Document:

AMENDMENT NO. 2

                                       to

            THIRD AMENDED AND RESTATED REVOLVING LOAN, GUARANTY AND
                               SECURITY AGREEMENT

                                      among

                           SUPREMA SPECIALTIES, INC.,

                         SUPREMA SPECIALTIES WEST, INC,

                      SUPREMA SPECIALTIES NORTHEAST, INC.,

                       SUPREMA SPECIALTIES NORTHWEST INC.,

                          THE BANKS SIGNATORY THERETO,

                  FLEET NATIONAL BANK, as Administrative Agent,

                      SOVEREIGN BANK, as Syndication Agent

                                       and

                    MELLON BANK, N.A., as Documentation Agent

                                   Arranged by

                             FLEET SECURITIES, INC.

                          Dated as of December 28, 2000

<PAGE>

                                AMENDMENT NO. 2

                                       to

               THIRD AMENDED AND RESTATED REVOLVING LOAN, GUARANTY
                             AND SECURITY AGREEMENT

     This AMENDMENT NO. 2, dated as of December 28, 2000 (this "Amendment"),  is
by and among FLEET  NATIONAL BANK  (successor by merger to Fleet Bank,  National
Association and as successor to NatWest Bank N.A. and National  Westminster Bank
NJ,  "Fleet"),  SOVEREIGN  BANK  ("Sovereign"),  MELLON BANK,  N.A.  ("Mellon"),
EUROPEAN  AMERICAN  BANK ("EAB"),  PNC BANK,  NATIONAL  ASSOCIATION  ("PNC") and
NATIONAL CITY BANK ("National City" and, together with Fleet, Sovereign, Mellon,
EAB and PNC, the "Banks"),  FLEET  NATIONAL  BANK,  successor by merger to Fleet
Bank, National Association, as administrative and collateral agent for the Banks
(in such capacity,  the "Agent"),  SOVEREIGN BANK, as syndication  agent for the
Banks  (in such  capacity  the  "Syndication  Agent"),  MELLON  BANK,  N.A.,  as
documentation agent for the Banks (in such capacity the "Documentation  Agent"),
SUPREMA  SPECIALTIES,  INC., a New York  corporation (the  "Borrower"),  SUPREMA
SPECIALTIES  WEST, INC.  ("Suprema  West"),  a California  corporation,  SUPREMA
SPECIALTIES NORTHEAST,  INC. ("Suprema  Northeast"),  a New York corporation and
SUPREMA SPECIALTIES NORTHWEST INC. ("Suprema  Northwest"),  Delaware corporation
(Suprema West, Suprema Northeast and Suprema Northwest are collectively referred
to herein as the "Guarantor").

RECITALS:

     A. The Borrower, the Banks, the Agent and the Guarantor (other than Suprema
Northwest)  have  entered  into a Third  Amended and  Restated  Revolving  Loan,
Guaranty and Security  Agreement,  dated as of September 23, 1999, as amended by
an Amendment Number 1 and Assignment Agreement dated as of March 10, 2000 (as so
amended, the "Loan Agreement").

     B. The Borrower,  the Guarantor,  the Banks and the Agent wish to amend the
Loan Agreement to permit an increase to the Commitment, to add Suprema Northwest
as a Guarantor  and to otherwise  amend the Loan  Agreement as  hereinafter  set
forth.

     NOW,  THEREFORE,  in  consideration of the foregoing and for other good and
valuable  consideration  whose receipt and  sufficiency  are  acknowledged,  the
Borrower,  the Guarantor,  the Banks, the Agent,  the Syndication  Agent and the
Documentation Agent agree as follows:

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     Section 1. Definitions.  Each capitalized term used but not defined in this
Amendment shall have the meaning ascribed to such term in the Loan Agreement.

     Section 2. Amendments of Loan Agreement.

     (a) The introductory  paragraph of the Loan Agreement is amended to read in
its entirety as follows:

          THIS THIRD AMENDED AND RESTATED REVOLVING LOAN,  GUARANTY AND SECURITY
     AGREEMENT dated as of September 23, 1999, as amended by Amendment No. 1 and
     Assignment  Agreement  dated as of March  10,  2000 is by and  among  FLEET
     NATIONAL BANK (successor by merger to Fleet Bank, National Association,  as
     successor to NatWest Bank N.A. and National  Westminster Bank NJ, "Fleet"),
     having an office at 208  Harristown  Road,  Glen Rock,  New  Jersey  07452,
     SOVEREIGN BANK ("Sovereign"),  having an office at 210 Smith Street,  Perth
     Amboy, New Jersey 08861, MELLON BANK, N.A. ("Mellon"),  having an office at
     379 Thornall  Street,  Edison,  New Jersey  08837,  EUROPEAN  AMERICAN BANK
     ("EAB"),  having an office at 335 Madison Avenue, New York, New York 10017,
     PNC  BANK,  NATIONAL  ASSOCIATION  ("PNC"),  having  an  office at 1 Garret
     Mountain  Plaza,  West  Paterson,  New  Jersey  07424,  NATIONAL  CITY BANK
     ("National  City") having an office at One South Broad Street,  13th Floor,
     Philadelphia,  Pennsylvania 19107 (Fleet,  Sovereign,  Mellon, EAB, PNC and
     National City, together with any other financial institution that becomes a
     party  hereto,  are  referred  to  herein  individually  as  a  "Bank"  and
     collectively as the "Banks"),  FLEET NATIONAL BANK, as  administrative  and
     collateral  agent for the Banks hereunder (in such capacity,  the "Agent"),
     having an office at 208  Harristown  Road,  Glen Rock,  New  Jersey  07452,
     SOVEREIGN  BANK, as  syndication  agent for the Banks (in such capacity the
     "Syndication Agent") having an office at 210 Smith Street, Perth Amboy, New
     Jersey 08861,  MELLON BANK, N.A., as documentation  agent for the Banks (in
     such capacity the  "Documentation  Agent") having an office at 379 Thornall
     Street,   Edison,  New  Jersey  08837,  SUPREMA   SPECIALTIES,   INC.  (the
     "Borrower"), a New York corporation with its principal place of business at
     510 East 35th Street, Paterson, New Jersey 07543, SUPREMA SPECIALTIES WEST,
     INC. ("Suprema West"), a California corporation with its principal place of
     business at 14253 South Airport Way,  Manteca,  California  95336,  SUPREMA
     SPECIALTIES NORTHEAST,  INC. ("Suprema Northeast"),  a New York corporation
     with its  principal  place of business at 30 Main Street,  Ogdensburg,  New
     York 13669 and SUPREMA SPECIALTIES NORTHWEST INC. ("Suprema Northwest"),  a
     Delaware  corporation with its principal place of business at 295 South Ash
     Street,  Black Foot,  Idaho  (Suprema West,  Suprema  Northeast and Suprema
     Northwest  are  collectively   referred  to  herein  as  the  "Guarantor").
     Capitalized  terms used herein without  definition  shall have the meanings
     assigned to such terms in Section 1 hereof.

     (b) A new  definition  for "Amendment No. 2" shall be added to Section 1 of
the Loan Agreement in its correct  alphabetical order to read in its entirety as
follows:

          "Amendment No. 2" means that certain Amendment No. 2 to this Agreement
     dated as of December 28, 2000 among the parties thereto.

     (c) The definition of "Capital Expenditures"  contained in Section 1 of the
Loan Agreement is amended to read in its entirety as follows:

          "Capital  Expenditures" means, as to any Person,  Capital Expenditures
     (Non-Operating Leases).

