to time.

"Bank" has the meaning specified in the Preamble to this Trust Agreement.

"Bankruptcy Event" means, with respect to any Person:

         (a)      the entry of a decree or order by a court having jurisdiction
         in the premises adjudging such Person a bankrupt or insolvent, or
         approving as properly filed a petition seeking liquidation or
         reorganization of or in respect of such Person under the United States
         Bankruptcy Code of 1978, as amended, or any other similar applicable
         federal or state law, and the continuance of any such decree or order
         unvacated and unstayed for a period of 90 days; or the commencement of
         an involuntary case under the United States Bankruptcy Code of 1978, as
         amended, in respect of such Person, which shall continue undismissed
         for a period of 90 days or entry of an order for relief in such case;
         or the entry of a decree or order of a court having jurisdiction in the
         premises for the appointment on the ground of insolvency or bankruptcy
         of a receiver, custodian, liquidator, trustee

                                      -2-
<PAGE>

         or assignee in bankruptcy or insolvency of such Person or of its
         property, or for the winding up or liquidation of its affairs, and such
         decree or order shall have remained in force unvacated and unstayed for
         a period of 90 days; or

         (b)      the institution by such Person of proceedings to be
         adjudicated a voluntary bankrupt, or the consent by such Person to the
         filing of a bankruptcy proceeding against it, or the filing by such
         Person of a petition or answer or consent seeking liquidation or
         reorganization under the United States Bankruptcy Code of 1978, as
         amended, or other similar applicable Federal or State law, or the
         consent by such Person to the filing of any such petition or to the
         appointment on the ground of insolvency or bankruptcy of a receiver or
         custodian or liquidator or trustee or assignee in bankruptcy or
         insolvency of such Person or of its property, or shall make a general
         assignment for the benefit of creditors.

"Bankruptcy Laws" has the meaning specified in Section 1009.

"Board Resolution" means a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the appropriate Trustee.

"Business Day" means a day other than a Saturday or Sunday, a day on which
banking institutions in The City of New York are authorized or required by law,
executive order or regulation to remain closed, or a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.

"Capital Treatment Event" has the meaning specified in Section 1.1 of the
Indenture.

"Certificate of Trust" means the certificate of trust filed with the Secretary
of State of the State of Delaware with respect to the Trust, as amended or
restated from time to time.

"Change in 1940 Act Law" shall have the meaning set forth in the definition of
"Investment Company Event."

"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depositary shall be the initial Clearing Agency.

"Clearing Agency Participant" means a broker, dealer, bank or other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.

"Closing Date" means the date of execution and delivery of this Trust Agreement.

"Code" means the Internal Revenue Code of 1986, or any successor statute, in
each case as amended from time to time.

"Commission" means the Securities and Exchange Commission, as from time to time
constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not

                                      -3-
<PAGE>

existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

"Common Security" means an undivided beneficial interest in the assets of the
Trust, having a Liquidation Amount of $__ and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.

"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.

"Corporate Trust Office" means the office at which, at any particular time, the
corporate trust business of the Property Trustee or the Debenture Trustee, as
the case may be, shall be principally administered, which office at the date
hereof, in each such case, is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration.

"Debenture Event of Default" means an "Event of Default" as defined in Section
___ of the Indenture.

"Debenture Redemption Date" means, with respect to any Debentures to be redeemed
under the Indenture, the date fixed for redemption under the Indenture.

"Debenture Tax Event" means a "Tax Event" as specified in Section ___ of the
Indenture.

"Debenture Trustee" means Wilmington Trust Company, a banking corporation
company organized under the laws of the State of Delaware and any successor
thereto, as trustee under the Indenture.

"Debentures" means the aggregate principal amount of the Depositor's ____%
Junior Subordinated Debentures due ____, issued pursuant to the Indenture.

"Definitive Preferred Securities Certificates" means the Preferred Securities
Certificates issued in certificated, fully registered form as provided in
Section 513.

"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Delaware Code Sections 3801 et seq. as it may be amended from time to time.

"Delaware Trustee" means the commercial bank or trust company identified as the
"Delaware Trustee," in the Preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Trust heretofore formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as herein provided.

"Depositary" means Depository Trust Company, as depositary.

"Depositor" has the meaning specified in the Preamble to this Trust Agreement.

"Distribution Date" has the meaning specified in Section 401(a)

"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 401(a).

                                      -4-
<PAGE>

"Event of Default" means any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):

         (a)      the occurrence of a Debenture Event of Default; or

         (b)      default by the Trust or the Property Trustee in the payment of
         any Distribution when it becomes due and payable, and continuation of
         such default for a period of 30 days; or

         (c)      default by the Trust or the Property Trustee in the payment of
         any Redemption Price of any Trust Security when it becomes due and
         payable; or

         (d)      default in the performance, or breach, in any material
         respect, of any covenant or warranty of the Trustees in this Trust
         Agreement (other than a covenant or warranty a default in the
         performance of which or the breach of which is dealt with in clause (b)
         or (c), above) and continuation of such default or breach for a period
         of 60 days after there has been given, by registered or certified mail,
         to the defaulting Trustee or Trustees by the Holders of at least 25% in
         aggregate liquidation preference of the Outstanding Preferred
         Securities a written notice specifying such default or breach and
         requiring it to be remedied and stating that such notice is a "Notice
         of Default" hereunder; or

         (e)      the occurrence of a Bankruptcy Event with respect to the
         Property Trustee and the failure by the Depositor to appoint a
         successor property Trustee within 60 days thereof

"Exchange Act" means the Securities Exchange Act of 1934, or any successor
statute, in each case as amended from time to time.

"Expense Agreement" means the Agreement as to Expenses and Liabilities between
the Depositor and the Trust, substantially in the form attached as Exhibit D, as
amended from time to time.

"Expiration Date" has the meaning specified in Section 901.

"Extended Interest Payment Period" has the meaning specified in Section ___ of
the Indenture.

"Global Preferred Securities Certificate" means a Preferred Securities
Certificate evidencing ownership of Global Preferred Securities.

"Global Preferred Security" means a Preferred Security, the ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 512.

"Guarantee" means the Preferred Securities Guarantee Agreement executed and
delivered by the Depositor and Wilmington Trust Company, as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the holders of the Preferred Securities, as amended from time to
time.

"Indenture" means the Indenture, dated as of ____________ between the Depositor
and the Debenture Trustee, as trustee, as amended or supplemented from time to
time.

                                      -5-
<PAGE>

"Investment Company Act," means the Investment Company Act of 1940, or any
successor statute, in each case as amended from time to time.

"Investment Company Event" has the meaning specified in Section ___ of the
Indenture.

"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust,
adverse ownership interest, hypothecation, assignment, security interest or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever.

"Like Amount" means (a) with respect to a redemption of Trust Securities, Trust
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture and
the proceeds of which shall be used to pay the Redemption Price of such Trust
Securities; and (b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a termination or liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Debentures are distributed. Each
Debenture distributed pursuant to clause (b) above shall carry with it
accumulated interest in an amount equal to the accumulated and unpaid interest
then due on such Debentures.

"Liquidation Amount" means the stated amount of $__ per Trust Security.

"Liquidation Date" means the date on which Debentures are to be distributed to
Holders of Trust Securities in connection with a termination and liquidation of
the Trust pursuant to Section 904(a).

"Liquidation Distribution" has the meaning specified in Section 904(d).

"Officers' Certificate" means a certificate signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the Controller or an
Assistant Controller or the Secretary or an Assistant Secretary, of the
Depositor, and delivered to the appropriate Trustee. One of the officers signing
an Officers' Certificate given pursuant to Section 816 shall be the principal
executive, financial or accounting officer of the Depositor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:

         (a)      a statement that each officer signing the Officers'
         Certificate has read the covenant or condition and the definitions
         relating thereto;

         (b)      a brief statement of the nature and scope of the examination
         or investigation undertaken by each officer in rendering the Officers'
         Certificate;

         (c)      a statement that each such officer has made such examination
         or investigation as, in such officer's opinion, is necessary to enable
         such officer to express an informed opinion as to whether or not such
         covenant or condition has been complied with; and

         (d)      a statement as to whether, in the opinion of each such
         officer, such condition or covenant has been complied with.

"Opinion of Counsel" means an opinion in writing of legal counsel, who may be
counsel for the Trust, the Property Trustee, or the Depositor, but not an
employee of any thereof, and who shall be reasonably acceptable to the Property
Trustee.

                                      -6-
<PAGE>

"Original Trust Agreement" has the meaning specified in the Recitals to this
Trust Agreement.

"Outstanding", when used with respect to Preferred Securities, means, as of the
date of determination, all Preferred Securities theretofore executed and
delivered under this Trust Agreement, except:

         (a)      Preferred Securities theretofore canceled by the Property
         Trustee or delivered to the Property Trustee for cancellation;

         (b)      Preferred Securities for whose payment or redemption money in
         the necessary amount has been theretofore deposited with the Property
         Trustee or any Paying Agent for the Holders of such Preferred
         Securities; provided that, if such Preferred Securities are to be
         redeemed, notice of such redemption has been duly given pursuant to
         this Trust Agreement; and

         (c)      Preferred Securities which have been paid or in exchange for
         or in lieu of which other Preferred Securities have been executed and
         delivered pursuant to Sections 504, 505 and 511; provided, however,
         that in determining whether the Holders of the requisite Liquidation
         Amount of the Outstanding Preferred Securities have given any request,
         demand, authorization, direction, notice, consent or waiver hereunder,
         Preferred Securities owned by the Depositor, any Trustee or any
         Affiliate of the Depositor or any Trustee shall be disregarded and
         deemed not to be Outstanding, except that (a) in determining whether
         any Trustee shall be protected in relying upon any such request,
         demand, authorization, direction, notice, consent or waiver, only
         Preferred Securities that such Trustee knows to be so owned shall be so
         disregarded and (b) the foregoing shall not apply at any time when all
         of the outstanding Preferred Securities are owned by the Depositor, one
         or more of the Trustees and/or any such Affiliate. Preferred Securities
         so owned which have been pledged in good faith may be regarded as
         Outstanding if the pledgee establishes to the satisfaction of the
         Administrative Trustees the pledgee's right so to act with respect to
         such Preferred Securities and that the pledgee is not the Depositor or
         any Affiliate of the Depositor.

"Paying Agent" means any paying agent or co-paying agent appointed pursuant to
Section 509 and shall initially be the Bank.

"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its trust department
for the benefit of the Securityholders in which all amounts paid in respect of
the Debentures shall be held and from which the Property Trustee shall make
payments to the Securityholders in accordance with Sections 401 and 102.

"Person" means any individual, corporation, partnership, joint venture, trust,
limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.

"Preferred Security" means an undivided beneficial interest in the assets of the
Trust, having a Liquidation Amount of $__ and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.

"Preferred Securities Certificate", means a certificate evidencing ownership of
Preferred Securities, substantially in the form attached as Exhibit E.

"Property Trustee" means the commercial bank or trust company identified as the
"Property Trustee," in the Preamble to this Trust Agreement solely in its
capacity as Property Trustee of the Trust heretofore

                                      -7-
<PAGE>

formed and continued hereunder and not in its individual capacity, or its
successor in interest in such capacity, or any successor property trustee
appointed as herein provided.

"Redemption Date" means, with respect to any Trust Security to be redeemed, the
date fixed for such redemption by or pursuant to this Trust Agreement; provided
that each Debenture Redemption Date and the stated maturity of the Debentures
shall be a Redemption Date for a Like Amount of Trust Securities.

"Redemption Price" means, with respect to any Trust Security, the Liquidation
Amount of such Trust Security, plus accumulated and unpaid Distributions to the
Redemption Date, paid by the Depositor upon the concurrent redemption of a Like
Amount of Debentures, allocated on a pro rata basis (based on Liquidation
Amounts) among the Trust Securities.

"Relevant Trustee" shall have the meaning specified in Section 810.

"Securities Register" and "Securities Registrar" have the respective meanings
specified in Section 504.

"Securityholder" or "Holder" means a Person in whose name a Trust Security or
Securities is registered in the Securities Register; any such Person is a
beneficial owner within the meaning of the Delaware Business Trust Act.

"Trust" means the Delaware business trust created and continued hereby and
identified on the cover page to this Trust Agreement.

"Trust Agreement" means this Amended and Restated Trust Agreement, as the same
may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including all exhibits hereto, including, for all purposes of
this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.

"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939, as amended, is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.

"Trust Property" means (a) the Debentures; (b) the rights of the Property
Trustee under the Guarantee; (c) any cash on deposit in, or owing to, the
Payment Account; and (d) all proceeds and rights in respect of the foregoing and
any other property and assets for the time being held or deemed to be held by
the Property Trustee pursuant to the trusts of this Trust Agreement.

"Trust Security" means any one of the Common Securities or the Preferred
Securities.

"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.

"Trustees" means, collectively, the Property Trustee, the Delaware Trustee, and
the Administrative Trustees.

                                      -8-
<PAGE>

"Underwriting Agreement" means the Underwriting Agreement, dated as of
_____________, among the Trust, the Depositor and the Underwriters named
therein.

                                   ARTICLE II
                           ESTABLISHMENT OF THE TRUST

SECTION 201. NAME.

The Trust created and continued hereby shall be known as "BBC Capital Trust II,"
as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may engage in the transactions contemplated
hereby, make and execute contracts and other instruments on behalf of the Trust
and sue and be sued.

SECTION 202. OFFICE OF THE PROPERTY TRUSTEE; PRINCIPAL PLACE OF BUSINESS.

The address of the Property Trustee in the State of Delaware is c/o Wilmington
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890-0001, Attention: Corporate Trust Administration, or such other
address in the State of Delaware as the Delaware Trustee may designate by
written notice to the Securityholders and the Depositor. The principal executive
office of the Trust is c/o BankAtlantic Bancorp, Inc., 1750 East Sunrise
Boulevard, Fort Lauderdale, Florida 33304.

SECTION 203. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES.

The Trustees acknowledge receipt in trust from the Depositor in connection with
the Original Trust Agreement of the sum of $10, which constituted the initial
Trust Property. The Depositor shall pay organizational expenses of the Trust as
they arise or shall, upon request of any Trustee, promptly reimburse such
Trustee for any such expenses paid by such Trustee. The Depositor shall make no
claim upon the Trust Property for the payment of such expenses.

SECTION 204. ISSUANCE OF THE PREFERRED SECURITIES.

On _________, the Depositor and an Administrative Trustee, on behalf of the
Trust and pursuant to the Original Trust Agreement, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 502 and deliver in accordance with the
Underwriting Agreement, Preferred Securities Certificates, registered in the
name of the Persons entitled thereto, in an aggregate amount of ________
Preferred Securities having an aggregate Liquidation Amount of $_____ against
receipt of the aggregate purchase price of such Preferred Securities of
$_______, which amount such Administrative Trustee shall promptly deliver to the
Property Trustee. If the underwriters exercise their Option and there is an
Option Closing Date (as such terms are defined in the Underwriting Agreement),
then an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 502 and deliver in accordance with the Underwriting
Agreement, Preferred Securities Certificates, registered in the name of the
Persons entitled thereto, in an aggregate amount of up to ______ Preferred
Securities having an aggregate Liquidation Amount of up to $______ against
receipt of the aggregate purchase price of such Preferred Securities of
$_______, which amount such Administrative Trustee shall promptly deliver to the
Property Trustee.

                                      -9-
<PAGE>

SECTION 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND PURCHASE OF
DEBENTURES.

         (a)      Contemporaneously with the execution and delivery of this
         Trust Agreement, an Administrative Trustee, on behalf of the Trust,
         shall execute in accordance with Section 502 and deliver to the
         Depositor, Common Securities Certificates, registered in the name of
         the Depositor in an aggregate amount of Common Securities having an
         aggregate Liquidation Amount of $_______ against payment by the
         Depositor of such amount. Contemporaneously therewith, an
         Administrative Trustee on behalf of the Trust, shall subscribe to and
         purchase from the Depositor Debentures, registered in the name of the
         Property Trustee on behalf of the Trust and having an aggregate
         principal amount equal to $_______, and, in satisfaction of the
         purchase price for such Debentures, the Property Trustee, on behalf of
         the Trust, shall deliver to the Depositor the sum of $________.

         (b)      If the underwriters exercise the Option and there is an Option
         Closing Date, then an Administrative Trustee, on behalf of the Trust,
         shall execute in accordance with Section 502 and deliver to the
         Depositor, Common Securities Certificates, registered in the name of
         the Depositor, in an aggregate amount of Common Securities having an
         aggregate Liquidation Amount of up to $_______ against payment by the
         Depositor of such amount. Contemporaneously therewith, an
         Administrative Trustee, on behalf of the Trust, shall subscribe to and
         purchase from the Depositor, Debentures, registered in the name of the
         Trust and having an aggregate principal amount of up to $________, and,
         in satisfaction of the purchase price of such Debentures, the Property
         Trustee, on behalf of the Trust, shall deliver to the Depositor the
         amount received from one of the Administrative Trustees pursuant to the
         last sentence of Section 204 (being the sum of the amounts delivered to
         the Property Trustee pursuant to (i) the third sentence of Section 204;
         and (ii) the first sentence of this Section 205(b)).

SECTION 206. DECLARATION OF TRUST.

The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures;
and (b) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to
have all the rights, powers and duties to the extent set forth herein, and the
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it shall hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust.

SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.

         (a)      The Trustees shall conduct the affairs of the Trust in
         accordance with the terms of this Trust Agreement. Subject to the
         limitations set forth in paragraph (b) of this Section 207 and Article
         VIII, and in accordance with the following provisions (i) and (ii), the
         Administrative Trustees shall have the authority to enter into all
         transactions and agreements determined by the Administrative Trustees
         to be appropriate in exercising the authority, express or implied,
         otherwise granted to the Administrative Trustees under this Trust
         Agreement, and to perform all acts in furtherance thereof, including
         without limitation, the following:

                                      -10-
<PAGE>

                  (i)      As among the Trustees, each Administrative Trustee,
                  acting singly or jointly, shall have the power and authority
                  to act on behalf of the Trust with respect to the following
                  matters:

                           (A) the issuance and sale of the Trust Securities;

                           (B) to cause the Trust to enter into, and to execute,
                           deliver and perform on behalf of the Trust, the
                           Expense Agreement and such other agreements or
                           documents as may be necessary or desirable in
                           connection with the purposes and function of the
                           Trust;

                           (C) assisting in the registration of the Preferred
                           Securities under the Securities Act of 1933, as
                           amended, and under state securities or blue sky laws,
                           and the qualification of this Trust Agreement as a
                           trust indenture under the Trust Indenture Act;

                           (D) assisting in the listing of the Preferred
                           Securities upon The Nasdaq Stock Market's National
                           Market or such securities exchange or exchanges as
                           shall be determined by the Depositor and the
                           registration of the Preferred Securities under the
                           Exchange Act, and the preparation and filing of all
                           periodic and other reports and other documents
                           pursuant to the foregoing;

                           (E) the sending of notices (other than notices of
                           default) and other information regarding the Trust
                           Securities and the Debentures to the Securityholders
                           in accordance with this Trust Agreement;

                           (F) the appointment of a Paying Agent, authenticating
                           agent and Securities Registrar in accordance with
                           this Trust Agreement;

                           (G) to the extent provided in this Trust Agreement,
                           the winding up of the affairs of and liquidation of
                           the Trust and the preparation, execution and filing
                           of the certificate of cancellation with the Secretary
                           of State of the State of Delaware;

                           (H) to take all action that may be necessary or
                           appropriate for the preservation and the continuation
                           of the Trust's valid existence, rights, franchises
                           and privileges as a statutory business trust under
                           the laws of the State of Delaware and of each other
                           jurisdiction in which such existence is necessary to
                           protect the limited liability of the Holders of the
                           Preferred Securities or to enable the Trust to effect
                           the purposes for which the Trust was created; and

                           (I) the taking of any action incidental to the
                           foregoing as the Administrative Trustees may from
                           time to time determine is necessary or advisable to
                           give effect to the terms of this Trust Agreement for
                           the benefit of the Securityholders (without
                           consideration of the effect of any such action on any
                           particular Securityholder).

                  (ii)     As among the Trustees, the Property Trustee shall
                  have the power, duty and authority to act on behalf of the
                  Trust with respect to the following matters:

                                      -11-
<PAGE>

                           (A) the establishment of the Payment Account;

                           (B) the receipt of the Debentures;

                           (C) the collection of interest, principal and any
                           other payments made in respect of the Debentures in
                           the Payment Account;

                           (D) the distribution of amounts owed to the
                           Securityholders in respect of the Trust Securities in
                           accordance with the terms of this Trust Agreement;

                           (E) the exercise of all of the rights, powers and
                           privileges of a holder of the Debentures;

                           (F) the sending of notices of default and other
                           information regarding the Trust Securities and the
                           Debentures to the Securityholders in accordance with
                           this Trust Agreement;

                           (G) the distribution of the Trust Property in
                           accordance with the terms of this Trust Agreement;

                           (H) to the extent provided in this Trust Agreement,
                           the winding up of the affairs of and liquidation of
                           the Trust;

                           (I) after an Event of Default, the taking of any
                           action incidental to the foregoing as the Property
                           Trustee may from time to time determine is necessary
                           or advisable to give effect to the terms of this
                           Trust Agreement and protect and conserve the Trust
                           Property for the benefit of the Securityholders
                           (without consideration of the effect of any such
                           action on any particular Securityholder);

                           (J) registering transfers of the Trust Securities in
                           accordance with this Trust Agreement; and

                           (K) except as otherwise provided in this Section
                           207(a)(ii), the Property Trustee shall have none of
                           the duties, liabilities, powers or the authority of
                           the Administrative Trustees set forth in Section
                           207(a)(i).

         (b)      So long as this Trust Agreement remains in effect, the Trust
         (or the Trustees acting on behalf of the Trust) shall not undertake any
         business, activities or transaction except as expressly provided herein
         or contemplated hereby. In particular, the Trustees shall not (i)
         acquire any investments or engage in any activities not authorized by
         this Trust Agreement; (ii) sell, assign, transfer, exchange, mortgage,
         pledge, setoff or otherwise dispose of any of the Trust Property or
         interests therein, including to Securityholders, except as expressly
         provided herein; (iii) take any action that would cause the Trust to
         fail or cease to qualify as a "grantor trust" for United States federal
         income tax purposes; (iv) incur any indebtedness for borrowed money or
         issue any other debt; or (v) take or consent to any action that would
         result in the placement of a Lien on any of the Trust Property. The
         Administrative Trustees shall defend all claims and demands of all
         Persons at any time claiming any Lien on any of the Trust Property
         adverse to the interest of the Trust or the Securityholders in their
         capacity as Securityholders.

                                      -12-
<PAGE>

         (c)      In connection with the issue and sale of the Preferred
         Securities, the Depositor shall have the right and responsibility to
         assist the Trust with respect to, or effect on behalf of the Trust, the
         following (and any actions taken by the Depositor in furtherance of the
         following prior to the date of this Trust Agreement are hereby ratified
         and confirmed in all respects):

                  (i)      the preparation and filing by the Trust with the
                  Commission and the execution on behalf of the Trust of a
                  registration statement on the appropriate form in relation to
                  the Preferred Securities and the Debentures, including any
                  amendments thereto;

                  (ii)     the determination of the states in which to take
                  appropriate action to qualify or register for sale all or part
                  of the Preferred Securities and to do any and all such acts,
                  other than actions which must be taken by or on behalf of the
                  Trust, and advise the Trustees of actions they must take on
                  behalf of the Trust, and prepare for execution and filing any
                  documents to be executed and filed by the Trust or on behalf
                  of the Trust, as the Depositor deems necessary or advisable in
                  order to comply with the applicable laws of any such States;

                  (iii)    the preparation for filing by the Trust and execution
                  on behalf of the Trust of an application to The Nasdaq Stock
                  Market's National Market or a national stock exchange or other
                  organizations for listing upon notice of issuance of any
                  Preferred Securities and to file or cause an Administrative
                  Trustee to file thereafter with such exchange or organization
                  such notifications and documents as may be necessary from time
                  to time;

                  (iv)     the preparation for filing by the Trust with the
                  Commission and the execution on behalf of the Trust of a
                  registration statement on Form 8-A relating to the
                  registration of the Preferred Securities under Section 12(b)
                  or 12(g) of the Exchange Act, including any amendments
                  thereto;

                  (v)      the negotiation of the terms of, and the execution
                  and delivery of, the Underwriting Agreement providing for the
                  sale of the Preferred Securities; and

                  (vi)     the taking of any other actions necessary or
                  desirable to carry out any of the foregoing activities.

         (d)      Notwithstanding anything herein to the contrary, the
         Administrative Trustees are authorized and directed to conduct the
         affairs of the Trust and to operate the Trust so that the Trust shall
         not be deemed to be an "investment company" required to be registered
         under the Investment Company Act, shall be classified as a "grantor
         trust" and not as an association taxable as a corporation for United
         States federal income tax purposes and so that the Debentures shall be
         treated as indebtedness of the Depositor for United States federal
         income tax purposes. In this connection, subject to Section 1002, the
         Depositor and the Administrative Trustees are authorized to take any
         action, not inconsistent with applicable law or this Trust Agreement,
         that each of the Depositor and the Administrative Trustees determines
         in their discretion to be necessary or desirable for such purposes.

SECTION 208. ASSETS OF TRUST.

The assets of the Trust shall consist of the Trust Property.

                                      -13-
<PAGE>

SECTION 209. TITLE TO TRUST PROPERTY.

Legal title to all Trust Property shall be vested at all times in the Property
Trustee (in its capacity as such) and shall be held and administered by the
Property Trustee for the benefit of the Securityholders in accordance with this
Trust Agreement.

                                   ARTICLE III
                                 PAYMENT ACCOUNT

SECTION 301. PAYMENT ACCOUNT.

         (a)      On or prior to the Closing Date, the Property Trustee shall
         establish the Payment Account. The Property Trustee and any agent of
         the Property Trustee shall have exclusive control and sole right of
         withdrawal with respect to the Payment Account for the purpose of
         making deposits and withdrawals from the Payment Account in accordance
         with this Trust Agreement. All monies and other property deposited or
         held from time to time in the Payment Account shall be held by the
         Property Trustee in the Payment Account for the exclusive benefit of
         the Securityholders and for distribution as herein provided, including
         (and subject to) any priority of payments provided for herein.

         (b)      The Property Trustee shall deposit in the Payment Account,
         promptly upon receipt, all payments of principal of or interest on, and
         any other payments or proceeds with respect to, the Debentures. Amounts
         held in the Payment Account shall not be invested by the Property
         Trustee pending distribution thereof.

                                   ARTICLE IV
                            DISTRIBUTIONS; REDEMPTION

SECTION 401. DISTRIBUTIONS.

         (a)      Distributions on the Trust Securities shall be cumulative, and
         shall accumulate whether or not there are funds of the Trust available
         for the payment of Distributions. Distributions shall accumulate from
         ______, and, except during any Extended Interest Payment Period with
         respect to the Debentures, shall be payable quarterly in arrears on
         March 31, June 30, September 30 and December 31 of each year,
         commencing on ________. If any date on which a Distribution is
         otherwise payable on the Trust Securities is not a Business Day, then
         the payment of such Distribution shall be made on the next succeeding
         day that is a Business Day (and without any interest or other payment
         in respect of any such delay) except that, if such Business Day is in
         the next succeeding calendar year, payment of such Distribution shall
         be made on the immediately preceding Business Day, in each case with
         the same force and effect as if made on such date (each date on which
         distributions are payable in accordance with this Section 401(a), a
         "Distribution Date").

         (b)      The Trust Securities represent undivided beneficial interests
         in the Trust Property and the Distributions on the Trust Securities
         shall be payable at a rate of ____% per annum of the Liquidation Amount
         of the Trust Securities. The amount of Distributions payable for any
         full period shall be computed on the basis of a 360-day year of twelve
         30-day months. The amount of

                                      -14-
<PAGE>

         Distributions for any partial period shall be computed on the basis of
         the number of days elapsed in a 360-day year of twelve 30 day months.
         During any Extended Interest Payment Period with respect to the
         Debentures, Distributions on the Preferred Securities shall be deferred
         for a period equal to the Extended Interest Payment Period. The amount
         of Distributions payable for any period shall include the Additional
         Amounts, if any.

         (c)      Distributions on the Trust Securities shall be made by the
         Property Trustee solely from the Payment Account and shall be payable
         on each Distribution Date only to the extent that the Trust has funds
         then on hand and immediately available in the Payment Account for the
         payment of such Distributions.

         (d)      Distributions on the Trust Securities with respect to a
         Distribution Date shall be payable to the Holders thereof as they
         appear on the Securities Register for the Trust Securities on the
         relevant record date, which shall be 15th day of the month in which the
         Distribution is payable.

SECTION 402. REDEMPTION.

         (a)      On each Debenture Redemption Date and on the stated maturity
         of the Debentures the Trust shall be required to redeem a Like Amount
         of Trust Securities at the Redemption Price.

         (b)      Notice of redemption shall be given by the Property Trustee by
         first-class mail, postage prepaid, mailed not less than 30 nor more
         than 60 days prior to the Redemption Date to each Holder of Trust
         Securities to be redeemed, at such Holder's address appearing in the
         Securities Register. The Property Trustee shall have no responsibility
         for the accuracy of any CUSIP number contained in such notice. All
         notices of redemption shall state:

                  (i)      the Redemption Date;

                  (ii)     the Redemption Price;

                  (iii)    the CUSIP number;

                  (iv)     if less than all the Outstanding Trust Securities are
                  to be redeemed, the identification and the aggregate
                  Liquidation Amount of the particular Trust Securities to be
                  redeemed; and

                  (v)      that, on the Redemption Date, the Redemption Price
                  shall become due and payable upon each such Trust Security to
                  be redeemed and that Distributions thereon shall cease to
                  accumulate on and after said date.

         (c)      The Trust Securities redeemed on each Redemption Date shall be
         redeemed at the Redemption Price with the proceeds from the
         contemporaneous redemption of Debentures. Redemptions of the Trust
         Securities shall be made and the Redemption Price shall be payable on
         each Redemption Date only to the extent that the Trust has immediately
         available funds then on hand and available in the Payment Account for
         the payment of such Redemption Price.

         (d)      If the Property Trustee gives a notice of redemption in
         respect of any Preferred Securities, then, by 12:00 noon, New York City
         time, on the Redemption Date, subject to Section 402(c), the

                                      -15-
<PAGE>

         Property Trustee will, with respect to Preferred Securities held in
         global form, irrevocably deposit with the Clearing Agency for such
         Preferred Securities, to the extent available therefor, funds
         sufficient to pay the applicable Redemption Price and will give such
         Clearing Agency irrevocable instructions and authority to pay the
         Redemption Price to the Holders of the Preferred Securities. With
         respect to Preferred Securities that are not held in global form, the
         Property Trustee, subject to Section 4.2(c), will irrevocably deposit
         with the Paying Agent, to the extent available therefor, funds
         sufficient to pay the applicable Redemption Price and shall give the
         Paying Agent irrevocable instructions and authority to pay the
         Redemption Price to the Holders thereof upon surrender of their
         Preferred Securities Certificates. Notwithstanding the foregoing,
         Distributions payable on or prior to the Redemption Date for any Trust
         Securities called for redemption shall be payable to the Holders of
         such Trust Securities as they appear on the Register for the Trust
         Securities on the relevant record dates for the related Distribution
         Dates. If notice of redemption shall have been given and funds
         deposited as required, then upon the date of such deposit, all rights
         of Securityholders holding Trust Securities so called for redemption
         shall cease, except the right of such Securityholders to receive the
         Redemption Price and any Distribution payable on or prior to the
         Redemption Date, but without interest, and such Securities shall cease
         to be Outstanding. In the event that any date on which any Redemption
         Price is payable is not a Business Day, then payment of the Redemption
         Price payable on such date shall be made on the next succeeding day
         that is a Business Day (and without any interest or other payment in
         respect of any such delay), except that, if such Business Day falls in
         the next calendar year, such payment shall be made on the immediately
         preceding Business Day, in each case, with the same force and effect as
         if made on such date. In the event that payment of the Redemption Price
         in respect of any Trust Securities called for redemption is improperly
         withheld or refused and not paid either by the Trust or by the
         Depositor pursuant to the Guarantee, Distributions on such Trust
         Securities shall continue to accumulate, at the then applicable rate,
         from the Redemption Date originally established by the Trust for such
         Trust Securities to the date such Redemption Price is actually paid, in
         which case the actual payment date shall be the date fixed for
         redemption for purposes of calculating the Redemption Price.

         (e)      Payment of the Redemption Price on the Trust Securities shall
         be made to the record holders thereof as they appear on the Securities
         Register for the Trust Securities on the relevant record date, which
         shall be the date 15 days prior to the relevant Redemption Date.

         (f)      Subject to Section 403(a), if less than all the Outstanding
         Trust Securities are to be redeemed on a Redemption Date, then the
         aggregate Liquidation Amount of Trust Securities to be redeemed shall
         be allocated on a pro rata basis (based on Liquidation Amounts) among
         the Common Securities and the Preferred Securities. The particular
         Preferred Securities to be redeemed shall be selected not more than 60
         days prior to the Redemption Date by the Property Trustee from the
         outstanding Preferred Securities not previously called for redemption,
         by such method (including, without limitation, by lot) as the Property
         Trustee shall deem fair and appropriate and which may provide for the
         selection for redemption of portions (equal to $__ or an integral
         multiple of $__ in excess thereof) of the Liquidation Amount of
         Preferred Securities of a denomination larger than $__. The Property
         Trustee shall promptly notify the Securities Registrar in writing of
         the Preferred Securities selected for redemption and, in the case of
         any Preferred Securities selected for partial redemption, the
         Liquidation Amount thereof to be redeemed. For all purposes of this
         Trust Agreement, unless the context otherwise requires, all provisions
         relating to the redemption of Preferred Securities shall relate, in the
         case of any

                                      -16-
<PAGE>

         Preferred Securities redeemed or to be redeemed only in part, to the
         portion of the Liquidation Amount of Preferred Securities which has
         been or is to be redeemed.

SECTION 403. SUBORDINATION OF COMMON SECURITIES.

         (a)      Payment of Distributions (including Additional Amounts, if
         applicable) on, and the Redemption Price of, the Trust Securities, as
         applicable, shall be made, subject to Section 402(f), pro rata among
         the Common Securities and the Preferred Securities based on the
         Liquidation Amount of the Trust Securities, provided, however, that if
         on any Distribution Date or Redemption Date any Event of Default
         resulting from a Debenture Event of Default shall have occurred and be
         continuing, no payment of any Distribution (including Additional
         Amounts, if applicable) on, or Redemption Price of, any Common
         Security, and no other payment on account of the redemption,
         liquidation or other acquisition of Common Securities, shall be made
         unless payment in full in cash of all accumulated and unpaid
         Distributions (including Additional Amounts, if applicable) on all
         Outstanding Preferred Securities for all Distribution periods
         terminating on or prior thereto, or in the case of payment of the
         Redemption Price the full amount of such Redemption Price on all
         Outstanding Preferred Securities then called for redemption, shall have
         been made or provided for, and all funds immediately available to the
         Property Trustee shall first be applied to the payment in full in cash
         of all Distributions (including Additional Amounts, if applicable) on,
         or the Redemption Price of, Preferred Securities then due and payable.