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<PAGE>

     (d)  The  definition  of  "Capital  Expenditures   (Non-Operating  Leases)"
contained in Section 1 of the Loan  Agreement is amended to read in its entirety
as follows:

          "Capital Expenditures (Non-Operating Leases)" means, as to any Person,
     for  any  period,  the sum of (a)  expenditures  for any  fixed  assets  or
     improvements and  replacements,  substitutions  or additions  thereto which
     would be treated as capital  expenditures  in accordance  with GAAP and (b)
     the portion of all payments  with respect to each  Capitalized  Lease which
     are  required  to be  capitalized  on the balance  sheet of the  applicable
     lessee in accordance with GAAP.

     (e) The  definition  of  "Commitment"  contained  in  Section 1 of the Loan
Agreement is amended to read in its entirety as follows:

          "Commitment"  means for the period from and  including the Closing to,
     but excluding,  the Commitment Expiration Date, the commitment of the Banks
     to make Loans to the  Borrower  pursuant to this  Agreement in an aggregate
     principal amount not to exceed at any time outstanding (i) $85,000,000 with
     respect to the period  from the Closing to, but  excluding,  the  Effective
     Date of Amendment  No. 2 and (ii)  $111,000,000  with respect to the period
     from  the  Effective  Date  of  Amendment  No.  2 to,  but  excluding,  the
     Commitment  Expiration  Date, as such amounts may be increased  pursuant to
     Section 2.1 and reduced pursuant to Section 5.

     (f) The  definition  of  "Guarantor"  contained  in  Section  1 of the Loan
Agreement is amended to read in its entirety as follows:

          "Guarantor" means collectively Suprema Specialties West, Inc., Suprema
     Specialties Northeast, Inc. and Suprema Specialties Northwest Inc., jointly
     and severally.

     (g) A new definition for "Increase  Supplement" shall be added to Section 1
of the Loan Agreement in its correct  alphabetical order to read in its entirety
as follows:

          "Increase  Supplement" means an increase  supplement  substantially in
     the form of Exhibit A to Amendment No. 2.

     (h) The definition of "Notes"  contained in Section 1 of the Loan Agreement
is amended to read in its entirety as follows:

          "Notes" means those certain Secured Revolving Notes dated December 28,
     2000 made by the Borrower in favor of each  institution  that was a Bank as
     of the date  thereof,  which Notes were given in  substitution  for certain
     notes dated March 10, 2000, but in each case not in cancellation, discharge
     or extinguishment of the indebtedness  formerly evidenced by such notes, as
     amended from time to time,  together with all promissory notes delivered in
     replacement or substitution  thereof and any all notes made by the Borrower
     in favor of an institution  that becomes a Bank after the Effective Date of
     Amendment No. 2.

     (i) A new definition for "Permitted Snake River Transaction" shall be added
to Section 1 of the Loan Agreement in its correct  alphabetical order to read in
its entirety as follows:

          "Permitted Snake River Transaction" means the purchase by the Borrower
     or Suprema  Northwest (the actual purchaser of such facility is referred to
     herein as the "Snake River Purchaser") from Snake River Cheese,  LLC of the
     furniture,  fixtures,  equipment  and real  property

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<PAGE>

     comprising  a certain  privately-owned,  approximately  37,280  square foot
     turn-key cheese  production  facility  located in Blackfoot,  Idaho, for an
     aggregate  consideration of not in excess of [$6,000,000],  from which some
     or all of the  property  so  purchased  shall  be sold by the  Snake  River
     Purchaser to a leasing company (or other financing  entity) and then leased
     back to the  Snake  River  Purchaser  by such  leasing  company  (or  other
     financing entity) pursuant to a sale-leaseback arrangement; provided, that,
     with respect to such described transaction (the "Transaction"); each of the
     following conditions shall have been satisfied (i) neither the Borrower nor
     Suprema  Northwest (if Suprema Northwest is such Snake River Purchaser) has
     incurred any additional  Indebtedness  to finance such  acquisition  (other
     than the sale-leaseback  arrangement described above),  whether in the form
     of seller notes, third party Indebtedness or otherwise; (ii) at the time of
     the  Transaction  no Default  or Event of Default  exists and no Default or
     Event of Default would occur after giving effect to such Transaction; (iii)
     the Borrower  shall have  delivered  to the Agent,  within five days of the
     execution  thereof,  but  in no  event  less  than  10  days  prior  to the
     consummation of such Transaction,  copies of the purchase agreement and any
     other material  documents  executed in connection  with the Transaction and
     each such document shall be in form and substance  reasonably  satisfactory
     to the Agent;  (iv) the assets being  acquired are being  acquired free and
     clear of any and all Liens (other than Liens reasonably satisfactory to the
     Agent);  (v) the Agent  shall  have  received  such  other  information  or
     documents as it shall have  reasonably  requested in  connection  with such
     Transaction; (vi) the Transaction shall have been consummated in accordance
     with the definitive Transaction documents,  without any waiver or amendment
     of any  material  term or condition  therein not  consented to by the Agent
     (acting  with  the  consent  of  the  Required  Banks,  if  needed)  and in
     compliance  with all applicable  laws and all necessary  approvals,  except
     where the failure to so comply could not  reasonably  be expected to have a
     Material Adverse Effect;  (vii) all applicable  environmental  issues shall
     have been addressed in a manner  reasonably  satisfactory  to the Agent and
     (viii) all governmental and third-party consents and approvals necessary in
     connection  with each aspect of the  Transaction  shall have been  obtained
     (without the imposition of any unreasonable conditions) and shall remain in
     effect,  except  where the failure to obtain same could not  reasonably  be
     expected to have a Material Adverse Effect;  all applicable waiting periods
     shall have  expired  or been  terminated  or waived  without  any  material
     adverse action being taken by any authority having jurisdiction; and no law
     or  regulation  shall be  applicable  that  restrains,  prevents or imposes
     material  adverse   conditions  upon  any  aspect  of  the  Transaction  as
     reasonably determined by the Borrower.

     (j) Section 2.1 of the Loan Agreement is amended to read in its entirety as
follows:

          2.1 Commitment; Maximum Credit; Increases to Commitments.

          (a) Subject to the terms and conditions of this  Agreement,  each Bank
     severally  (but  not  jointly)   agrees  to  make  loans  to  the  Borrower
     (hereinafter  collectively  referred  to as "Loans" and  individually  as a
     "Loan"),  from time to time before the Termination Date, in such amounts as
     Borrower  may  from  time  to  time  request,  not to  exceed  at any  time
     outstanding the amount set opposite the Bank's name below; provided,  that,
     pursuant  to the terms of  Section  2.1(b)  the  table  set forth  below is
     subject to revision  upon  written  notice from the Agent  consented  to in
     writing by the  Borrower  (and upon the  Agent's  distribution  of any such
     notice that includes a revised table, absent manifest error the table below
     shall be deemed  amended  and  automatically  revised  as set forth in such
     notice);   provided,   however,  that  in  no  event  shall  the  aggregate
     outstanding  principal amount of Loans at any time  outstanding  exceed the
     lesser of (A) the Commitment,  or (B) the Borrowing Base, each as in effect
     at the time of such Loan (the "Maximum Credit"):

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          Name of Bank                                Amount

          Fleet National Bank                         $ 30,000,000.00

          Sovereign Bank                              $ 25,000,000.00

          Mellon Bank, N.A.                           $ 22,500,000.00

          National City Bank                          $ 15,000,000.00

          PNC Bank, National Association              $ 10,000,000.00

          European American Bank                      $  8,500,000.00

                                             TOTAL    $111,000,000.00

          Each Loan  shall be made by each  Bank in the  proportion  which  that
     Bank's Commitment bears to the total amount of all the Banks'  Commitments;
     provided,  however, that the failure of any Bank to make any requested Loan
     to be made by it on the date specified for such Loan shall not relieve each
     other Bank of its  obligation  (if any) to make such Loan on such date, but
     no Bank shall be responsible  for the failure of any other Bank to make any
     Loan to be made by such  other  Bank.  Subject  to the  terms  hereof,  the
     Borrower may borrow, prepay and reborrow,  and may continue and convert any
     Loan in accordance with Section 2.5, until the Termination  Date. The Banks
     have no obligation to make any Loan on or after the Termination Date.

          (b) Provided that no Default or Event of Default exists or would exist
     immediately before and after giving effect thereto, the Borrower may at any
     time and from time to time,  at its sole cost and expense,  request any one
     or more of the Banks to increase its Commitment  (such decision to increase
     the  Commitment of a Bank to be within the sole and absolute  discretion of
     such Bank), or request any other institution reasonably satisfactory to the
     Agent to provide a new  Commitment,  by submitting an Increase  Supplement,
     duly  executed  by the  Borrower  and each  such  increasing  Bank or other
     institution   agreeing  to  increase  its   Commitment  or  provide  a  new
     Commitment,  as the  case may be.  If such  Increase  Supplement  is in all
     respects reasonably satisfactory to the Agent, the Agent shall execute such
     Increase  Supplement  and deliver a copy  thereof to the  Borrower and each
     such  increasing  Bank or  other  institution,  as the  case  may be.  Upon
     execution and delivery of such Increase Supplement, (i) in the case of each
     such increasing Bank, such increasing  Bank's Commitment shall be increased
     to the amount set forth in such  Increase  Supplement,  (ii) in the case of
     each such other  institution,  such other  institution shall become a party
     hereto and shall for all purposes of the Loan  Documents be deemed a "Bank"
     with a  Commitment  in the  amount set forth in such  Increase  Supplement,
     (iii) in each case,  the Commitment of such  increasing  Bank or such other
     institution,  as the case may be,  shall be as set forth in the  applicable
     Increase  Supplement,   and  (iv)  the  Borrower  shall   contemporaneously
     therewith  execute and deliver to the Agent (x) for each Bank  providing an
     increased Commitment, a new Note in the amount of such increased Commitment
     in exchange for the return and  cancellation  of each such Bank's  existing
     Note and (y) for each such other institution providing a new Commitment,  a
     Note in the amount of its Commitment; provided, however, that:

               (i)  immediately  after  giving  effect  thereto,  the  aggregate
          Commitment of all the Banks shall not be in excess of $125,000,000.00;

               (ii) unless otherwise agreed to by the Agent,  each such increase
          shall be in an amount not less than $5,000,000 or an integral multiple
          of $1,000,000 in excess thereof;

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               (iii) from the date  hereof  through  the  Commitment  Expiration
          Date,  the  Commitment  shall  not  be  increased  on  more  than  two
          occasions;

               (iv) if  Loans  shall be  outstanding  immediately  after  giving
          effect  to  such   increase,   each  Bank  shall  be  deemed  to  have
          automatically  assigned or assumed  from each other Bank such  rights,
          and  shall  have  been  deemed to have  automatically  assigned  to or
          assumed from or delegated to such other Bank such obligations, in each
          case without recourse,  representation or warranty, as shall cause the
          outstanding  principal  balance of its Loans to be an amount  equal to
          its Percentage of the aggregate  amount of all  outstanding  Loans (as
          used herein, a Bank's "Percentage" shall be determined by dividing the
          Commitment  of such  Bank as set forth in  Section  2.1(a) of the Loan
          Agreement,  by the total  Commitment  of all the Banks as set forth in
          such  Section  2.1(a);  provided,  that,  in each  case (x) the  table
          utilized  with  respect to such  Section  2.1(a)  shall be the revised
          table  distributed  by the Agent pursuant to this Section 2.1(b) , (y)
          the Commitment  shall be the increased  Commitment of all the Banks as
          provided by the Agent pursuant to this Section 2.1(b) and (z) the term
          "Banks"  shall  include all then  existing  Banks and any and all such
          "other  institutions" that shall become Banks (as more fully described
          above)).  Each such Bank shall make such  payments to, and as directed
          by, the Agent and the Agent  shall make such  payments to the Banks in
          order to cause the outstanding  principal balance of the Loans by each
          Bank to be an amount equal to its  Percentage of the aggregate  amount
          of all  outstanding  Loans  after  giving  effect  to  the  Commitment
          increase.  The Borrower  hereby agrees that (x) any amount that a Bank
          so pays to another  Bank  pursuant  to this  Section  2.1(b)  shall be
          entitled  to all  rights  of a Bank  under  this  Agreement  and  such
          payments to Banks shall  constitute Loans held by each such payor Bank
          under  this  Agreement,  (y) that each  such  payor  Bank may,  to the
          fullest extent permitted by law,  exercise all of its right of payment
          (including the right of set-off) with respect to such amounts as fully
          as if such payor Bank had  initially  advanced the Borrower the amount
          of such  payments  and (z) each Bank  receiving  payment  of its Loans
          pursuant to this Section may treat the assignment of Eurodollar  Loans
          as a prepayment of such  Eurodollar  Loans for purposes of Section 5.4
          hereof.

               (v) each such other institution shall have delivered to the Agent
          and the Borrower all forms,  if any, that are required to be delivered
          by such other institution pursuant to this Agreement;

               (vi)  within  two  Business  Days  after the Agent  executes  and
          delivers each Increase Supplement in accordance with the terms hereof,
          the Agent  shall  revise  the table  set  forth in  Section  2.1(a) to
          reflect the adjustments to the Commitments contemplated by clause (iv)
          above and shall promptly send a copy thereof to the Banks and upon the
          Agent's  distribution  of same,  the  Commitment of each Bank shall be
          automatically adjusted to be the Commitment set forth therein; and

               (vii) the Borrower shall have paid to Fleet Securities,  Inc., as
          arranger  of  the  increase  of  the  facility,   an  arrangement  fee
          satisfactory to Fleet Securities, Inc. and the Borrower.

          In  connection  with any increase to the  Commitment  pursuant to this
          Section, the Borrower, the Guarantor,  the Agent and each of the Banks
          hereby  consents to the addition of each "other  institution" as a new
          Bank as a Bank under this  Agreement with a Commitment as set forth in
          Section 2.1(a) of this Agreement, as amended and updated by the Agent.

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<PAGE>

          (k)  Section  10.17 of the Loan  Agreement  is  amended  by adding the
     following  phrase  immediately  to the end thereof  immediately  before the
     period:

               and (iii) the sale of property  pursuant to the  Permitted  Snake
          River Transaction

          (l) Section  10.19(vi) of the Loan Agreement is amended to read in its
     entirety as follows:

               (vi) the  Permitted  Snake  River  Transaction  and  transactions
          permitted by Sections 10.16 and 10.21 hereof.

          (m) Section 10.20(v) of the Loan Agreement is amended by replacing the
     phrase "; provided, however, that in no event" with the phrase "; provided,
     however, that, excluding obligations in connection with Equipment Operating
     Leases, in no event".