         (b)      In the case of the occurrence of any Event of Default
         resulting from a Debenture Event of Default, the Holder of Common
         Securities shall be deemed to have waived any right to act with respect
         to any such Event of Default under this Trust Agreement until the
         effect of all such Events of Default with respect to the Preferred
         Securities shall have been cured, waived or otherwise eliminated. Until
         any such Event of Default under this Trust Agreement with respect to
         the Preferred Securities shall have been so cured, waived or otherwise
         eliminated, the Property Trustee shall act solely on behalf of the
         Holders of the Preferred Securities and not the Holder of the Common
         Securities, and only the Holders of the Preferred Securities shall have
         the right to direct the Property Trustee to act on their behalf.

SECTION 404. PAYMENT PROCEDURES.

Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which will credit the relevant accounts on the applicable Distribution
Date. Payments in respect of the Common Securities shall be made in such manner
as shall be mutually agreed between the Property Trustee and the Common
Securityholder.

SECTION 405. TAX RETURNS AND REPORTS.

The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
Form required to be filed in respect of the Trust in each taxable year of the
Trust; and (b) prepare and furnish (or cause to be prepared and furnished)

                                      -17-
<PAGE>

to each Securityholder the appropriate Internal Revenue Service form required to
be furnished to such Securityholder or the information required to be provided
on such form. The Administrative Trustees shall provide the Depositor with a
copy of all such returns and reports promptly after such filing or furnishing.
The Property Trustee shall comply with United States federal withholding and
backup withholding tax laws and information reporting requirements with respect
to any payments to Securityholders under the Trust Securities.

SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.

Upon receipt under the Debentures of Additional Interest (as defined in Section
___ of the Indenture), the Property Trustee, at the direction of an
Administrative Trustee or the Depositor, shall promptly pay any taxes, duties or
governmental charges of whatsoever nature (other than withholding taxes) imposed
on the Trust by the United States or any other taxing authority.

SECTION 407. PAYMENTS UNDER INDENTURE.

Any amount payable hereunder to any Holder of Preferred Securities shall be
reduced by the amount of any corresponding payment such Holder has directly
received under the Indenture pursuant to Section 514(b) or (c) hereof.

                                    ARTICLE V
                          TRUST SECURITIES CERTIFICATES

SECTION 501. INITIAL OWNERSHIP.

Upon the creation of the Trust and the contribution by the Depositor pursuant to
Section 203 and until the issuance of the Trust Securities, and at any time
during which no Trust Securities are outstanding, the Depositor shall be the
sole beneficial owner of the Trust.

SECTION 502. THE TRUST SECURITIES CERTIFICATES.

The Preferred Securities Certificates shall be issued in minimum denominations
of $__ Liquidation Amount and integral multiples of $__ in excess thereof, and
the Common Securities Certificates shall be issued in denominations of $__
Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual, facsimile or
imprinted signature of at least one Administrative Trustee. Trust Securities
Certificates bearing the signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 504 and
511.

                                      -18-
<PAGE>

SECTION 503. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.

On the Closing Date and on the date on which the Underwriter exercises the
option, as applicable (the "Option Closing Date"), the Administrative Trustees
shall cause Trust Securities Certificates, in an aggregate Liquidation Amount as
provided in Sections 204 and 205, to be executed on behalf of the Trust by at
least one of the Administrative Trustees and delivered to the Property Trustee
and upon such delivery, the Property Trustee shall countersign and register such
Trust Securities Certificates and deliver such Trust Securities Certificates
upon the written order of the Depositor, executed by its Chief Executive Officer
or President or any Vice President and the Treasurer or an Assistant Treasurer
or Secretary or Assistant Secretary without further corporate action by the
Depositor, in authorized denominations.

SECTION 504. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED SECURITIES
CERTIFICATES

         (a)      The Property Trustee shall keep or cause to be kept, at the
         office or agency maintained pursuant to Section 508, a register or
         registers for the purpose of registering Trust Securities Certificates
         and transfers and exchanges of Preferred Securities Certificates
         (herein referred to as the "Securities Register") in which the
         registrar and transfer agent (the "Securities Registrar"), subject to
         such reasonable regulations as it may prescribe, shall provide for the
         registration of Preferred Securities Certificates and Common Securities
         Certificates (subject to Section 510 in the case of the Common
         Securities Certificates) and registration of transfers and exchanges of
         Preferred Securities Certificates as herein provided. The Property
         Trustee shall be the initial Securities Registrar.

         (b)      Upon surrender for registration of transfer of any Preferred
         Securities Certificate at the office or agency maintained pursuant to
         Section 508, the Administrative Trustees or any one of them and the
         Property Trustee shall execute and deliver, in the name of the
         designated transferee or transferees, one or more new Preferred
         Securities Certificates in authorized denominations of a like aggregate
         Liquidation Amount dated the date of execution by such Administrative
         Trustee or Trustees. The Securities Registrar shall not be required to
         register the transfer of any Preferred Securities that have been called
         for redemption. At the option of a Holder, Preferred Securities
         Certificates may be exchanged for other Preferred Securities
         Certificates in authorized denominations of the same class and of a
         like aggregate Liquidation Amount upon surrender of the Preferred
         Securities Certificates to be exchanged at the office or agency
         maintained pursuant to Section 508.

         (c)      Every Preferred Securities Certificate presented or
         surrendered for registration of transfer or exchange shall be
         accompanied by a written instrument of transfer in form satisfactory to
         the Property Trustee and the Securities Registrar duly executed by the
         Holder or his attorney duly authorized in writing. Each Preferred
         Securities Certificate surrendered for registration of transfer or
         exchange shall be canceled and subsequently disposed of by the Property
         Trustee in accordance with its customary practice. The Trust shall not
         be required to (i) issue, register the transfer of, or exchange any
         Preferred Securities during a period beginning at the opening of
         business 15 calendar days before the date of mailing of a notice of
         redemption of any Preferred Securities called for redemption and ending
         at the close of business on the day of such mailing; or (ii) register
         the transfer of or exchange any Preferred Securities so selected for
         redemption, in whole or in part, except the unredeemed portion of any
         such Preferred Securities being redeemed in part.

                                      -19-
<PAGE>

         (d)      No service charge shall be made for any registration of
         transfer or exchange of Preferred Securities Certificates, but the
         Securities Registrar may require payment of a sum sufficient to cover
         any tax or governmental charge that may be imposed in connection with
         any transfer or exchange of Preferred Securities Certificates.

SECTION 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES CERTIFICATES.

If (a) any mutilated Trust Securities certificate shall be surrendered to the
Securities Registrar, or if the Securities Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate, and (b) there shall be delivered to the Securities Registrar and
the Administrative Trustees such security or indemnity as may be required by
them to save each of them harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide purchaser,
the Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, and the Property Trustee shall
countersign, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Trust Securities Certificate, a new Trust Securities Certificate of
like class, tenor and denomination. In connection with the issuance of any new
Trust Securities Certificate under this Section 505, the Administrative Trustees
or the Securities Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Trust Securities Certificate issued pursuant to this
Section 505 shall constitute conclusive evidence of an undivided beneficial
interest in the assets of the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Trust Securities Certificate shall be found at any
time.

SECTION 506. PERSONS DEEMED SECURITYHOLDERS.

The Trustees, the Paying Agent and the Securities Registrar shall treat the
Persons in whose name any Trust Securities are issued as the owner of such Trust
Securities Certificate for the purpose of receiving Distributions and for all
other purposes whatsoever, and neither the Trustees nor the Securities Registrar
shall be bound by any notice to the contrary.

SECTION 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.

At any time when the Property Trustee is not also acting as the Securities
Registrar, the Administrative Trustees or the Depositor shall furnish or cause
to be furnished to the Property Trustee a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the
Securityholders as of the most recent record date (a) semi-annually on or before
January 15 and July 15 in each year; and (b) promptly after receipt by any
Administrative Trustee or the Depositor of a request therefor from the Property
Trustee in order to enable the Property Trustee to discharge its obligations
under this Trust Agreement, in each case to the extent such information is in
the possession or control of the Administrative Trustees or the Depositor and is
not identical to a previously supplied list or has not otherwise been received
by the Property Trustee in its capacity as Securities Registrar. The rights of
Securityholders to communicate with other Securityholders with respect to their
rights under this Trust Agreement or under the Trust Securities, and the
corresponding rights of the Trustee shall be as provided in the Trust Indenture
Act. Each Holder and each owner shall be deemed to have agreed not to hold the
Depositor, the Property Trustee or the Administrative Trustees accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.

                                      -20-
<PAGE>

SECTION 508. MAINTENANCE OF OFFICE OR AGENCY.

The Property Trustee shall designate, with the consent of the Administrative
Trustees, which consent shall not be unreasonably withheld, an office or offices
or agency or agencies where Preferred Securities Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Trustees in respect of the Trust Securities Certificates may be served.
The Property Trustee initially designates its corporate trust office at Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001, as the
principal corporate trust office for such purposes. The Property Trustee shall
give prompt written notice to the Depositor, the Administrative Trustees and to
the Securityholders of any change in the location of the Securities Register or
any such office or agency.

SECTION 509. APPOINTMENT OF PAYING AGENT.

The Paying Agent shall make Distributions to Securityholders from the Payment
Account and shall report the amounts of such Distributions to the Property
Trustee and the Administrative Trustees. Any Paying Agent shall have the
revocable power to withdraw funds from the Payment Account for the purpose of
making the Distributions referred to above. The Property Trustee may revoke such
power and remove the Paying Agent if such Trustee determines in its sole
discretion that the Paying Agent shall have failed to perform its obligation
under this Trust Agreement in any material respect. The Paying Agent shall
initially be the Property Trustee, and any co-paying agent chosen by the
Property Trustee, and acceptable to the Administrative Trustees and the
Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustee and the
Property Trustee. In the event that the Property Trustee shall no longer be the
Paying Agent or a successor Paying Agent shall resign or its authority to act be
revoked, the Property Trustee shall appoint a successor that is reasonably
acceptable to the Administrative Trustees to act as Paying Agent to execute and
deliver to the Trustees an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent shall hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and, upon removal of a Paying Agent, such Paying Agent shall
also return all funds in its possession to the Property Trustee. The provisions
of Sections 801, 803 and 806 shall apply to the Property Trustee also in its
role as Paying Agent, for so long as the Property Trustee shall act as Paying
Agent and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.

SECTION 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.

On the Closing Date, the Depositor shall acquire and retain beneficial and
record ownership of the Common Securities. To the fullest extent permitted by
law, any attempted transfer of the Common Securities (other than a transfer in
connection with a merger or consolidation of the Depositor into another
corporation pursuant to Section ____ of the Indenture) shall be void. The
Administrative Trustees shall cause each Common Securities Certificate issued to
the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE".

                                      -21-
<PAGE>

SECTION 511. PREFERRED SECURITIES CERTIFICATES

         (a) Upon their original issuance, Preferred Securities Certificates
shall be issued in the form of one or more fully registered Global Preferred
Securities Certificates, which will be deposited with or on behalf of the
Depositary and registered in the name of the Depositary's nominee. Unless and
until it is exchangeable in whole or in part for the Preferred Securities in
definitive form, a global security may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor.

         (b) A Single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.

         (c) A Trust Securities Certificate shall not be valid unless signed by
the manual signature of at least one Administrative Trustee or by the facsimile
or imprinted signature of at least one Administrative Trustee and countersigned
and registered by the manual signature of an authorized signatory of the
Property Trustee. These signatures shall be conclusive evidence that the Trust
Security has been validly issued under this Trust Agreement.

SECTION 512.  GLOBAL PREFERRED SECURITY

         (a) Any Global Preferred Security issued under this Trust Agreement
shall be registered in the name of the nominee of the Clearing Agency and
delivered to such custodian therefor, and such Global Preferred Security shall
constitute a single Preferred Security for all purposes of this Trust Agreement.

         (b) Notwithstanding any other provision in this Trust Agreement, a
Global Preferred Security may not be exchanged in whole or in part for Preferred
Securities registered, and no transfer of the Global Preferred Security in whole
or in part may be registered, in the name of any Person other than the Clearing
Agency for such Global Preferred Security, or its nominee thereof unless (i)
such Clearing Agency advises the Property Trustee in writing that such Clearing
Agency is no longer willing or able to properly discharge its responsibilities
as Clearing Agency with respect to such Global Preferred Security, and the
Depositor is unable to locate a qualified successor, (ii) the Trust as its
option advises the Depositary in writing that it elects to terminate the book
entry system through the Clearing Agency, or (iii) there shall have occurred and
be continuing an Event of Default.

         (c) If a Preferred Security is to be exchanged in whole or in part for
a beneficial interest in a Global Preferred Security, then either (i) such
Global Preferred Security shall be so surrendered for exchange or cancellation
as provided in this Article V or (ii) the Liquidation Amount thereof shall be
reduced or increased by an amount equal to the portion thereof to be so
exchanged or cancelled, or equal to the Liquidation Amount of such other
Preferred Security to be so exchanged for a beneficial interest therein, as the
case may be, by means of an appropriate adjustment made on the records of the
Security Registrar, whereupon the Property Trustee, in accordance with the
Applicable Procedures, shall instruct the Clearing Agency or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Preferred Security by the Clearing Agency,
accompanied by registration instructions, the Administrative Trustees shall
execute and the Property Trustee shall, subject to Section 512(b) and as
otherwise provided in this Article V, countersign, register and deliver any
Preferred Securities issuable in exchange for such Global Preferred Security (or
any portion thereof) in accordance with the instructions of the Clearing Agency.
The Property Trustee shall not be liable for any

                                      -22-
<PAGE>

delay in delivery of such instructions and may conclusively rely on, and shall
be fully protected in relying on, such instructions.

         (d) Every Preferred Security countersigned, registered and delivered
upon registration or transfer of, or in exchange for or in lieu of, a Global
Preferred Security or any portion thereof, whether pursuant to this Article V or
Article IV or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Preferred Security, unless such Global Preferred Security
is registered in the name of a Person other than the Clearing Agency for such
Global Preferred Security or a nominee thereof.

         (e) The Clearing Agency or its nominee, as the registered owner of a
Global Preferred Security, shall be considered the Holder of the Preferred
Securities represented by such Global Preferred Security for all purposes under
this Trust Agreement and the Preferred Securities, and owners of beneficial
interests in such Global Preferred Security shall hold such interests pursuant
to the Applicable Procedures and, except as otherwise provided herein, shall not
be entitled to receive physical delivery of any such Preferred Securities in
definitive form and shall not be considered the Holders thereof under this Trust
Agreement. Accordingly, any such owner's beneficial interest in the Global
Preferred Security shall be shown only on, and the transfer of such interest
shall be effected only through, records maintained by the Clearing Agency or its
nominee. Neither the Property Trustee, the Securities Registrar nor the
Depositor shall have any liability in respect of any transfers effected by the
Clearing Agency.

         (f) The rights of owners of beneficial interests in a Global Preferred
Security shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such owners and the
Clearing Agency.

SECTION 513. NOTICE TO CLEARING AGENCY

         To the extent that a notice or other communication to the Holders is
required under this Trust Agreement, for so long as Preferred Securities are
represented by a Global Preferred Securities Certificate, the Administrative
Trustees and the Property Trustee shall give all such notices and communications
specified herein to be given to the Clearing Agency, and shall have no
obligations to owners of beneficial interests in such Global Preferred
Securities.

SECTION 514. RIGHTS OF SECURITYHOLDERS.

         (a)      The legal title to the Trust Property is vested exclusively in
         the Property Trustee (in its capacity as such) in accordance with
         Section 209, and the Securityholders shall not have any right or title
         therein other than the undivided beneficial interest in the assets of
         the Trust conferred by their Trust Securities and they shall have no
         right to call for any partition or division of property, profits or
         rights of the Trust except as described below. The Trust Securities
         shall be personal property giving only the rights specifically set
         forth therein and in this Trust Agreement. The Trust Securities shall
         have no preemptive or similar rights. When issued and delivered to
         Holders of the Preferred Securities against payment of the purchase
         price therefor, the Preferred Securities shall be fully paid and
         nonassessable interests in the Trust. The Holders of the Preferred
         Securities, in their capacities as such, shall be entitled to the same
         limitation of personal liability extended to stockholders of private
         corporations for profit organized under the General Corporation Law of
         the State of Delaware.

                                      -23-
<PAGE>

         (b)      For so long as any Preferred Securities remain Outstanding,
         if, upon a Debenture Event of Default, the Debenture Trustee fails or
         the holders of not less than 25% in principal amount of the outstanding
         Debentures fail to declare the principal of all of the Debentures to be
         immediately due and payable, the Holders of at least 25% in Liquidation
         Amount of the Preferred Securities then Outstanding shall have such
         right by a notice in writing to the Depositor and the Debenture
         Trustee; and upon any such declaration such principal amount of and the
         accrued interest on all of the Debentures shall become immediately due
         and payable, provided that the payment of principal and interest on
         such Debentures shall remain subordinated to the extent provided in the
         Indenture.

         (c)      For so long as any Preferred Securities remain outstanding,
         if, upon a Debenture Event of Default arising from the failure to pay
         interest or principal on the Debentures, the Holders of any Preferred
         Securities then Outstanding shall, to the fullest extent permitted by
         law, have the right to directly institute proceedings for enforcement
         of payment to such Holders of principal of or interest on the
         Debentures having a principal amount equal to the Liquidation Amount of
         the Preferred Securities of such Holders.

                                   ARTICLE VI
                    ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

SECTION 601. LIMITATIONS ON VOTING RIGHTS.

         (a)      Except as provided in this Section 601, in Sections 514, 810
         and 1002, in the Indenture and as otherwise required by law, no Holder
         of Preferred Securities shall have any right to vote or in any manner
         otherwise control the administration, operation and management of the
         Trust or the obligations of the parties hereto, nor shall anything
         herein set forth, or contained in the terms of the Trust Securities
         Certificates, be construed so as to constitute the Securityholders from
         time to time as partners or members of an association.

         (b)      So long as any Debentures are held by the Property Trustee,
         the Trustees shall not (i) direct the time, method and place of
         conducting any proceeding for any remedy available to the Debenture
         Trustee, or executing any trust or power conferred on the Debenture
         Trustee with respect to such Debentures; (ii) waive any past default
         which is waivable under Article ___ of the Indenture; (iii) exercise
         any right to rescind or annul a declaration that the principal of all
         the Debentures shall be due and payable; or (iv) consent to any
         amendment, modification or termination of the Indenture or the
         Debentures, where such consent shall be required, without, in each
         case, obtaining the prior approval of the Holders of at least a
         majority in Liquidation Amount of all Outstanding Preferred Securities;
         provided, however, that where a consent under the Indenture would
         require the consent of each Holder of Outstanding Debentures affected
         thereby, no such consent shall be given by the Property Trustee without
         the prior written consent of each holder of Preferred Securities. The
         Trustees shall not revoke any action previously authorized or approved
         by a vote of the Holders of the Outstanding Preferred Securities,
         except by a subsequent vote of the Holders of the Outstanding Preferred
         Securities. The Property Trustee shall notify each Holder of the
         Outstanding Preferred Securities of any notice of default received from
         the Debenture Trustee with respect to the Debentures. In addition to
         obtaining the foregoing approvals of the Holders of the Preferred
         Securities, prior to taking any of the foregoing actions, the Trustees
         shall, at the expense of the Depositor, obtain an Opinion of Counsel
         experienced in such matters

                                      -24-
<PAGE>

         to the effect that the Trust shall continue to be classified as a
         grantor trust and not as an association taxable as a corporation for
         United States federal income tax purposes on account of such action.

         (c)      If any proposed amendment to the Trust Agreement provides for,
         or the Trustees otherwise propose to effect, (i) any action that would
         adversely affect in any material respect the powers, preferences or
         special rights of the Preferred Securities, whether by way of amendment
         to the Trust Agreement or otherwise; or (ii) the dissolution,
         winding-up or termination of the Trust, other than pursuant to the
         terms of this Trust Agreement, then the Holders of Outstanding
         Preferred Securities as a class shall be entitled to vote on such
         amendment or proposal and such amendment or proposal shall not be
         effective except with the approval of the Holders of at least a
         majority in Liquidation Amount of the Outstanding Preferred Securities.
         No amendment to this Trust Agreement may be made if, as a result of
         such amendment, the Trust would cease to be classified as a grantor
         trust or would be classified as an association taxable as a corporation
         for United States federal income tax purposes.

SECTION 602. NOTICE OF MEETINGS.

Notice of all meetings of the Preferred Securityholders, stating the time, place
and purpose of the meeting, shall be given by the Property Trustee pursuant to
Section 1008 to each Preferred Securityholder of record, at his registered
address, at least 15 days and not more than 90 days before the meeting. At any
such meeting, any business properly before the meeting may be so considered
whether or not stated in the notice of the meeting. Any adjourned meeting may be
held as adjourned without further notice.

SECTION 603. MEETINGS OF PREFERRED SECURITYHOLDERS.

         (a)      No annual meeting of Securityholders is required to be held.
         The Administrative Trustees, however, shall call a meeting of
         Securityholders to vote on any matter in respect of which Preferred
         Securityholders are entitled to vote upon the written request of the
         Preferred Securityholders of 25% of the Outstanding Preferred
         Securities (based upon their aggregate Liquidation Amount) and the
         Administrative Trustees or the Property Trustee may, at any time in
         their discretion, call a meeting of Preferred Securityholders to vote
         on any matters as to which the Preferred Securityholders are entitled
         to vote.

         (b)      Preferred Securityholders of record of 50% of the Outstanding
         Preferred Securities (based upon their aggregate Liquidation Amount),
         present in person or by proposal shall constitute a quorum at any
         meeting of Securityholders

         (c)      If a quorum is present at a meeting, an affirmative vote by
         the Preferred Securityholders of record present, in person or by proxy,
         holding more than a majority of the Preferred Securities (based upon
         their aggregate Liquidation Amount) held by the Preferred
         Securityholders of record present, either in person or by proxy, at
         such meeting shall constitute the action of the Securityholders unless
         this Trust Agreement requires a greater number of affirmative votes.

SECTION 604. VOTING RIGHTS.

Securityholders shall be entitled to one vote for each $__ of Liquidation Amount
represented by their Trust Securities in respect of any matter as to which such
Securityholders are entitled to vote.

                                      -25-
<PAGE>

SECTION 605. PROXIES, ETC.

At any meeting of Securityholders, any Securityholder entitled to vote thereat
may vote by proxy, provided that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Administrative Trustees, or with such
other officer or agent of the Trust as the Administrative Trustees may direct,
for verification prior to the time at which such vote shall be taken. When Trust
Securities are held jointly by several persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and, the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.

SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT

Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their aggregate Liquidation Amount)
entitled to vote in respect of such action (or such larger proportion thereof as
shall be required by any express provision of this Trust Agreement) shall
consent to the action in writing (based upon their aggregate Liquidation
Amount).

SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES.

For the purposes of determining the Securityholders who are entitled to notice
of and to vote at any meeting or by written consent, or to participate in any
Distribution on the Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the purpose of any other
action, the Administrative Trustees may from time to time fix a date, not more
than 90 days prior to the date of any meeting of Securityholders or the payment
of any Distribution or other action as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.

SECTION 608. ACTS OF SECURITYHOLDERS.

         (a)      Any request, demand, authorization, direction, notice,
         consent, waiver or other action provided or permitted by this Trust
         Agreement to be given, made or taken by Securityholders may be embodied
         in and evidenced by one or more instruments of substantially similar
         tenor signed by such Securityholders in person or by an agent duly
         appointed in writing, and, except as otherwise expressly provided
         herein, such action shall become effective when such instrument or
         instruments are delivered to an Administrative Trustee. Such instrument
         or instruments (and the action embodied therein and evidenced thereby)
         are herein sometimes referred to as the "Act" of the Securityholders
         signing such instrument or instruments. Proof of execution of any such
         instrument or of a writing appointing any such agent shall be
         sufficient for any purpose of this Trust Agreement and (subject to
         Section 801) conclusive in favor of the Trustees, if made in the manner
         provided in this Section 608.

         (b)      The fact and date of the execution by any Person of any such
         instrument or writing may be proved by the affidavit of a witness of
         such execution or by a certificate of a notary public or other officer
         authorized by law to take acknowledgments of deeds, certifying that the
         individual signing such instrument or writing acknowledged to him the
         execution thereof. Where such

                                      -26-
<PAGE>

         execution is by a signer acting in a capacity other than his individual
         capacity, such certificate or affidavit shall also constitute
         sufficient proof of his authority. The fact and date of the execution
         of any such instrument or writing, or the authority of the Person
         executing the same, may also be proved in any other manner which any
         Trustee receiving the same deems sufficient.

         (c)      The ownership of Preferred Securities shall be proved by the
         Securities Register.

         (d)      Any request, demand, authorization, direction, notice,
         consent, waiver or other Act of the Securityholder of any Trust
         Security shall bind every future Securityholder of the same Trust
         Security and the Securityholder of every Trust Security issued upon the
         registration of transfer thereof or in exchange therefor or in lieu
         thereof in respect of anything done, omitted or suffered to be done by
         the Trustees or the Trust in reliance thereon, whether or not notation
         of such action is made upon such Trust Security.

         (e)      Without limiting the foregoing, a Securityholder entitled
         hereunder to take any action hereunder with regard to any particular
         Trust Security may do so with regard to all or any part of the
         Liquidation Amount of such Trust Security or by one or more duly
         appointed agents each of which may do so pursuant to such appointment
         with regard to all or any part of such liquidation amount.

         (f)      A Securityholder may institute a legal proceeding directly
         against the Depositor under the Guarantee to enforce its rights under
         the Guarantee without first instituting a legal proceeding against the
         Guarantee Trustee (as defined in the Guarantee), the Trust or any
         Person.

SECTION 609. INSPECTION OF RECORDS.

Upon reasonable notice to the Administrative Trustees and the Property Trustee,
the records of the Trust shall be open to inspection and copying by
Securityholders and their authorized representatives during normal business
hours for any purpose reasonably related to such Securityholder's interest as a
Securityholder.

                                   ARTICLE VII
                         REPRESENTATIONS AND WARRANTIES

SECTION 701. REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE PROPERTY
TRUSTEE.

The Bank and the Property Trustee, each severally on behalf of and as to itself,
as of the date hereof, and each Successor Property Trustee at the time of the
Successor Property Trustee's acceptance of its appointment as Property Trustee
hereunder (the term "Bank" being used to refer to such Successor Property
Trustee in its separate corporate capacity) hereby represents and warrants (as
applicable) for the benefit of the Depositor and the Securityholders that:

         (a)      the Bank is a banking corporation duly organized, validly
         existing and in good standing under the laws of the State of Delaware;

                                      -27-
<PAGE>

         (b)      the Bank has full corporate power, authority and legal right
         to execute, deliver and perform its obligations under this Trust
         Agreement and has taken all necessary action to authorize the
         execution, delivery and performance by it of this Trust Agreement;

         (c)      this Trust Agreement has been duly authorized, executed and
         delivered by the Property Trustee and constitutes the valid and legally
         binding agreement of the Property Trustee enforceable against it in
         accordance with its terms, subject to bankruptcy, insolvency,
         fraudulent transfer, reorganization, moratorium and similar laws of
         general applicability relating to or affecting creditors, rights and to
         general equity principles;

         (d)      the execution, delivery and performance by the Property
         Trustee of this Trust Agreement has been duly authorized by all
         necessary corporate or other action on the part of the Property Trustee
         and does not require any approval of stockholders of the Bank and such
         execution, delivery and performance shall not (i) violate the Bank's
         charter or by-laws; (ii) violate any provision of, or constitute, with
         or without notice or lapse of time, a default under, or result in the
         creation or imposition of, any Lien on any properties included in the
         Trust Property pursuant to the provisions of any indenture, mortgage,
         credit agreement, license or other agreement or instrument to which the
         Property Trustee or the Bank is a party or by which it is bound; or
         (iii) violate any law, governmental rule or regulation of the United
         States or the State of Delaware, as the case may be, governing the
         banking or trust powers of the Bank or the Property Trustee (as
         appropriate in context) or any order, judgment or decree applicable to
         the Property Trustee or the Bank;

         (e)      neither the authorization, execution or delivery by the
         Property Trustee of this Trust Agreement nor the consummation of any of
         the transactions by the Property Trustee contemplated herein or therein
         requires the consent or approval of, the giving of notice to, the
         registration with or the taking of any other action with respect to any
         governmental authority or agency under any existing federal law
         governing the banking or trust powers of the Bank or the Property
         Trustee, as the case may be, under the laws of the United States or the
         State of Delaware; and

         (f)      there are no proceedings pending or, to the best of the
         Property Trustee's knowledge, threatened against or affecting the Bank
         or the Property Trustee in any court or before any governmental
         authority, agency or arbitration board or tribunal which, individually
         or in the aggregate, would materially and adversely affect the Trust or
         would question the right, power and authority of the Property Trustee
         to enter into or perform its obligations as one of the Trustees under
         this Trust Agreement.

SECTION 702. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.

The Depositor hereby represents and warrants for the benefit of the
Securityholders that:

         (a)      the Trust Securities Certificates issued on the Closing Date
         or the Option Closing Date, if applicable, on behalf of the Trust have
         been duly authorized and, shall have been, duly and validly executed,
         issued and delivered by the Administrative Trustees pursuant to the
         terms and provisions of, and in accordance with the requirements of,
         this Trust Agreement and the Securityholders shall be, as of such date,
         entitled to the benefits of this Trust Agreement; and

         (b)      there are no taxes, fees or other governmental charges payable
         by the Trust (or the Trustees on behalf of the Trust) under the laws of
         the State of Delaware or any political subdivision

                                      -28-
<PAGE>

         thereof in connection with the execution, delivery and performance by
         the Bank or the Property Trustee, as the case may be, of this Trust
         Agreement.

                                  ARTICLE VIII
                                    TRUSTEES

SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.

         (a)      The duties and responsibilities of the Trustees shall be as
         provided by this Trust Agreement and, in the case of the Property
         Trustee, by the Trust Indenture Act. Notwithstanding the foregoing, no
         provision of this Trust Agreement shall require the Trustees to expend
         or risk their own funds or otherwise incur any financial liability in
         the performance of any of their duties hereunder, or in the exercise of
         any of their rights or powers, if they shall have reasonable grounds
         for believing that repayment of such funds or adequate indemnity
         against such risk or liability is not reasonably assured to it. No
         Administrative Trustee shall be liable for its act or omissions
         hereunder except as a result of its own gross negligence or willful
         misconduct. The Property Trustee's liability shall be determined under
         the Trust Indenture Act. Whether or not therein expressly so provided,
         every provision of this Trust Agreement relating to the conduct or
         affecting the liability of or affording protection to the Trustees
         shall be subject to the provisions of this Section 801. To the extent
         that, at law or in equity, an Administrative Trustee has duties
         (including fiduciary duties) and liabilities relating thereto to the
         Trust or to the Securityholders, such Administrative Trustee shall not
         be liable to the Trust or to any Securityholder for such Trustee's good
         faith reliance on the provisions of this Trust Agreement. The
         provisions of this Trust Agreement, to the extent that they restrict
         the duties and liabilities of the Administrative Trustees otherwise
         existing at law or in equity, are agreed by the Depositor and the
         Securityholders to replace such other duties and liabilities of the
         Administrative Trustees.

         (b)      All payments made by the Property Trustee or a Paying Agent in
         respect of the Trust Securities shall be made only from the revenue and
         proceeds from the Trust Property and only to the extent that there
         shall be sufficient revenue or proceeds from the Trust Property to
         enable the Property Trustee or a Paying Agent to make payments in
         accordance with the terms hereof. With respect to the relationship of
         each Securityholder and the Trustee, each Securityholder, by its
         acceptance of a Trust Security, agrees that it shall look solely to the
         revenue and proceeds from the Trust Property to the extent legally
         available for distribution to it as herein provided and that the
         Trustees are not personally liable to it for any amount distributable
         in respect of any Trust Security or for any other liability in respect
         of any Trust Security. This Section 801(b) does not limit the liability
         of the Trustees expressly set forth elsewhere in this Trust Agreement
         or, in the case of the Property Trustee, in the Trust Indenture Act.

         (c)      No provision of this Trust Agreement shall be construed to
         relieve the Property Trustee from liability for its own negligent
         action, its own negligent failure to act, or its own willful
         misconduct, except that:

                  (i)      the property Trustee shall not be liable for any
                  error of judgment made in good faith by an authorized officer
                  of the Property Trustee, unless it shall be proved that the
                  Property Trustee was negligent in ascertaining the pertinent
                  facts;

                                      -29-
<PAGE>

                  (ii)     the Property Trustee shall not be liable with respect
                  to any action taken or omitted to be taken by it in good faith
                  in accordance with the direction of the Holders of not less
                  than a majority in Liquidation Amount of the Trust Securities
                  relating to the time, method and place of conducting any
                  proceeding for any remedy available to the Property Trustee,
                  or exercising any trust or power conferred upon the Property
                  Trustee under this Trust Agreement;

                  (iii)    the Property Trustee's sole duty with respect to the
                  custody, safe keeping and physical preservation of the
                  Debentures and the Payment Account shall be to deal with such
                  Property in a similar manner as the Property Trustee deals
                  with similar property for its own account, subject to the
                  protections and limitations on liability afforded to the
                  Property Trustee under this Trust Agreement and the Trust
                  Indenture Act;

                  (iv)     the Property Trustee shall not be liable for any
                  interest on any money received by it except as it may
                  otherwise agree with the Depositor and money held by the
                  Property Trustee need not be segregated from other funds held
                  by it except in relation to the Payment Account maintained by
                  the Property Trustee pursuant to Section 301 and except to the
                  extent otherwise required by law; and

                  (v)      the Property Trustee shall not be responsible for
                  monitoring the compliance by the Administrative Trustees or
                  the Depositor with their respective duties under this Trust
                  Agreement, nor shall the Property Trustee be liable for the
                  negligence, default or misconduct of the Administrative
                  Trustees or the Depositor.

SECTION 802. CERTAIN NOTICES.

         (a)      Within 5 Business Days after the occurrence of any Event of
         Default actually known to the Property Trustee, the Property Trustee
         shall transmit, in the manner and to the extent provided in Section
         1008, notice of such Event of Default to the Securityholders, the
         Administrative Trustees and the Depositor, unless such Event of Default
         shall have been cured or waived. For purposes of this Section 802 the
         term "Event of Default" means any event that is, or after notice or
         lapse of time or both would become, an Event of Default.

         (b)      The Administrative Trustees shall transmit to the
         Securityholders in the manner and to the extent provided in Section
         1008 notice of the Depositor's election to begin or further extend an
         Extended Interest Payment Period on the Debentures (unless such
         election shall have been revoked) within the time specified for
         transmitting such notice to the holders of the Debentures pursuant to
         the Indenture as originally executed.

SECTION 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.

Subject to the provisions of Section 801:

         (a)      the Property Trustee may rely and shall be protected in acting
         or refraining from acting in good faith upon any resolution, Opinion of
         Counsel, certificate, written representation of a Holder or transferee,
         certificate of auditors or any other certificate, statement,
         instrument, opinion, report, notice, request, consent, order,
         appraisal, bond, debenture, note, other evidence of

                                      -30-
<PAGE>

         indebtedness or other paper or document believed by it to be genuine
         and to have been signed or presented by the proper party or parties;

         (b)      if (i) in performing its duties under this Trust Agreement the
         Property Trustee is required to decide between alternative courses of
         action; or (ii) in construing any of the provisions of this Trust
         Agreement the Property Trustee finds the same ambiguous or inconsistent
         with other provisions contained herein; or (iii) the Property Trustee
         is unsure of the application of any provision of this Trust Agreement,
         then, except as to any matter as to which the Preferred Securityholders
         are entitled to vote under the terms of this Trust Agreement, the
         Property Trustee shall deliver a notice to the Depositor requesting
         written instructions of the Depositor as to the course of action to be
         taken and the Property Trustee shall take such action, or refrain from
         taking such action, as the Property Trustee shall be instructed in
         writing to take, or to refrain from taking, by the Depositor, provided,
         however, that if the Property Trustee does not receive such
         instructions of the Depositor within 10 Business Days after it has
         delivered such notice, or such reasonably shorter period of time set
         forth in such notice (which to the extent practicable shall not be less
         than 2 Business Days), it may, but shall be under no duty to, take or
         refrain from taking such action not inconsistent with this Trust
         Agreement as it shall deem advisable and in the best interests of the
         Securityholders, in which event the Property Trustee shall have no
         liability except for its own bad faith, negligence or willful
         misconduct;

         (c)      any direction or act of the Depositor or the Administrative
         Trustees contemplated by this Trust Agreement shall be sufficiently
         evidenced by an Officers' Certificate;

         (d)      whenever in the administration of this Trust Agreement, the
         Property Trustee shall deem it desirable that a matter be established
         before undertaking, suffering or omitting any action hereunder, the
         Property Trustee (unless other evidence is herein specifically
         prescribed) may, in the absence of bad faith on its part, request and
         conclusively rely upon an Officer's Certificate which, upon receipt of
         such request, shall be promptly delivered by the Depositor or the
         Administrative Trustees;

         (e)      the Property Trustee shall have no duty to see to any
         recording, filing or registration of any instrument (including any
         financing or continuation statement) or any filing under tax or
         securities laws or any rerecording, refiling, or reregistration
         thereof;

         (f)      the Property Trustee may consult with counsel of its choice
         (which counsel may be counsel to the Depositor or any of its
         Affiliates) and the advice of such counsel shall be full and complete
         authorization and protection in respect of any action taken, suffered
         or omitted by it hereunder in good faith and in reliance thereon and in
         accordance with such advice, the Property Trustee shall have the right
         at any time to seek instructions concerning the administration of this
         Trust Agreement from any court of competent jurisdiction;

         (g)      the Property Trustee shall be under no obligation to exercise
         any of the rights or powers vested in it by this Trust Agreement at the
         request or direction of any of the Securityholders pursuant to this
         Trust Agreement, unless such Securityholders shall have offered to the
         Property Trustee reasonable security or indemnity against the costs,
         expenses and liabilities which might be incurred by it in compliance
         with such request or direction;

                                      -31-
<PAGE>

         (h)      the Property Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, bond, debenture, note or other evidence of
         indebtedness or other paper or document, unless requested in writing to
         do so by one or more Securityholders, but the Property Trustee may make
         such further inquiry or investigation into such facts or matters as it
         may see fit;

         (i)      the Property Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through its agents or attorneys, provided that the Property Trustee
         shall be responsible for its own negligence or recklessness with
         respect to selection of any agent or attorney appointed by it
         hereunder;

         (j)      whenever in the administration of this Trust Agreement the
         Property Trustee shall deem it desirable to receive instructions with
         respect to enforcing any remedy or right or taking any other action
         hereunder the Property Trustee (i) may request instructions from the
         Holders of the Trust Securities which instructions may only be given by
         the Holders of the same proportion in Liquidation Amount of the Trust
         Securities as would be entitled to direct the Property Trustee under
         the terms of the Trust Securities in respect of such remedy, right or
         action; (ii) may refrain from enforcing such remedy or right or taking
         such other action until such instructions are received; and (iii) shall
         be protected in acting in accordance with such instructions; and

         (k)      except as otherwise expressly provided by this Trust
         Agreement, the Property Trustee shall not be under any obligation to
         take any action that is discretionary under the provisions of this
         Trust Agreement. No provision of this Trust Agreement shall be deemed
         to impose any duty or obligation on the Property Trustee to perform any
         act or acts or exercise any right, power, duty or obligation conferred
         or imposed on it, in any jurisdiction in which it shall be illegal, or
         in which the Property Trustee shall be unqualified or incompetent in
         accordance with applicable law, to perform any such act or acts, or to
         exercise any such right, power, duty or obligation. No permissive power
         or authority available to the Property Trustee shall be construed to be
         a duty.

SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

The Recitals contained herein and in the Trust Securities Certificates shall be
taken as the statements of the Trust, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable for
the use or application by the Depositor of the proceeds of the Debentures.

SECTION 805. MAY HOLD SECURITIES.

Any Trustee or any other agent of any Trustee or the Trust, in its individual or
any other capacity, may become the owner or pledgee of Trust Securities and,
subject to Sections 808 and 813 and except as provided in the definition of the
term "Outstanding" in Article I, may otherwise deal with the Trust with the same
rights it would have if it were not a Trustee or such other agent.

SECTION 806. COMPENSATION; INDEMNITY; FEES.

The Depositor agrees:

                                      -32-
<PAGE>

         (a)      to pay to the Trustees from time to time reasonable
         compensation for all services rendered by them hereunder (which
         compensation shall not be limited by any provision of law in regard to
         the compensation of a trustee of an express trust);

         (b)      except as otherwise expressly provided herein, to reimburse
         the Trustees upon request for all reasonable expenses, disbursements
         and advances incurred or made by the Trustees in accordance with any
         provision of this Trust Agreement (including the reasonable
         compensation and the expenses and disbursements of its agents and
         counsel), except any such expense, disbursement or advance as may be
         attributable to such Trustee's negligence, bad faith or willful
         misconduct (or, in the case of the Administrative Trustees, any such
         expense, disbursement or advance as may be attributable to its, his or
         her gross negligence, bad faith or willful misconduct); and

         (c)      to indemnify each of the Trustees or any predecessor Trustee
         for, and to hold the Trustees harmless against, any loss, damage,
         claim, liability, penalty or expense incurred without negligence or bad
         faith on its part, arising out of or in connection with the acceptance
         or administration of this Trust Agreement, including the costs and
         expenses of defending itself against any claim or liability in
         connection with the exercise or performance of any of its powers or
         duties hereunder, except any such expense, disbursement or advance as
         may be attributable to such Trustee's negligence, bad faith or willful
         misconduct (or, in the case of the Administrative Trustees, any such
         expense, disbursement or advance as may be attributable to its, his or
         her gross negligence, bad faith or willful misconduct).

No Trustee may claim any Lien or charge on any Trust Property as a result of any
amount due pursuant to this Section 806.

SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.

         (a)      There shall at all times be a Property Trustee hereunder with
         respect to the Trust Securities. The Property Trustee shall be a Person
         that is eligible pursuant to the Trust Indenture Act to act as such and
         has a combined capital and surplus of at least $50,000,000. If any such
         Person publishes reports of condition at least annually, pursuant to
         law or to the requirements of its supervising or examining authority,
         then for the purposes of this Section 807, the combined capital and
         surplus of such Person shall be deemed to be its combined capital and
         surplus as set forth in its most recent report of condition so
         published. If at any time the Property Trustee with respect to the
         Trust Securities shall cease to be eligible in accordance with the
         provisions of this Section 807, it shall resign immediately in the
         manner and with the effect hereinafter specified in this Article VIII.

         (b)      There shall at all times be one or more Administrative
         Trustees hereunder with respect to the Trust Securities. Each
         Administrative Trustee shall be either a natural person who is at least
         21 years of age or a legal entity that shall act through one or more
         persons authorized to bind that entity.

         (c)      There shall at all times be a Delaware Trustee with respect to
         the Trust Securities. The Delaware Trustee shall either be (i) a
         natural person who is at least 21 years of age and a resident of the
         State of Delaware; or (ii) a legal entity with its principal place of
         business in the State of Delaware and that otherwise meets the
         requirements of applicable Delaware law that shall act through one or
         more persons authorized to bind such entity.

                                      -33-
<PAGE>

SECTION 808. CONFLICTING INTERESTS.

If the Property Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Property Trustee shall either eliminate
such interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Trust Agreement.

SECTION 809. CO-TRUSTEES AND SEPARATE TRUSTEE.

         (a)      Unless an Event of Default shall have occurred and be
         continuing, at any time or times, for the purpose of meeting the legal
         requirements of the Trust Indenture Act or of any jurisdiction in which
         any part of the Trust Property may at the time be located, the
         Depositor shall have power to appoint, and upon the written request of
         the Property Trustee, the Depositor shall for such purpose join with
         the Property Trustee in the execution, delivery and performance of any
         instruments and agreements necessary or proper to appoint, one or more
         Persons approved by the Property Trustee either to act as co-trustee,
         jointly with the Property Trustee, of all or any part of such Trust
         Property, or to the extent required by law to act as separate trustee
         of any such property, in either case with such powers as may be
         provided in the instrument of appointment, and to vest in such Person
         or Persons in the capacity aforesaid, any property, title, right or
         power deemed necessary or desirable, subject to the other provisions of
         this Section 809. If the Depositor does not join in such appointment
         within 15 days after the receipt by it of a request so to do, or in
         case a Debenture Event of Default has occurred and is continuing, the
         Property Trustee alone shall have power to make such appointment. Any
         co-trustee or separate trustee appointed pursuant to this Section 809
         shall either be (i) a natural person who is at least 21 years of age
         and a resident of the United States; or (ii) a legal entity with its
         principal place of business in the United States that shall act through
         one or more persons authorized to bind such entity.

         (b)      Should any written instrument from the Depositor be required
         by any co-trustee or separate trustee so appointed for more fully
         confirming to such co-trustee or separate trustee such property, title,
         right, or power, any and all such instruments shall, on request, be
         executed, acknowledged, and delivered by the Depositor.

         (c)      Every co-trustee or separate trustee shall, to the extent
         permitted by law, but to such extent only, be appointed subject to the
         following terms, namely:

                  (i)      The Trust Securities shall be executed and delivered
                  and all rights, powers, duties and obligations hereunder in
                  respect of the custody of securities, cash and other personal
                  property held by, or required to be deposited or pledged with,
                  the Trustees specified hereunder, shall be exercised, solely
                  by such Trustees and not by such co-trustee or separate
                  trustee.

                  (ii)     The rights, powers, duties and obligations hereby
                  conferred or imposed upon the Property Trustee in respect of
                  any property covered by such appointment shall be conferred or
                  imposed upon and exercised or performed by the Property
                  Trustee or by the Property Trustee and such co-trustee or
                  separate trustee jointly, as shall be provided in the
                  instrument appointing such co-trustee or separate trustee,
                  except to the extent that under any law of any jurisdiction in
                  which any particular act is to be performed, the Property
                  Trustee shall be incompetent or unqualified to perform such
                  act, in which event such

                                      -34-
<PAGE>

                  rights, powers, duties and obligations shall be exercised and
                  performed by such co-trustee or separate trustee.

                  (iii)    The Property Trustee at any time, by an instrument in
                  writing executed by it, with the written concurrence of the
                  Depositor, may accept the resignation of or remove any co-
                  trustee or separate trustee appointed under this Section 809,
                  and, in case a Debenture Event of Default has occurred and is
                  continuing, the Property Trustee shall have the power to
                  accept the resignation of, or remove, any such co-trustee or
                  separate trustee without the concurrence of the Depositor.
                  Upon the written request of the Property Trustee, the
                  Depositor shall join with the Property Trustee in the
                  execution, delivery and performance of all instruments
                  necessary or proper to effectuate such resignation or removal.
                  A successor to any co-trustee or separate trustee so resigned
                  or removed may be appointed in the manner provided in this
                  Section 809.

                  (iv)     No co-trustee or separate trustee hereunder shall be
                  personally liable by reason of any act or omission of the
                  Property Trustee or any other trustee hereunder.

                  (v)      The Property Trustee shall not be liable by reason of
                  any act of a co-trustee or separate trustee.

                  (vi)     Any Act of Holders delivered to the Property Trustee
                  shall be deemed to have been delivered to each such co-trustee
                  and separate trustee.

SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

         (a)      No resignation or removal of any Trustee (the "Relevant
         Trustee") and no appointment of a successor Trustee pursuant to this
         Article VIII shall become effective until the acceptance of appointment
         by the successor Trustee in accordance with the applicable requirements
         of Section 811.

         (b)      Subject to the immediately preceding paragraph, the Relevant
         Trustee may resign at any time with respect to the Trust Securities by
         giving written notice thereof to the Securityholders. If the instrument
         of acceptance by the successor Trustee required by Section 811 shall
         not have been delivered to the Relevant Trustee within 30 days after
         the giving of such notice of resignation, the Relevant Trustee may
         petition, at the expense of the Depositor, any court of competent
         jurisdiction for the appointment of a successor Relevant Trustee with
         respect to the Trust Securities.

         (c)      Unless a Debenture Event of Default shall have occurred and be
         continuing, any Trustee may be removed at any time by Act of the Common
         Securityholder. If a Debenture Event of Default shall have occurred and
         be continuing, the Property Trustee or the Delaware Trustee, or both of
         them, may be removed at such time by Act of the Holders of a majority
         in Liquidation Amount of the Preferred Securities, delivered to the
         Relevant Trustee (in its individual capacity and on behalf of the
         Trust). An Administrative Trustee may be removed by the Common
         Securityholder at any time.

         (d)      If any Trustee shall resign, be removed or become incapable of
         acting as Trustee, or if a vacancy shall occur in the office of any
         Trustee for any cause, at a time when no Debenture Event

                                      -35-
<PAGE>

         of Default shall have occurred and be continuing, the Common
         Securityholder, by Act of the Common Securityholder delivered to the
         retiring Trustee, shall promptly appoint a successor Trustee or
         Trustees with respect to the Trust Securities and the Trust, and the
         successor Trustee shall comply with the applicable requirements of
         Section 811. If the Property Trustee shall resign, be removed or become
         incapable of continuing to act as the Property Trustee at a time when a
         Debenture Event of Default shall have occurred and is continuing, the
         Preferred Securityholders, by Act of the Securityholders of a majority
         in Liquidation Amount of the Preferred Securities then Outstanding
         delivered to the retiring Relevant Trustee, shall promptly appoint a
         successor Relevant Trustee or Trustees with respect to the Trust
         Securities and the Trust, and such successor Trustee shall comply with
         the applicable requirements of Section 811. If an Administrative
         Trustee shall resign, be removed or become incapable of acting as
         Administrative Trustee, at a time when a Debenture Event of Default
         shall have occurred and be continuing, the Common Securityholder, by
         Act of the Common Securityholder delivered to an Administrative
         Trustee, shall promptly appoint a successor Administrative Trustee or
         Administrative Trustees with respect to the Trust Securities and the
         Trust, and such successor Administrative Trustee or Administrative
         Trustees shall comply with the applicable requirements of Section 811.
         If no successor Relevant Trustee with respect to the Trust Securities
         shall have been so appointed by the Common Securityholder or the
         Preferred Securityholders and accepted appointment in the manner
         required by Section 811, any Securityholder who has been a Security
         holder of Trust Securities on behalf of himself and all others
         similarly situated may petition a court of competent jurisdiction for
         the appointment of a successor Trustee with respect to the Trust
         Securities.

         (e)      The Property Trustee shall give notice of each resignation and
         each removal of a Trustee and each appointment of a successor Trustee
         to all Securityholders in the manner provided in Section 1008 and shall
         give notice to the Depositor. Each notice shall include the name of the
         successor Relevant Trustee and the address of its Corporate Trust
         office if it is the Property Trustee.

         (f)      Notwithstanding the foregoing or any other provision of this
         Trust Agreement, in the event any Administrative Trustee who is a
         natural person dies or becomes, in the opinion of the Depositor,
         incompetent or incapacitated, the vacancy created by such death,
         incompetence or incapacity may be filled by (a) the unanimous act of
         the remaining Administrative Trustees if there are at least two of
         them; or (b) otherwise by the Depositor (with the successor in each
         case being a Person who satisfies the eligibility requirement for
         Administrative Trustees set forth in Section 807).

SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

         (a)      In case of the appointment hereunder of a successor Relevant
         Trustee with respect to the Trust Securities and the Trust, the
         retiring Relevant Trustee and each successor Relevant Trustee with
         respect to the Trust Securities shall execute and deliver an instrument
         hereto wherein each successor Relevant Trustee shall accept such
         appointment and which shall contain such provisions as shall be
         necessary or desirable to transfer and confirm to, and to vest in, each
         successor Relevant Trustee all the rights, powers, trusts and duties of
         the retiring Relevant Trustee with respect to the Trust Securities and
         the Trust and, upon the execution and delivery of such instrument, the
         resignation or removal of the retiring Relevant Trustee shall become
         effective to the extent provided therein and each such successor
         Relevant Trustee, without any further act, deed or conveyance, shall
         become vested with all the rights, powers, trusts and duties of the
         retiring

                                      -36-
<PAGE>

         Relevant Trustee with respect to the Trust Securities and the Trust,
         but, on request of the Trust or any successor Relevant Trustee such
         retiring Relevant Trustee shall duly assign, transfer and deliver to
         such successor Relevant Trustee all Trust Property, all proceeds
         thereof and money held by such retiring Relevant Trustee hereunder with
         respect to the Trust Securities and the Trust.

         (b)      Upon request of any such successor Relevant Trustee, the Trust
         shall execute any and all instruments for more fully and certainly
         vesting in and confirming to such successor Relevant Trustee all such
         rights, powers and trusts referred to in the immediately preceding
         paragraph, as the case may be.

         (c)      No successor Relevant Trustee shall accept its appointment
         unless at the time of such acceptance such successor Relevant Trustee
         shall be qualified and eligible under this Article VIII.

SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

Any Person into which the Property Trustee or any Administrative Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of such Relevant Trustee, shall be the
successor of such Relevant Trustee hereunder, provided such Person shall be
otherwise qualified and eligible under this Article VIII, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.

SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.

If and when the Property Trustee shall be or become a creditor of the Depositor
or the Trust (or any other obligor upon the Debentures or the Trust Securities),
the Property Trustee shall be subject to and shall take all actions necessary in
order to comply with the provisions of the Trust Indenture Act regarding the
collection of claims against the Depositor or Trust (or any such other obligor).

SECTION 814. REPORTS BY PROPERTY TRUSTEE.

         (a)      Not later than July 15 of each year commencing with July 15,
         ____, the Property Trustee shall transmit to all Securityholders in
         accordance with Section 1008, and to the Depositor, a brief report
         dated as of December 31 with respect to:

                  (i)      its eligibility under Section 807 or, in lieu
                  thereof, if to the best of its knowledge it has continued to
                  be eligible under said Section, a written statement to such
                  effect; and

                  (ii)     any change in the property and funds in its
                  possession as Property Trustee since the date of its last
                  report and any action taken by the Property Trustee in the
                  performance of its duties hereunder which it has not
                  previously reported and which in its opinion materially
                  affects the Trust Securities

         (b)      In addition the Property Trustee shall transmit to
         Securityholders such reports concerning the Property Trustee and its
         actions under this Trust Agreement as may be required pursuant to the
         Trust Indenture Act at the times and in the manner provided pursuant
         thereto.

                                      -37-
<PAGE>

         (c)      A copy of each such report shall, at the time of such
         transmission to Holders, be filed by the Property Trustee with The
         Nasdaq Stock Market's National Market and/or any national securities
         exchange or other organization upon which the Trust Securities are
         listed, and also with the Commission and the Depositor.

SECTION 815. REPORTS TO THE PROPERTY TRUSTEE.

The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.

SECTION 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.

Each of the Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(l) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.

SECTION 817. NUMBER OF TRUSTEES.

         (a)      The number of Trustees shall be five, provided that the Holder
         of all of the Common Securities by written instrument may increase or
         decrease the number of Administrative Trustees. The Property Trustee
         and the Delaware Trustee may be the same Person.

         (b)      If a Trustee ceases to hold office for any reason and the
         number of Administrative Trustees is not reduced pursuant to Section
         817(a), or if the number of Trustees is increased pursuant to Section
         817(a), a vacancy shall occur. The vacancy shall be filled with a
         Trustee appointed in accordance with Section 810.

         (c)      The death, resignation, retirement, removal, bankruptcy,
         incompetence or incapacity to perform the duties of a Trustee shall not
         operate to annul the Trust. Whenever a vacancy in the number of
         Administrative Trustees shall occur, until such vacancy is filled by
         the appointment of an Administrative Trustee in accordance with Section
         810, the Administrative Trustees in office, regardless of their number
         (and notwithstanding any other provision of this Agreement), shall have
         all the powers granted to the Administrative Trustees and shall
         discharge all the duties imposed upon the Administrative Trustees by
         this Trust Agreement.

SECTION 818. DELEGATION OF POWER.

         (a)      Any Administrative Trustee may, by power of attorney
         consistent with applicable law, delegate to any other natural person
         over the age of 21 his or her power for the purpose of executing any
         documents contemplated in Section 207(a); and

         (b)      The Administrative Trustees shall have power to delegate from
         time to time to such of their number or to the Depositor the doing of
         such things and the execution of such instruments either in the name of
         the Trust or the names of the Administrative Trustees or otherwise as
         the

                                      -38-
<PAGE>

         Administrative Trustees may deem expedient, to the extent such
         delegation is not prohibited by applicable law or contrary to the
         provisions of the Trust, as set forth herein.

SECTION 819. VOTING.

Except as otherwise provided in this Trust Agreement, the consent or approval of
the Administrative Trustees shall require consent or approval by not less than a
majority of the Administrative Trustees, unless there are only two, in which
case both must consent.

                                   ARTICLE IX
                       TERMINATION, LIQUIDATION AND MERGER

SECTION 901. TERMINATION UPON EXPIRATION DATE.

Unless earlier dissolved, the Trust shall automatically dissolve on _______ (the
"Expiration Date") subject to distribution of the Trust Property in accordance
with Section 904.

SECTION 902. EARLY TERMINATION.

The first to occur of any of the following events is an "Early Termination
Event:"

         (a)      the occurrence of a Bankruptcy Event in respect of, or the
         dissolution or liquidation of, the Depositor;

         (b)      delivery of written direction to the Property Trustee by the
         Depositor at any time (which direction is wholly optional and within
         the discretion of the Depositor) to dissolve the Trust and distribute
         the Debentures to Securityholders in exchange for the Preferred
         Securities in accordance with Section 904;

         (c)      the redemption of all of the Preferred Securities in
         connection with the redemption of all of the Debentures; and

         (d)      an order for dissolution of the Trust shall have been entered
         by a court of competent jurisdiction.

SECTION 903. TERMINATION.

The respective obligations and responsibilities of the Trustees and the Trust
created and continued hereby shall terminate upon the latest to occur of the
following: (a) the distribution by the Property Trustee to Securityholders upon
the liquidation of the Trust pursuant to Section 904, or upon the redemption of
all of the Trust Securities pursuant to Section 402, of all amounts required to
be distributed hereunder upon the final payment of the Trust Securities; (b) the
payment of any expenses owed by the Trust; (c) the discharge of all
administrative duties of the Administrative Trustees, including the performance
of any tax reporting obligations with respect to the Trust or the
Securityholders; and (d) the filing of a Certificate of Cancellation by the
Administrative Trustee under the Business Trust Act.

SECTION 904. LIQUIDATION.

                                      -39-
<PAGE>

         (a)      If an Early Termination Event specified in clause (a), (b), or
         (d) of Section 902 occurs or upon the Expiration Date, the Trust shall
         be liquidated by the Trustees as expeditiously as the Trustees
         determine to be possible by distributing, after satisfaction of
         liabilities to creditors of the Trust as provided by applicable law, to
         each Securityholder a Like Amount of Debentures, subject to Section
         904(d). Notice of liquidation shall be given by the Property Trustee by
         first-class mail, postage prepaid, mailed not later than 30 nor more
         than 60 days prior to the Liquidation Date to each Holder of Trust
         Securities at such Holder's address appearing in the Securities
         Register. All notices of liquidation shall:

                  (i)      state the Liquidation Date;

                  (ii)     state that from and after the Liquidation Date, the
                  Trust Securities shall no longer be deemed to be Outstanding
                  and any Trust Securities Certificates not surrendered for
                  exchange shall be deemed to represent a Like Amount of
                  Debentures; and

                  (iii)    provide such information with respect to the
                  mechanics by which Holders may exchange Trust Securities
                  Certificates for Debentures, or, if Section 904(d) applies,
                  receive a Liquidation Distribution, as the Administrative
                  Trustees or the Property Trustee shall deem appropriate.

         (b)      Except where Section 902(c) or 904(d) applies, in order to
         effect the liquidation of the Trust and distribution of the Debentures
         to Securityholders, the Property Trustee shall establish a record date
         for such distribution (which shall be not more than 45 days prior to
         the Liquidation Date) and, either itself acting as exchange agent or
         through the appointment of a separate exchange agent, shall establish
         such procedures as it shall deem appropriate to effect the distribution
         of Debentures in exchange for the Outstanding Trust Securities
         Certificates.

         (c)      Except where Section 902(c) or 904(d) applies, after the
         Liquidation Date, (i) the Trust Securities shall no longer be deemed to
         be outstanding; (ii) the Clearing Agency for the Preferred Securities
         or its nominee, as the registered holder of the Global Preferred
         Securities Certificate, shall receive a registered global certificate
         or certificate or certificates representing a Like Amount of Debentures
         with respect to Preferred Securities held by the Clearing Agency or its
         nominee; (iii) certificates representing a Like Amount of Debentures
         shall be issued to holders of Trust Securities Certificates not held by
         the Clearing Agency for the Preferred Securities or its nominee as
         specified in clause (ii) above upon surrender of such certificates to
         the Administrative Trustees or their agent for exchange; (iv) the
         Depositor shall use its reasonable efforts to have the Debentures
         listed on The Nasdaq Stock Market's National Market or SmallCap Market
         or on such other securities exchange or other organization as the
         Preferred Securities are then listed or traded; (v) any Trust
         Securities Certificates not so surrendered for exchange shall be deemed
         to represent a Like Amount of Debentures, accruing interest at the rate
         provided for in the Debentures from the last Distribution Date on which
         a Distribution was made on such Trust Securities Certificates until
         such certificates are so surrendered (and until such certificates are
         so surrendered, no payments of interest or principal shall be made to
         holders of Trust Securities Certificates with respect to such
         Debentures): and (vi) all rights of Securityholders holding Trust
         Securities shall cease, except the right of such Securityholders to
         receive Debentures upon surrender of Trust Securities Certificates.

         (d)      In the event that, notwithstanding the other provisions of
         this Section 904, whether because of an order for dissolution entered
         by a court of competent jurisdiction or otherwise, distribution

                                      -40-
<PAGE>

         of the Debentures in the manner provided herein is determined by the
         Property Trustees not to be practical, the Trust Property shall be
         liquidated, and the Trust shall be dissolved, wound-up or terminated,
         by the Property Trustee in such manner as the Property Trustee
         determines. In such event, on the date of the dissolution, winding-up
         or other termination of the Trust, Securityholders shall be entitled to
         receive out of the assets of the Trust available for distribution to
         Securityholders, after satisfaction of liabilities to creditors of the
         Trust as provided by applicable law, an amount equal to the Liquidation
         Amount per Trust Security plus accumulated and unpaid Distributions
         thereon to the date of payment (such amount being the "Liquidation
         Distribution"). If, upon any such dissolution, winding-up or
         termination, the Liquidation Distribution can be paid only in part
         because the Trust has insufficient assets available to pay in full the
         aggregate Liquidation Distribution, then, subject to the next
         succeeding sentence, the amounts payable by the Trust on the Trust
         Securities shall be paid on a pro rata basis (based upon Liquidation
         Amounts). The holder of the Common Securities shall be entitled to
         receive Liquidation Distributions upon any such dissolution, winding-up
         or termination pro rata (determined as aforesaid) with Holders of
         Preferred Securities, except that, if a Debenture Event of Default has
         occurred and is continuing, the Preferred Securities shall have a
         priority over the Common Securities.

SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
TRUST.

The Trust may not merge with or into, consolidate, amalgamate, or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other Person, except pursuant to this Section
905. At the request of the Depositor, with the consent of the Administrative
Trustees and without the consent of the holders of the Preferred Securities, the
Property Trustee or the Delaware Trustee, the Trust may merge with or into,
consolidate, amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any state; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Trust with respect to the
Preferred Securities; or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise; (ii) the Depositor expressly
appoints a trustee of such successor entity possessing substantially the same
powers and duties as the Property Trustee as the holder of the Debentures; (iii)
the Successor Securities are listed or traded, or any Successor Securities shall
be listed or traded upon notification of issuance, on any national securities
exchange or other organization on which the Preferred Securities are then
listed, if any; (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect; (v) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an Opinion of Counsel to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Preferred Securities (including any Successor Securities) in any material
respect: and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity shall be required to register as an "investment company" under the
Investment Company Act, and (vi) the Depositor owns all of the Common Securities
of such successor entity and guarantees the obligations of such successor entity
under the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer

                                      -41-
<PAGE>

or lease its properties and assets substantially as an entirety to any other
Person or permit any other Person to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger or replacement
would cause the Trust or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes.

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

SECTION 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.

The death or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.

SECTION 1002. AMENDMENT.

         (a)      This Trust Agreement may be amended from time to time by the
         Trustees and the Depositor, without the consent of any Securityholders,
         (i) as provided in Section 811 with respect to acceptance of
         appointment by a successor Trustee; (ii) to cure any ambiguity, correct
         or supplement any provision herein or therein which may be inconsistent
         with any other provision herein or therein, or to make any other
         provisions with respect to matters or questions arising under this
         Trust Agreement, that shall not be inconsistent with the other
         provisions of this Trust Agreement; or (iii) to modify, eliminate or
         add to any provisions of this Trust Agreement to such extent as shall
         be necessary to ensure that the Trust shall be classified for United
         States federal income tax purposes as a grantor trust at all times that
         any Trust Securities are outstanding or to ensure that the Trust shall
         not be required to register as an "investment company" under the
         Investment Company Act; provided, however, that in the case of clause
         (ii), such action shall not adversely affect in any material respect
         the interests of any Securityholder, and any amendments of this Trust
         Agreement shall become effective when notice thereof is given to the
         Securityholders.

         (b)      Except as provided in Section 601(c) or Section 1002(c)
         hereof, any provision of this Trust Agreement may be amended by the
         Trustees and the Depositor (i) with the consent of Trust
         Securityholders representing not less than a majority (based upon
         Liquidation Amounts) of the Trust Securities then Outstanding; and (ii)
         upon receipt by the Trustees of an Opinion of Counsel to the effect
         that such amendment or the exercise of any power granted to the
         Trustees in accordance with such amendment shall not affect the Trust's
         status as a grantor trust for United Status federal income tax purposes
         or the Trust's exemption from status of an "investment company" under
         the Investment Company Act.

         (c)      In addition to and notwithstanding any other provision in this
         Trust Agreement, without the consent of each affected Securityholder
         (such consent being obtained in accordance with Section 603 or 606
         hereof), this Trust Agreement may not be amended to (i) change the
         amount or timing of any Distribution on the Trust Securities or
         otherwise adversely affect the amount of any Distribution required to
         be made in respect of the Trust Securities as of a specified date; or
         (ii) restrict the right of a Securityholder to institute suit for the
         enforcement of any such payment on or after such date; notwithstanding
         any other provision herein, without the unanimous consent

                                      -42-
<PAGE>

         of the Securityholders (such consent being obtained in accordance with
         Section 603 or 606 hereof), this paragraph (c) of this Section 1002 may
         not be amended.

         (d)      Notwithstanding any other provisions of this Trust Agreement,
         no Trustee shall enter into or consent to any amendment to this Trust
         Agreement which would cause the Trust to fail or cease to qualify for
         the exemption from status of an "investment company" under the
         Investment Company Act or to fail or cease to be classified as a
         grantor trust for United States federal income tax purposes.

         (e)      In the event that any amendment to this Trust Agreement is
         made, the Administrative Trustees shall promptly provide to the
         Depositor a copy of such amendment.

         (f)      The Property Trustee shall not be required to enter into any
         amendment to this Trust Agreement which affects its own rights, duties
         or immunities under this Trust Agreement. The Property Trustee shall be
         entitled to receive an Opinion of Counsel and an Officers' Certificate
         stating that any amendment to this Trust Agreement is in compliance
         with this Trust Agreement.

         (g)      Notwithstanding anything in this Trust Agreement to the
         contrary, without the consent of the Depositor and the Administrative
         Trustees, this Trust Agreement may not be amended in a manner which
         imposes any additional obligation on the Depositor and the
         Administrative Trustees.

SECTION 1003. SEPARABILITY.

In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

SECTION 1004. GOVERNING LAW.

THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).

SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY.

If the date fixed for any payment on any Trust Security shall be a day that is
not a Business Day, then such payment need not be made on such date but may be
made on the next succeeding day which is a Business Day (except as otherwise
provided in Sections 401(a) and 402(d)), with the same force and effect as
though made on the date fixed for such payment, and no distribution shall
accumulate thereon for the period after such date.

SECTION 1006. SUCCESSORS.

This Trust Agreement shall be binding upon and shall inure to the benefit of any
successor to the Depositor, the Trust or the Relevant Trustee(s), including any
successor by operation of law. Except in connection with a consolidation, merger
or sale involving the Depositor that is permitted under Article ___

                                      -43-
<PAGE>

of the Indenture and pursuant to which the assignee agrees in writing to perform
the Depositor's obligations hereunder, the Depositor shall not assign its
obligations hereunder.

SECTION 1007. HEADINGS.

The Article and Section headings are for convenience only and shall not affect
the construction of this Trust Agreement.

SECTION 1008. REPORTS, NOTICES AND DEMANDS.

Any report, notice, demand or other communication, which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor, may be given or served in writing by
deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to BankAtlantic
Bancorp, Inc., 1750 East Sunrise Boulevard, Fort Lauderdale, Florida 33304,
Attention: Chief Financial Officer, facsimile no.: (954) 763-4764. Any notice to
Preferred Securityholders shall also be given to such owners as have, within two
years preceding the giving of such notice, filed their names and addresses with
the Property Trustee for that purpose. Such notice, demand or other
communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.

Any notice, demand or other communication which by any provision of this Trust
Agreement is required or permitted to be given or served to or upon the Trust,
the Property Trustee or the Administrative Trustees shall be given in writing
addressed (until another address is published by the Trust) as follows: (a) with
respect to the Property Trustee or the Delaware Trustee to Wilmington Trust
Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration; and (b) with respect to
the Administrative Trustees, to them at the address above for notices to the
Depositor, marked "Attention: Administrative Trustees of BBC Capital Trust II."
Such notice, demand or other communication to or upon the Trust or the Property
Trustee shall be deemed to have been sufficiently given or made only upon actual
receipt of the writing by the Trust or the Property Trustee.

SECTION 1009. AGREEMENT NOT TO PETITION.

Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and 1 day after the Trust has been
terminated in accordance with Article IX, they shall not file, or join in the
filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code of 1978, as amended) (collectively, "Bankruptcy Laws") or
otherwise join in the commencement of any proceeding against the Trust under any
Bankruptcy Law. In the event the Depositor takes action in violation of this
Section 1009, the Property Trustee agrees, for the benefit of Securityholders,
that at the expense of the Depositor (which expense shall be paid prior to the
filing), it shall file an answer with the bankruptcy court or otherwise properly
contest the filing of such petition by the Depositor against the Trust or the
commencement of such action and raise the defense that the Depositor has agreed
in writing not to take such action and should be stopped and precluded
therefrom. The provisions of this Section 1009 shall survive the termination of
this Trust Agreement.

                                      -44-
<PAGE>

SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.