          (n) The  initial  paragraph  of  Section  10.27 of the Loan  Agreement
     (appearing  prior to the table set forth in such Section  10.27) is amended
     to read in its entirety as follows:

                    10.27  Limitation  on  Capital  Expenditures.Expend  in  the
               aggregate,  for the Borrower and all  Subsidiaries,  in excess of
               the amount set forth opposite the Fiscal Year ending the date set
               forth below for Capital  Expenditures  including payments made on
               account of Capitalized  Leases (but excluding,  for the avoidance
               of doubt,  payments  made or to be made on account  of  Equipment
               Operating Lease Obligations),  to be tested on a quarterly basis.
               For purposes of the foregoing, Capital Expenditures shall include
               equipment  acquired  under direct  purchases,  bank financing and
               payments  made on account of any  deferred  purchase  price or on
               account of any indebtedness incurred to finance any such purchase
               price:

          (o) A  new  Section  10.31  shall  be  added  to  the  Loan  Agreement
     immediately after Section 10.30 and shall read in its entirety as follows:

                  10.31 Margin Stock. Not use any portion of the proceeds of any
         Loan,  in whole or in part,  for the purpose of  purchasing or carrying
         any "margin stock" as such term is defined in Regulation U of the Board
         of Governors of the Federal Reserve System.

          (p) Section  15.1(i) of the Loan  Agreement  is amended to read in its
     entirety as follows:

          (i)  change  the  Commitments  of the Banks,  except as  permitted  by
          Section  2.1 (which  changes in  Commitments  shall only  require  the
          consent  of a  Bank  that  is  increasing  its  Commitment  and  shall
          automatically apply to all other Banks; provided, that, changes to the
          dollar  amounts in the  second  clause  (i) in  Section  2.1(b)  shall
          require the approval of all Banks);

          (q)  Section  15.2 of the Loan  Agreement  is  amended  to read in its
     entirety as follows:

               15.2 WAIVER OF TRIAL BY JURY. THE BORROWER,  GUARANTOR, AGENT AND
          THE BANKS (BY  ACCEPTANCE  OF THE NOTES)  MUTUALLY  HEREBY

                                       7
<PAGE>

          KNOWINGLY,  VOLUNTARILY AND INTENIONALLY WAIVE THE RIGHT TO A TRIAL BY
          JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
          CONNECTION  WITH THIS  AGREEMENT  OR ANY OF THE OTHER  LOAN  DOCUMENTS
          CONTEMPLATED  TO BE EXECUTED IN  CONNECTION  HEREWITH OR ANY COURSE OF
          CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
          ACTIONS OF ANY PARTY,  INCLUDING,  WITHOUT  LIMITATION,  ANY COURSE OF
          CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE AGENT AND/OR
          THE BANKS RELATING TO THE ADMINISTRATION OF THE LOANS AND/OR ANY OTHER
          CREDIT  FACILITIES  HEREUNDER OR THE ENFORCEMENT OF THE LOAN DOCUMENTS
          AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE  ANY SUCH ACTION
          WITH ANY OTHER  ACTION IN WHICH JURY  TRIAL  CANNOT BE OR HAS NOT BEEN
          WAIVED.  EXCEPT AS PROHIBITED BY LAW, THE BORROWER AND GUARANTOR  EACH
          HEREBY  WAIVE  ANY  RIGHT  IT MAY  HAVE TO  CLAIM  OR  RECOVER  IN ANY
          LITIGATION ANY SPECIAL,  EXEMPLARY,  PUNITIVE OR CONSEQUENTIAL DAMAGES
          OR ANY DAMAGES  OTHER THAN,  OR IN ADDITION TO,  ACTUAL  DAMAGES.  THE
          BORROWER AND GUARANTOR EACH CERTIFY THAT NO  REPRESENTATIVE,  AGENT OR
          ATTORNEY OF THE AGENT AND/OR THE BANKS HAS  REPRESENTED,  EXPRESSLY OR
          OTHERWISE,  THAT THE AGENT AND/OR THE BANKS WOULD NOT, IN THE EVENT OF
          LITIGATION,   SEEK  TO  ENFORCE  THE  FOREGOING  WAIVER.  THIS  WAIVER
          CONSITUTES A MATERIAL INDUCEMENT FOR THE AGENT AND THE BANKS TO ACCEPT
          THIS  AGREEMENT,  THE NOTES,  THE OTHER LOAN  DOCUMENTS  AND TO EXTEND
          CREDIT TO THE BORROWER.

          (r)  Section  15.3 of the Loan  Agreement  is  amended  to read in its
     entirety as follows:

               15.3 Notices.  Except as otherwise expressly provided herein, all
          notices  hereunder  shall be in  writing  and  shall be  delivered  by
          telecopier, hand, overnight delivery or by mail. Notices given by mail
          shall be deemed to have been given  three (3) days after the date sent
          if sent by registered or certified mail, postage prepaid, and:

               (i)      if to the Borrower and/or the Guarantor, to:

                                  Suprema Specialties, Inc.
                                  510 East 35th Street
                                  Paterson, New Jersey  07543
                                  Attn:  President

               (ii)     if to the Agent or Fleet, to:

                                  Fleet National Bank
                                  208 Harristown Road
                                  Glen Rock, New Jersey  07452
                                  Attn:  Edward J. Waterfield,
                                         Senior Vice President

               (iii)    if to Sovereign, to:

                                  Sovereign Bank
                                  210 Smith Street
                                  Perth Amboy 08861
                                  Attn:  Owen McKenna, Vice President

                                       8
<PAGE>

               (iv)     if to Mellon, to:

                                  Mellon Bank, N.A.
                                  379 Thornall Street
                                  Edison, New Jersey  08837
                                  Attn:  Russ J. Lopinto, Vice President

               (v)      if to EAB, to:

                                  European American Bank
                                  335 Madison Avenue
                                  New York, New York 10017
                                  Attn:  George Stirling, Vice President

               (vi)     if to PNC, to:

                                  PNC Bank, National Association
                                  1 Garret Mountain Plaza
                                  West Paterson, New Jersey 07424
                                  Attn:  Judy Land, Vice President

               (vii)    if to National City, to:

                                  National City Bank
                                  One South Broad Street
                                  13th Floor
                                  Philadelphia, Pennsylvania 19107
                                  Attn:  Lyle Cunningham, Vice President

          or in the case of any party,  such other address as such party may, by
          written notice,  received by the Agent, have designated as its address
          for  notices  and in the case of any  institution  that  became a Bank
          after the Effective  Date of Amendment No. 2, such address as shall be
          designated on its assignment  agreement or otherwise in writing to the
          Agent.  Notices given by (i)  telecopier  shall be deemed to have been
          given when sent, (ii) hand shall be deemed to have been given the same
          day they have been sent and (iii)  overnight  delivery shall be deemed
          to have  been  given the day after  they  have  sent,  in each case if
          properly  addressed  to the party to whom  sent,  at its  address,  as
          aforesaid.  The Agent shall be entitled  to  reasonably  rely upon any
          telephonic  notices  purportedly  given  pursuant to the terms of this
          Agreement  and the  Borrower  and the  Guarantor  shall hold the Agent
          harmless  from  any  loss,  cost or  expense  ensuing  from  any  such
          reliance.

          (s) Section 15.7 of the Loan Agreement is amended by adding the phrase
     "(excluding the laws applicable to conflicts or choice of law)" immediately
     after the phrase "construed by the laws of the State of New Jersey".

          (t)  Section  15.17 of the Loan  Agreement  is  amended to read in its
     entirety as follows:

               15.17  References  in Other  Loan  Documents.  The  Borrower  and
          Guarantor  acknowledge  and  agree  that  any  reference  in any  Loan
          Document to "the  Agreement",  or words of like import shall mean this
          Agreement, as amended from time to time, and any reference in any

                                       9
<PAGE>

          Loan Document to the Notes,  the Loans,  or words of like import shall
          mean the Notes and the Loans as defined herein.

          (u) New  Sections  15.19,  15.20 and 15.21  shall be added to the Loan
     Agreement  immediately after Section 15.18 and shall read in their entirety
     as follows:

               15.19  Payments.  All payments under this Agreement and the Notes
          shall be applied first to the payment of all fees,  expenses and other
          amounts due to the Banks (excluding  principal and interest),  then to
          accrued interest, and the balance on account of outstanding principal;
          provided,  however,  that after the occurrence of an Event of Default,
          payments  will be applied to the  obligations  of the  Borrower to the
          Banks as the Required Banks determine in their sole discretion.

               15.20  Integration.  This  Agreement and the other Loan Documents
          are  intended  by the  parties as the final,  complete  and  exclusive
          statement  of  the  transactions   evidenced  thereby.  All  prior  or
          contemporaneous promises, agreements and understandings,  whether oral
          or written,  are deemed to be  superceded  by this  Agreement and such
          other  Loan  Documents,  and no  party  is  relying  on  any  promise,
          agreement  or  understanding  not set forth in this  Agreement or such
          other Loan Documents.

               15.21 Name of Fleet. Any reference in this Agreement or any other
          Loan Document to Fleet Bank, National  Association or Fleet Bank, N.A.
          shall be deemed to mean Fleet  National  Bank,  successor by merger to
          Fleet Bank, National Association.

     Section 3. Reallocation of Commitments; Notes.

          (a) The total  amount of each Bank's  Commitment  pursuant to the Loan
     Agreement  shall  be the  amount  set  forth  in  Section  2.1 of the  Loan
     Agreement, as amended by this Amendment.

          (b) All Loans of each Bank to the  Borrower  shall be  evidenced  by a
     Note of the  Borrower  substantially  in the form of  Exhibit A to the Loan
     Agreement  (the  "Note"),  which Note shall amend and restate the  existing
     Note payable to such Bank.

          (c) Upon the  Effective  Date,  the  Commitment  of each Bank shall be
     automatically adjusted as set forth in this Amendment.

     Section 4. Conforming  Amendments.  The Loan Agreement,  the Loan Documents
and  all  agreements,  instruments  and  documents  executed  and  delivered  in
connection  with any of the  foregoing,  shall each be deemed to be amended  and
supplemented  hereby to the  extent  necessary,  if any,  to give  effect to the
provisions  of this  Amendment,  and each Bank is  authorized to annex a copy of
this  Amendment  to its  respective  copy of the Loan  Agreement.  Except  as so
amended hereby,  the Loan Agreement and the other Loan Documents shall remain in
full force and effect in accordance with their respective terms.

                                       10
<PAGE>

     Section 5. Acknowledgments, Confirmations and Consent.

          (a) The Borrower and the Guarantor each  acknowledge  and confirm that
     the Liens granted pursuant to the Loan Agreement  secure the  indebtedness,
     liabilities  and  obligations  of the  Borrower  to the Banks and the Agent
     under the Notes as amended and restated  pursuant to this Amendment,  under
     the Loan Agreement as further amended by this Amendment and under the other
     Loan  Documents,  whether  or not so stated in such Loan  Agreement  and/or
     other Loan Document,  and that the term  "Obligations"  as used in the Loan
     Agreement  (or any other  terms used in the Loan  Agreement  to describe or
     refer to the  indebtedness,  liabilities and obligations of the Borrower to
     the Banks and the Agent) includes all other  indebtedness,  liabilities and
     obligations  of the  Borrower  under the Loan  Agreement as amended by this
     Amendment and under the amended and restated  Notes  executed in connection
     with this Amendment.

          (b) The  Guarantor  consents in all  respects to the  execution by the
     Borrower of this Amendment and acknowledges and confirms that the Guarantor
     continues  to  guarantee   the  full   payment  and   performance   of  the
     indebtedness,  liabilities  and  obligations of the Borrower under the Loan
     Agreement as further  amended by this  Amendment  and under the amended and
     restated  Notes  executed in connection  with this Amendment as provided in
     the Loan Agreement,  and remain in full force and effect in accordance with
     their respective terms.

     Section 6. Representations and Warranties.  The Borrower and the Guarantor,
as the case may be, each  represents and warrants to the Banks,  the Agent,  the
Syndication Agent and the Documentation Agent as follows:

          (a)  After  giving   effect  to  this   Amendment   (i)  each  of  the
     representations and warranties set forth in Section 9 of the Loan Agreement
     is  true  and  correct  in all  respects  as if  made  on the  date of this
     Amendment,  except for changes in the  ordinary  course of business  which,
     either  singly  or in the  aggregate,  are not  materially  adverse  to the
     business or financial condition of the Borrower or the Guarantor,  and (ii)
     no Default or Event of Default exists under the Loan Agreement.

          (b) Each of the Borrower and the  Guarantor  has the power to execute,
     deliver  and  perform,  and has taken  all  necessary  corporate  action to
     authorize the execution,  delivery and  performance  of, this Amendment and
     the other  agreements,  instruments  and  documents to be executed by it in
     connection  with this  Amendment.  No  consent  or  approval  of any Person
     (except for such consents as have been  obtained) and no consent,  license,
     certificate of need,  approval,  authorization or declaration of, or filing
     with, any governmental  authority,  bureau or agency is or will be required
     in connection  with the execution,  delivery or performance by the Borrower
     or the Guarantor,  or the validity or  enforceability of this Amendment and
     the other agreements, instruments and documents executed in connection with
     this Amendment.

          (c) The  execution,  delivery and  performance by the Borrower and the
     Guarantor of this  Amendment and each of the  agreements,  instruments  and
     documents executed in connection with this Amendment to which it is a party
     will not (i) violate any

                                       11
<PAGE>

     provision of law,  (ii)  conflict  with or result in a breach of any order,
     writ, injunction,  ordinance,  resolution, decree or other similar document
     or instrument  of any court or  governmental  authority,  bureau or agency,
     domestic or foreign,  or the certificate of incorporation or by-laws of the
     Borrower  or any  Guarantor,  (iii)  create  (with or without the giving of
     notice  or lapse  of  time,  or both) a  default  under  or  breach  of any
     agreement,  bond,  note or indenture to which the Borrower or any Guarantor
     is a party  or by which  any of them is  bound  or any of their  respective
     properties or assets is affected,  or (iv) result in the  imposition of any
     Lien of any nature whatsoever upon any of the properties or assets owned by
     or used in connection  with the business of the Borrower or any  Guarantor,
     except for the Liens created and granted pursuant to the Loan Documents.