         (a)      This Trust Agreement is subject to the provisions of the Trust
         Indenture Act that are required to be part of this Trust Agreement and
         shall, to the extent applicable, be governed by such provisions.

         (b)      The Property Trustee shall be the only Trustee which is a
         trustee for the purposes of the Trust Indenture Act.

         (c)      If any provision hereof limits, qualifies or conflicts with
         another provision hereof which is required to be included in this Trust
         Agreement by any of the provisions of the Trust Indenture Act, such
         required provision shall control. If any provision of this Trust
         Agreement modifies or excludes any provision of the Trust Indenture Act
         which may be so modified or excluded, the latter provision shall be
         deemed to apply to this Trust Agreement as so modified or to be
         excluded, as the case may be.

         (d)      The application of the Trust Indenture Act to this Trust
         Agreement shall not affect the nature of the Securities as equity
         securities representing undivided beneficial interests in the assets of
         the Trust.

SECTION 1011. ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND INDENTURE.

THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON
BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT
TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE
INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER
AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE
BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER
AND SUCH OTHERS.

                                      -45-
<PAGE>

                            BANKATLANTIC BANCORP, INC.,
                               as Depositor

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

                            WILMINGTON TRUST COMPANY,
                            as Property Trustee and Delaware Trustee

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

                                ----------------------------------------------
                                Alan B. Levan, as Administrative Trustee

                                ----------------------------------------------
                                James A. White, as Administrative Trustee

                                ----------------------------------------------
                                Jarett S. Levan, as Administrative Trustee

                                      -46-
<PAGE>

                                    EXHIBIT A

                                       A-1

<PAGE>

                                    EXHIBIT B

                                       B-1

<PAGE>

                                    EXHIBIT C

                                       C-1

<PAGE>
                                   Exhibit D

                    AGREEMENT AS TO EXPENSES AND LIABILITIES

AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement") dated as of _______,
____, between BANKATLANTIC BANCORP, INC., a Florida corporation (the "Company"),
and BBC CAPITAL TRUST II, a Delaware business trust (the "Trust").

                                    RECITALS

WHEREAS, the Trust intends to issue its common securities (the "Common
Securities") to, and receive Debentures from, the Company and to issue and sell
its __% Cumulative Trust Preferred Securities (the "Preferred Securities") with
such powers, preferences and special rights and restrictions as are set forth in
the Amended and Restated Trust Agreement of the Trust dated as of ________,
____, as the same may be amended from time to time (the "Trust Agreement");

WHEREAS, the Company shall directly or indirectly own all of the
Common Securities of the Trust and shall issue the Debentures;

NOW, THEREFORE, in consideration of the purchase by each holder of the Preferred
Securities, which purchase the Company hereby agrees shall benefit the Company
and which purchase the Company acknowledges shall be made in reliance upon the
execution and delivery of this Agreement, the Company, including in its capacity
as holder of the Common Securities, and the Trust hereby agree as follows:

                                    ARTICLE I

         SECTION 1.1 GUARANTEE BY THE COMPANY.

Subject to the terms and conditions hereof, the Company, including in its
capacity as holder of the Common Securities, hereby irrevocably and
unconditionally guarantees to each person or entity to whom the Trust is now or
hereafter becomes indebted or liable (the "Beneficiaries") the full payment when
and as due, of any and all Obligations (as hereinafter defined) to such
Beneficiaries. As used herein, "Obligations" means any costs, expenses or
liabilities of the Trust other than obligations of the Trust to pay to holders
of any Preferred Securities, Common Securities or other similar interests in the
Trust the amounts due such holders pursuant to the terms of the Preferred
Securities, Common Securities or such other similar interests, as the case may
be. This Agreement is intended to be for the benefit of, and to be enforceable
by, all such Beneficiaries, whether or not such Beneficiaries have received
notice hereof.

                                       1

<PAGE>

         SECTION 1.2 TERM OF AGREEMENT.

This Agreement shall terminate and be of no further force and effect upon the
later of (a) the date on which full payment has been made of all amounts payable
to all holders of all the Preferred Securities (whether upon redemption,
liquidation, exchange or otherwise); and (b) the date on which no Obligations
remain outstanding; provided, however, that this Agreement shall continue to be
effective or shall be reinstated, as the case may be, if at any time any holder
of Preferred Securities or any Beneficiary must restore payment of any sums paid
under the Preferred Securities, under any Obligation, under the Preferred
Securities Guarantee Agreement dated the date hereof between the Company and
Wilmington Trust Company, as guarantee trustee, or under this Agreement for any
reason whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.

         SECTION 1.3 WAIVER OF NOTICE.

The Company hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and the Company hereby waives
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.

         SECTION 1.4 NO IMPAIRMENT.

The obligations, covenants, agreements and duties of the Company under this
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:

         (a) the extension of time for the payment by the Trust of all or any
         portion of the Obligations or for the performance of any other
         obligation under, arising out of, or in connection with, the
         Obligations;

         (b) any failure, omission, delay or lack of diligence on the part of
         the Beneficiaries to enforce, assert or exercise any right, privilege,
         power or remedy conferred on the Beneficiaries with respect to the
         Obligations or any action on the part of the Trust granting indulgence
         or extension of any kind; or

         (c) the voluntary or involuntary liquidation, dissolution, sale of any
         collateral, receivership, insolvency, bankruptcy, assignment for the
         benefit of creditors, reorganization, arrangement, composition or
         readjustment of debt of, or other similar proceedings affecting, the
         Trust or any of the assets of the Trust.

                                        2

<PAGE>

There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Company with respect to the happening of any of the
foregoing.

         SECTION 1.5 ENFORCEMENT.

A Beneficiary may enforce this Agreement directly against the Company, and the
Company waives any right or remedy to require that any action be brought against
the Trust or any other person or entity before proceeding against the Company.

                                   ARTICLE II

         SECTION 2.1 BINDING EFFECT.

All guarantees and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of the Company and
shall inure to the benefit of the Beneficiaries.

         SECTION 2.2 AMENDMENT.

So long as there remains any Beneficiary or any Preferred Securities of any
series are outstanding, this Agreement shall not be modified or amended in any
manner adverse to such Beneficiary or to the holders of the Preferred
Securities.

         SECTION 2.3 NOTICES.

Any notice, request or other communication required or permitted to be given
hereunder shall be given in writing by delivering the same by facsimile
transmission (confirmed by mail), telex, or by registered or certified mail,
addressed as follows (and if so given, shall be deemed given when mailed or upon
receipt of an answerback, if sent by telex):

                  BBC Capital Trust II
                  c/o BankAtlantic Bancorp, Inc.
                  1750 East Sunrise Boulevard
                  Fort Lauderdale, Florida 33304
                  Facsimile No.: (954) 763-4764
                  Attention: Chief Financial Officer

                  BankAtlantic Bancorp, Inc.
                  1750 East Sunrise Boulevard
                  Fort Lauderdale, Florida 33304
                  Facsimile No.: (954) 763-4764
                  Attention: Chief Financial Officer

                                        3

<PAGE>

         SECTION 2.4 This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Florida (without regard
to conflict of laws principles).

                                        4

<PAGE>

         THIS AGREEMENT is executed as of the day and year first above written.

                                       BANKATLANTIC BANCORP, INC.

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

                                       BBC CAPITAL TRUST II

                                       By:
                                          --------------------------------------
                                          Name:
                                          Title:  Administrative Trustee

                                        5<PAGE>
                                                                   Page 5 of 107

                                  EXHIBIT 10-1
                                  ------------

                               PURCHASE AGREEMENT

                            Dated September 21, 2001

                                      Among

                             ASSOCIATED BRANDS, INC.
                            (a Delaware corporation),

                             ASSOCIATED BRANDS INC.
                            (an Ontario corporation)

                                       and

                               GENESEE CORPORATION
                            (a New York corporation)

<PAGE>
                                                                   Page 6 of 107

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>
                                                                                                               PAGE

<S>                                                                                                             <C>
SCHEDULES........................................................................................................12

EXHIBITS.........................................................................................................13

PURCHASE AGREEMENT...............................................................................................14

RECITALS:........................................................................................................14

ARTICLE 1 DEFINITIONS............................................................................................14

1.1      Defined Terms. As used in this Agreement, the following terms shall have the following meanings:........14

1.2      Other Defined Terms.....................................................................................24

1.3      Construction of Defined Terms...........................................................................25

1.4      Usage of Terms..........................................................................................25

1.5      References to Articles, Sections, Exhibits and Schedules................................................26

ARTICLE 2 PURCHASE AND SALE OF SHARES............................................................................26

2.1      Sale of Shares..........................................................................................26

2.2      Purchase Price..........................................................................................26

2.3      Closing Certificate; Preliminary Purchase Price Closing Adjustment; Physical Inventory; Audit;
         Effective Date Financial Report; Final Purchase Price Closing Adjustment................................26

2.4      Payments by Buyer.......................................................................................27

2.5      Final Purchase Price Closing Adjustment.................................................................28

2.6      Taxes, Penalties and Fees...............................................................................28

2.7      Bridge Financing .......................................................................................15

ARTICLE 3 CLOSING................................................................................................31

3.1      Closing.................................................................................................31

3.2      Conveyances at Closing..................................................................................31
</TABLE>

<PAGE>
                                                                   Page 7 of 107
<TABLE>
<S>                                                                                                             <C>
3.3      Certificates and Other Documents........................................................................31

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER...............................................................31

4.1      Organization and Authority of the Corporation to Conduct Business.......................................31

4.2      Power and Authority; Binding Effect.....................................................................32

4.3      Authorized and Issued Shares............................................................................32

4.4      Title of Shares and Certain Other Assets................................................................32

4.5      No Conflict or Violation................................................................................32

4.6      Consents and Approvals..................................................................................33

4.7      No Proceedings..........................................................................................33

4.8      Financial Statements; Unknown Liabilities...............................................................33

4.9      Tax Matters.............................................................................................34

4.10     Real Property...........................................................................................34

4.11     Tangible Personal Property..............................................................................36

4.12     Intellectual Property...................................................................................36

4.13     Compliance with Laws; Permits...........................................................................37

4.14     Litigation..............................................................................................38

4.15     Labor Matters...........................................................................................38

4.16     Employee Benefit Plans..................................................................................39

4.17     Transactions with Certain Persons.......................................................................42

4.18     Insurance...............................................................................................42

4.19     Inventory...............................................................................................43

4.20     Accounts Receivable.....................................................................................43

4.21     Material Contracts......................................................................................43

4.22     Suppliers and Customers.................................................................................43

4.23     Business Records........................................................................................44

4.24     Bank Accounts; Powers of Attorney.......................................................................44

4.25     Environmental Matters...................................................................................44
</TABLE>

<PAGE>
                                                                   Page 8 of 107

<TABLE>
<S>                                                                                                             <C>
4.26     Absence of Certain Changes..............................................................................45

4.27     Brokers.................................................................................................45

4.28     Absence of Certain Payments.............................................................................46

4.29     Product Guaranties; Product Liability...................................................................46

4.30     Effective Date Working Capital..........................................................................46

4.31     Change in Control.......................................................................................46

4.32     Karl D. Simonson Severance Payments.....................................................................47

4.33     Workers Compensation....................................................................................47

4.34     Enterprise Development Zone or Similar Credits..........................................................47

4.35     Conduct Pending Closing.................................................................................47

4.36     Material Misstatements or Omissions.....................................................................47

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER................................................................47

5.1      Organization and Good Standing..........................................................................47

5.2      Authority; Authorization; Binding Effect................................................................47

5.3      No Conflict or Violation................................................................................48

5.4      Consents and Approvals..................................................................................48

5.5      No Proceedings..........................................................................................48

5.6      Brokers.................................................................................................48

5.7      Material Misstatements or Omissions.....................................................................48

5.8      Guarantor...............................................................................................48

ARTICLE 6 COVENANTS AND CONDUCT OF THE PARTIES PRIOR TO AND AFTER CLOSING........................................48

6.1      Investigation by Buyer..................................................................................48

6.2      Environmental Audits....................................................................................49

6.3      Matters Relating to Real Property.......................................................................50

6.4      Notifications, Consents and Approvals...................................................................51

6.5      Conduct Pending Closing.................................................................................51
</TABLE>

<PAGE>
                                                                   Page 9 of 107
<TABLE>

<S>                                                                                                             <C>
6.6      Notification of Certain Matters.........................................................................52

6.7      Delivery of Interim Financial Statements................................................................53

6.8      Escrow Agreement........................................................................................53

6.9      Repayment of Employee Advances..........................................................................53

6.10     Termination of Related Person Arrangements..............................................................53

6.11     Accounts Receivable Payments............................................................................53

6.12     Standstill Agreement....................................................................................54

6.13     Satisfaction of Indebtedness............................................................................54

6.14     Liquidation of TKI Foods International, Inc. (the "FSC")................................................54

6.15     Insurance...............................................................................................54

6.16     Tax Matters.............................................................................................54

6.17     Employee Matters........................................................................................55

6.18     Severance Policy.  .....................................................................................56

6.19     Specific Claim..........................................................................................56

ARTICLE 7 CONDITIONS TO SELLER'S OBLIGATIONS.....................................................................56

7.1      Representations, Warranties and Covenants...............................................................56

7.2      No Proceedings..........................................................................................56

7.3      Closing Certificates....................................................................................57

7.4      Legal Opinion...........................................................................................57

7.5      Escrow Agreement........................................................................................57

7.6      Required Consents and Filings...........................................................................57

7.7      Bridge Financing........................................................................................42

ARTICLE 8 CONDITIONS TO BUYER'S OBLIGATIONS......................................................................57

8.1      Representations, Warranties and Covenants...............................................................57

8.2      Required Consents and Filings...........................................................................58

8.3      No Proceedings..........................................................................................58

8.4      No Material Adverse Change..............................................................................58
</TABLE>

<PAGE>
                                                                  Page 10 of 107

<TABLE>

<S>                                                                                                             <C>
8.5      Closing Certificate.....................................................................................58

8.6      Legal Opinion...........................................................................................58

8.7      Escrow Agreement........................................................................................58

8.8      Employment Arrangements, Release and Resignations.......................................................58

8.9      No Casualty or Environmental Problems...................................................................58

8.10     Financing...............................................................................................58

8.11     Section 6.13 Covenants.  The Covenants in Section 6.13 shall have been satisfied........................59

ARTICLE 9 INDEMNIFICATIONS AND OTHER POST CLOSING MATTERS........................................................59

9.1      Survival and Indemnifications...........................................................................59

9.2      Claims Against the Escrow...............................................................................63

9.3      Effect of Basket........................................................................................63

9.4      Use of Corporate Name or Trade Name.....................................................................64

9.5      Access to Records and Personnel.........................................................................64

9.6      Confidentiality.........................................................................................64

9.7      Non-Competition.........................................................................................64

9.8      Seller's Assistance.....................................................................................66

9.9      Tangible Net Worth Maintenance .........................................................................51

ARTICLE 10 MISCELLANEOUS.........................................................................................66

10.1     Further Assurances; Information.........................................................................66

10.2     Risk of Loss............................................................................................67

10.3     Termination.............................................................................................67

10.4     Notices.................................................................................................68

10.5     Public Statements.......................................................................................69

10.6     Choice of Law...........................................................................................69

10.7     Expenses................................................................................................69

10.8     Titles..................................................................................................70

10.9     Waiver..................................................................................................70
</TABLE>

<PAGE>
                                                                  Page 11 of 107

<TABLE>

<S>                                                                                                             <C>
10.10    Effective; Binding......................................................................................70

10.11    Entire Agreement........................................................................................70

10.12    Modification............................................................................................70

10.13    Counterparts............................................................................................70

10.14    Consent to Jurisdiction.................................................................................71
</TABLE>

<PAGE>
                                                                  Page 12 of 107

                                    SCHEDULES

    SCHEDULE              DESCRIPTION
    --------              -----------
    1.1(ax)               February 24, 2001 Pro-Forma Debt Free Balance Sheet
    4.1                   Organizational and Authority of the Corporation to
                          Conduct Business
    4.3                   Authorized and Issued Shares
    4.4(b)                Title
    4.4(c)                Leases
    4.5                   No Conflict or Violation
    4.6                   Consents and Approvals
    4.8                   Financial Statements; Unknown Liabilities
    4.9                   Tax Matters
    4.10                  Real Property
    4.11                  Tangible Personal Property
    4.12                  Intellectual Property
    4.13                  Compliance with Laws; Permits
    4.14                  Litigation
    4.15                  Labor Matters
    4.16                  Employee Benefit Plans
    4.17                  Transactions with Certain Persons
    4.18                  Insurance
    4.19                  Inventory
    4.20                  Accounts Receivable
    4.21                  Material Contracts
    4.22                  Suppliers and Customers
    4.24                  Bank Accounts; Powers of Attorney
    4.25                  Environmental Matters
    4.26                  Absence of Certain Changes
    4.29                  Product Guaranties; Product Liability
    4.31                  Change in Control
    4.33                  Workers Compensation
    4.34                  Enterprise Development Zone of Similar Credits
    5.4                   Consents and Approvals
    6.3                   Matters Relating to Real Property
    6.4                   Notifications, Consents and Approvals
    6.5                   Conduct Pending Closing
    6.18                  Severance Policy
    10.11                 Entire Agreement

<PAGE>
                                                                  Page 13 of 107

                                    EXHIBITS

    EXHIBIT               DESCRIPTION
    -------               -----------

    2.2                   Guaranty
    2.7(a)                Restated Mortgage Note
    2.7(b)                Mortgage Modification and Extension Agreement
    6.3                   Matters Relating to Real Property
    6.8                   Escrow Agreement
    7.4(a)                Seller's Legal Opinion (Hodgson Russ LLP)
    7.4(b)                Seller's Legal Opinion (Mills & Mills LLP)
    7.7(c)                Assignment of Mortgage
    8.6                   Buyer's Legal Opinion

<PAGE>
                                                                  Page 14 of 107

                               PURCHASE AGREEMENT

         THIS PURCHASE AGREEMENT dated September 21, 2001 is by and among
ASSOCIATED BRANDS, INC., a Delaware corporation with its principal place of
business to be at 4001 Salt Works Road, Medina, New York 14103 ("Buyer"),
ASSOCIATED BRANDS INC. ("Guarantor"), an Ontario corporation with its principal
place of business at 335 Judson Street, Toronto, Ontario MBZ 1B2 and GENESEE
CORPORATION, a New York corporation with its principal place of business at 600
Powers Building, 16 West Main Street, Rochester, New York 14614-1601 ("Seller").

                                    RECITALS:

         A. Seller owns in the aggregate one hundred (100) shares of the common
stock ("Common Stock") of Ontario Foods, Incorporated ("Corporation") of the par
value of $1.00 per share, which constitute all of the issued and outstanding
shares of OFI (the "Shares").

         B. Buyer desires to purchase and accept from Seller the Shares and
Seller desires to sell and transfer to Buyer the Shares, and Guarantor wishes to
induce Seller to sell the Shares to Buyer, upon the terms and conditions
contained in this Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties, intending to
be legally bound, agree as follows:

                                  ARTICLE 1
                                 DEFINITIONS

1.1 DEFINED TERMS. As used in this Agreement, the following terms shall have the
following meanings:

         (a) "ACCOUNTS RECEIVABLE" shall mean all trade receivables and accounts
receivable of the Corporation as determined in accordance with GAAP and to the
extent reflected on the Effective Date Financial Report.

         (b) "ACCOUNTS PAYABLE" shall mean (i) all current trade accounts
payable of the Corporation as of the Effective Date as determined in accordance
with GAAP and to the extent reflected on the Effective Date Financial Report and
(ii) all checks written on the Corporation's "zero balance" or other bank
accounts on or prior to the Effective Date which have not cleared as of the
Effective Date.

         (c) "ACCRUED LIABILITIES" shall mean (i) accrued expenses of the
Corporation (other than Accounts Payable) of a type shown on the Financial
Statements, as determined in accordance with GAAP, (ii) accrued expenses under
the Employee Benefit Plans at a rate not less than the expense accrued for the
previous plan year (pro-rated through the Effective Date), including but not
limited to (A) vacation benefits earned through the Effective Date, (B) short
term disability benefits incurred through the Effective Date and (C) amounts
payable to employees incurred prior to or as a consequence of the Closing
including, but not limited to,

<PAGE>
                                                                  Page 15 of 107

amounts owing pursuant to the Severance Pay and Benefits Policy of the
Corporation dated March 1, 2000 (the "Severance Policy") and (iii) overdrafts on
any bank account and reimbursement obligations under any credit facility of the
Corporation acquired by Buyer (in each of items (i) through (iii), to the extent
reflected on the Effective Date Financial Report).

          (d) "AFFILIATE" shall mean, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise). Without
limiting the generality of the foregoing, the Corporation will be an Affiliate
of Buyer from and after the Closing.

         (e) "AGREEMENT" shall mean, unless the context otherwise requires, this
Purchase Agreement together with the Schedules, Exhibits and the Disclosure
Schedule attached hereto, and the certificates and instruments to be executed
and delivered in connection herewith.

         (f) "APRIL 28 BALANCE SHEET" shall mean the audited balance sheet for
the Corporation dated April 28, 2001.

         (g) "BUSINESS" shall mean all activities which the Corporation is
presently, or is presently contemplating, conducting or pursuing, including,
without limitation, the production, packaging and sale of food products,
including, without limitation, side dishes, bouillon, artificial sweeteners,
soup mixes, ice tea mixes, instant beverage mixes and hot cocoa, sold under the
Corporation's proprietary label brands or as private label brands for food and
other store chains or wholesalers and the Corporation's contract processing and
packaging business.

         (h) "BUSINESS RECORDS" shall mean originals or true copies of all
operating data and records of the Business including, without limitation,
financial, accounting and bookkeeping books and records, purchase and sale
orders and invoices, sales and sales promotional data, advertising materials,
market research studies, marketing analyses, research and development materials,
past and present price lists, past and present customer service files, customer
complaint files, credit files, guaranty and warranty files, product liability
files, batch and product serial number records and files, written operating
methods and procedures, formulae, specifications, operating records, quality
assurance records, information technology manuals and procedures, bills of
material, bills of lading and other information related to the Tangible Personal
Property and the Current Real Property, reference catalogues, insurance files,
personnel records, records relating to potential acquisitions and other records,
on whatever media, pertaining to the Business, or to customers or suppliers of,
or any other parties having contracts or other business relationships with, the
Business.

         (i) "BUYER'S ACCOUNTANTS" shall mean those accountants at the firm of
Grant Thornton LLP who from time to time provide accounting services to Buyer.

<PAGE>
                                                                  Page 16 of 107

         (j) "CAPITALIZED LEASE OBLIGATION" shall mean the amount of liability
capitalized or disclosed (or which should be disclosed in accordance with GAAP)
on a balance sheet in respect of a lease or other agreement for the use of
property which should be capitalized on the lessee's or user's balance sheet in
accordance with GAAP.

         (k) "CASH" shall mean cash and cash equivalents of the Corporation held
in any of its bank accounts or safe deposit boxes, but excluding bank
overdrafts.

         (l) "CASH SWEEP ADJUSTMENT" shall mean, during the period from July 28,
2001 to the Closing Date, all cash swept from the Corporation's bank accounts by
the Seller minus all cash advances to the Corporation's bank accounts from the
Seller plus any payments on account of the indebtedness (principal and interest)
of the Corporation to related party or third party lenders.

         (m) "CLAIMS PERIOD" shall mean the period beginning on the Closing Date
and ending 24 months following the Closing Date.

         (n) "CLOSING DATE" shall mean the latest to occur of (i) September 24,
2001 and (ii) 5 days after all other consents, approvals and other actions
required to be obtained from or performed by any third party as a condition to
Closing have been obtained, performed or waived, or if such day is not a
business day, the next succeeding business day, or any other date as Seller and
Buyer shall mutually agree in writing; provided however, that the Effective Date
("Effective Date") for the purchase of the Shares shall be July 28, 2001.

         (o) "COBRA" shall mean the provisions of Part 6 of Subtitle B of Title
I of ERISA and Section 4980B of the Code and all regulations thereunder.

         (p) "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         (q) "CONTRACTS" shall mean (i) the Material Contracts of the
Corporation and (ii) the Minor Contracts of the Corporation.

         (r) "CORPORATION'S ACCOUNTANTS" shall mean those accountants at the
firm of PricewaterhouseCoopers LLP who are preparing the Financial Statements
and who from time to time provide accounting services to Seller.

         (s) "CURRENT REAL PROPERTY" shall mean all Real Property currently
owned or leased by the Corporation or in which the Corporation has any interest.

         (t) "CUSTOMER LISTS" shall mean all past and current customer and
potential customer lists of the Business.

         (u) "DOLLAR ($)" shall mean the U.S. dollar.

         (v) "EARNINGS BEFORE TAX" shall have the meaning as set forth on the
Interim Financial Statements.

<PAGE>
                                                                  Page 17 of 107

         (w) "EFFECTIVE DATE WORKING CAPITAL" shall mean the Working Capital as
of the Effective Date.

         (x) "EMPLOYEE BENEFIT PLAN" shall mean any (i) non-qualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (ii) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (iii) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), (iv) Employee Welfare Benefit Plan or fringe
benefit plan or program, (v) any severance benefit plan or (vi) any similar
plan, arrangement or program relating to the Business which is maintained,
administered or contributed to by the Corporation, or which covers any employee
or former employee of the Corporation by reason of such employee's employment by
the Corporation.

         (y) "EMPLOYEE PENSION BENEFIT PLAN" shall have the meaning set forth in
ERISA Section 3(2).

         (z) "EMPLOYEE WELFARE BENEFIT PLAN" shall have the meaning set forth in
ERISA Section 3(1).

         (aa) "EMPLOYMENT AGREEMENT" shall mean the employment agreement between
Seller together with its subsidiaries and Karl D. Simonson dated January 25,
2000.

         (ab) "ENCUMBRANCE" shall mean any claim, lien, pledge, option, charge,
easement, security interest, right-of-way, encroachment, reservation,
restriction, encumbrance, or other right of any Person, or any other restriction
or limitation of any nature whatsoever, affecting title to the Shares or the
Current Real Property, the Tangible Personal Property, the Inventory, the
Intellectual Property or any other assets of the Corporation.

         (ac) "ENFORCEABILITY LIMITATIONS" shall mean (i) bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights and (ii) the discretion of the appropriate
court with respect to specific performance, injunctive relief or other terms of
equitable remedies.

         (ad) "ENVIRONMENTAL CLAIMS" shall mean any notice of violation, notice
of potential or actual responsibility or liability, or written claim, suit,
action, demand, directive or order (including those for contribution and/or
indemnity) by any Governmental Authority or other Person for any damage
(including, but not limited to, personal injury, tangible or intangible property
damage, natural resource damage, indirect or consequential damages,
investigative costs, removal, response or remediation costs, nuisance,
pollution, contamination or other adverse effects on the environment or for
fines, penalties or restrictions or conditions on existing environmental permits
or licenses) resulting from or relating to (i) the presence of, a Release or
threatened Release into the environment of, or exposure to, any Hazardous
Substances, (ii) the generation, manufacture, processing, distribution, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Substances, (iii) the violation, or alleged violation, of any Environmental Laws
or (iv) the non-compliance or alleged non-compliance with any Environmental
Laws.

<PAGE>
                                                                  Page 18 of 107

         (ae) "ENVIRONMENTAL CONDITIONS" shall mean any condition with respect
to the environment on or off the Real Property, whether or not yet discovered,
which could or does result in any Environmental Claim, including, without
limitation, any condition resulting from the operation of the Business and/or
any activity or operation conducted by any Person on or off the Real Property.

         (af) "ENVIRONMENTAL LAWS" shall mean any applicable, or relevant and
appropriate, statutes, ordinances, or other written, published laws, any
written, published rules or regulations, judicial orders, directives and any
licenses, permits, judgments and written notices, orders and directives issued
pursuant thereto, enacted, promulgated or issued by any Governmental Authority,
in effect as of the Closing Date, relating to pollution or protection of public
health or the environment from Hazardous Substances (including, but not limited
to, any air, surface water, groundwater, land surface or sub-surface strata,
whether outside, inside or under any structure), or to the identification,
reporting, generation, manufacture, processing, distribution, use, handling,
treatment, storage, disposal, transportation, presence, Release or threatened
Release of, any Hazardous Substances. Without limiting the generality of the
foregoing, Environmental Laws shall include the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Toxic
Substances Control Act, as amended, the Hazardous Materials Transportation Act,
as amended, the Resource Conservation and Recovery Act, as amended, the Clean
Water Act, as amended, the Safe Drinking Water Act, as amended, the Clean Air
Act, as amended, and all analogous laws enacted, promulgated or lawfully issued
by any Governmental Authority, but shall exclude the Occupational Safety and
Health Act, as amended, and similar state laws.

         (ag) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

         (ah) "ERISA AFFILIATE" shall mean a trade or business, whether or not
incorporated, which is deemed to be in common control or affiliated with the
Corporation within the meaning of Section 4001 of ERISA or Sections 414(b), (c),
(m), or (o) of the Code.

         (ai) "FINANCIAL STATEMENTS" shall mean the audited financial statements
of the Corporation for the fiscal years ended April 29, 2000 and April 28, 2001
(consisting of a balance sheet, a statement of income and retained earnings, a
statement of cash flows and all related footnotes) and the Effective Date
Financial Report.

         (aj) "FINAL PURCHASE PRICE CLOSING ADJUSTMENT" shall mean the Purchase
Price Closing Adjustment as finally determined in accordance with Section 2.3.

         (ak) "GAAP" shall mean, with respect to all accounting matters and
issues, generally accepted accounting principles as in effect from time to time
in the United States applied (to the extent applicable) consistent with the
Financial Statements and the Interim Financial Statements.

         (al) "GOODWILL" shall mean the goodwill of the Business.

<PAGE>
                                                                  Page 19 of 107

         (am) "GOVERNMENTAL AUTHORITY" shall mean any federal, state, local or
foreign government, or any political subdivision of any of the foregoing, or any
court, agency or other entity, body, organization or group, exercising any
executive, legislative, judicial, quasi-judicial, regulatory or administrative
function of government, or any supranational body (including the European
Union).

         (an) "GOVERNMENTAL REQUIREMENT" shall mean any published law, statute,
ordinance, directive or regulation of any Governmental Authority now in effect.

         (ao) "HAZARDOUS SUBSTANCES" shall mean any pollutants, contaminants,
substances, hazardous and/or toxic chemicals, known carcinogens, wastes, and any
ignitable, corrosive, reactive, toxic or other hazardous substances or
materials, whether solids, liquids or gases (including, but not limited to,
petroleum and its derivatives, PCBs, asbestos, radioactive materials, waste
waters, sludge, slag and any other substance, material or waste), as defined in
or regulated by any Environmental Laws or as determined by any Governmental
Authority.

          (ap) "INDEBTEDNESS" shall mean, with respect to any Person (without
duplication), (i) all obligations of such Person for borrowed money, including
without limitation all obligations for principal and interest, and for
prepayment and other penalties, fees, costs and charges of whatsoever nature
with respect thereto, (ii) all obligations of such Person under conditional sale
or other title retention agreements relating to property purchased by such
Person, (iii) all obligations of such Person issued or assumed as the deferred
purchase price of property or services (other than accounts payable to suppliers
and similar accrued liabilities incurred in the ordinary course of business and
paid in a manner consistent with industry practice and other than any such
obligations for services to be rendered in the future), (iv) 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 or security interest
on property owned or acquired by such Person whether or not the obligations
secured thereby have been assumed, (v) all Capitalized Lease Obligations of such
Person, (vi) all obligations of such Person guaranteeing, or in effect
guaranteeing, any Indebtedness, dividend or other obligation of any other
Person, (vii) all obligations (including but not limited to reimbursement
obligations) relating to the issuance of letters of credit for the account of
such Person, (viii) all obligations arising out of foreign exchange contracts,
and (x) all obligations arising out of interest rate and currency swap
agreements, cap, floor and collar agreements, interest rate insurance, currency
spot and forward contracts and other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates.

         (aq) "INDEPENDENT ACCOUNTANTS" shall mean the Buffalo office of Ernst &
Young, or any successor thereof.

         (ar) "INSURANCE" shall mean any fire, product liability, automobile
liability, general liability, worker's compensation, medical insurance stop-loss
coverage or other form of insurance of the Business, and any tail coverage
purchased with respect thereto.

         (as) "INTELLECTUAL PROPERTY" shall mean all intellectual property used
to conduct the Business including, without limitation, (i) all inventions
(whether patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent

<PAGE>
                                                                  Page 20 of 107

applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and re-examinations
thereof, (ii) all trademarks, service marks, trade dress, logos, trade names,
and corporate names (including, without limitation, the name "Ontario Foods",
"Ontario Foods, Incorporated", "T.K.I. Foods, Inc." "TKI" or "Freedom Foods"),
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (iii) all copyrightable
works, all copyrights, and all applications, registrations and renewals in
connection therewith (including, without limitation, all artwork for product
packaging and advertising and promotional materials), (iv) all mask works and
all applications, registrations, and renewals in connection therewith, (v) all
trade secrets and confidential business information (including ideas, research
and development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (vi) all computer software (including data and
related documentation and including software installed on hard disk drives)
other than off-the-shelf computer software subject to shrink-wrap licenses and
(vii) all copies and tangible embodiments of any of the foregoing (in whatever
form or medium).

         (at) "INTERIM FINANCIAL STATEMENTS" shall mean the unaudited interim
financial statements of the Corporation, consisting of an income statement and a
balance sheet of the Corporation for the period ended the Effective Date.

         (au) "INVENTORY" shall mean all ingredients, raw material,
work-in-process and finished goods inventory of the Business, including, without
limitation, all packaging material. Solely for purposes of calculating Working
Capital, "Inventory" shall mean Inventory of the Business after reduction for
reserves for damage or obsolescence (as determined in accordance with GAAP) or
obsolete or excess, as reflected on the Effective Date Financial Report.

         (av) "KNOWLEDGE," insofar as it relates to the Knowledge of the Seller
and/or the Corporation, shall mean the actual knowledge of Stephen Ashley, Karl
Simonson, Michael Bayusik, Richard Cook, James Dimatteo, Ronald Good, John
Mandabach, James Whitlock, Mark Leunig, and Steven Morse upon each of them
making due inquiry with any other individual that they might reasonably expect
to have knowledge of the subject matter.

         (aw) "LOSSES" shall mean all losses, liabilities, deficiencies, damages
(including, without limitation, consequential damages), encumbrances, fines,
penalties, costs and expenses (including, without limitation, all fines,
penalties and other amounts paid pursuant to a judgment, compromise or
settlement), court costs and reasonable legal and accounting fees and
disbursements, net of any insurance proceeds or other recoupment.

         (ax) "FEBRUARY 24, 2001 PRO-FORMA DEBT FREE BALANCE SHEET" shall mean
the unaudited pro-forma balance sheet of the Corporation attached hereto as
SCHEDULE 1.1(ax).

         (ay) "MATERIAL CONTRACTS" shall mean the following written contracts
and oral contracts which are currently in effect and to which the Corporation is
a party or by which the Corporation is bound:

<PAGE>
                                                                  Page 21 of 107

              (i) any agreement (or group of related agreements with the same
Person or its Affiliates) for the lease of real property or personal property
(whether or not capitalized under GAAP) providing for lease payments in excess
of $10,000 per year,

              (ii) any agreement (or group of related agreements with the same
Person or its Affiliates) not cancelable by the Corporation without penalty for
the purchase or sale of raw materials, commodities, supplies, products or other
personal property, or for the furnishing or receipt of services, the performance
of which will extend over a period of more than 1 year, involves consideration
in excess of $25,000 or is anticipated to result in a loss to the Corporation
exceeding $10,000,

              (iii) any agreement concerning the Corporation's membership in a
partnership or joint venture,

              (iv) any agreement (or group of related agreements with the same
Person or its Affiliates) under which the Corporation has created, incurred or
assumed any Indebtedness,

              (v) any agreement under which the Corporation has imposed an
Encumbrance on any of its assets,

              (vi) any letter of credit or performance bond,

              (vii) any confidentiality or non-competition agreement (other than
confidentiality agreements (x) related to Seller's negotiations to sell the
Business (y) with the Corporation's employees, agents, distributors and
independent contractors, and (z) with other Persons, in each case entered into
in the ordinary course of the Business),

              (viii) any agreement with any Affiliate of the Corporation,

              (ix) any profit sharing, deferred compensation, severance or other
plan or arrangement for the benefit of the Corporation's current or former
partners, shareholders, directors, officers or employees (other than any
Employee Benefit Plans or agreements described in clause (xi)),

              (x) any collective bargaining agreement,

              (xi) any agreement not terminable at will or upon 30 days notice
by the Corporation without penalty (other than severance obligations) for the
employment of any individual on a full-time, part-time, consulting or other
basis,

              (xii) any agreement or instruments reflecting outstanding loans or
advances from the Corporation to the Corporation's directors, officers or
employees, other than travel and entertainment expenses advanced to any officer
or employee of the Corporation in the ordinary course of the Business and in an
amount which does not exceed $1,000 for any such officer or employee,

              (xiii) any agreement for the prospective acquisition of any
business or product line of any other Person,

<PAGE>
                                                                  Page 22 of 107

              (xiv) any distributor, sales representative, dealer or broker
agreement not terminable by the Corporation upon 90 days or less written notice
without penalty,

              (xv) any Intellectual Property license or royalty agreement,

              (xvi) any independent contractor agreement requiring payments by
the Corporation in excess of $10,000 per year,

              (xvii) any agreement providing for indemnification by the
Corporation other than indemnification agreements contained in standard terms
and conditions of sale or contained in any agreement constituting a Material
Contract under any other provision of this Section 1.1(bb), or

              (xviii) any other agreement (or group of related agreements with
the same Person or its Affiliates) not cancelable by the Corporation without
penalty the performance of which will extend over a period of more than 1 year,
involves consideration in excess of $10,000 or is anticipated to result in a
loss to the Corporation exceeding $5,000.

         (az) "MEDINA REAL PROPERTY" shall mean the Current Real Property, known
as 4001 Salt Works Road, Medina, New York, owned by the County of Orleans
Industrial Development Agency and leased to the Corporation.

         (ba) "MINOR CONTRACTS" shall mean any contract and other agreement
(other than the Material Contracts), whether written or oral, to which the
Corporation is a party or by which either Corporation is bound.

         (bb) "MULTIEMPLOYER PLAN" shall have the meaning set forth in Section
3(37) of ERISA.

         (bc) "NET SALES" shall have the meaning as set forth on the Interim
Financial Statements.

         (bd) "OTHER CURRENT ASSETS" shall mean all current assets of the
Corporation other than Accounts Receivable and Inventory as determined in
accordance with GAAP and to the extent reflected on the Effective Date Financial
Report.

         (be) "OWNED INTELLECTUAL PROPERTY" shall mean all Intellectual Property
owned by the Corporation.

         (bf) "OWNED TANGIBLE PERSONAL PROPERTY" shall mean all Tangible
Personal Property owned by the Corporation.

         (bg) "PBGC" shall mean the Pension Benefit Guaranty Corporation.

         (bh) "PERMITTED ENCUMBRANCES" shall mean (i) liens which will be
removed by payment of Indebtedness reflected on the Effective Date Financial
Report in the amounts reflected on the Effective Date Financial Report, (ii)
liens which are removed on or prior to the Effective Date and (iii) the
Permitted Title Encumbrances.

<PAGE>
                                                                  Page 23 of 107

         (bi) "PERMITS" shall mean all permits, licenses, consents, franchises,
approvals and other authorizations required from any Governmental Authority or
other Person in connection with the operation of the Business and necessary to
conduct the Business as presently conducted.

         (bj) "PRE-CLOSING PERIOD" shall mean the period beginning on April 29,
2001 and ending on the Effective Date.

         (bk) "PERSON" shall mean any Governmental Authority, individual,
association, joint venture, partnership, corporation, limited liability company,
trust or other entity.

         (bl) "PREDECESSOR" shall mean a Person, if any, whose status or
activities could give rise to a claim against the Corporation.

         (bm) "PROCEEDING" shall mean any claim, demand, action, suit,
litigation, dispute, order, writ, injunction, judgment, assessment, decree,
grievance, arbitral action, investigation or other proceeding.

         (bn) "PROHIBITED TRANSACTION" shall have the meaning set forth in ERISA
Section 406 and Code Section 4975.

         (bo) "PURCHASE PRICE" shall mean the purchase price for the Shares
which shall be equal to $27,000,000, as increased or decreased by the Purchase
Price Closing Adjustment and as increased by Buyer's obligation to pay Seller
for certain insurance coverage as described in Section 6.15.

         (bp) "PURCHASE PRICE CLOSING ADJUSTMENT" shall mean, whether positive
or negative, the Working Capital Adjustment minus (i) the Indebtedness of the
Corporation on the Closing Date and (ii) plus or minus, as the case may be, the
Cash Sweep Adjustment.

         (bq) "REAL PROPERTY" shall mean (i) all real property now or in the
past owned or leased by the Corporation, or any Predecessor, or in which the
Corporation, or any Predecessor has now or in the past had any interest together
with, (ii) all buildings and improvements located thereon and (iii) all rights,
privileges, interests, easements, hereditaments and appurtenances thereunto in
any way incident, appertaining or belonging thereto.

         (br) "RELATED PERSON" shall mean any partner, shareholder, director,
officer or employee of the Corporation, any Person related to any such partner,
shareholder, director, officer or employee by blood or marriage, or the
Corporation, or any partnership, trust or other entity in which any such person
has a substantial interest as a shareholder, partner, trustee or otherwise.

         (bs) "RELEASE" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, migration,
dumping or disposing into the environment which could give rise to an
Environmental Claim or which is required to be reported pursuant to 40 C.F.R.
302 or 355, or any analogous Environmental Law.

         (bt) "REPORTABLE EVENT" shall have the meaning set forth in ERISA
Section 4043.

<PAGE>
                                                                  Page 24 of 107

         (bu) "REPRESENTATIVE" shall mean any officer, director, principal,
attorney, accountant, agent, employee or other representative of any Person.

         (bv) "TANGIBLE PERSONAL PROPERTY" shall mean all tangible personal
property (other than Inventory) owned or leased by the Corporation or in which
the Corporation has any interest including, without limitation, show equipment,
production and processing equipment, warehouse equipment, computer hardware,
furniture and fixtures, transportation equipment, leasehold improvements,
supplies and other tangible assets, together with any transferable manufacturer
or vendor warranties related thereto.

         (bw) "TAX" shall mean any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, startup,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), health, unemployment, disability, real property,
personal property, intangible property, sales, use, transfer, registration,
value added, goods and services, alternative or add-on minimum, estimated, or
other tax of any kind whatsoever, including any interest, penalty or addition
thereto, whether disputed or not.

         (bx) "TAX RETURN" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to any Tax, including any
schedule or attachment thereto, and any amendment thereof.

         (by) "WORKING CAPITAL" shall mean (i) the sum of (A) the Cash, (B) the
Accounts Receivable (net of reserves for doubtful accounts as computed in
accordance with GAAP), (C) the Inventory and (D) the Other Current Assets MINUS
(ii) the sum of (A) the Accounts Payable and (B) the Accrued Liabilities (not
including workers' compensation liability, if any).

         (bz) "WORKING CAPITAL ADJUSTMENT" shall mean (i) if the Effective Date
Working Capital is equal to or greater than $9,699,000, the amount, expressed as
a positive number, by which the Effective Date Working Capital exceeds
$9,699,000 or (ii) if the Effective Date Working Capital is less than
$9,699,000, the amount, expressed as a negative number, by which the Effective
Date Working Capital is less than $9,699,000.

1.2 OTHER DEFINED TERMS. The following terms shall have the meanings defined for
such terms in the Sections set forth below:

         TERM                                                    SECTION
         ----                                                    -------
         ALTA                                                    6.3(a)
         Bad Debt Allowance                                      6.11
         Basket                                                  9.1(e)
         Buyer                                                   Introduction
         Casualty                                                10.2
         Casualty Amount                                         10.2
         Closing                                                 3.1
         Closing Certificate                                     2.3(a)
         Closing Purchase Price Reconciliation                   2.5
         COBRA                                                   4.16(n)

<PAGE>
                                                                  Page 25 of 107

         Common Stock                                            Recitals
         Confidential Information                                9.6
         Corporation                                             Recitals
         Covenant Expiration Date                                9.7(c)(i)
         Defect Notice                                           6.3(c)
         Disapproved Encumbrance                                 6.3(c)
         Effective Date                                          1.1(a)
         Effective Date Financial Report                         2.3(c)
         Endorsements                                            6.3(a)
         Escrow Agent                                            2.4(a)
         Escrow Agreement                                        6.8
         Escrow Funds                                            2.4(a)
         Excess Uncollected Receivables                          6.11
         Final Purchase Price Closing Adjustment                 2.3(c)
         Guaranty                                                2.2
         Guarantor                                               Introduction
         Letter of Credit                                        2.7
         Tangible Net Worth                                      9.9
         Medina Mortgage                                         4.8(b)
         Mortgage Modification and Extension Agreement           2.4(b)
         Ontario Foods, Inc.                                     Recitals
         Permitted Title Encumbrances                            6.3(a)
         Preliminary Purchase Price Closing Adjustment           2.3(a)
         Proposed Purchase Price Closing Adjustment              2.3(c)
         Related Affiliate                                       9.7(a)
         Required Consents and Filings                           6.4
         Restated Mortgage Note                                  2.4(a)
         Restricted Territory                                    9.7(c)(ii)
         Seller                                                  Introduction
         Shares                                                  Recitals
         Subsequent Mortgage                                     2.7(c)
         Subsequent Note                                         2.7(c)
         Subsidiary                                              4.9
         Survey and Surveys                                      6.3(b)
         Title Commitments                                       6.3(a)
         Title Company                                           6.3(a)
         Title Policies                                          6.3(a)

1.3 CONSTRUCTION OF DEFINED TERMS. As used in this Agreement, Accounts Payable,
Accounts Receivable, Accrued Liabilities, Indebtedness, Inventory, and Other
Current Assets of the Corporation and the adjustments based thereon shall mean
the amounts determined in accordance with GAAP, except as expressly modified by
the applicable definition.

1.4 USAGE OF TERMS. Except where the context otherwise requires, words importing
the singular number shall include the plural number and vice versa. Use of the
word "including" shall mean "including, without limitation".

<PAGE>
                                                                  Page 26 of 107

1.5 REFERENCES TO ARTICLES, SECTIONS, EXHIBITS AND SCHEDULES. All references in
this Agreement to Articles, Sections (and other subdivisions), Exhibits and
Schedules refer to the corresponding Articles, Sections (and other
subdivisions), Exhibits and Schedules of or attached to this Agreement, unless
the context expressly, or by necessary implication, otherwise requires.

                                   ARTICLE 2
                                   ---------
                           PURCHASE AND SALE OF SHARES
                           ---------------------------

2.1 SALE OF SHARES. Subject to the terms and conditions contained in this
Agreement, on the Closing Date Seller shall sell, convey, transfer, assign, and
deliver to Buyer, and Buyer shall acquire from Seller, all of the Shares, free
and clear of any Encumbrances. The sale, conveyance, transfer, assignment and
delivery of the Shares is to be effective as of the Effective Date.

2.2 PURCHASE PRICE. As consideration for the sale, conveyance, transfer,
assignment and delivery of the Shares, Buyer shall pay to Seller an amount equal
to the Purchase Price for the Shares. Such consideration shall be paid in
accordance with Sections 2.4, 2.5 and 2.6. Guarantor is delivering herewith its
guaranty (the "Guaranty") in the form of EXHIBIT 2.2 guaranteeing, subject to
Buyer's conditions to close the transactions contemplated by this Agreement,
payment of the Purchase Price and performance of Buyer's obligations under this
Agreement.

2.3 CLOSING CERTIFICATE; PRELIMINARY PURCHASE PRICE CLOSING ADJUSTMENT; PHYSICAL
INVENTORY; AUDIT; EFFECTIVE DATE FINANCIAL REPORT; FINAL PURCHASE PRICE CLOSING
ADJUSTMENT.

         (a) CLOSING CERTIFICATE; PRELIMINARY PURCHASE PRICE CLOSING ADJUSTMENT.
On the fifth business day prior to the Closing Date, Seller shall cause the
President or the Chief Financial Officer of the Corporation in good faith to
prepare and deliver to Buyer a certificate (the "Closing Certificate")
containing the Effective Date Working Capital, the Working Capital Adjustment,
the Indebtedness of the Corporation on the Closing Date, the Cash Sweep
Adjustment and the Purchase Price Closing Adjustment based on the Interim
Financial Statements (the "Preliminary Purchase Price Closing Adjustment") and
the Purchase Price. The Closing shall proceed, and the payments required to be
made on the Closing Date pursuant to Section 2.4 shall be determined, on the
basis of the Closing Certificate and the Preliminary Purchase Price Closing
Adjustment.

         (b) PHYSICAL INVENTORY. Neither Buyer nor Seller will conduct a full
physical inventory prior to the Closing Date. With respect to any Inventory of
the Corporation located at any premises not owned or leased by the Corporation,
(i) for purposes of the Preliminary Purchase Price Closing Adjustment, Seller
shall provide to Buyer in writing a good faith estimate as to the amount of such
Inventory prior to the Closing Date and (ii) for purposes of the Final Purchase
Price Closing Adjustment, Seller shall obtain from each Person who is in
possession of any such Inventory written certification as to the amount of such
Inventory as of the Effective Date. In connection with the preparation of the
Effective Date Financial Report, the valuation of Inventory will be at the lower
of cost or market and computed by the Corporation's Accountants

<PAGE>
                                 Page 27 of 107

in accordance with GAAP and consistent with the procedures followed for the
valuation of inventories for the April 28 Balance Sheet.

         (c) AUDIT; EFFECTIVE DATE FINANCIAL REPORT. As promptly as possible
after the Closing and in any event prior to 90 days after the Closing, Seller
shall cause the Corporation's Accountants to prepare and deliver to Buyer (i) an
audited balance sheet of the Corporation as of the Effective Date in accordance
with GAAP and (ii) a supplemental report setting forth the Effective Date
Working Capital, the Working Capital Adjustment, the Indebtedness of the
Corporation on the Closing Date, the Cash Sweep Adjustment and the Purchase
Price Closing Adjustment and the Purchase Price based thereon (the "Proposed
Purchase Price Closing Adjustment"), each of which shall be reported on by the
Corporation's Accountants without qualification (collectively the "Effective
Date Financial Report"). Any third-party expenses or fees incurred by Seller or
the Corporation in preparing the Effective Date Financial Report and the
Proposed or Final Purchase Price Closing Adjustment shall be borne by Seller.
The Corporation's Accountants shall deliver or make available to Buyer promptly
and in any event, within 5 business days after any written request, any work
papers or other information requested by Buyer. If Buyer does not object, or
otherwise fails to respond, to the Effective Date Financial Report within 30
days after delivery to Buyer, such Effective Date Financial Report shall
automatically become final and conclusive. In the event that Buyer objects to
the Effective Date Financial Report within such 30-day period, Seller and Buyer
shall promptly meet and endeavor to reach agreement as to the content of the
Effective Date Financial Report. If Seller and Buyer agree on the content of the
Effective Date Financial Report, such Effective Date Financial Report shall
become final and conclusive. If Seller and Buyer are unable to reach agreement
within 20 days after the delivery of such objection to the Effective Date
Financial Report, then the Independent Accountants shall promptly be retained to
undertake a determination of the Effective Date Financial Report, which
determination shall be made as quickly as possible. Buyer and Seller shall each
submit a proposed Final Purchase Price Closing Adjustment to the Independent
Accountants. Only disputed item(s) shall be submitted to the Independent
Accountants for review. In resolving any disputed item, the Independent
Accountants may not assign a value to such item greater than the greatest value
for such item claimed by either party or less than the lowest value for such
item claimed by either party, in each case as presented to the Independent
Accountants. Such determination of the Independent Accountants shall be final
and binding on Seller and Buyer, shall include any interest pursuant to Section
2.5 and shall include an allocation of their fees and expenses, which shall be
borne by Seller and Buyer in proportion to their relative success in the
determination. For instance, if the Buyer's proposed Final Purchase Price
Closing Adjustment is $100,000 lower than the Seller's and the Independent
Accountants conclude that the Final Purchase Price Closing Adjustment is $75,000
higher than the Buyer's proposed figure, the Buyer will bear 75% of the expenses
of the fees and expenses of the Independent Accountants and the Seller will bear
25% thereof. The Purchase Price and the payments required to be made after the
Effective Date pursuant to Section 2.5 shall be finally determined on the basis
of the Effective Date Financial Report after any determinations described in
this Section 2.3(c).

         2.4 PAYMENTS BY BUYER. Buyer shall deliver or pay to Seller or the
Escrow Agent the purchase consideration set forth in Section 2.3 as follows:

<PAGE>
                                                                  Page 28 of 107

         (a) At the Closing, Buyer shall deliver or pay the following to the
escrow agent designated in the Escrow Agreement (the "Escrow Agent") to be held
in escrow pursuant to the terms and conditions of the Escrow Agreement:

             (i) A promissory note in the amount of $2.25 million made payable
to Seller (the "Restated Mortgage Note"); and

             (ii) 10% of the Purchase Price (as adjusted by the Preliminary
Purchase Price Closing Adjustment) minus $2.25 million, in cash by wire
transfer, certified check or bank draft to an account designated by the Escrow
Agent to Buyer (the amounts represented by (i) and (ii) being collectively, the
"Escrow Funds").

         (b) At the Closing, Buyer shall pay to Seller an amount equal to the
Purchase Price (as adjusted by the Preliminary Purchase Price Closing
Adjustment) minus the Escrow Funds plus an amount equal to the Purchase Price
(as adjusted by the Preliminary Purchase Price Closing Adjustment) multiplied by
(5% multiplied by x/365, where x equals the number of days from the Effective
Date to and including the Closing Date), in cash by wire transfer, certified
check or bank draft to an account designated by Seller to Buyer in writing not
less than 2 business days prior to the Closing Date.

2.5 FINAL PURCHASE PRICE CLOSING ADJUSTMENT. Within 5 business days after
determination of the Final Purchase Price Closing Adjustment, Buyer or Seller,
as the case may be, shall pay to the other the amount by which the Purchase
Price, as adjusted by the Final Purchase Price Closing Adjustment, is greater or
less than the Purchase Price, as adjusted by the Preliminary Purchase Price
Closing Adjustment (such difference being the "Closing Purchase Price
Reconciliation"); provided, however, that if the Closing Purchase Price
Reconciliation is positive by an amount greater than $250,000, Buyer shall pay
such difference to Seller no later than 90 days after the Closing Date. If (i)
Buyer fails to pay any amount owing pursuant to this Section 2.5 or (ii) Seller
fails to pay any amount owing pursuant to this Section 2.5 within 5 business
days, then the amount so owing shall be payable on demand and interest shall
accrue on the unpaid amount from the date due until paid at a rate equal to the
lower of (A) ten percent (10%) per annum or (B) the highest rate permitted by
law.

2.6 TAXES, PENALTIES AND FEES. Seller shall be responsible for the payment of
any transfer tax under New York State Tax Law Section 1401(e). The parties agree
that the fair market value of the real property located in Medina, New York is
$2.7 million and that $2.7 million of the Purchase Price is apportioned to this
real property. Buyer and Seller shall each execute and deliver New York State
form TP-584 consistent with the immediately preceding information. Seller shall
also be responsible for the payment of any transfer taxes, penalties or fees
(including, without limitation, any penalty or fee for prepayment of the Medina
Mortgage or any IDA fee) relating to the repayment of the Corporation's
Indebtedness and related transfer of real property, except that Seller and Buyer
shall each pay one half of the $21,165 administrative fee owed to the IDA of
Orleans County with respect to the existing Medina Mortgage financing.

<PAGE>
                                                                  Page 29 of 107

2.7 BRIDGE FINANCING.

         (a) RESTATED MORTGAGE NOTE. The Restated Mortgage Note, which shall be
substantially in the form of EXHIBIT 2.7(a), shall have a term of 18 months with
interest payable to Seller monthly at the rate of 12% per annum for the first 6
months and 15% per annum for the remaining 12 months. Seller may not assign the
Restated Mortgage Note without the written consent of Buyer and Buyer's senior
lender not to be unreasonably withheld.

         (b) MORTGAGE MODIFICATION AND EXTENSION AGREEMENT. The Restated
Mortgage Note shall be secured by an assignment of the Medina Mortgage to
Seller. At the Closing, Buyer and Seller shall execute and deliver a mortgage
modification and extension agreement substantially in the form of EXHIBIT 2.7(b)
representing a first mortgage on the Medina Real Property (the "Mortgage
Modification and Extension Agreement"). Seller may not assign the Mortgage
Modification and Extension Agreement without the written consent of Buyer and
Buyer's senior lender not to be unreasonably withheld. Notwithstanding any other
provision of this Agreement, Seller shall be entitled to exercise its rights and
remedies under the Mortgage Modification and Extension Agreement during the term
of the Restated Mortgage Note.

         (c) SUBSEQUENT MORTGAGE FINANCING OBLIGATION. At Buyer's option, Seller
shall, within 30 days after maturity of the Restated Mortgage Note, refinance
the outstanding balance under the Restated Mortgage Note by taking a new note
from Buyer with a term of 5 years, with payments of principal and interest
amortized over 15 years and interest payable at 3.5% over the then current
interest rate on 5 year U.S. Treasuries (the "Subsequent Note"), if (i) the
Restated Mortgage Note is not repaid in full upon maturity, (ii) except for
non-payment of the principal amount of the Restated Mortgage Note, Buyer is not
in default under the Restated Mortgage Note at the time of the refinancing, and
(iii) Buyer is not in default under its senior lender debt at the time of the
refinancing. The Subsequent Note will be secured by a first mortgage on the
Medina Real Property (the "Subsequent Mortgage"). The balance of the terms of
the Subsequent Note and the terms of the Subsequent Mortgage shall be such terms
as are commercially reasonable. Seller may not assign the Subsequent Note or
Subsequent Mortgage without the written consent of Buyer and Buyer's senior
lender not to be unreasonably withheld. If Buyer has made a good faith claim for
indemnification in excess of the cash portion of the Escrow Funds that is
unresolved upon maturity of the Restated Mortgage Note, then the Subsequent Note
will consist of two notes. The first note shall be in amount equal to the amount
by which Buyer's good faith claim for indemnification exceeds the cash portion
of the Escrow Funds but shall not exceed the amount by which total Escrow Funds
immediately prior to maturity of the Restated Mortgage Note exceed the cash
portion of the Escrow Funds. The first note shall be delivered to the Escrow
Agent and held as Escrow Funds under the terms of the Escrow Agreement. The
second note shall be in amount equal to the remainder of the outstanding balance
under the Restated Mortgage Note. The second note shall be delivered to Seller.
If there are two notes, the portion of the monthly payment allocable to
principal on the first note shall be payable to the Escrow Agent and the portion
allocable to interest shall be payable directly to Seller. Monthly payments on
the second note shall be payable to Seller. If Buyer has made a good faith claim
for indemnification in excess of the cash portion of the Escrow Funds that is
unresolved at the time the Medina Real Property is sold upon foreclosure, then
Seller's proceeds from the sale to the extent of the principal outstanding on
the first note will be paid to the Escrow Agent and held as Escrow Funds under
the terms of the Escrow Agreement. Notwithstanding

<PAGE>
                                                                  Page 30 of 107

anything to the contrary contained in the Restated Mortgage Note and the
Mortgage Modification and Extension Agreement, in the event Buyer refinances the
Restated Mortgage Note and the Mortgage Modification and Extension Agreement
with Seller upon maturity as described in this Section 2.7(c), Seller agrees
that (a) no late payment charge will be assessed, (b) the interest rate charged
on the Restated Mortgage Note shall remain at the then applicable rate until the
refinanced rate is established or Buyer is no longer making a good faith effort
to complete the refinancing, and (c) if no event of default exists other than
non-payment of principal, Seller shall not seek to exercise its remedies under
the Restated Mortgage Note and Mortgage Modification Extension Agreement,
provided that Buyer is making a good faith effort to complete the refinancing.

         (d) LETTER OF CREDIT. The Restated Mortgage Note shall also be secured
by a $500,000 irrevocable letter of credit to be provided to Seller by Buyer
from Buyer's senior lender (the "Letter of Credit"). The Letter of Credit will
have a term of 19 months beginning on the Closing Date. Seller may not draw upon
the Letter of Credit until maturity of the Restated Mortgage Note and then only
under the terms and conditions set forth in this Section 2.7(d). If an event of
default exists upon maturity of the Restated Mortgage Note other than
non-payment of principal and the Restated Mortgage Note is not refinanced as
provided in Section 2.7(c), the term of the Letter of Credit will be extended
and Buyer may draw upon the Letter of Credit only to the extent the proceeds
from a sale of the Medina Real Property upon foreclosure do not satisfy Buyer's
outstanding obligations under the Restated Mortgage Note. If Buyer refinances
with Seller as set forth in Section 2.7(c), upon execution and delivery of the
Subsequent Note and the Subsequent Mortgage, Seller may draw upon the Letter of
Credit up to the lesser of (i) the amount of the Letter of Credit or (ii) the
amount outstanding under the Restated Mortgage Note immediately prior to
execution and delivery of the Subsequent Note and the Subsequent Mortgage, with
the amount drawn being applied against the Subsequent Note. If Buyer has made a
good faith claim for indemnification in excess of the cash portion of the Escrow
Funds that is unresolved at the time Seller makes a draw upon the Letter of
Credit, the funds drawn, up to the amount by which the amount of the claim
exceeds the cash portion of the Escrow Amount, will be paid to the Escrow Agent
and held as Escrow Funds under the terms of the Escrow Agreement. Any reduction
of the Subsequent Note under this Section shall first be made to the first note
(referred to in Section 2.7(c)). The Letter of Credit will contain the terms and
conditions set forth in this Section 2.7(d) and otherwise will be in form
acceptable to both Seller and Buyer's senior lender.

         (e) DISBURSEMENTS OF ESCROW FUNDS. If disbursements of the Escrow Funds
are required in excess of the cash balance of the Escrow Funds, such excess
shall be set off against the Restated Mortgage Note as follows, first to any
unpaid charges, then to outstanding interest and then to reduce principal.

         (f) THIRD PARTY MORTGAGE REFINANCING. Buyer agrees to use commercially
reasonable efforts to find a new mortgage lender. Upon finding a new mortgage
lender and closing of the replacement mortgage financing, Buyer shall pay the
funds received, up to the amount of the outstanding principal under the Restated
Mortgage Note, to the Escrow Agent in cash by wire transfer, certified check or
bank draft to the account designated by the Escrow Agent under Section 2.4(a).
The outstanding principal under the Restated Mortgage Note shall be reduced by
the amount of principal so received.

<PAGE>
                                                                  Page 31 of 107

         (g) FEES AND COSTS. Buyer shall be responsible for the payment of (i)
any IDA fees relating to the Restated Mortgage Note financing, but only to the
extent such fees exceed the IDA fees that would have been payable by Buyer had
the Medina Mortgage been discharged immediately prior to or upon the Closing
Date, and (ii) Seller's costs related to the Restated Mortgage Note financing
except any penalty or fee for prepayment of the Medina Mortgage.

                                    ARTICLE 3
                                    ---------
                                     CLOSING
                                     -------

3.1 CLOSING. The closing of the transactions contemplated by this Agreement
shall be held at 10:00 a.m. local time on the Closing Date at the offices of
Nixon Peabody LLP, Rochester, New York, or any other place as Buyer and Seller
mutually agree in writing ("Closing"). The Closing shall be effective as of the
close of business on the Effective Date. Seller shall operate the business for
the account of Buyer from the day following the Effective Date to the Closing
Date.

3.2 CONVEYANCES AT CLOSING.

         (a) INSTRUMENTS AND POSSESSION. Upon the terms and conditions contained
in this Agreement, on the Closing Date, Seller shall deliver to Buyer (i) share
certificates representing all of the Shares, (ii) a stock power executed by
Seller conveying all of the Shares, (iii) such other instruments as shall be
reasonably requested by Buyer to vest in Buyer title in and to the Shares in
accordance with the provisions of this Agreement and (iv) such other documents
and agreements as are contemplated by this Agreement.

         (b) FORM OF INSTRUMENTS. All of such instruments shall be in form and
substance, and shall be executed and delivered in a manner, reasonably
satisfactory to Buyer and Seller, but shall not diminish the status of title to
the Shares required to be delivered by Seller pursuant to this Agreement.

3.3 CERTIFICATES AND OTHER DOCUMENTS. Each of Buyer and Seller shall deliver or
cause to be delivered the certificates and other documents and items described
in Articles 6, 7 and 8 of this Agreement.

                                   ARTICLE 4
                                   ---------
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------
                                    OF SELLER
                                    ---------

         Seller represents and warrants to Buyer as follows:

4.1 ORGANIZATION AND AUTHORITY OF THE CORPORATION TO CONDUCT BUSINESS. The
Corporation is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. SCHEDULE 4.1 sets forth the
jurisdiction of organization of the Corporation and each jurisdiction where it
is qualified to do business. The Corporation is duly qualified and in good
standing in each jurisdiction where it is required to be qualified and where the
failure to qualify

<PAGE>
                                                                  Page 32 of 107

might have a material adverse effect on the Business, financial condition or
operations of the Corporation. The Corporation has full corporate power and
authority to conduct its business as it is presently being conducted and to own
and lease its properties and assets. Except as set forth on SCHEDULE 4.1, the
Corporation does not have any stock or equity interest in any other Person.

4.2 POWER AND AUTHORITY; BINDING EFFECT. The Seller has all necessary power and
authority and has taken all action necessary to authorize, execute and deliver
this Agreement, to consummate the transactions contemplated by this Agreement,
and to perform its obligations under this Agreement. This Agreement has been
duly executed and delivered by the Seller and constitutes a legal, valid and
binding obligation of the Seller enforceable against the Seller in accordance
with its terms, except as such enforcement may be limited by the Enforceability
Limitations.

4.3 AUTHORIZED AND ISSUED SHARES. The authorized capitalization of the
Corporation consists solely of one hundred (100) shares of Common Stock of the
par value of $1.00 per share of which only the Shares are issued and
outstanding. Seller owns all of the Shares. All of the Shares are duly
authorized, validly issued, fully paid and nonassessable, except as provided in
Section 630 of the New York Business Corporation Law. There are not now
outstanding any other shares, phantom shares or other securities, or any
options, warrants or any rights related to the Shares or to any other shares,
phantom shares or other securities of the Corporation. Except as set forth in
SCHEDULE 4.3, there are no agreements of any kind relating to the issuance of
any shares of the Corporation, or any convertible or exchangeable securities or
any options, warrants or other rights relating to the stock of the Corporation.
Except for this Agreement and as set forth in SCHEDULE 4.3, there are no voting
agreements, voting trusts, buy-sell agreements, options or right of first
purchase agreements or other agreements of any kind relating to the Shares.

4.4 TITLE OF SHARES AND CERTAIN OTHER ASSETS.

         (a) The Seller has good title to the Shares, free and clear of all
Encumbrances, and at the Closing will have full legal right and power to sell,
assign and transfer title to the Shares to Buyer pursuant to this Agreement free
and clear of all Encumbrances.

         (b) Except as set forth in SCHEDULE 4.4(b) and except for Permitted
Encumbrances, the Corporation has good title to all of its personal property,
free and clear of all Encumbrances.

         (c) The Corporation owns or leases pursuant to leases described on
SCHEDULE 4.4(c) all tangible personal property used in the Business and all
other tangible personal property located at the real property described on
SCHEDULE 4.10 and owns or otherwise has sufficient rights with respect to all
intangible property used in connection with the Business necessary to carry on
the Business in the manner in which it is currently operated.

4.5 NO CONFLICT OR VIOLATION. The execution and delivery of this Agreement, the
consummation of the transactions contemplated by this Agreement, and the
fulfillment of the terms of this Agreement, do not and will not result in or
constitute (i) a violation of or conflict with any provision of the
organizational or other governing documents of the Corporation, (ii) except as
set forth on SCHEDULE 4.5, a breach of, a loss of rights under, or constitute an
event, occurrence, condition or act which is or, with the giving of notice or
the lapse of time, would

<PAGE>
                                 Page 33 of 107

become, a material default under, or result in the acceleration of any
obligations under, any term or provision of, any material contract, agreement,
indebtedness, lease, commitment, license, franchise, permit, authorization or
concession to which the Seller or the Corporation is a party, (iii) a violation
by the Seller or the Corporation of any statute, rule, regulation, ordinance,
by-law, code, order, judgment, writ, injunction, decree or award applicable to
the Seller or the Corporation which could result in a penalty in excess of
$1,000 or a loss of privilege or (iv) an imposition of any Encumbrance on the
Shares or any Encumbrance (other than a Permitted Encumbrance) on the assets of
the Corporation.

4.6 CONSENTS AND APPROVALS. Except as set forth on SCHEDULE 4.6, no consent,
approval or authorization of, or declaration, filing or registration with, any
Person is required to be made or obtained by the Seller in connection with the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement.

4.7 NO PROCEEDINGS. There is no Proceeding pending or, to the Knowledge of the
Seller, threatened against, relating to or affecting in any adverse manner the
transactions contemplated by this Agreement.

4.8 FINANCIAL STATEMENTS; UNKNOWN LIABILITIES.

         (a) The Financial Statements have and will fairly present the financial
condition and the results of operations of the Corporation as of their
respective dates and for the periods then ended in accordance with GAAP applied
on a consistent basis. The Interim Financial Statements will fairly present the
financial condition and the results of operations of the Corporation as of their
date and for the period then ended in accordance with GAAP, except for the
absence of footnote disclosures and other routine differences between audited
and interim unaudited financial statements. The books and records of the
Corporation from which the Financial Statements have been prepared and from
which the Interim Financial Statements will be prepared fairly reflect in all
material respects the assets, liabilities and operations of the Corporation, and
the Financial Statements are in conformity therewith and the Interim Financial
Statements are and will be in conformity therewith.

         (b) Except as disclosed on SCHEDULE 4.8, there are, and as of the
Effective Date there will be, no liabilities or obligations of any nature,
whether absolute, accrued, contingent, known, unknown, matured, unmatured or
otherwise, and whether or not required to be disclosed or provided for in
financial statements in accordance with GAAP, of the Corporation except (i)
liabilities and obligations reflected in the Financial Statements for the fiscal
year ended April 28, 2001, excluding any third party debt (other than the
mortgage presently existing on the real property located in Medina, New York
("Medina Mortgage") if the parties hereto agree to continue the Medina Mortgage)
and excluding debt between the Corporation and any Affiliate and (ii)
liabilities and obligations incurred between April 28, 2001 and the Effective
Date in the ordinary course of business of the Corporation (none of which
results from, arises out of or relates to any breach of contract, breach of
contractual warranty, tort, infringement or violation of law).