          (d) This Amendment and each of the other  agreements,  instruments and
     documents  executed in connection with this Amendment to which the Borrower
     or the  Guarantor is a party has been duly  executed  and  delivered by the
     Borrower or the Guarantor,  as the case may be, and  constitutes  the valid
     and legally  binding  obligation of the Borrower or the  Guarantor,  as the
     case may be,  enforceable  in  accordance  with its  terms,  except as such
     enforcement   may  be  limited  by   applicable   bankruptcy,   insolvency,
     reorganization,  moratorium,  or other  similar  laws,  now or hereafter in
     effect,  relating to or affecting  the  enforcement  of  creditors'  rights
     generally  and except  that the remedy of  specific  performance  and other
     equitable remedies are subject to judicial discretion;  provided,  however,
     that  such  laws  shall  not   materially   interfere  with  the  practical
     realization of the benefits of the Security  Documents or the Liens created
     thereby,  except for: (i) possible delay,  (ii) situations  which may arise
     under  Chapter II of the U.S.  Bankruptcy  Code, II U.S.C.  ss.ss.  10 1 et
     seq., and (iii) equitable orders of any United States Bankruptcy Court.

          (e) Since January 1, 2000, the Borrower has not repurchased any of its
     issued and outstanding capital stock.

          (f)  To the  extent  the  Borrower  remains  in  compliance  with  the
     Borrowing  Base,  all  obligations  under the Loan  Agreement,  as  further
     amended pursuant to the terms of this Amendment,  constitute  "Senior Debt"
     as defined in that  certain Note  Agreement  dated as of March 9, 1998 with
     respect to $10,500,000 16.5% Senior Subordinated Notes Due March 1, 2006.

     Section 7. Fees and Expenses. The Borrower shall pay the following fees and
expenses in connection with this Amendment:

          (a) The Borrower shall pay to each increasing Bank a fee in the amount
     of .25% of the amount of the  increase,  if any, in Bank's  Commitment  set
     forth in this Amendment from such Bank's  Commitment set forth in Amendment
     No. 1, such fee to be payable upon execution of this Amendment.

          (b) The  Borrower  agrees to pay the Agent upon demand all  reasonable
     expenses,  including  reasonable  fees of attorneys and  paralegals for the
     Agent,   incurred  by

                                       12
<PAGE>

     the Agent in connection with the preparation,  negotiation and execution of
     this Amendment and any agreements,  instruments  and documents  executed or
     furnished in connection with this Amendment.

     Section 8. Miscellaneous.

          (a)  Except  as  specifically  amended  by this  Amendment,  the  Loan
     Agreement  and each of the  other  agreements,  instruments  and  documents
     executed in connection  with the Loan Agreement  shall remain in full force
     and effect in accordance with their respective terms.

          (b) THIS AMENDMENT AND ALL OTHER AGREEMENTS, DOCUMENTS AND INSTRUMENTS
     EXECUTED AND DELIVERED IN CONNECTION  WITH THIS AMENDMENT SHALL BE GOVERNED
     BY AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW JERSEY
     APPLICABLE TO CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY WITHIN THE
     STATE  OF NEW  JERSEY  BY  RESIDENTS  OF SUCH  STATE  (EXCLUDING  THE  LAWS
     APPLICABLE TO CONFLICTS OR CHOICE OF LAW).

          (c) The provisions of this Amendment are severable,  and if any clause
     or provision shall be held invalid or  unenforceable in whole or in part in
     any  jurisdiction,  then such invalidity or  unenforceability  shall affect
     only such clause,  provision or part in such  jurisdiction and shall not in
     any manner affect such clause,  provision or part in any other jurisdiction
     or any other clause or provision in this Amendment in any jurisdiction.

          (d) This  Amendment may be signed in any number of  counterparts  with
     the  same  effect  as if all  parties  to this  Amendment  signed  the same
     counterpart.

          (e) This  Amendment  shall be binding upon and inure to the benefit of
     each of the Borrower and the Guarantor and their respective  successors and
     to the benefit of the Agent,  the Banks,  the Syndication  Agent and/or the
     Documentation Agent and their respective successors and assigns. The rights
     and  obligations  of each of the  Borrower  and the  Guarantor  under  this
     Amendment  shall not be assigned  or  delegated  without the prior  written
     consent  of the  Agent  and the  Banks,  and any  purported  assignment  or
     delegation without such consent shall be void.

     Section  9.  Effectiveness  of  Amendment.   This  Amendment  shall  become
effective (the "Effective Date") upon the later of (i) delivery from Borrower to
each Bank of a Note in a face amount equal to such Bank's Commitment (as amended
by this  Amendment)  which note shall amend and restate and be in replacement of
and  substitution  for its existing  promissory  note (such amended and restated
promissory  note, when executed and delivered,  shall be deemed one of the Notes
for all purposes of the Agreement) and documents relating thereto,  (ii) receipt
by the Agent of counterparts of this Amendment duly signed by each party hereto,
(iii)  receipt  by the Agent of a fully  executed

                                       13
<PAGE>

copy of an  Amendment  to the  Pledge  Agreement  in the  form of  Exhibit  B to
Amendment  No.  2,  (iv)  receipt  by the  Agent  of one  or  more  certificates
representing all the issued and outstanding  shares of Suprema  Northwest and an
irrevocable power of attorney with respect to such shares in the form of Exhibit
A to the Pledge Agreement, (v) the payment of the fees and expenses set forth in
Section 7 of this Amendment,  (vi) receipt by the Agent of corporate resolutions
and certificates of good standing with respect to Borrower and Guarantor,  (vii)
receipt by the Agent of such other documents that it shall  reasonably  request,
including  without  limitation duly executed  Uniform  Commercial Code financing
statements  with respect to all  Collateral  owned by Suprema  Northwest,  (vii)
receipt by the Agent of  evidence to the  consummation  of the  Permitted  Snake
River  Transaction and (ix) receipt by the Agent of an opinion of counsel to the
Borrower and Guarantor  substantially similar to the opinion of counsel provided
in connection with Amendment No. 1.

                            [Signature Pages Follow]

                                       14
<PAGE>

     IN WITNESS  WHEREOF,  the Borrower,  the Banks,  the Agent, the Syndication
Agent, the Documentation  Agent and the Guarantor have signed and delivered this
Amendment No. 2 as of the date first written above.

                                            SUPREMA SPECIALTIES, INC.,
                                                 as Borrower

                                            By /s/ Mark Cocchiola
                                               ---------------------------------
                                            Name: Mark Cocchiola
                                            Title: President

     Each of the guarantors  indicated  below hereby  consents to this Amendment
and reaffirms its continuing obligations under its guarantee as set forth in the
Loan  Agreement  as  amended  hereby  and all  the  documents,  instruments  and
agreements executed pursuant thereto or in connection therewith, without offset,
defense or counterclaim  (any such offset,  defense or counterclaim as may exist
being hereby irrevocably waived by each such guarantor).