<PAGE>
                                                                  Page 34 of 107

4.9 TAX MATTERS.

         (a) Except as set forth on SCHEDULE 4.9, (i)(A) Seller with respect to
the Corporation and (B) the Corporation and any company now or previously owned
by the Corporation including, without limitation, T.K.I. Foods, Inc. and Freedom
Foods and any subsidiary of T.K.I. Foods, Inc. and Freedom Foods (a
"Subsidiary"), (1) has filed all Tax Returns required to be filed, (2) all Taxes
required to have been withheld in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party
have been withheld, (3) all such Tax Returns were correct and complete in all
material respects when filed, (ii) all Taxes required to have been paid by the
Corporation or any Subsidiary (whether or not shown on any Tax Return),
including, without limitation, Taxes for which the Corporation is jointly and
severally liable with Seller (or an Affiliate of Seller or the Corporation),
have been paid, (iii) neither the Corporation nor any Subsidiary, nor Seller
(nor any Affiliate of Seller or the Corporation), is currently the beneficiary
of any extension of time within which to file any Tax Return and (iv) no notice
has been received by the Corporation or any Subsidiary (or Seller or any
Affiliate of the Corporation or Seller if the Corporation is jointly and
severally liable for any Tax related thereto) and no claim has been made in the
last 5 years by any Governmental Authority in a jurisdiction where the
Corporation or any Subsidiary (or Seller or any Affiliate of the Corporation or
Seller if the Corporation is jointly and severally liable for any Tax related
thereto) does not file Tax Returns that the Corporation or any Subsidiary (or
Seller or any Affiliate of the Corporation or Seller if the Corporation is
jointly and severally liable for any Tax related thereto) is or may be subject
to taxation by that jurisdiction. There are no Encumbrances on any of the assets
of the Corporation that arose in connection with any failure (or any alleged
failure) to pay any Tax.

         (b) There is no dispute or claim concerning any Tax liability of the
Corporation or any Subsidiary or Seller (or any Affiliate of the Corporation or
Seller for any period during which the Corporation was jointly and severally
liable with such Persons for Taxes) either (i) claimed or raised by any
Governmental Authority in writing or (ii) as to which the Corporation or Seller
(or any Affiliate of the Corporation or any Subsidiary or Seller) has Knowledge.
SCHEDULE 4.9 lists all federal, state, local, and foreign Tax Returns filed with
respect to the Corporation or any Subsidiary (or Seller or any Affiliate of
Seller or the Corporation if by virtue of filing such Tax Return the Corporation
is jointly and severally liable for any Tax related to such Tax Return) for any
taxable period ended on or after May 3, 1997, indicates those Tax Returns that
have been audited, and indicates those Tax Returns that currently are the
subject of an audit. Seller has delivered to Buyer correct and complete copies
of all federal, state, and local and foreign Tax Returns, examination reports,
and statements of deficiencies agreed to by the Corporation or any Subsidiary
(or Seller or any Affiliate of Seller or the Corporation if the Corporation is
jointly and severally liable for any Tax related thereto) for any period ended
on or after May 3, 1997.

         4.10 REAL PROPERTY. SCHEDULE 4.10 contains a true, complete and correct
list of the Real Property and identifies all Real Property which constitutes
Current Real Property. Except as set forth on SCHEDULE 4.10, (a) the Corporation
enjoys peaceful and undisturbed possession of the Current Real Property it
leases, (b) none of the Current Real Property is subject to any commitment for
sale or use by any Person other than to the extent the Corporation leases said
Current Real Property, (c) none of the Current Real Property is subject to any
Encumbrance

<PAGE>
                                                                  Page 35 of 107

which in any material respect interferes with or impairs the value,
transferability or present and continued use thereof in the usual and normal
conduct of the Business, (d) no labor has been performed or material furnished
for the Current Real Property for which a mechanic's or materialman's lien or
liens, or any other lien, has been or could be claimed by any Person, (e) the
Current Real Property, and each user thereof, is, to the knowledge of Seller, in
material compliance with all Governmental Requirements (including without
limitation all zoning, subdivision and other applicable land use ordinances) and
all existing covenants, conditions, restrictions and easements, and the current
use of the Current Real Property does not constitute a non-conforming use under
the applicable zoning ordinances and (f) no default or breach exists with
respect to, and the Corporation has not received any notice of any default or
breach under, any Encumbrance affecting any of the Current Real Property. There
are no condemnation, eminent domain or expropriation proceedings pending, or to
the Knowledge of Seller contemplated or threatened, against the Current Real
Property or any part thereof, and the Seller does not know of any desire of any
Governmental Authority to take or use the Current Real Property or any part
thereof. There are no existing, or to the Knowledge of Seller, contemplated or
threatened, general or special assessments affecting the Current Real Property
or any portion thereof. The Corporation has not received notice of, nor does
Seller have any Knowledge of, any pending or threatened Proceeding (including
without limitation condemnation or eminent domain proceeding) before any
Governmental Authority which relates to the ownership, maintenance, use or
operation of the Current Real Property, nor does the Seller know of any fact
which might give rise to any such Proceeding or any type of existing or intended
use of any real property adjacent to the Current Real Property which might
materially adversely affect the use of the Current Real Property. To Seller's
Knowledge, none of the Current Real Property is located within any area
determined to be flood-prone under the Federal Flood Protection Act of 1973, or
any comparable state or local Governmental Requirement. The Corporation has not
received any notice from any insurance company of any defects or inadequacies in
the Current Real Property or any part thereof which would materially and
adversely affect the insurability of the Current Real Property or the premiums
for the insurance thereof, and no notice has been given by any insurance company
which has issued a policy with respect to any portion of the Current Real
Property or by any board of fire underwriters (or other body exercising similar
functions) requesting the performance of any repairs, alterations or other work
which has not been complied with. All water, sewer, gas, electric, telephone and
drainage facilities and all other utilities servicing the Current Real Property
are installed to the improvements situated on the Current Real Property, are, to
the knowledge of Seller, connected pursuant to valid permits, enter the Current
Real Property through adjoining public streets, are adequate for the present
operation of the Business and otherwise are in compliance in all material
respects with all Governmental Requirements applicable thereto. Access to and
from the Current Real Property is via public streets, which streets are
sufficient to ensure adequate vehicular and pedestrian access for the present
operation of the Business. Except as set forth on SCHEDULE 4.10, the buildings
and improvements on the Current Real Property (including, without limitation,
the heating, air conditioning, mechanical, electrical and other systems used in
connection therewith) are in a reasonable state of repair, have been well
maintained and are free from infestation by termites, other wood destroying
insects, vermin and other pests. Except as set forth on SCHEDULE 4.10, there are
no repairs or replacements exceeding $25,000 in the aggregate for all Current
Real Property or $5,000 for any single repair or replacement or which to
Seller's Knowledge are

<PAGE>
                                                                  Page 36 of 107

required to avoid interruption of the Business or which are currently
contemplated by the Corporation.

4.11 TANGIBLE PERSONAL PROPERTY. Seller has delivered to Buyer (a) a
depreciation list of each item of Tangible Personal Property owned by the
Corporation having a value in excess of $5,000, and (b) a list of each item of
Tangible Personal Property leased by the Corporation having an annual rental in
excess of $5,000. Except as set forth in SCHEDULE 4.11, there is no tangible
personal property used in the operation of the Business other than the Tangible
Personal Property. Except as set forth on SCHEDULE 4.11, the Tangible Personal
Property owned by the Corporation is free and clear of any Encumbrances (other
than Permitted Encumbrances). Except as set forth on SCHEDULE 4.11, all of the
Tangible Personal Property is located at the Current Real Property and there is
no tangible personal property located at the Current Real Property which is not
owned or leased by the Corporation. Except as set forth in SCHEDULE 4.11, the
Tangible Personal Property is in good working condition and adequate for its
intended use, ordinary wear and tear and normal repairs and replacements
excepted. Except as disclosed on SCHEDULE 4.11, there are no repairs or
replacements exceeding $25,000 in the aggregate for all Tangible Personal
Property or $5,000 for any single item of Tangible Personal Property which are
currently budgeted for by the Corporation or required to avoid an interruption
to production in the near future.

4.12 INTELLECTUAL PROPERTY.

         (a) Except as set forth on SCHEDULE 4.12, (i) there is no material
intellectual property used in the Business other than the Intellectual Property,
(ii) each material item of Intellectual Property owned or used by the
Corporation immediately prior to the Closing Date will be owned or available for
use by the Corporation on substantially similar terms and conditions immediately
subsequent to the Closing Date and (iii) the Corporation has taken reasonable
commercial actions to maintain and protect each item of material Intellectual
Property used in the Business.

         (b) Except as set forth on SCHEDULE 4.12, to the Seller's Knowledge (i)
the Corporation has not during the last 5 years interfered with, infringed upon,
misappropriated or otherwise come into conflict with any intellectual property
rights of third parties, and the Corporation has not received any charge,
complaint, claim, demand or notice alleging any such interference, infringement,
misappropriation or violation (including any claim that the Corporation must
license or refrain from using any intangible property rights of any third party)
which has not been resolved and (ii) no third party has interfered with,
infringed upon, misappropriated or otherwise come into conflict with any of the
Intellectual Property.

         (c) SCHEDULE 4.12 identifies each patent or registration which has been
issued to the Corporation with respect to any of the Intellectual Property,
identifies each pending patent application or application for registration which
the Corporation has made with respect to any of the Intellectual Property, and
identifies each license or other agreement which the Corporation has granted to
any third party with respect to any of the Intellectual Property. Seller has
delivered to Buyer correct and complete copies of all such patents,
registrations, applications, licenses and agreements (as amended to date) and
has made available to Buyer correct and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable) of each such
item. SCHEDULE 4.12 also identifies each trade name or unregistered

<PAGE>
                                                                  Page 37 of 107

trademark used by the Corporation. Except as set forth on SCHEDULE 4.12, with
respect to each item of Intellectual Property required to be identified in
SCHEDULE 4.12: (i) Seller has no Knowledge of any reason (other than possible
descriptiveness) why the Corporation would be unable to register with the United
States Patent and Trademark Office each item which is an unregistered trademark,
(ii) the Corporation possesses all right, title and interest in and to the item,
free and clear of any Encumbrances or licenses, (iii) the item is not subject to
any outstanding injunction, judgment, order, decree, ruling, or charge, (iv) no
Proceeding is pending or, to the Knowledge of Seller, threatened which
challenges the legality, validity, enforceability, use or ownership of the item
and (v) other than routine indemnities given to distributors, sales
representatives, dealers, brokers and customers, the Corporation has no current
obligations to indemnify any Person for or against any interference,
infringement, misappropriation, or other conflict with respect to the item.

         (d) SCHEDULE 4.12 identifies each item of Intellectual Property that
any third party owns and that the Corporation uses pursuant to license,
sublicense or agreement. Seller has delivered to Buyer correct and complete
copies of all such licenses, sublicenses and other agreements (as amended to
date). Except as set forth on SCHEDULE 4.12, with respect to each item of
Intellectual Property required to be identified in SCHEDULE 4.12: (i) the
license, sublicense or other agreement covering the item is enforceable, except
as may be limited by Enforceability Limitations, (ii) following the Closing, the
license, sublicense or other agreement will continue to be enforceable on
substantially similar terms and conditions, except as may be limited by
Enforceability Limitations, (iii) neither the Corporation nor, to the Knowledge
of Seller, any other party to the license, sublicense or other agreement is in
material breach or default, and no event has occurred which, with notice or
lapse of time, would constitute a breach or default or permit early termination,
modification or acceleration thereunder, (iv) neither the Corporation nor, to
the Knowledge of Seller, any other party to the license, sublicense or other
agreement has repudiated any provision thereof, (v) to Seller's Knowledge the
underlying item of Intellectual Property is not subject to any outstanding
injunction, judgment, order, decree, ruling or charge, (vi) no Proceeding is
pending or, to the Knowledge of Seller, threatened which challenges the
legality, validity, enforceability or use of the underlying item of Intellectual
Property and (vii) the Corporation has not granted any sublicense or similar
right with respect to the license, sublicense or other agreement.

         (e) Except as set forth on SCHEDULE 4.12, to Seller's Knowledge Buyer's
use of the Intellectual Property will not interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any intangible property
rights of third parties as a result of the continued operation of the Business
as presently conducted and as presently proposed to be conducted.

4.13 COMPLIANCE WITH LAWS; PERMITS. Except as set forth on SCHEDULE 4.13, the
conduct of the Business is in compliance in all material respects with all
applicable Governmental Requirements, including, without limitation,
requirements of the U.S. Food and Drug Administration, the U.S. Department of
Agriculture and the New York Department of Agriculture and Markets. The
Corporation has not received any notice to the effect that, or otherwise been
advised that, the Corporation is not in compliance in all material respects with
any applicable Governmental Requirement and there are no presently existing
facts, circumstances or events which, with notice or lapse of time, would result
in material violations of any applicable Governmental Requirement. SCHEDULE 4.13
identifies all material Permits

<PAGE>
                                                                  Page 38 of 107

issued to the Corporation and currently in effect. Except as set forth on
SCHEDULE 4.13, the Permits constitute all permits, consents, licenses,
franchises, authorizations and approvals used in the operation of and necessary
to conduct the Business. All of the Permits are valid and in full force and
effect, no violations have been experienced, noted or recorded and no violations
are expected, and no Proceeding is pending or, to the Knowledge of Seller,
threatened to revoke or limit any of the Permits.

4.14 LITIGATION. Except as set forth on SCHEDULE 4.14, there is no Proceeding
pending or, to the Knowledge of Seller, currently threatened which is (a) a
Proceeding against or relating to the Shares or the Corporation, or its
properties, assets or business or (b) a Proceeding relating to the Business and
against or relating to any partner, shareholder, member, director, officer or
employee of the Corporation.

4.15 LABOR MATTERS.

         (a) SCHEDULE 4.15 identifies for each current employee of the
Corporation as of August 1, 2001, his or her name, position or job title, and
his or her current base compensation and bonus compensation. Except as set forth
on SCHEDULE 4.15: (i) the Corporation has no obligations under any written or
oral labor agreement, collective bargaining agreement or other agreement with
any labor organization or employee group, (ii) the Corporation is not currently
engaged in any unfair labor practice and there is no unfair labor practice
charge or other employee-related or employment-related complaint against the
Corporation pending or, to the Knowledge of Seller, threatened before any
Governmental Authority, (iii) there is currently no labor strike, labor
disturbance, slowdown, work stoppage or other material labor dispute or
arbitration pending or, to the Knowledge of Seller, threatened against the
Corporation and no material grievance currently being asserted, (iv) the
Corporation has not experienced a labor strike, labor disturbance, slowdown,
work stoppage or other material labor dispute at any time during the three years
immediately preceding the date of this Agreement and (v) there is no
organizational campaign being conducted or, to the Knowledge of Seller,
contemplated and there is no pending or, to the Knowledge of Seller, threatened
petition before any Governmental Authority or other dispute as to the
representation of any employees of the Corporation. Except as set forth on
SCHEDULE 4.15, the Corporation has complied in all material respects with, and
is currently in compliance in all material respects with, all applicable
Governmental Requirements relating to any of its employees or consultants
(including, without limitation, any Governmental Requirement of the Occupational
Safety and Health Administration), and the Corporation has not received within
the past 3 years any written notice of failure to comply with any such
Governmental Requirement which has not been rectified.

         (b) Except as set forth on SCHEDULE 4.15, the Corporation has on file a
valid Form I-9 for each employee hired by the Corporation on or after November
7, 1986 and continuously employed after November 6, 1986 or the applicable date
of hire. Except as set forth on SCHEDULE 4.15, to the Knowledge of Seller, all
employees of the Corporation employed in the United States are (i) United States
citizens, or lawful permanent residents of the United States, (ii) aliens whose
right to work in the United States is unrestricted, (iii) aliens who have valid,
unexpired work authorization issued by the Attorney General of the United States
(Immigration and Naturalization Service) or (iv) aliens who have been
continually employed by the Corporation since November 6, 1986 or the applicable
date of hire. Except as set forth on

<PAGE>
                                                                  Page 39 of 107

SCHEDULE 4.15, the Corporation has not been the subject of an immigration
compliance or employment visit from, nor has the Corporation been assessed any
fine or penalty by, or been the subject of any order or directive of, the United
States Department of Labor or the Attorney General of the United States
(Immigration and Naturalization Service).

4.16 EMPLOYEE BENEFIT PLANS. With respect to the Employee Benefit Plans of the
Corporation:

         (a) SCHEDULE 4.16 sets forth a list identifying each Employee Benefit
Plan which is an Employee Pension Benefit Plan, including any Multiemployer
Plan, and a list identifying each Employee Benefit Plan which is an Employee
Welfare Benefit Plan. Except as otherwise identified on SCHEDULE 4.16, (i) no
Employee Benefit Plan is maintained, administered or contributed to by any
entity other than the Corporation, and (ii) no Employee Benefit Plan is
maintained under any trust arrangement which covers any employee benefit
arrangement which is not an Employee Benefit Plan.

         (b) The Corporation has delivered or has caused to be delivered to
Buyer true and complete copies of (i) the Employee Benefit Plans (including
related trust agreements, custodial agreements, insurance contracts, investment
contracts and other funding arrangements, if any, and adoption agreements, if
any), (ii) any amendments to the Employee Benefit Plans, (iii) written
interpretations of the Employee Benefit Plans, (iv) summary plan descriptions
and summaries of material modifications, as defined under ERISA, of each
Employee Benefit Plan for which such documents are required by ERISA), (v) the
three most recent annual reports (e.g., the complete Form 5500 series) prepared
in connection with each Employee Benefit Plan (if any such report was required),
including all attachments (including, without limitation, the audited financial
statements, if any) and (vi) the three most recent actuarial valuation reports
prepared in connection with each Employee Benefit Plan (if any such report was
required).

         (c) Each Employee Benefit Plan which is an Employee Pension Benefit
Plan that is intended to be "qualified" within the meaning of Section 401(a) of
the Code has received a favorable determination letter from the IRS. The
Corporation has delivered or caused to be delivered to Buyer the latest
determination letters of the Internal Revenue Service relating to each such
Employee Benefit Plan. Such determination letters have not been revoked.
Furthermore, there are no pending proceedings or, to the Knowledge of the
Corporation or Seller, threatened proceedings in which the "qualified" status of
any such Employee Benefit Plan is at issue and in which revocation of the
determination letter has been threatened. Each such Employee Benefit Plan has
not been amended or operated, since the receipt of the most recent determination
letter, in a manner that would adversely affect the "qualified" status of the
Plan. No distributions have been made from any such Employee Benefit Plan that
would violate in any respect the restrictions under Treas. Reg. Section
1.401(a)(4)-5(b), and none will have been made by the Closing Date. There has
been no termination or partial termination, as defined in Section 411(d) of the
Code and the regulations thereunder, of any such Employee Benefit Plan.

         (d) The Corporation has made all required contributions under each
Employee Benefit Plan on a timely basis or, if not yet due, adequate accruals
therefore have been provided for in the Financial Statements. No Employee
Benefit Plan which is an Employee Pension Benefit Plan has incurred any
"accumulated funding deficiency" within the meaning of

<PAGE>
                                                                  Page 40 of 107

Section 302 of ERISA or Section 412 of the Code and no such Plan has applied for
or received a waiver of the minimum funding standards imposed by Section 412 of
the Code.

         (e) There has been no amendment to, written interpretation or
announcement (whether or not written) by the Corporation relating to, or change
in employee participation or coverage under any Employee Benefit Plan that would
increase materially the expense of maintaining such Employee Benefit Plan above
the level of expense incurred in respect of such Employee Benefit Plan for the
most recent plan year with respect to Employee Benefit Plans. The execution of
this Agreement and the consummation of the transactions contemplated hereby do
not and will not constitute an event under any Employee Benefit Plan, which
(either alone or upon the occurrence of a subsequent event) will or may result
in any payment, acceleration, vesting or increase in benefits to any employee,
former employee or director of the Corporation.

         (f) Except as set forth on SCHEDULE 4.16, each Employee Benefit Plan
has been maintained in compliance with its terms and the requirements prescribed
by any and all Governmental Requirements, including but not limited to, ERISA
and the Code, which are applicable to such Employee Benefit Plan.

         (g) Except as set forth on SCHEDULE 4.16, there are no pending or, to
the Knowledge of Seller, threatened (i) Proceedings by any employees, former
employees or plan participants or the beneficiaries, spouses or representatives
of any of them, other than ordinary and usual claims for benefits by
participants or beneficiaries, or (ii) Proceedings by any Governmental Authority
of or against any Employee Benefit Plan, the assets held thereunder, the trustee
of any such assets, or the Corporation relating to any of the Employee Benefit
Plans. If any of the actions described in this Section 4.16(g) are initiated
prior to the Closing Date, Seller shall notify Buyer of such action prior to the
date of Closing.

         (h) The Corporation has not engaged in (i) any transaction or acted or
failed to act in a manner that violates the fiduciary requirements of Section
404 of ERISA, or (ii) any Prohibited Transaction with respect to any Employee
Benefit Plans, and will not so engage, act or fail to act prior to the Closing
Date. Furthermore, to the Knowledge of Seller, no other "party in interest," as
defined in Section 3(14) of ERISA, or "disqualified person," as defined in
Section 4975(e)(2) of the Code, has engaged in any Prohibited Transaction.

         (i) No liability has been incurred by the Corporation or any ERISA
Affiliate for any tax, penalty or other liability, other than the liability to
make contributions and to pay benefits in the normal course, with respect to any
Employee Benefit Plan and, to the Knowledge of Seller, such Plans do not expect
to incur any such liability prior to the date of Closing.

         (j) Except for required premium payments, no liability to the Pension
Benefit Guaranty Corporation (the "PBGC") has been incurred by the Corporation
or its Affiliates with respect to any Employee Benefit Plan which is an Employee
Pension Benefit Plan that has not been satisfied in full, and no event has
occurred and there exists no condition or set of circumstances that could result
in the imposition of any such liability. The Corporation has complied, or will
comply, with all requirements for premium payments, including any interest and
penalty charges for late payment, due to PBGC on or before the Closing Date with
respect to each Employee Benefit Plan for which any premiums are required. No
proceedings to terminate,

<PAGE>
                                                                  Page 41 of 107

pursuant to Section 4042 of ERISA, have been instituted or, to the Knowledge of
the Corporation or Seller, are threatened by the PBGC with respect to any
Employee Benefit Plan (or any Pension Plan maintained by an ERISA Affiliate).
There has been no termination or partial termination, as defined in Section
411(d) of the Code and the regulations thereunder, of any Employee Benefit Plan
which is an Employee Pension Benefit Plan. No reportable event, within the
meaning of Section 4043 of ERISA, has occurred with respect to any Employee
Benefit Plan which is an Employee Pension Benefit Plan.

         (k) As of the date of this Agreement, with respect to each Employee
Benefit Plan which is covered by Title IV of ERISA and which is not a
Multiemployer Plan, the current value of the accumulated benefit obligations
(based on the actuarial assumptions that would be utilized upon termination of
such Plan) do not exceed the current fair value of the assets of such Employee
Benefit Plan. Except as listed in SCHEDULE 4.16, there has been no material
adverse change in the financial condition of any such Employee Benefit Plan, no
change in actuarial assumptions with respect to any such Employee Benefit Plan
and no increase in benefits under any such Employee Benefit Plan as a result of
plan amendment, written interpretations, announcements, change in applicable law
or otherwise which, individually or in the aggregate, would result in the value
of any such Employee Benefit Plan's accrued benefits exceeding the current value
of such Employee Benefit Plan's assets.

         (l) Except as disclosed on SCHEDULE 4.16, neither the Corporation nor
any ERISA Affiliate has ever maintained, adopted or established, contributed or
been required to contribute to, or otherwise participated in or been required to
participate in, nor will they become obligated to do so through the Closing
Date, any Multiemployer Plan. Except as disclosed on SCHEDULE 4.16, no amount is
due from, or owed by, the Corporation or any ERISA Affiliate on account of a
Multiemployer Plan of ERISA or on account of any withdrawal therefrom.

         (m) Except as disclosed on SCHEDULE 4.16, no Employee Benefit Plan
provides benefits, including without limitation, any severance or other
post-employment benefit, salary continuation, termination, death, disability, or
health or medical benefits (whether or not insured), life insurance or similar
benefit with respect to current or former employees (or their spouses or
dependents) of the Corporation beyond their retirement or other termination of
service other than (i) coverage mandated by applicable law, (ii) deferred
compensation benefits fully accrued as Accrued Liabilities on the Financial
Statements or Interim Financial Statements, or (iii) benefits, the full cost of
which is borne by the current or former employee (or his or her beneficiary).

         (n) Each Employee Benefit Plan which is an Employee Welfare Benefit
Plan that is a group health plan (as defined for the purposes of Section 4980B
of the Code and Part 6 of Subtitle B of Title I of ERISA, and all regulations
thereunder, ("COBRA")) has complied at all times, and will continue to comply
through the date of Closing, with requirements of COBRA to provide health care
continuation coverage to qualified beneficiaries who have elected, or may elect
to have, such coverage. The Corporation or its agent who administers any such
Employee Welfare Benefit Plans, have complied at all times and will continue to
comply through the date of Closing, with the notification and written notice
requirements of COBRA. There are no pending or, to the Knowledge of Seller,
threatened claims, suits, or other proceedings by any employee, former employee,
participants or by the beneficiary, dependent or representative of

<PAGE>
                                                                  Page 42 of 107

any such person, involving the failure of any such Employee Welfare Benefit Plan
or of any other group health plan ever maintained by the Corporation to comply
with the health care continuation coverage requirements of COBRA.

         (o) Each Employee Benefit Plan which is an Employee Welfare Benefit
Plan and that is a group health plan (as defined for the purposes of Section
9832(a) of the Code) has complied at all times, and will continue to comply
through the date of Closing, with requirements of Sections 9801 and 9802 of the
Code.

         (p) There is no contract, agreement, plan or arrangement covering any
employee or former employee of the Corporation that, individually or in the
aggregate, could give rise to the payment by the Corporation, directly or
indirectly, of any amount that would not be deductible pursuant to the terms of
Section 280G of the Code.

4.17 TRANSACTIONS WITH CERTAIN PERSONS. Except as set forth on SCHEDULE 4.17 or
as otherwise disclosed in this Agreement, (a) no Related Person is presently, or
at any time during the past 1 year has been, a party to any transaction with the
Corporation including, without limitation, any contract, agreement or other
arrangement (i) providing for the furnishing of services to or by, (ii)
providing for the rental or sale of real or personal property to or from or
(iii) otherwise requiring payments annually to or from (other than for services
as officers or employees of the Corporation), such Related Person and (b) no
shareholder, director, officer or employee of the Corporation is related to any
other shareholder, director, officer or employee of the Corporation by blood or
marriage. All such transactions have been and are on an arms-length basis
providing for substantially the same payment and performance terms as would
reasonably be expected to be negotiated with an independent third party. Except
as set forth on SCHEDULE 4.17, there is no outstanding amount in excess of $500
owing (including, without limitation, pursuant to any advance, note or other
indebtedness instrument) from the Corporation to any Related Person identified
on SCHEDULE 4.17 or from any Related Person identified on SCHEDULE 4.17 to the
Corporation.

4.18 INSURANCE. SCHEDULE 4.18 contains a complete and accurate list of all
current policies or binders of Insurance (showing as to each policy or binder
the carrier, policy number, coverage limits, expiration dates, annual premiums,
deductibles and a general description of the type of coverage provided and
policy exclusions) maintained by the Corporation and relating to the
Corporation's properties, assets and personnel. Except as set forth on SCHEDULE
4.18, all of the Insurance is "occurrence" based insurance. The Insurance is in
full force and effect and sufficient for compliance in all material respects
with all requirements of applicable law and of all contracts to which the
Corporation is a party. The Corporation is not in material default under any of
the Insurance, and the Corporation has not failed to give any notice or to
present any claim under any of the Insurance in a due and timely manner. No
notice of cancellation, termination, reduction in coverage or increase in
premium (other than reductions in coverage or increases in premiums in the
ordinary course) has been received with respect to any of the Insurance, and all
premiums with respect to any of the Insurance have been timely paid. The
Corporation has not experienced claims in excess of current coverage of the
Insurance. Except as disclosed on SCHEDULE 4.18, there will be no retrospective
insurance premiums or charges on or with respect to any of the Insurance for any
period or occurrence through the Effective Date.

<PAGE>
                                                                  Page 43 of 107

4.19 INVENTORY. Except as set forth on SCHEDULE 4.19, (a) all of the Inventory
is owned by the Corporation free and clear of any Encumbrances (other than
Permitted Encumbrances) and is located at the Current Real Property, (b) none of
the Inventory is on consignment, (c) the Inventory reflected in the Financial
Statements and Interim Financial Statements has been valued in a manner
consistent with past practices and procedures and in accordance with GAAP, and
(d) all inventory located at the Current Real Property is owned by the
Corporation and is not held by the Corporation (on consignment or otherwise) for
or on behalf of any other Person. If any inventory located at the Current Real
Property is not owned by the Corporation, the information concerning this
inventory provided on SCHEDULE 4.19 is based on a recent physical count.
Attached as part of SCHEDULE 4.19 is the Corporation's report entitled Status of
Obsolete Reserves dated as of the Effective Date. This report accurately
reflects the amount and value of all Inventory located at the premises of
suppliers as of the date of this Agreement that is (a) owned by the Corporation
or (b) for which the Corporation has a binding commitment to purchase. The
updated Status of Obsolete Reserves set forth in Item 2 of SCHEDULE 4.19
accurately reflects the amount, value and identity of Inventory taken as a
reserve on the balance sheet of the Corporation dated July 28, 2001.

4.20 ACCOUNTS RECEIVABLE. All of the Accounts Receivable of the Corporation are
bona fide receivables, are reflected on the books and records of the
Corporation, arose in the ordinary course of the Business and will be collected
in the ordinary course of business consistent with past collection practices at
their full face value net of reserves for doubtful accounts as reflected on the
Effective Date Financial Report. Except as set forth on SCHEDULE 4.20, no Person
has any liens on the Accounts Receivable, there is no right of offset against
any of the Accounts Receivable, and no agreement for deduction or discount has
been made with respect to any of the Accounts Receivable other than ordinary
course trade discounts.

4.21 MATERIAL CONTRACTS. SCHEDULE 4.21 contains a true and correct list or
description of the Material Contracts. True and correct copies of the Material
Contracts have been delivered to Buyer. Each of the Material Contracts is
enforceable against the Corporation and, to the Knowledge of Seller, each other
party thereto, in accordance with its terms, except as such enforcement may be
limited by Enforceability Limitations. Except as set forth on SCHEDULE 4.21,
neither the Corporation nor, to the Knowledge of Seller, any other party to any
Material Contract, is in material default thereunder or in material breach
thereof, and the Corporation has not during the past 2 years obtained or granted
any material waiver of or under any provision of any Material Contract. There
exists no event, occurrence, condition or act which constitutes or, with the
giving of notice, the lapse of time or the happening of any future event or
condition, would become a material default by the Corporation or, to the
Knowledge of Seller, any other party under any Material Contracts. Seller does
not know of a threatened default under any Material Contracts.

4.22 SUPPLIERS AND CUSTOMERS. SCHEDULE 4.22 contain a list of the 10 largest
suppliers and 20 largest customers of the Business for the fiscal year ending
April 28, 2001. Except as set forth on SCHEDULE 4.22, none of the suppliers or
customers set forth on SCHEDULE 4.22 has informed the Corporation that it
intends to terminate its relationship with the Corporation, and Seller is not
aware of any such supplier or customer that intends to terminate such
relationship or of any material problem or dispute with any such supplier or
customer. Seller believes that the Corporation has good business relationships
with each such supplier and customer. Seller does

<PAGE>
                                                                  Page 44 of 107

not believe that the consummation of a sale of the Shares will or is likely to
disrupt the existing relationships with any such supplier or customer in any
material respect.

4.23 BUSINESS RECORDS. No material records of accounts, personnel records and
other business records for the past 5 years relating to the Business have been
destroyed and all such records are available upon request, subject to applicable
Governmental Requirements and/or contractual prohibitions or limitations.

4.24 BANK ACCOUNTS; POWERS OF ATTORNEY. SCHEDULE 4.24 contains a true, complete
and correct list of all bank accounts and safe deposit boxes maintained by the
Corporation and all persons entitled to draw thereon, to withdraw therefrom or
with access thereto, a description of all lock box arrangements for the
Corporation and a description of all powers of attorney granted by the
Corporation.

4.25 ENVIRONMENTAL MATTERS. Except as described in environmental reports and
other documents listed in SCHEDULE 4.25, copies of which reports and documents
have been provided to Buyer, and further, with regard to all Predecessors and
all Persons other than Corporation, to Seller's Knowledge:

         (a) the Corporation and its assets, properties and operations are now,
and at all times during Corporation's ownership or use of its assets and
properties prior to the Effective Date have been, in compliance in all material
respects with all applicable Environmental Laws, and each Predecessor and its
assets, properties and operations were in compliance in all material respects
with all applicable Environmental Laws;

         (b) except in compliance with Environmental Laws, no Person has
generated, manufactured, refined, transported, treated, stored, handled,
disposed, transferred, produced or processed any Hazardous Substance at, on,
under the Real Property, and, to Seller's Knowledge, there has been and is no
Release of any Hazardous Substance at, on, under, in, to or from the Real
Property or in the vicinity of the Real Property, whether as a result of the
operations and activities at the Real Property or otherwise;

         (c) no Person has caused or contributed to the Release of Hazardous
Substances at, on, under, in, to or from any of the Real Property and is not, to
the Knowledge of Seller, otherwise liable or potentially liable for any such
Releases and, to Seller's Knowledge, there exist no Environmental Conditions at,
on or under the Real Property;

         (d) no Person has received any notice of alleged, actual or potential
responsibility for, or any inquiry or investigation regarding, the presence,
Release or threatened Release of any Hazardous Substance at any location,
whether at the Real Property or otherwise, that was allegedly manufactured,
used, generated, processed, treated, stored, disposed of or otherwise handled at
or transported from the Real Property or otherwise;

         (e) no Person has received any notice of any other claim, demand or
action by any Person alleging any actual or threatened injury or damage to any
Person, property, natural resource or the environment arising from or relating
to the presence, Release or threatened Release of any Hazardous Substances at,
on, under, in, to or from the Real Property or in

<PAGE>
                                                                  Page 45 of 107

connection with any operations or activities thereat, or at, on, under, in, to
or from any other property;

         (f) neither the Current Real Property nor any operations or activities
thereat is nor, to Seller's Knowledge has the Real Property been, subject to any
judicial or administrative proceeding, order, consent, agreement or any lien
relating to any applicable Environmental Laws or Environmental Claims;

         (g) there are no underground storage tanks presently located at the
Current Real Property and, to Seller's Knowledge, there have been no Releases of
any Hazardous Substances from any underground storage tanks or related piping at
the Real Property;

         (h) there is no equipment containing PCBs at levels greater than 50
parts per million located at, on, under or in the Current Real Property; and

         (i) there is no asbestos or asbestos-containing material located at,
on, under or in the Current Real Property.

4.26 ABSENCE OF CERTAIN CHANGES. Except as set forth on SCHEDULE 4.26 or as
reflected in the Interim Financial Statements delivered on or before the date of
this Agreement, since April 28, 2001 there has not been:

         (a) any material adverse change in the Business, financial condition or
operations of the Corporation;

         (b) any increase in the compensation of or granting of bonuses payable
or to become payable by the Corporation to any officer or employee for the
fiscal year ending April 28, 2001, other than annual increases or bonuses
consistent with the Corporation's past practices and not resulting in the
compensation for any such officer or employee for such fiscal year exceeding one
hundred and five percent (105%) of the compensation of such officer or employee
for the preceding fiscal year;

         (c) any sale or transfer by the Corporation of any tangible or
intangible asset having a value at the time of disposition greater than $10,000
or $25,000 in the aggregate for all such assets, any mortgage or pledge or
creation of any Encumbrance relating to any such asset, any lease of real
property or equipment, or any cancellation of any debt or claim, except in the
ordinary course of business;

         (d) any other material transaction not in the ordinary course of the
Business or not otherwise consistent with the Corporation's past practices
involving consideration in excess of $25,000; or

         (e) any material change in accounting methods or principles.

4.27 BROKERS. Seller and/or the Corporation has entered into an agreement,
arrangement or understanding with J.H. Chapman which will result in the
obligation to pay a finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated by

<PAGE>
                                                                  Page 46 of 107

this Agreement. Any such fee, commission or payment has been or will be paid
exclusively by Seller.

4.28 ABSENCE OF CERTAIN PAYMENTS. To the Knowledge of Seller, neither the
Corporation, nor any other Person owned or controlled by the Corporation, nor
any of its respective partners, shareholders, directors, officers, employees or
agents, or other people acting on behalf of any of them, have with respect to
the Business (a) engaged in any activity prohibited by the United States Foreign
Corrupt Practices Act of 1977 or any other similar law, regulation or decree,
directive or order of any Governmental Authority or (b) without limiting the
generality of the preceding clause (a), used any corporate or other funds for
unlawful contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to officials of any Governmental
Authority. To the Knowledge of Seller neither the Corporation, nor any Person
owned or controlled by the Corporation, nor any of its partners, shareholders,
directors, officers, employees or agents, or other Persons acting on behalf of
any of them, have accepted or received any unlawful contributions, payments,
gifts or expenditures.

4.29 PRODUCT GUARANTIES; PRODUCT LIABILITY.

         (a) A form of each product guaranty relating to products produced
(including products produced under co-packing agreements), marketed, sold or
delivered by the Corporation at any time during the 2 year period preceding the
date of this Agreement is attached to or set forth on SCHEDULE 4.29.

         (b) SCHEDULE 4.29 sets forth a true and complete list of (A) all
products produced (including products produced under co-packing agreements),
marketed, sold or delivered by the Corporation or any predecessor of the
Corporation that have been recalled or withdrawn (whether voluntarily or
otherwise) at any time since December 31, 1996 and (B) all Proceedings (whether
completed or pending) at any time since December 31, 1996 seeking the recall,
withdrawal, suspension or seizure of any product produced (including products
produced under co-packing agreements), marketed, sold or delivered by the
Corporation or any predecessor of the Corporation.

         (c) Except to the extent covered by applicable insurance the
Corporation has no liability or potential liability arising out of any injury to
individuals or property as a result of the ownership, possession or use of any
product produced, marketed, sold or delivered by the Corporation, and, to the
Knowledge of the Corporation, there is no basis for the assertion of any such
liability against the Corporation.

4.30 EFFECTIVE DATE WORKING CAPITAL. The Corporation has not changed or varied
any of its practices concerning the collection of accounts receivable, the
payment of Accounts Payable, the Inventory levels it maintains or any other
methods or practices concerning the Corporation's working capital as a result of
or in contemplation of the transactions which are the subject of this Agreement.

4.31 CHANGE IN CONTROL. Except for this Agreement and as disclosed on SCHEDULE
4.31, the Corporation is not party to any contract or arrangement (including,
without limitation, any approval, authorization, declaration, filing or
registration) which contains a "change in control",

<PAGE>
                                                                  Page 47 of 107

"potential change in control" or similar provision, and the consummation of the
transactions contemplated by this Agreement shall not (either alone or upon the
occurrence of additional acts or events) result in any payment or payments
becoming due from the Corporation to any person or give any person the right to
terminate or alter the provisions of any agreement to which the Corporation is a
party.

4.32 KARL D. SIMONSON SEVERANCE PAYMENTS . Neither the Corporation nor Buyer has
any obligation to Karl D. Simonson with respect to (i) the Employment Agreement
or (ii) any other employment arrangements with Mr. Simonson.

4.33 WORKERS COMPENSATION. Seller has maintained adequate workers compensation
coverage for the employees of the Corporation and has been in compliance with
all Governmental Requirements with respect to workers compensation matters.
Except as disclosed on SCHEDULE 4.33, there are no prior unpaid obligations or
pending claims or obligations for workers compensation by an employee or former
employee of the Corporation.

4.34 ENTERPRISE DEVELOPMENT ZONE OR SIMILAR CREDITS. Except as disclosed on
SCHEDULE 4.34, neither the Corporation nor Seller is obligated to repay or
refund any amount with respect to any Enterprise Development Zone credit or
similar credits offered by any Governmental Authority.

4.35 CONDUCT PENDING CLOSING. The covenants in Section 6.5 have not been
breached for the period from the Effective Date through the Closing Date.

4.36 MATERIAL MISSTATEMENTS OR OMISSIONS. None of the representations and
warranties by Seller in this Agreement contains any untrue statement of a
material fact, or omits to state any material fact necessary to make the
statements or facts contained therein not misleading.

                                   ARTICLE 5
                                   ---------
                     REPRESENTATIONS AND WARRANTIES OF BUYER
                     ---------------------------------------

         Buyer and Guarantor hereby jointly and severally represent and warrant
to Seller as follows:

5.1 ORGANIZATION AND GOOD STANDING. Buyer is a Delaware corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has full power and authority to conduct its business as
presently being conducted and to own and lease its properties and assets.

5.2 AUTHORITY; AUTHORIZATION; BINDING EFFECT. Buyer has all necessary power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement and to perform its obligations under
this Agreement. Copies of all resolutions of the board of directors of Buyer
with respect to the transactions contemplated by this Agreement, certified by
the Secretary or an Assistant Secretary of Buyer, in form reasonably
satisfactory to counsel for Seller, have been delivered to Seller. This
Agreement has been duly executed and delivered by Buyer and constitutes a legal,
valid and binding obligation of Buyer, enforceable

<PAGE>
                                                                  Page 48 of 107

against Buyer in accordance with its terms, except as such enforcement may be
limited by Enforceability Limitations.

5.3 NO CONFLICT OR VIOLATION. The execution and delivery of this Agreement, the
consummation of the transactions contemplated by this Agreement and the
performance by Buyer of its obligations under this Agreement, do not and will
not result in or constitute (i) a violation of or a conflict with any provision
of the certificate of incorporation or by-laws of Buyer, (ii) a breach of, a
loss of rights under, or constitute an event, occurrence, condition or act which
is or, with the giving of notice, the lapse of time or the happening of any
future event or condition, would become, a material default under, any term or
provision of any contract, agreement, indebtedness, lease, commitment, license,
franchise, permit, authorization or concession to which Buyer is a party or
(iii) a violation by Buyer of any statute, rule, regulation, ordinance, by-law,
code, order, judgment, writ, injunction, decree or award.

5.4 CONSENTS AND APPROVALS. Except as disclosed on SCHEDULE 5.4, no consent,
approval or authorization of, or declaration, filing or registration with, any
Person is required to be made or obtained by Buyer in connection with the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement.

5.5 NO PROCEEDINGS. There is no Proceeding pending or, to the knowledge of
Buyer, threatened against, relating to or affecting in any adverse manner the
transactions contemplated by this Agreement.

5.6 BROKERS. Buyer or its Affiliate has entered into an agreement, arrangement
or understanding with Shoniker and Associates which will result in the
obligation to pay a finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby. Any such fee, commission
or payment has been or will be paid exclusively by Buyer or its Affiliate.

5.7 MATERIAL MISSTATEMENTS OR OMISSIONS. None of the representations and
warranties by Buyer in this Agreement contains any untrue statement of a
material fact, or omits to state any material fact necessary to make the
statements or facts contained therein not misleading.

5.8 GUARANTOR. The representations and warranties in Section 5.1, 5.2, 5.3, 5.4,
5.5, 5.6 and 5.7 are true in respect of Guarantor as if "Buyer" is read to mean
"Guarantor" and "Agreement" is read to mean "Agreement and Guaranty," except
that Guarantor is incorporated under the laws of Ontario.

                                   ARTICLE 6
                                   ---------
                          COVENANTS AND CONDUCT OF THE
                          ----------------------------
                       PARTIES PRIOR TO AND AFTER CLOSING
                       ----------------------------------

         Seller, on the one hand, and Buyer, on the other hand, each covenant
and agree with the other as follows:

6.1 INVESTIGATION BY BUYER. During the period beginning on the date of this
Agreement and ending on the Closing Date, Buyer and each Representative of Buyer
may continue to conduct a

<PAGE>
                                                                  Page 49 of 107

due diligence review of the Corporation and the Business. In connection with
such due diligence review, Buyer and each Representative of Buyer shall be
granted full access to all Current Real Property upon reasonable prior notice
and during normal business hours, and Seller shall, upon request by Buyer,
arrange for Buyer to be granted full access to any third party warehouses or
other facilities where property of the Corporation is located. In connection
with such due diligence review, Seller agrees, and shall cause each
Representative of Seller, upon reasonable prior notice, to (i) cooperate with
Buyer and each Representative of Buyer, (ii) provide all information, and all
documents and other data relating to such information, reasonably requested by
Buyer or any Representative of Buyer (including, without limitation, (A) the
work papers of the Corporation's Accountants, (B) the Tax Returns of the
Corporation or any Subsidiary (or Seller or any Affiliate of Seller or the
Corporation to the extent that the Corporation is jointly and severally liable
for Taxes with respect to such Tax Return), and (C) all responses to auditor's
inquiry letters for the past 5 years or related to the preparation of the
Financial Statements) and (iii) permit Buyer and each Representative of Buyer to
inspect any assets of the Corporation. Buyer shall not be given access to
information regarding Seller's negotiations to sell the Business. Buyer shall
disclose to Seller in writing any information gained in its due diligence review
which might reasonably be adjudged to result in a breach of any of Seller's
representations, warranties and covenants. Except as set forth in Section 6.2,
Buyer and each Representative of Buyer shall be granted full access to all
Current Real Property upon reasonable prior notice and during normal business
hours. In connection with such due diligence review, Seller agrees, and shall
cause each Representative of Seller, upon reasonable prior notice, to (i)
cooperate with Buyer and each Representative of Buyer, (ii) provide all
information, and all documents and other data relating to such information,
reasonably requested by Buyer or any Representative of Buyer (including, without
limitation, the work papers of the Corporation's Accountants and all responses
to auditor's inquiry letters for the past 5 years or related to the preparation
of the Financial Statements) and (iii) permit Buyer and each Representative of
Buyer to inspect any assets of the Corporation.

6.2 ENVIRONMENTAL AUDITS. In addition to any environmental investigations and
audits conducted by Buyer or its Representatives prior to the date of this
Agreement, Buyer shall, at Buyer's sole expense, be permitted to cause further
environmental audits of the Real Property to be conducted assessing the presence
and/or disposition of Hazardous Substances and compliance with Environmental
Laws provided, however, that prior to conducting any intrusive testing on the
Corporation's property Buyer shall have executed and delivered an agreement,
acceptable to Seller which, among other things, requires Buyer and its
Representatives to comply with all applicable Environmental Laws and
Corporation's policies and procedures, provides evidence of general liability,
automobile, and pollution liability insurance and indemnification of Seller from
and against any personal injury and property damage arising from such intrusive
testing, and provided further that Buyer shall provide for Seller's approval a
written scope of work that describes the media to be sampled, number, depth and
location of samples, constituents for which analysis will be performed,
analytical methodologies to be used and other pertinent information. No
intrusive testing shall occur without Seller's prior approval which shall not be
unreasonably withheld. Seller shall cause the Corporation to grant a license to
Buyer's qualified environmental consultants to enter upon the Current Real
Property, upon giving the Corporation reasonable notice, with persons and
materials to conduct such environmental audits. Buyer shall provide Seller with
a copy of all draft reports of the environmental audits and provide Seller at

<PAGE>
                                                                  Page 50 of 107

least three business days to comment on such drafts. Buyer also shall provide
Seller with a copy of all final environmental audit reports.

6.3 MATTERS RELATING TO REAL PROPERTY .

         (a) Buyer shall obtain, at Buyer's sole cost and expense, except that
Seller shall be responsible for the cost of the title search continuation work
through the Closing Date, a commitment from Attorneys Title Insurance Fund or
any other title insurance company acceptable to Buyer (the "Title Company") for
the issuance of an American Land Title Association ("ALTA") extended coverage
owner's policy of title insurance (including mechanics' lien coverage) for each
parcel included in the Medina Real Property setting forth the status of title to
each such parcel (individually a "Title Commitment" and collectively the "Title
Commitments"). The Title Commitments shall be accompanied by true, complete and
legible copies of all Encumbrances identified therein. At Closing, the policies
to be issued pursuant to the Title Commitments (individually a "Title Policy"
and collectively the "Title Policies") shall insure that the Corporation has
good, marketable and indefeasible title to the Medina Real Property, subject
only to those Encumbrances accepted by Buyer pursuant to subparagraph (c) of
this Section 6.3 ("Permitted Title Encumbrances"), and shall include the
additional coverages and endorsements described in SCHEDULE 6.3 attached hereto
(collectively the "Endorsements"). At the Closing, Seller shall deliver to the
Title Company such affidavits (including an affidavit of title) and other
documentation as shall be necessary to enable the Title Company to issue the
Title Policies with the Endorsements subject only to Permitted Title
Encumbrances and with a non-imputation endorsement reasonably acceptable to
Buyer. Buyer shall pay all fees and premiums incurred in the issuance of the
Title Policies.

         (b) Buyer shall obtain, at Buyer's sole cost and expense, current
surveys covering each parcel included in the Owned Current Real Property
(individually a "Survey" and collectively the "Surveys"), dated subsequent to
this Agreement, each of which shall be prepared by a surveyor duly licensed
under the laws of the state in which such Current Real Property is located and
approved by Buyer. Each survey (i) shall be in form and substance satisfactory
to the Buyer and the Title Company, (ii) shall be prepared in accordance with
the 1997 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys
as adopted by ALTA and the American Congress on Surveying & Mapping and (iii)
shall be certified to Buyer, the Corporation and the Title Company using the
form of certification attached hereto as EXHIBIT 6.3.

         (c) On or prior to the 10th business day following the Buyer's receipt
of the Title Commitment or all of the Surveys, whichever is later, Buyer shall
notify Seller in writing (the "Defect Notice") of any unacceptable Encumbrances
or other matters disclosed by either the Title Commitments or the Surveys
(individually a "Disapproved Encumbrance" and collectively the "Disapproved
Encumbrances"). Seller agrees to use commercially reasonable efforts to
eliminate the Disapproved Encumbrances or otherwise resolve the Disapproved
Encumbrances to the satisfaction of Buyer on or before the Closing Date. Seller
shall have 3 business days after receipt of the Defect Notice to notify Buyer in
writing (i) that the Disapproved Encumbrances will be eliminated or otherwise
resolved as provided above or (ii) that the Disapproved Encumbrances will not be
eliminated or otherwise resolved. If Seller elects not to cause any Disapproved
Encumbrance to be eliminated or otherwise resolved, Buyer shall have the right,
in its sole discretion, for a period of 5 business days following the expiration
of the 3 business day

<PAGE>
                                                                  Page 51 of 107

period provided for above, to notify Seller of Buyer's election to either waive
such objection and proceed with the Closing, without any reduction in the
Purchase Price, or to terminate this Agreement. Absent any notice from Buyer
within such 5 business day period, Buyer shall be deemed to have elected to
terminate this Agreement. If Seller gives notice that one or more Disapproved
Encumbrances will be eliminated or otherwise resolved, and such Disapproved
Encumbrances are not so eliminated or otherwise resolved on or before the
Closing Date, Buyer shall have the right to either (i) terminate this Agreement
by written notice to Seller or (ii) proceed with the Closing, with an abatement
of the Purchase Price equal to the actual cost of eliminating or resolving such
Disapproved Encumbrance.

6.4 NOTIFICATIONS, CONSENTS AND APPROVALS. As soon as practicable, Buyer and
Seller, as applicable, shall commence all reasonable actions to obtain the
consents and approvals and to make the filings set forth on SCHEDULE 6.4 (the
"Required Consents and Filings") required to consummate the transactions
contemplated by this Agreement.

6.5 CONDUCT PENDING CLOSING. Except as disclosed on SCHEDULE 6.5,

         (a) From the Effective Date to the Closing Date, and except as
otherwise specifically provided in this Agreement or consented to or approved by
Buyer in advance in writing, such consent or approval not to be unreasonably
withheld or delayed, Seller agrees as follows:

             (i) The Corporation shall carry on its business substantially in
the same manner as heretofore conducted and shall not engage in any transaction
or activity, enter into, terminate or amend any agreement or make any commitment
except in the ordinary course of business.

             (ii) The Corporation shall use reasonable commercial efforts to
preserve its existence and business organization intact and to preserve its
properties, assets and relationships with its employees, suppliers, customers
and others with whom it has business relations.

             (iii) The Corporation shall not (i) grant any increase in
compensation to any employee or (ii) enter into, or amend in any material
respect, any Employee Benefit Plan.

             (iv) The Corporation shall not (A) grant any special conditions
with respect to any Account Receivable other than in the ordinary course of
business (e.g., extended terms), (B) fail to pay any Account Payable on a timely
basis in the ordinary course of business consistent with past practice, (C)
except as described on SCHEDULE 6.5 or as otherwise disclosed in this Agreement,
make or commit to make any capital expenditures, (D) purchase Inventory in
excess of supplies necessary in the ordinary course of business and, in no event
exceeding, for any particular item, a 6 month supply (E) ship Inventory or take
any other action designed or having the effect of accelerating the generation of
Accounts Receivable in a manner inconsistent with past practice or (F) start up
or acquire any new business or product line.

             (v) The Corporation shall not enter into any settlement with
respect to any Proceeding against or relating to the Corporation, or any of its
officers, directors, employees, or properties, assets or business.

             (vi) The Corporation shall not make any payment of principal
with respect to any debt owing to Seller or any other Affiliate; and Seller
hereby waives any rights it may have to any principal payments owed to it by the
Corporation during this period, provided that the transaction contemplated by
this Agreement is completed.

<PAGE>
                                                                  Page 52 of 107

                  (vii) No change or amendment shall be made in or to the
certificate or articles of incorporation or other governing or organizational
charter or instruments of the Corporation.

                  (viii) The Corporation shall not declare, pay or set aside for
payment any dividend or other distribution (whether in cash, stock or property)
with respect to its capital stock or directly or indirectly redeem, purchase or
otherwise acquire any shares of its capital stock.

                  (ix) Neither the Seller nor the Corporation shall voluntarily
take any action which would cause, or voluntarily fail to take any action the
failure of which would cause, any representation or warranty of Seller contained
in this Agreement to be breached or untrue in any material respect.

                  (x) The Corporation shall not make any payment of interest
with respect to any debt owing to Seller or any other Affiliate; and Seller
hereby waives any rights it may have to any interest payments owed to it by the
Corporation during this period, provided that the transaction contemplated by
this Agreement is completed.

         (b) From the date of this Agreement to the Closing Date, and except as
otherwise specifically provided in this Agreement or consented to or approved by
Seller in advance in writing, such consent or approval not to be unreasonably
withheld or delayed, Buyer shall not voluntarily take any action which would
cause, or voluntarily fail to take any action the failure of which would cause,
any representation or warranty of Buyer contained in this Agreement to be
breached or untrue in any respect.

6.6 NOTIFICATION OF CERTAIN MATTERS.

         (a) Seller shall give prompt written notice to Buyer of (i) any fact or
circumstance, or any occurrence or failure to occur of any event of which Seller
has Knowledge, which fact, circumstance, occurrence or failure causes or, with
notice or the lapse of time, would cause any representation or warranty of
Seller contained in this Agreement to be breached or untrue or inaccurate in any
respect any time from the date of this Agreement to the Closing Date and (ii)
any failure of Seller to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by Seller under this Agreement.

         (b) Buyer shall give prompt written notice to Seller of (i) any fact or
circumstance, or any occurrence or failure to occur of any event of which Buyer
has knowledge, which fact, circumstance, occurrence or failure causes or, with
notice or the lapse of time, would cause any representation or warranty of Buyer
contained in this Agreement to be breached or untrue or inaccurate in any
respect any time from the date of this Agreement to the Closing Date and (ii)
any failure of Buyer to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by Buyer under this Agreement.

<PAGE>
                                                                  Page 53 of 107

6.7 DELIVERY OF INTERIM FINANCIAL STATEMENTS. Within 20 days of the end of each
month after the execution of this Agreement and prior to the Closing Date,
Seller shall deliver or cause to be delivered to Buyer internally prepared
unaudited monthly and year-to-date interim financial statements of the
Corporation.

6.8 ESCROW AGREEMENT. On the Closing Date, each of Seller, Buyer and the Escrow
Agent shall enter into an escrow agreement substantially in the form attached as
EXHIBIT 6.8 (the "Escrow Agreement").

6.9 REPAYMENT OF EMPLOYEE ADVANCES. On or prior to the Closing Date, Seller
shall cause all outstanding employee advances to be repaid to the Corporation in
full, other than ordinary course travel advances in amounts consistent with past
practice.

6.10 TERMINATION OF RELATED PERSON ARRANGEMENTS. All agreements and other
arrangements, whether oral or written, with Related Persons which are disclosed
pursuant to Section 4.3 or 4.17 shall be terminated on or prior to the Closing
Date, except to the extent the continuation thereof is specifically consented to
by Buyer in writing.

6.11 ACCOUNTS RECEIVABLE PAYMENTS. After the Closing Date, Buyer will exercise
its commercially reasonable efforts to collect the Accounts Receivable, but
without being required to incur any third party expenses, so as to minimize the
amount of the Accounts Receivable which remain uncollected 120 days after the
Effective Date. Seller will deliver to Buyer on the Closing Date an aging report
of the Accounts Receivable as of the Effective Date and Buyer will promptly
deliver such reports to Seller on a monthly basis after the Closing Date. All
payments with respect to Accounts Receivable received by the Buyer after the
Effective Date from a customer or other debtor shall be credited to the oldest
accounts receivable of the Corporation with respect to that customer, unless the
customer or other debtor designates such payment as being made with respect to a
specific debt other than its oldest accounts receivable. To the extent that the
aggregate Accounts Receivable as of the Effective Date which are not collected
in full within 120 days of the Effective Date exceed the Corporation's allowance
for bad debts and write-offs as shown on the Effective Date Financial Report
(the "Bad Debt Allowance"), after Buyer so notifies Seller and the parties
discuss the matter, the excess of such uncollected accounts receivable ("Excess
Uncollected Receivables") shall be paid by Seller to Buyer within 30 days of
notification by Buyer of the applicable amount. At any time that Seller
reimburses Buyer for Excess Uncollected Receivables, the Corporation will be
required to deliver to Seller an assignment of the Excess Uncollected
Receivables, without recourse, for $1.00 consideration. In the event of any such
assignment of Excess Uncollected Receivables, Buyer shall cause the Corporation
to cooperate fully with Seller, at Seller's expense, in collecting such Excess
Uncollected Receivables including, without limitation, the prompt remitting to
Seller of all payments received by the Corporation from any obligor of any such
Excess Uncollected Receivable, such payments to be credited to the oldest
accounts receivable of the Corporation, with respect to that obligor, unless the
obligor or other debtor designates such payment as being made with respect to a
specific debt other than its oldest account receivable. To the extent that the
aggregate Accounts Receivable as of the Effective Date collected within 120 days
of the Effective Date exceed aggregate Accounts Receivable less the Bad Debt
Allowance as of the Effective Date, after Buyer so notifies Seller and the
parties discuss the matter, the excess of

<PAGE>
                                                                  Page 54 of 107

such collected Accounts Receivable shall be paid by Buyer to Seller within 150
days after the Effective Date.

6.12 STANDSTILL AGREEMENT. Seller shall not negotiate the sale of the Shares or
the Business with any other Person before September 24, 2001. If Seller or its
agents (including, but not limited to, J.H. Chapman) violate this condition,
Seller shall pay Buyer or Buyer's Affiliates reasonable out-of-pocket third
party expenses incurred in connection with the transactions contemplated by this
Agreement up to $1,000,000.

6.13 SATISFACTION OF INDEBTEDNESS. On or prior to the Closing Date, Seller shall
cause the Corporation to pay, or cause to be paid, its Indebtedness as reflected
on the Financial Statements or the Interim Financial Statements or to otherwise
obtain a release of all liability of the Corporation with respect thereto
satisfactory in form and substance to Buyer; provided, however, that if the
parties hereto agree to continue the Medina Mortgage, the Medina Mortgage shall
not be paid by the Corporation or Seller. Such satisfaction of Indebtedness
shall be done in a manner (i) consistent with the methodology used to prepare
the February 24, 2001 Pro Forma Debt Free Balance Sheet and (ii) without
resulting in any liability to the Corporation, Buyer or any Affiliate of Buyer
for any Tax.

6.14 LIQUIDATION OF TKI FOODS INTERNATIONAL, INC. (THE "FSC"). On or prior to
the Closing Date, Seller shall cause the Corporation to liquidate the FSC at the
expense of Seller or, to the extent such liquidation cannot be completed before
the Closing Date, Seller shall pay directly or shall reimburse Buyer for any
costs incurred by Buyer in effecting such liquidation, including, without
limitation, any Tax Liability resulting from such liquidation.

6.15 INSURANCE. Seller shall cause the Corporation to maintain its current
products liability and other insurance coverage through the Closing Date. Buyer
shall obtain or maintain equivalent products liability insurance coverage
insuring against claims relating to products manufactured after the Closing
Date. For the period between the Effective Date and the Closing Date, Seller
shall purchase, from an insurer mutually agreeable to Buyer and Seller, workers
compensation insurance for the Corporation with coverage that is retroactive to
the Effective Date. Buyer shall, through an adjustment to the Purchase Price,
reimburse Seller $20,170 for the property insurance premium paid by Seller that
affords the Corporation insurance coverage after the Effective Date. Buyer shall
be responsible for the deductible under any insurance policies held by the
Seller for the benefit of the Corporation for (i) claims made against the
Corporation relating to events that occurred during the period beginning on the
Effective Date and ending on the Closing Date (for occurrence based coverage)
and (ii) for claims made against the Corporation during the period beginning on
the Effective Date and ending on the Closing Date (for claims made coverage).

6.16     TAX MATTERS.

         (a) TAX YEAR CLOSING. For federal and New York State income tax
purposes the Closing will result in a closing of the Corporation's and any of
its Subsidiary's tax years. The federal tax liability of the Corporation and any
Subsidiary for the Pre-Closing Period shall be the liability of Seller and
shall be included in Seller's consolidated return covering the Pre-Closing
Period. The New York State tax liability of the Corporation and any Subsidiary
for the Pre-

<PAGE>
                                                                  Page 55 of 107

Closing Period shall be the liability of Seller and shall be included in
Seller's combined report covering the Pre-Closing Period. The tax liability
of the Corporation and any Subsidiary for any state or locality other than New
York State for the Pre-Closing Period shall be the liability of Seller and
shall be reported on a separately-filed return prepared and filed by Seller.

         (b) ALLOCATION OF TAX LIABILITY. The taxable income or loss of the
Corporation for the Pre-Closing Period shall be allocated between the first
federal income Tax Return due for Buyer after the Closing and the consolidated
federal income tax return due for Seller in accordance with Treas. Reg. Section
1.1502-76(b). Any taxable income or loss that must be reported on any state or
local income tax return attributable to the Pre-Closing Period shall be
allocated in the same manner as set forth above. Taxable income or loss for the
Pre-Closing Period shall be determined on a closing-of-the-books basis as of the
close of business on the Effective Date.

         (c) COOPERATION. Seller shall prepare and file on a timely basis all
Tax Returns covering taxable periods ending on or prior to the Effective Date.
Buyer shall prepare and file on a timely basis all Tax Returns which include any
period following the Effective Date. Buyer and Seller shall furnish or cause to
be furnished to each other, upon request, as promptly as practicable, such
information (including, without limitation, access to books and records) and
assistance relating to the Corporation as is reasonably necessary for
preparation and filing of any Tax Return, for any audit relating thereto, and
for the prosecution or defense of any claim, suit or proceeding relating to any
proposed tax adjustment. Buyer and Seller shall cooperate with each other in the
conduct of any audit or other proceeding involving the Corporation and any
Subsidiary or any other entity with which it was or is consolidated or combined
for any tax purpose.

         (d) TAX DETERMINATION. Seller shall (i) file its 2002 Federal and New
York State ("NYS") Tax Returns expeditiously and (ii) avail itself of the
procedure provided in Section 6501(d) of the Code and Section 1083(c)(6) of the
NYS Tax Law to seek an accelerated determination of its Taxes (and Taxes of the
Corporation, or any Subsidiary and any Affiliate for which a consolidated or
combined return is filed) for periods ending on or prior to the April 2002 tax
year of Seller. If the Governmental Authority to which an application for
accelerated determination of Taxes is made accepts such an application and
conducts an audit, Seller shall not liquidate or dissolve prior to the
resolution (including final settlement and any payment related thereto) of an
audit by the Governmental Authority for such periods. In the event of an audit
by the Governmental Authority, on conclusion of such audit Seller shall use its
best efforts to obtain from the Governmental Authority a closing agreement or
other written determination of final resolution of Tax liabilities that finally
and conclusively determines the Tax liabilities for the Corporation or any
Subsidiary (and any Affiliate of either). If no audit is conducted by the
Internal Revenue Service or NYS with respect to the foregoing tax periods and
Persons, Seller shall not liquidate or dissolve prior to the end of the usual
statutory period for assessment under Section 6501 of the Code and NYS law with
respect to these tax periods.

6.17 EMPLOYEE MATTERS.

         (a) KARL D. SIMONSON. Seller shall make any severance or related
payments owing to Karl D. Simonson under (i) the Employment Agreement or (ii)
any other employment arrangements. So long as Mr. Simonson remains employed by
Seller, Seller shall make Mr.

<PAGE>
                                                                  Page 56 of 107

Simonson's services available to Buyer for up to 6 months subsequent to the
Closing Date. Buyer shall compensate Seller for Mr. Simonson's services at the
hourly rate of $95 per hour and for reasonable out-of-pocket expenses incurred
by Seller or Mr. Simonson in connection with the services rendered by Mr.
Simonson. Buyer shall reimburse Seller as described above within 30 days of
receipt of an itemization of payments Seller asserts are owing by Buyer in
connection with this provision.

         (b) ACCRUALS FOR PROFIT SHARING AND PENSION COSTS. If the amounts
accrued on the Effective Date Financial Report for accrued profit sharing and
accrued pension costs for the Corporation's fiscal year ending April 2002 are
not paid to employees by May 31, 2002, then the Corporation will pay the unpaid
portion of such accrued amounts to Seller within 30 days.

6.18 SEVERANCE POLICY. Buyer shall not change the Severance Policy attached as
SCHEDULE 6.18 during the 6 month period following the Effective Date and will
honor this policy with respect to employees of the Corporation who are
terminated within that period. Except as provided in the preceding sentence,
Seller acknowledges that no provision of this Agreement will limit the ability
of the Corporation to modify any other term or condition of employment of any
employee of the Corporation on or after the Closing Date.

6.19 SPECIFIC CLAIM. Seller shall not liquidate or dissolve until it delivers
evidence, reasonably satisfactory to Buyer, that all of the claims described in
Item 1 of SCHEDULE 4.14 and any amended related claims are completely settled or
resolved and all obligations of Seller under any related settlement agreement or
judgment are fully satisfied.

                                   ARTICLE 7
                                   ---------
                       CONDITIONS TO SELLER'S OBLIGATIONS
                       ----------------------------------

         The obligation of Seller to consummate the transactions contemplated by
this Agreement, is subject, in the absolute and sole discretion of Seller, to
the satisfaction, on or prior to the Closing Date, of each of the following
conditions (any of which, in Seller's absolute and sole discretion, may be
waived in writing in whole or in part without impairing or affecting any right
of indemnification or other right or remedy under this Agreement):

7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and
warranties of Buyer and Guarantor contained in this Agreement shall be true and
correct in all material respects at and as of the Closing Date, except as and to
the extent that the facts and conditions upon which such representations and
warranties are based are expressly required or permitted to be changed by the
terms of this Agreement, and Buyer shall have performed in all material respects
all agreements and covenants required by this Agreement to be performed by it
prior to or at the Closing Date.

7.2 NO PROCEEDINGS. No Proceeding shall be pending, threatened or anticipated
against Buyer, Guarantor or Seller seeking to enjoin, or adversely affecting,
the consummation of the transactions contemplated by this Agreement.

<PAGE>
                                                                  Page 57 of 107

7.3 CLOSING CERTIFICATES. Buyer shall have furnished Seller with a certificate
of an officer of Buyer, in form and substance reasonably satisfactory to Seller,
to evidence compliance with the conditions set forth in Sections 7.1 and 7.2.
Guarantor shall have furnished Seller with a certificate of an officer of
Guarantor, in form and substance reasonably satisfactory to Seller, to evidence
compliance with the conditions set forth in Sections 7.1 and 7.2.

7.4 LEGAL OPINION. Seller shall have received an opinion of Hodgson Russ LLP,
substantially in the form of EXHIBIT 7.4(a). Seller shall have received an
opinion of Mills & Mills LLP, substantially in the form of EXHIBIT 7.4(b).

7.5 ESCROW AGREEMENT. Each of Buyer and the Escrow Agent shall have executed and
delivered the Escrow Agreement.

7.6 REQUIRED CONSENTS AND FILINGS. The Required Consents and Filings shall have
been obtained or made.

7.7 BRIDGE FINANCING.

         (a) Seller shall be satisfied with the terms and conditions of the
Restated Mortgage Note, Mortgage Modification and Extension Agreement and all
other bridge financing documents.

         (b) Buyer shall have executed and delivered to Seller the Restated
Mortgage Note and the Mortgage Modification and Extension Agreement.

         (c) M&T Real Estate, Inc. shall have executed an assignment of the
Medina Mortgage substantially in the form of EXHIBIT 7.7(c).

         (d) Buyer's senior lender shall have executed and delivered to Seller
the Letter of Credit.

                                   ARTICLE 8
                                   ---------
                        CONDITIONS TO BUYER'S OBLIGATIONS
                        ---------------------------------

         The obligation of Buyer to consummate the transactions contemplated by
this Agreement, is subject, in the absolute and sole discretion of Buyer, to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions (any of which, in Buyer's absolute and sole discretion, may be waived
in writing in whole or in part without impairing or affecting any right of
indemnification or other right or remedy under this Agreement):

8.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects at and as of the Closing Date, except as and to the extent
that the facts and conditions upon which such representations and warranties are
based are expressly required or permitted to be changed by the terms of this
Agreement and Seller shall have performed or caused to be performed in all

<PAGE>
                                                                  Page 58 of 107

material respects all agreements and covenants required by this Agreement to be
performed or caused to be performed by it prior to or at the Closing Date.

8.2 REQUIRED CONSENTS AND FILINGS. The Required Consents and Filings shall have
been obtained or made.

8.3 NO PROCEEDINGS. No Proceeding shall be pending, threatened or anticipated
against Buyer, Guarantor or Seller seeking to enjoin, or adversely affecting,
the transactions contemplated by this Agreement.