                                            SUPREMA SPECIALTIES WEST, INC.,
                                              as a Guarantor

                                            By /s/ Mark Cocchiola
                                               ---------------------------------
                                            Name: Mark Cocchiola
                                            Title: President

                                            SUPREMA SPECIALTIES NORTHEAST, INC.,
                                              as a Guarantor

                                            By /s/ Mark Cocchiola
                                               ---------------------------------
                                            Name: Mark Cocchiola
                                            Title: President

                                            SUPREMA SPECIALTIES NORTHWEST INC.,
                                              as a Guarantor

                                            By /s/ Mark Cocchiola
                                               ---------------------------------
                                            Name: Mark Cocchiola
                                            Title: President

                                       15
<PAGE>

                                            FLEET NATIONAL BANK,
                                              successor by merger to Fleet Bank,
                                              National Association, as Agent and
                                              as a Bank

                                            By /s/ Edward D. Harrington
                                               ---------------------------------
                                            Name: Edward D. Harrington
                                            Title: Vice President

                                       16
<PAGE>

                                            SOVEREIGN BANK,
                                              as Syndication Agent and as a Bank

                                            By /s/ Owen P. McKenna
                                               ---------------------------------
                                            Name: Owen P. McKenna
                                            Title: Vice President

                                       17
<PAGE>

                                            MELLON BANK, N.A.,
                                              as Documentation Agent and
                                              as a Bank

                                            By /s/ Russ J. Lopinto
                                               ---------------------------------
                                            Name: Russ J. Lopinto
                                            Title: Vice President

                                       18
<PAGE>

                                            EUROPEAN AMERICAN BANK,
                                              as a Bank

                                            By /s/ George L. Stirling
                                               ---------------------------------
                                            Name: George L. Stirling
                                            Title: Vice President

                                       19
<PAGE>

                                            PNC BANK, NATIONAL ASSOCIATION,
                                              as a Bank

                                            By /s/ Richard Bishop
                                               ---------------------------------
                                            Name: Richard Bishop
                                            Title: Vice President

                                       20
<PAGE>

                                            NATIONAL CITY BANK,
                                              as a Bank

                                            By /s/ Thomas J. McDonnell
                                               ---------------------------------
                                            Name: Thomas J. McDonnell
                                            Title: Senior Vice President

                                       21
<PAGE>

                                    EXHIBIT A
                           FORM OF INCREASE SUPPLEMENT

                                       22
<PAGE>

                                    EXHIBIT B
                      FORM OF AMENDMENT TO PLEDGE AGREEMENT

                                       23ASSETS PURCHASE AGREEMENT

     AGREEMENT, dated as of the 27th day of November 2000, by and among Snake
River Cheese, L.L.C., an Idaho limited liability company ("Seller"), and Suprema
Specialties Northwest Inc., a Delaware corporation ("Buyer").

                              W I T N E S S E T H:

     WHEREAS, Seller owns a cheese plant in the City of Blackfoot, Idaho (the
"Plant");

     WHEREAS, Beatrice Foods currently leases the Plant from Seller and operates
the Plant (the "Business"), which lease shall expire on November 30, 2000; and

     WHEREAS, Buyer desires to purchase from Seller substantially all of the
properties and assets comprising the Plant, including the Real Property (as
defined below), and Seller desires to sell such properties and assets to Buyer,
upon the terms and conditions herein contained;

     NOW, THEREFORE, in consideration of, and in reliance upon, the
representations, warranties, covenants and conditions herein contained, the
parties hereto hereby agree as follows:

     1. Certain Definitions and Rules of Construction.

          1.1 Certain Definitions. As used in this Agreement, the following
     terms have the respective meanings set forth below:

          "Affiliate" of any specified Person shall mean any other Person
     directly or indirectly controlling or controlled by or under direct or
     indirect common control with such specified Person. For the purposes of
     this definition, "control" when used with respect to any specified Person
     means the power to direct the management and policies of such Person,
     directly or indirectly, whether through the ownership of voting securities,
     by contract or otherwise.

          "Allocation Statement" shall have the meaning set forth in
     subparagraph 2.5.2 hereof.

          "Ancillary Agreements" shall mean the Buyer Ancillary Agreements and
     the Seller Ancillary Agreements.

          "Applicable Law" means, with respect to any Person, any common law or
     duty, case law or ruling, or any domestic or foreign, federal, state or
     local statute, law, ordinance, rule, administrative interpretation,
     regulation, order, writ, injunction, directive, judgment, decree or other
     requirement of any Governmental Authority which is applicable to such
     Person or its properties, assets or activities.

<PAGE>

          "Assumed Contracts" shall have the meaning set forth in subparagraph
     4.10 hereof.

          "Assumed Liabilities" means only those liabilities of Seller listed on
     Schedule 2.3 and obligations relating to the Assumed Contracts included in
     the Purchased Assets.

          "Books and Records" shall mean originals or copies of all books,
     records, files and papers of Seller which are used or held for use in
     connection with the Business (or any portions thereof), whether in hard
     copy or computer format, including bank account records, books of account,
     invoices, sales and promotional materials, manuals, sales and purchase
     correspondence, employment records, and documentation declared or used for
     accounting, marketing, manufacturing.

          "Business" shall have the meaning set forth in the preamble.

          "Business Day" shall mean any day other than a Saturday, Sunday,
     federal holiday or day on which banks in the State of New York are required
     or permitted by law to be closed.

          "Buyer" shall have the meaning set forth in the preamble.

          "Buyer Ancillary Agreements" shall have the meaning set forth in
     subparagraph 3.3 hereof.

          "Cash Purchase Price" shall have the meaning set forth in subparagraph
     2.5.1 hereof.

          "Claims" shall mean, except with respect to Taxes and any insurance
     policies of Seller, rights, claims, credits, causes of action or rights of
     set-off against third parties, whether liquidated or unliquidated, fixed or
     contingent, including rights under, or pursuant to, warranties,
     representations and guaranties made by suppliers, manufacturers,
     contractors or other third parties in connection with products or services
     purchased by or furnished to the Business, which are owned by Seller and
     which are used or held for use by Seller in connection with the Business.

          "Closing" shall have the meaning set forth in subparagraph 3.1 hereof.

          "Closing Date" shall have the meaning set forth in subparagraph 3.1
     hereof.

          "Code" shall mean the United States Internal Revenue Code of 1986, as
     amended from time to time.

          "Contract" shall mean any written or oral contract, agreement,
     instrument, order, commitment or binding arrangement, express or implied,
     of any nature whatsoever.

                                       2-
<PAGE>

          "Contract Right" shall mean any right, power or remedy under any
     Contract, including, but not limited to, rights to receive property or
     services or otherwise to derive benefits from the payment, satisfaction or
     performance of another party's obligations.

          "Deposit" shall have the meaning set forth in subparagraph 2.5.1
     hereof.

          "Disclosure Schedules" shall have the meaning set forth in
     subparagraph 1.2.2 hereof.

          "Dollars" shall mean United States Dollars.

          "Employee Plans" shall have the meaning set forth in subparagraph 4.15
     hereof.

          "Employees" shall mean all employees of Seller who are employed on the
     Closing Date solely in connection with the Business.

          "Environmental Costs" shall mean any (i) clean-up, remediation,
     removal, or other response costs which may be required to cause the
     Business or the Purchased Assets to come into compliance with Environmental
     Laws or to comply with the requirements of a Governmental Authority or an
     administrative or judicial order, and (ii) any costs, expenses, fines,
     penalties, liabilities, amounts paid in settlement, and judgments arising
     out of, relating to, or resulting from, any Environmental Matter.

          "Environmental Laws" shall mean all Applicable Laws governing
     Environmental Matters.

          "Environmental Matters" shall mean any matters arising out of,
     relating to or resulting from pollution, contamination, protection of the
     environment, human health or safety, sanitation, and any matters relating
     to emissions, discharges, disseminations, releases or threatened releases,
     of Hazardous Substances into the air, surface water, groundwater, soil,
     land surface or subsurface, buildings or facilities or otherwise arising
     out of, relating to or resulting from the manufacture, processing,
     distribution, use, treatment, storage, disposal, transport or handling of
     Hazardous Substances.