8.4 NO MATERIAL ADVERSE CHANGE. There shall have been no material adverse change
in the business, assets or financial condition of the Corporation, other than as
permitted by Section 10.2.

8.5 CLOSING CERTIFICATE. Seller shall have furnished or caused to be furnished
to Buyer a certificate or certificates in form reasonably satisfactory to Buyer
to evidence compliance with the conditions set forth in Sections 8.1, 8.2, 8.3
and 8.4.

8.6 LEGAL OPINION. Buyer shall have received an opinion from Nixon Peabody LLP,
substantially in the form of EXHIBIT 8.6.

8.7 ESCROW AGREEMENT. Each of Seller and the Escrow Agent shall have executed
and delivered the Escrow Agreement.

8.8 EMPLOYMENT ARRANGEMENTS, RELEASE AND RESIGNATIONS. Seller and Karl D.
Simonson shall have amended the Employment Agreement to release the Corporation
from any obligation or liability under the Employment Agreement and any other
employment arrangements. Mr. Simonson shall have resigned from or been
terminated by the Corporation as an employee and shall have signed and delivered
to the Corporation a release of all claims against the Corporation. All officers
and directors of the Corporation shall have resigned as officers and directors
of the Corporation.

8.9 NO CASUALTY OR ENVIRONMENTAL PROBLEMS. Buyer shall not have elected to
terminate this Agreement in accordance with Section 6.3 or Section 10.2.

8.10 FINANCING.

         (a) Buyer shall have obtained financing for the purchase of the Shares
acceptable to the Buyer in its sole discretion.

         (b) Buyer and Buyer's senior lender shall be satisfied with the terms
and conditions of the Restated Mortgage Note, Mortgage Modification and
Extension Agreement and all other bridge financing documents.

         (c) Seller shall have executed and delivered to Buyer the Mortgage
Modification and Extension Agreement.

<PAGE>
                                                                  Page 59 of 107

         (d) M&T Real Estate, Inc. shall have executed and delivered an
assignment of the Medina Mortgage substantially in the form of EXHIBIT 7.7(c).

8.11 SECTION 6.13 COVENANTS. The Covenants in Section 6.13 shall have been
satisfied.

                                   ARTICLE 9
                                   ---------
                 INDEMNIFICATIONS AND OTHER POST CLOSING MATTERS
                 -----------------------------------------------

9.1 SURVIVAL AND INDEMNIFICATIONS.

         (a) SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.

             (i) All representations and warranties of Seller contained in this
Agreement shall survive the Effective Date for the duration of the Claims Period
and then expire, EXCEPT THAT (A) the representations and warranties in Section
4.4 (Title Matters), Section 4.25 (Environmental Matters) and Section 4.9 (Tax
Matters) shall survive the Closing until the later of December 31, 2003 or the
date on which the Seller is liquidated and dissolved. Any claim made by Buyer
with respect to the representations and warranties of Seller contained in this
Agreement must be initiated by Buyer during the Claims Period, except that any
claim with respect to the representations and warranties in Section 4.25
(Environmental Matters), Section 4.9 (Tax Matters) and Section 4.4 (Title) must
be initiated by the later of December 31, 2003 or the date on which the Seller
is liquidated and dissolved. All of the representations and warranties of Seller
contained in this Agreement shall in no respect be limited or diminished by any
past or future inspection, investigation, examination or possession on the part
of Buyer or its Representatives or any notice pursuant to Section 6.6(a). All
covenants and agreements made by Seller contained in this Agreement (including,
without limitation, the obligation of Seller to convey the Shares to Buyer free
and clear of any Encumbrance and the indemnification obligations of Seller set
forth in this Section 9.1) shall survive the Closing Date until fully performed
or discharged.

             (ii) All representations and warranties of Buyer contained in this
Agreement shall survive the Closing Date for the duration of the Claims Period.
Any claim made by Seller with respect to the representations and warranties of
Buyer contained in this Agreement must be initiated during the Claims Period.
All of the representations and warranties of Buyer contained in this Agreement
shall in no respect be limited or diminished by any past or future inspection,
investigation, examination or possession on the part of Seller or their
Representatives or any notice pursuant to Section 6.6(b). All covenants and
agreements made by Buyer contained in this Agreement (including the
indemnification obligations of Buyer set forth in this Section 9.1) shall
survive the Closing Date until fully performed or discharged.

         (b) GENERAL INDEMNIFICATION BY SELLER. Seller hereby agrees to defend,
indemnify and hold harmless Buyer and its Affiliates, and the directors,
officers and employees of Buyer and its Affiliates, from, against and in respect
of the following:

<PAGE>
                                                                  Page 60 of 107

             (i) any and all Losses suffered or incurred by any of them by
reason of any breached or untrue representation or warranty of Seller contained
in this Agreement and any Proceeding incident thereto;

             (ii) any and all Losses suffered or incurred by any of them (before
or after the Closing) by reason of the nonfulfillment of any covenant or
agreement by Seller contained in this Agreement (including, without limitation,
the payment or performance by Seller of its obligations under Sections 2.3 and
2.5 with respect to purchase price adjustments) and Seller's obligations under
Section 9.1(c) (Tax Indemnification), Section 9.1(d) (Workers Compensation
Indemnification) and Section 9.1(e) (Specific Claim Indemnification);

             (iii) any and all Losses suffered or incurred by any of them by
reason of any demands, claims, inquiries, arbitration or lawsuits of any former
shareholder of the Corporation, or any such shareholder's personal
representative or any other person making a claim based on a relationship with a
shareholder of the Corporation;

             (iv) any and all Losses suffered or incurred by any of them
arising from any Indebtedness of the Corporation on the Effective Date,
including, without limitation, any Loss resulting from satisfaction of
Indebtedness in a manner that gives rise to a Tax Liability, except to the
extent reflected in the Effective Date Financial Report;

             (v) any and all Losses suffered or incurred by any of them
attributable to the operation of the Business or the activities of the
Corporation on or prior to the Closing Date, except to the extent such Losses
(A) are disclosed in this Agreement and specifically made an obligation of Buyer
or (B) are fully reflected on the Effective Date Financial Report and used in
calculating the Purchase Price Closing Adjustment; and

             (vi) any and all Losses suffered or incurred by any of them by
reason of (A) any failure of any Employee Benefit Pension Plans maintained by
the Corporation to satisfy any discrimination testing requirements as required
by Governmental Requirements, whether in order to correct or compensate for such
failure or otherwise and (B) any withdrawal liability of the Corporation or an
ERISA Affiliate relating to any Multiemployer Plan.

         (c) TAX INDEMNIFICATION.

             (i) Seller agrees to be responsible for and to indemnify and hold
Buyer, its Affiliates and the Corporation harmless from and against any and all
Losses incurred by Buyer arising from any Taxes that may be imposed upon or
assessed against the Corporation or Buyer or the assets of the Corporation or
Buyer (A) for all periods ending on or prior to the Effective Date (including,
without limitation, Taxes for which the Corporation is jointly and severally
liable with Seller (or any Affiliate of Seller or the Corporation) imposed by
Treas. Regs. Section 1.1502-6(a) or any similar provision of state, local or
foreign law) and for all Taxes attributable to the Corporation's operations
prior to or on the Effective Date or (B) arising by reason of any breach by
Seller of any of the representations contained in Section 4.9 (Tax Matters) or
the covenants contained in Section 6.13, 6.14, or 6.16.

<PAGE>
                                                                  Page 61 of 107

                  (ii) Any claim for indemnity under this Section 9.1(c) may be
made at any time prior to 60 days after the expiration of the applicable tax
statute of limitations with respect to the relevant taxable period (including
all periods of extension, whether automatic or permissive).

         (d) WORKERS COMPENSATION INDEMNIFICATION. Seller agrees to be
responsible for and shall indemnify Buyer with respect to Losses arising from
workers compensation claims relating to periods before the Effective Date.

         (e) SPECIFIC CLAIMS INDEMNIFICATION.

             (i) Seller agrees to be responsible for and shall indemnify Buyer
with respect to Losses arising from the matter described in Item 1 on SCHEDULE
4.14 or any breach by Seller of the covenants contained in Section 6.19; and

             (ii) Seller agrees to be responsible for and shall indemnify Buyer
and its lenders with respect to Losses arising from the security interest
underlying Illinois UCC-1 No. 3592597 filed 9/27/96.

         (f) INDEMNIFICATION BY BUYER. Buyer, and Guarantor, jointly and
severally, hereby agree to indemnify and hold harmless Seller and its
Affiliates, and the directors, officers and employees of Seller and its
Affiliates from, against, and in respect of:

             (i) any and all Losses suffered or incurred by any of them
resulting from any breached or untrue representation or warranty of Buyer
contained in this Agreement and any Proceeding incident thereto; or

             (ii) any and all Losses suffered or incurred by any of them
resulting from the nonfulfillment of any covenant or agreement of Buyer
contained in this Agreement.

         (g) LIMITATIONS ON LIABILITY. The indemnification obligations set forth
in this Article 9 shall apply only if the Closing occurs, and then only after
the aggregate amount of such obligations exceed $250,000 (the "Basket"), at
which time the indemnification obligations shall be effective as to the amount
by which such aggregate amount exceeds $50,000. The foregoing indemnification
threshold shall not apply to any indemnification obligations on account of a
breach of the representation and warranties in Section 4.9 (Tax Matters), a
breach of the covenants set forth in Section 2.6 (Taxes, Penalties and Fees),
Section 2.7 (Bridge Financing), Section 6.11 (Accounts Receivable Payments) and
Section 6.15 (Insurance), Section 9.1(c) (Tax Indemnification), Section 9.1(d)
(Workers' Compensation), Section 9.1(e) (Specific Claims Indemnification),
Section 10.7 Expenses, the adjustments required under Section 2.3 and 2.5, or
any Losses arising from an under-accrual for promotional coupons issued prior to
the Effective Date. Notwithstanding anything to the contrary contained in this
Agreement, Seller shall not have any liability to Buyer under this Section 9.1
or otherwise in an amount in excess of $13,500,000, except that a breach of a
representation or warranty or misrepresentation made by Seller in Section 4.4
(Title of Shares and Certain Other Assets) and any Losses arising from Seller's
fraud shall not be so limited.

<PAGE>
                                                                  Page 62 of 107

         (h) NOTIFICATION AND DEFENSE OF CLAIMS OR ACTIONS.

             (i) As used in this Section 9.1, any party seeking indemnification
pursuant to this Section 9.1 is referred to as an "indemnified party" and any
party from whom indemnification is sought pursuant to this Section 9.1 is
referred to as an "indemnifying party." An indemnified party which proposes to
assert the right to be indemnified under this Section 9.1 shall submit a written
demand for indemnification to the indemnifying party setting forth with
specificity the facts as then known which form the basis for the claim for
indemnification. With respect to claims based on actions by third parties, an
indemnified party shall, within 10 days after the receipt of notice of the
commencement of any Proceeding against it in respect of which a claim for
indemnification is to be made against an indemnifying party, notify the
indemnifying party in writing of the commencement of such Proceeding, enclosing
a copy of all papers served; provided, however, that the failure to so notify
the indemnifying party of any such claim, action, suit or proceeding shall not
relieve the indemnifying party from any liability which it may have to the
indemnified party, except to the extent that the indemnifying party is
prejudiced thereby. Thereafter, the indemnified party shall deliver to the
indemnifying party, within 5 days after receipt by the indemnified party, copies
of all further notices relating to such claim.

             (ii) If any third-party claim is brought against an indemnified
party and it gives notice to the indemnifying party of the claim, the
indemnifying party will be entitled to participate in the defense of such claim
and, to the extent that it wishes (unless the indemnifying party is also a party
to such claim and the indemnified party determines in good faith on the written
advice of counsel, a copy of which it shall provide to the indemnifying party,
that joint representation would be prejudicial to it), to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party and,
after notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim, the indemnifying party will not,
as long as it diligently conducts such defense, be liable to the indemnified
party under this Section 10 for any fees of other counsel or any other expenses
with respect to the defense of such claim, in each case subsequently incurred by
the indemnified party in connection with the defense of such claim, other than
reasonable costs of investigation. If the indemnifying party assumes the defense
of a third party claim, (i) no compromise or settlement of such claims may be
effected by the indemnifying party without the indemnified party's consent
unless (A) there is no finding or admission of any violation of Law or any
violation of the rights of any Person and no effect on any other claims that may
be made against the indemnified party, and (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying party; and (ii) the
indemnified party will have no liability with respect to any compromise or
settlement of such claims effected without its consent.

             (iii) A claim for indemnification for any matter not involving a
third-party claim may be asserted by notice to the party from whom
indemnification is sought within the time periods set forth in Section 9.1.
Promptly upon being aware of a matter that may give rise to a claim for
indemnification under Section 9.1, the indemnified party will promptly, if a
claim is to be made against an indemnifying party under such Section, give
notice to the indemnifying party of the commencement of such claim, but the
failure to notify the indemnifying party will not relieve the indemnifying party
of any liability that it may have to any indemnified party, except to the extent
that the indemnifying party demonstrates that it is adversely affected by the

<PAGE>
                                                                  Page 63 of 107

indemnifying party's failure to give such notice. Following receipt of a notice
of claim for indemnification, the indemnifying party shall have thirty (30) days
in which to satisfy its indemnification responsibilities or advise the
indemnified party if the indemnifying party disputes the claim made in whole or
in part. If the indemnified party does not receive a notice of dispute within
said thirty (30) day period, the indemnifying party shall be deemed to have
consented to the claim identified in the indemnified party's notice. The notice
from the indemnifying party shall set forth in reasonable detail the nature of
its objection(s).

             (iv) In the event that any claim for indemnification is made with
respect to any third-party claim pursuant to this Section 9.1, (A) the party
assuming primary responsibility for the defense of such claim shall at all times
keep the other party reasonably informed as to the status of such claim and (B)
the party not primarily responsible for the defense of such claim shall
cooperate fully with the other party in connection with such defense.

             (v) Any indemnification amounts payable by Seller or Buyer under
this Section 9.1 shall be calculated after giving effect to (i) any proceeds
(net of any retro-premium adjustments) received from insurance policies covering
the Losses that are the subject of the claim for indemnity and (ii) the actual
realized tax benefit to the indemnified party resulting from the damage, loss,
liability or expense that is the subject of the indemnity, provided that to the
extent that any tax benefit is realized in a tax year other than the year in
which the indemnity is paid, the indemnified party shall make a payment to the
indemnifying party in the amount of such realized tax benefit in the year in
which it is realized. For purposes hereof, an actual realized tax benefit is an
actual reduction in Taxes payable or a refund of Taxes previously paid after
taking into account the tax impact of any indemnification from the indemnifying
party and any future tax detriment resulting from the Loss in question. The
indemnification for a tax liability assessed by a state or local government
shall not exceed sixty-six percent (66%) of the assessment (or, if federal tax
rates change after the date of this Agreement, the difference (expressed as a
percentage) between 100% and the highest federal tax rate at such time),
provided that such state or local tax liability is a deductible amount for
federal purposes. In the event of a tax assessment by the Internal Revenue
Service or a foreign, state or local government, which would give rise to a
future deductible amount, the amount of the indemnification shall not exceed the
true economic cost of the tax adjustment to the Buyer. All future tax costs and
benefits would be discounted to present value at a discount rate of prime plus
one percent (1%) compounded monthly.

9.2 CLAIMS AGAINST THE ESCROW. To the extent that Seller does not make
indemnification payments within the prescribed time period, Buyer may seek
reimbursement for any indemnification claim under Section 9.1 in accordance with
the terms of the Escrow Agreement.

9.3 EFFECT OF BASKET. It is specifically understood and agreed that with respect
to any claim for indemnification arising in favor of Buyer or its Affiliates
under a section referred to in Section 9.1(g) (Limitations on Liability) which
could also give rise to a claim under any other provision of this Agreement, the
claim arising under the Section referred to in 9.1(g) shall control and the
$250,000 Basket and $50,000 deductible shall not apply to such claim.

<PAGE>
                                                                  Page 64 of 107

9.4 USE OF CORPORATE NAME OR TRADE NAME. After the Closing, Seller will not use
or refer to the names "Ontario Foods", "T.K.I. Foods" or "Freedom Foods" or any
trade name included within the Intellectual Property, or any derivative or
variation thereof or any name similar thereto, except as required by law.

9.5 ACCESS TO RECORDS AND PERSONNEL.

         (a) Until the later of December 31, 2003 or dissolution of Seller,
Buyer and its Representatives shall have reasonable access to all of the books
and records, if any, relating to the Business which Seller, or any of its
Representatives, may retain after the Closing Date. Such access shall be
afforded by Seller and its Representatives upon receipt of reasonable advance
notice and during normal business hours. Buyer shall be solely responsible for
any costs and expenses incurred by it pursuant to this Section 9.5(a). If Seller
shall desire to dispose of any of such books and records prior to the expiration
of the retention period, Seller shall, prior to such disposition, give Buyer a
reasonable opportunity, at Buyer's expense, to segregate and remove such books
and records as Buyer may select. On the later of December 31, 2003 or
dissolution of Seller, all books and records relating to the Business will be
transferred to Buyer.

         (b) For a period of 6 years after the Closing Date, Seller and its
Representatives shall have reasonable access to all of the books and records
relating to the Business prior to the Closing which Buyer, or any of its
Representatives, may retain after the Closing Date. Such access shall be
afforded by Buyer and its Representatives upon receipt of reasonable advance
notice and during normal business hours. Seller shall be solely responsible for
any costs and expenses incurred by them pursuant to this Section 9.5(b). If
Buyer shall desire to dispose of any of such books and records other than in the
ordinary course of business prior to the expiration of such 6 year period, Buyer
shall, prior to such disposition, give Seller a reasonable opportunity, at
Seller's expense, to segregate and remove such books and records as Seller may
select.

9.6 CONFIDENTIALITY. Seller has had access to, and has gained knowledge with
respect to the Business, including, without limitation, trade secrets, financial
results and information, processes and techniques, technical production and cost
data, methods of doing business and information concerning customers and
suppliers, and other valuable and confidential information relating to the
Business (the "Confidential Information"). Seller acknowledges that unauthorized
disclosure or misuse of the Confidential Information will cause irreparable
damage to the Corporation and Buyer subsequent to the Closing. The parties also
agree that covenants by Seller not to make unauthorized disclosures of the
Confidential Information are essential to the growth and stability of the
business of the Corporation and Buyer. Accordingly, Seller agrees that it will
not use or disclose any Confidential Information obtained in the course of its
past connection with the Business, other than information generally available to
the public through sources other than Seller.

9.7 NON-COMPETITION.

         (a) The Seller agrees that, beginning on the Closing Date and
continuing until the Covenant Expiration Date (as defined in Section 9.7(c)), it
shall not, directly or indirectly, for its own account or as agent, employee,
officer, director, trustee, consultant, partner, stockholder or equity owner of
any corporation or any other entity (except that its may own securities

<PAGE>
                                                                  Page 65 of 107

constituting less than 3% of any class of securities of a public company), or
member of any firm or otherwise, (i) engage or attempt to engage, in the
Restricted Territory (as defined in Section 9.7(c)), in the Business or any
other business activity which is directly or indirectly competitive with the
business conducted by the Corporation or any other Affiliate of Buyer at the
Effective Date, (ii) employ or solicit the employment of any person who is
employed by the Corporation or any other Affiliate of Buyer at the Effective
Date or at any time during the 6 month period preceding the Effective Date,
except that Seller shall be free to employ or solicit the employment of any such
person whose employment with the Corporation or any other Affiliate of Buyer has
terminated for any reason (without any interference from such Seller) and who
has not been employed by the Corporation or any other Affiliate of Buyer for at
least 6 months, (iii) canvass or solicit business in competition with the
Business or any other business conducted by the Corporation or by any other
Affiliate of Buyer conducting or pursuing activities similar to those of either
Corporation (a "Related Affiliate") at the Effective Date from any person or
entity who during the 6 month period preceding the Effective Date shall have
been a customer of the Corporation or any Related Affiliate or from any person
or entity which the Seller has reason to believe might in the future become a
customer of the Corporation or any Related Affiliate as a result of marketing
efforts, contacts or other facts and circumstances of which Seller is aware,
(iv) willfully dissuade or discourage any person or entity from using, employing
or conducting business with the Corporation or any other Affiliate of Buyer or
(v) intentionally disrupt or interfere with, or seek to disrupt or interfere
with, the business or contractual relationship between the Corporation or any
other Affiliate of Buyer and any supplier who during the 6 month period
preceding the Effective Date shall have supplied components, materials or
services to the Corporation or any other Affiliate of Buyer.

         (b) Notwithstanding the foregoing, the restrictions imposed by this
Section 9.7 and Section 9.6 shall not in any manner be construed to prohibit,
directly or indirectly, the Seller or any of its employees from serving as an
employee or consultant of the Corporation or any other Affiliate of Buyer.

         (c) For purposes of this Agreement, the following terms shall have the
meanings given them below:

             (i) "Covenant Expiration Date" shall mean the date which is 4 years
after the Effective Date.

             (ii) "Restricted Territory" shall mean anywhere in North America
where the Corporation or any other Affiliate of Buyer conducts or plans to
conduct the Business or any other business activity, as the case may be, at the
Effective Date.

         (d) The Seller acknowledges that (a) a remedy at law for its failure to
comply with Section 9.6 and this Section 9.7 of this Agreement may be inadequate
and (b) Buyer and each of its Affiliates shall be entitled to seek and obtain
from a court having jurisdiction specific performance, an injunction, a
restraining order or any other equitable relief in order to enforce any such
provision. The right to obtain such equitable relief shall be in addition to any
other remedy to which Buyer or any of its Affiliates is entitled under
applicable law (including, but not limited to, monetary damages).

<PAGE>
                                                                  Page 66 of 107

9.8 SELLER'S ASSISTANCE. Following the Closing Date, for a reasonable time
period and at Buyer's expense for out of pocket expenses, Seller shall continue
to assist Buyer with the transition of those services that were previously
provided by Seller to the Corporation, including, without limitation,
preparation of tax filings, fixed asset accounting, workers compensation and
other insurance and employee benefit programs.

9.9 TANGIBLE NET WORTH MAINTENANCE.

         (a) Seller shall maintain a Tangible Net Worth (as defined below) in an
amount that is not less than:

             (i) $13.5 million during the 12 month period following the Closing
Date; and

             (ii) $1.5 million until the later of December 31, 2003 or complete
liquidation of Seller.

         (b) "Tangible Net Worth" shall mean shareholders' equity less goodwill
less deferred income tax asset as determined in accordance with GAAP.

         (c) If Buyer makes a good faith claim for indemnification under this
Agreement, until the claim is finally resolved, Seller shall maintain Tangible
Net Worth equal to the lesser of the amount claimed or the applicable net worth
requirement from Section 9.9(a).

         (d) Seller may maintain any or all of the Tangible Net Worth in a
liquidating trust, if the liquidating trust assumes all of Seller's obligations
to Buyer on a joint and several basis with Seller.

                                   ARTICLE 10
                                   ----------
                                  MISCELLANEOUS
                                  -------------

10.1 FURTHER ASSURANCES; INFORMATION.

         (a) Both before and after the Closing Date, each party will cooperate
in good faith with each other party and will take all appropriate action and
execute any agreement, instrument or other writing of any kind which may be
reasonably necessary or advisable to carry out and confirm the transactions
contemplated by this Agreement.

         (b) If at any time within 3 years of the date of this Agreement, Buyer
or any of its Affiliates proposes to register under the Securities Act of 1933
any Securities in connection with any registered offering thereof and in
connection therewith the Securities and Exchange Commission makes any comments
or requests any information with respect to accounting information presented in
the registration statement pertaining to any period prior to the Closing Date
related to the Corporation, then Seller, at Buyer's sole expense, will cooperate
fully in responding promptly to such comments or questions, and will request the
Corporation's Accountants to respond (also at Buyer's sole expense) to comments
on the relevant financial

<PAGE>
                                                                  Page 67 of 107

statements or to provide such information as the Securities and Exchange
Commission requests in order to cause the Securities and Exchange Commission to
declare effective such registration statement, at the expense of Buyer or its
designated Affiliates, as the case may be. In addition, Seller will provide to
any underwriters in connection with any such registration a comfort letter
reasonably requested by such underwriter relating to financial information
pertaining to any period prior to the Closing Date in accordance with SAS 72
upon receipt of consent from its auditors.

10.2 RISK OF LOSS. Risk of loss with respect to any of the property or assets of
the Corporation shall be borne by Seller at all times prior to the Closing and
shall pass to Buyer only upon transfer to Buyer at Closing of title to the
Shares. If any of the Current Real Property, the Tangible Personal Property or
the Inventory is lost, damaged or destroyed by fire, theft, casualty or any
other cause or causes prior to the Closing (a "Casualty"), Seller shall promptly
notify Buyer in writing of such Casualty and the details thereof and shall
answer promptly any reasonable requests from Buyer for details or information.
Buyer shall thereafter proceed with the Closing, except that in the event of a
Casualty to the Current Real Property, the Tangible Personal Property or the
Inventory, the Purchase Price shall be reduced by the dollar amount (based upon
replacement value) of the Casualty loss (and any insurance proceeds received or
receivable as a result of such Casualty shall be payable to Seller); PROVIDED,
HOWEVER, that if such Casualty/Casualties are in an aggregate amount in excess
of $250,000 from the date of this Agreement through the Closing Date or
materially interfere, in Buyer's reasonable discretion, with the operation of
the Business, Buyer may terminate this Agreement. The aforesaid option shall be
exercised by Buyer by written notice to Seller given within 15 days or the
number of days remaining to the Closing, whichever is less, after the later of
Buyer receiving (i) written notice of any such Casualty and (ii) satisfactory
responses to all of its reasonable requests, if any, for details or information.
If this Agreement is not terminated by Buyer pursuant to this Section 10.2 and
if Buyer and Seller are unable to agree as to the dollar amount of the loss
(based upon replacement value) or the insurance proceeds to be recovered, Buyer
and Seller shall proceed with the Closing as scheduled, except that Buyer shall
place in escrow pursuant to the Escrow Agreement (to be held pending agreement
as to the final amount) an additional amount (based upon estimated replacement
value of the damaged or destroyed property) as determined by a firm selected by
the Independent Accountants (the "Casualty Amount") and the payments to be made
by Buyer on the Closing Date pursuant to this Agreement shall be reduced by the
Casualty Amount. The escrow agent shall hold the Casualty Amount until the
dispute has been resolved following the Closing either by agreement of Buyer and
Seller or otherwise. In the event that the actual Casualty loss is greater than
or less than the Casualty Amount held in escrow, to the extent necessary, the
parties shall make appropriate adjustment payments.

10.3 TERMINATION. This Agreement may be terminated at any time prior to the
Closing Date as follows:

         (a) By written agreement of Buyer and Seller;

         (b) By Buyer or Seller by written notice to the other in the event that
the Closing Date has not occurred for any reason on or prior to September 24,
2001, but only if the terminating party is not in material breach of, or
material default under, any provision of this Agreement;

<PAGE>
                                                                  Page 68 of 107

         (c) By Buyer by written notice to Seller of its election to terminate
this Agreement pursuant to Section 6.3 or Section 10.2; or

         (d) by Seller by written notice to Buyer if Buyer proposes, in writing,
any reduction of the Purchase Price other than as provided for in this
Agreement.

In the event of the termination of this Agreement by any party as provided in
this Section 10.3, no party shall have any liability hereunder of any nature
whatsoever, other than for indemnification pursuant to Section 9.1. In the event
that a condition precedent to its obligations is not satisfied, nothing
contained in this Agreement shall be deemed to require any party to terminate
this Agreement, rather than to waive such condition precedent and proceed with
the Closing, which waiver shall not impair or affect any right of
indemnification or other right or remedy hereunder.

10.4 NOTICES. Unless otherwise provided in this Agreement, any agreement,
notice, request, instruction or other communication to be given hereunder by any
party to the other shall be in writing and (i) delivered personally (such
delivered notice to be effective on the date it is delivered), (ii) mailed by
certified mail return receipt requested, postage prepaid (such mailed notice to
be effective 7 days after the date it is mailed) or (iii) sent by facsimile
transmission (such facsimile notice to be effective on the date that
confirmation of such facsimile transmission is received), with a confirmation
sent by way of one of the above methods, as follows:

         If to Seller addressed to:

                  Genesee Corporation
                  600 Powers Building
                  16 West Main Street
                  Rochester, New York  14614-1601
                  Attention:  Mark W. Leunig, Esq.
                  Telephone:  716-454-1250
                  Telecopy:   716-454-1297

         With a copy to:

                  Nixon Peabody LLP
                  Clinton Square
                  P.O. Box 31051
                  Rochester, NY  14603-1051
                  Attention:  Justin P. Doyle, Esq.
                  Telephone:  716-263-1359
                  Telecopy:   716-263-1600

<PAGE>
                                                                  Page 69 of 107

         If to Buyer, addressed to:

                  Associated Brands, Inc.
                  335 Judson Street
                  Toronto, Ontario
                  M8Z 1B2
                  Attention:  John R. Currie
                              John R. Foster
                              James A. Holland
                  Telephone:416-503-7000
                  Telecopy: 416-259-4317

         With a copy to:

                  Hodgson Russ LLP
                  Attention:  Carol A. Fitzsimmons, Esq.
                              George J. Eydt, Esq.
                  One M & T Plaza, Suite 2000
                  Buffalo, New York 14203
                  Telephone: (716) 856-4000
                  Telecopy: (716) 849-0349

Any party may designate in a writing to any other party any other address or
telecopy number to which, and any other Person to whom or which, a copy of any
such notice, request, instruction or other communication should be sent.

10.5 PUBLIC STATEMENTS. Buyer and Seller agree to cooperate, both prior to and
after the Closing, in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated by this Agreement
(including any statements to employees of the Corporation) and no press release
or other public statements shall be issued without the joint consent of Buyer
and Seller; PROVIDED, HOWEVER, that Seller may issue press releases or make
public statements without Buyer's consent to the extent Seller's counsel
reasonably advises it is required by law so long as, Seller gives Buyer an
opportunity to review such press release or public statement before its release
or the statement is consistent with language previously approved by Buyer in
writing.

10.6 CHOICE OF LAW. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of New
York without regard to principles of conflicts of law, except that, with respect
to matters of law concerning the internal corporate affairs of any corporate
entity which is a party to or the subject of this Agreement, the law of the
jurisdiction under which the respective entity was organized shall govern.

10.7 EXPENSES. Except as otherwise provided in this Agreement and except to the
extent reflected on the Effective Date Financial Report under Accounts Payable
or Accrued Liabilities, Seller shall pay all legal, accounting and other
expenses of Seller and the Corporation incident to this Agreement and Buyer
shall pay all legal, accounting and other expenses of Buyer incident to this
Agreement. Except as otherwise provided in this Agreement, nothing contained in
this

<PAGE>
                                                                  Page 70 of 107

Agreement shall be interpreted or construed to require Buyer to directly or
indirectly pay, assume or be liable for any of the foregoing expenses of Seller
and the Corporation.

10.8 TITLES. The headings of the articles and sections of this Agreement are
inserted for convenience of reference only, and shall not affect the meaning or
interpretation of this Agreement.

10.9 WAIVER. No failure of any party to this Agreement to require, and no delay
by any party to this Agreement in requiring, any other party to comply with any
provision of this Agreement shall constitute a waiver of the right to require
such compliance. No failure of any party to this Agreement to exercise, and no
delay by any party to this Agreement in exercising, any right or remedy under
this Agreement shall constitute a waiver of such right or remedy. No waiver by
any party to this Agreement of any right or remedy under this Agreement shall be
effective unless made in writing. Any waiver by any party to this Agreement of
any right or remedy under this Agreement shall be limited to the specific
instance and shall not constitute a waiver of such right or remedy in the
future.

10.10 EFFECTIVE; BINDING. This Agreement shall be effective upon the due
execution hereof by each party to this Agreement. Upon becoming effective, this
Agreement shall be binding upon each party to this Agreement and upon each
successor and assignee of each party to this Agreement and shall inure to the
benefit of, and be enforceable by, each party to this Agreement and each
successor and assignee of each party to this Agreement; PROVIDED, HOWEVER, that,
except as provided for in the immediately following sentence, no party to this
Agreement shall assign any right or obligation arising pursuant to this
Agreement without first obtaining the written consent of the other parties.
Buyer may assign all or a portion of its rights and obligations under this
Agreement to one or more Affiliates of Buyer or to Buyer's lender(s), or to any
agent for Buyer's lender(s), as security for payment of indebtedness and
liability owing by Buyer provided that Buyer and Guarantor shall remain liable
hereunder notwithstanding any such assignment.

10.11 ENTIRE AGREEMENT. This Agreement contains the entire agreement between the
parties to this Agreement with respect to the subject matter of this Agreement
and supersedes each course of conduct previously pursued, accepted or acquiesced
in, and each written or oral agreement and representation previously made, by
the parties to this Agreement with respect to the subject matter of this
Agreement, other than the confidentiality agreements between Seller and
Guarantor attached as SCHEDULE 10.11 which shall survive this Agreement.

10.12 MODIFICATION. No course of performance or other conduct hereafter pursued,
accepted or acquiesced in, and no oral agreement or representation made in the
future, by any party to this Agreement, whether or not relied or acted upon, and
no usage of trade, whether or not relied or acted upon, shall modify or
terminate this Agreement, impair or otherwise affect any obligation of any party
pursuant to this Agreement or otherwise operate as a waiver of any such right or
remedy. No modification of this Agreement or waiver of any such right or remedy
shall be effective unless made in writing duly executed by the parties to this
Agreement.

10.13 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which taken together shall
constitute one and the same instrument. Any party may execute this Agreement by
facsimile signature and the other

<PAGE>
                                                                  Page 71 of 107

party shall be entitled to rely on such facsimile signature as evidence that
this Agreement has been duly executed by such party. Any party executing this
Agreement by facsimile signature shall immediately forward to the other party an
original signature page by overnight mail.

10.14 CONSENT TO JURISDICTION. Each party to this Agreement hereby (i) consents
to the exclusive jurisdiction of the United States District Court for the
Western District of New York located in Erie County or, if such court does not
have jurisdiction over such matter, to the Supreme Court of the State of New
York located in Erie County and (ii) irrevocably agrees that all actions or
proceedings arising out of or relating to this Agreement shall be litigated in
such court. Each party to this Agreement accepts for itself and in connection
with its properties, generally and unconditionally, the exclusive jurisdiction
and venue of the aforesaid courts and waives any defense of forum no convenience
or any similar defense, and irrevocably agrees to be bound by any non-appeasable
judgment rendered thereby in connection with this Agreement.

                         (SIGNATURES ON FOLLOWING PAGE)

<PAGE>
                                                                  Page 72 of 107

         IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed on the day and year indicated at the beginning of this
Agreement.

                               GENESEE CORPORATION

                                      By:   /s/ Stephen B. Ashley
                                            --------------------------------
                                            Name:    Stephen B. Ashley
                                            Title:   President

                                      ASSOCIATED BRANDS, INC. (DELAWARE)

                                      By:   /s/ John R. Currie
                                            --------------------------------
                                            Name:    John R. Currie
                                            Title:   Chairman & CEO

                                      ASSOCIATED BRANDS INC. (ONTARIO)

                                      By:   /s/ John R. Currie
                                            --------------------------------
                                            Name:    John R. Currie
                                            Title:   Chairman & CEO

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