          "Environmental Permit" shall mean any Permit that is required pursuant
     to any Environmental Laws, including, without limitation, the
     Wastewater-Land Application Permit and IWA Permit described on Schedule
     2.2(iv) hereof.

          "Environmental Reports" shall have the meaning set forth in
     subparagraph 4.13(v) hereof.

          "Excluded Liabilities" shall have the meaning set forth in
     subparagraph 2.4 hereof.

                                       3-
<PAGE>

          "Financial Statements" shall have the meaning set forth in
     subparagraph 4.6 hereof.

          "Governmental Authority" shall mean any foreign, domestic, federal,
     state or local governmental authority, quasi-governmental authority,
     instrumentality, court, government or self-regulatory organization,
     commission, tribunal or organization, or any regulatory administrative or
     other agency, or any political or other subdivision, department or branch
     of any of the foregoing.

          "Hazardous Substances" shall mean hazardous material/waste as defined
     by any Environmental Laws and/or any pollutants, contaminants, toxic or
     hazardous substances, materials, wastes, constituents or chemicals that are
     regulated by any Environmental Laws including, but not limited to, the
     Comprehensive Environmental Response, Compensation and Liability Act, 42
     U.S.C. Section 9601 et.seq., the Resource Conservation Act, 42 U.S.C.
     Section 6901 et.seq., the Clean Air Act, 42 U.S.C. Section 7401 et.seq.,
     the Clean Water Act, 33 U.S.C. Section 1251 et.seq., the Hazard
     Communication Act and the Occupational Safety and Health Act 29 U.S.C.
     Section 651 et.seq., the Federal Insecticide, Fungicide and Rodenticide Act
     17 U.S.C. Section 136 et.seq., as amended, and all state and local
     counterparts.

          "Income Taxes" shall mean all Federal, state, local and foreign income
     or franchise taxes, including interest, penalties and additions to tax
     relating thereto.

          "Lien" shall mean, with respect to any asset, any imperfection of
     title, lien, pledge, encumbrance, or other charge or security interest, or
     hire, purchase or leasing arrangement, in or on such asset.

          "Loss" or "Losses" shall mean each and all of the following items:
     claims, losses, liabilities, obligations, payments, damages, judgments,
     fines, penalties, amounts paid in settlement, and reasonable costs and
     expenses (including, but not limited to, reasonable fees and disbursements
     of counsel and other experts) incurred by the Person (the "Indemnitee")
     seeking indemnification (whether relating to claims asserted by or against
     third parties or to claims asserted against the party providing
     indemnification (the "Indemnitor")).

          "Material Adverse Effect" means a material adverse change in, or a
     material adverse effect upon, the Business or the Purchased Assets.

          "Notice" shall have the meaning set forth in subparagraph 10.5 hereof.

          "Optioned Property" shall mean the land more particularly described on
     Schedule 6.12 annexed hereto with all buildings, structures, improvements
     or other real property of any kind or nature whatsoever situated thereon,
     and all appurtenant and ancillary rights thereto, including, without
     limitation, easements, covenants, water rights, sewer rights and utility
     rights.

                                       4-
<PAGE>

          "Permits" shall mean licenses, permits, approvals, certificates,
     consents, orders or other authorizations issued or granted by any
     Governmental Authority, which are owned by Seller and which are used or
     held for use by Seller in connection with the Business, including, without
     limitation, Environmental Permits.

          "Person" shall mean an individual, partnership (general or limited),
     corporation, joint venture, business trust, limited liability company,
     cooperative, association or other form of business organization (whether or
     not regarded as a business entity under Applicable Law), trust, estate or
     any other entity.

          "Proceedings" shall have the meaning set forth in subparagraph 4.10
     hereof.

          "Purchase Price" shall have the meaning set forth in subparagraph
     2.5.1 hereof.

          "Purchased Assets" shall have the meaning set forth in subparagraph
     2.2 hereof.

          "Records" shall have the meaning set forth in subparagraph 6.6 hereof.

          "Real Property" means the land more particularly described on Schedule
     2.2(ii) annexed hereto with all buildings, structures, improvements or
     other real property of any kind or nature whatsoever situated thereon, and
     all appurtenant and ancillary rights thereto, including, without
     limitation, easements, covenants, water rights, sewer rights and utility
     rights.

          "Seller" shall have the meaning set forth in the preamble.

          "Seller Ancillary Agreements" shall have the meaning set forth in
     subparagraph 3.2 hereof.

          "Tangible Property" means any machinery, buildings, fixtures,
     equipment, parts, furniture, leasehold improvements, office equipment,
     vehicles, tools, forms, supplies or other tangible property of any kind or
     nature whatsoever.

          "Tax Returns" shall have the meaning set forth in subparagraph 4.15
     hereof.

          "Taxes" means all income, franchise, excise, real and personal
     property, sales, use, value-added, payroll, withholding, social security
     and other taxes imposed by any Governmental Authority, together with all
     interest, penalties and additions imposed with respect to such amounts.

          "Third Party Claim" shall have the meaning set forth in subparagraph
     10.5 hereof.

                                       5-
<PAGE>

     Anything herein contained to the contrary notwithstanding, if any of the
terms defined above are also expressly defined in any of the Ancillary
Agreements, then, in such event, the definition set forth in said Ancillary
Agreement shall control for all purposes of said Ancillary Agreement.

          1.2 Certain Rules of Construction.

               1.2.1 Interpretation. As used in this Agreement, unless the
          context otherwise requires, words describing the singular number shall
          include the plural and vice versa; words denoting any gender shall
          include all genders; words denoting natural persons shall include
          corporations, partnerships and other entities, and vice versa; and the
          words "hereof", "herein" and "hereunder", and words of similar import,
          shall refer to this Agreement as a whole (including the Exhibits
          hereto), and not to any particular provision of this Agreement.

               1.2.2 Schedules. The schedules delivered pursuant to this
          Agreement (collectively, the "Disclosure Schedules") are an integral
          part hereof, and are considered to be part of the representations and
          warranties to which they relate. Each such Disclosure Schedule shall
          be in writing and shall indicate the subparagraph pursuant to which it
          is being delivered; provided, however, that such disclosure shall also
          apply to any other subparagraph to which it is applicable, but only if
          such information appears on such Disclosure Schedule in such form and
          detail responsive to the requirements of the other Disclosure Schedule
          to which it may be applicable.

     2.   Purchase and Sale.

          2.1 Agreement of Purchase and Sale. Subject to the terms and
     conditions set forth in this Agreement, on the Closing Date (as defined in
     subparagraph 3.1 hereof), Seller shall sell, transfer, assign and deliver
     the Purchased Assets to Buyer, and Buyer shall purchase, the Purchased
     Assets, free and clear of all Liens except as otherwise expressly provided
     for in this Agreement. Buyer shall have the right to direct Seller to
     transfer title to some or all of the Purchased Assets directly to a
     designee of Buyer.

          2.2 "Purchased Assets". As used in this Agreement, the term "Purchased
     Assets" means:

          (i) All of Seller's Tangible Property used in or for the Business and
     as described in Schedule 2.2(i);

          (ii) All of Seller's Real Property as described in Schedule 2.2(ii);

          (iii) All of Seller's Contract Rights under the Assumed Contracts;

          (iv) All transferable rights under all Permits granted or issued to
     Seller or otherwise held by Seller relating to or for the benefit of the
     Business and the Plant as described in Schedule 2.2(iv) hereof; and

                                       6-
<PAGE>

          (v) All of Seller's claims, causes of action and other legal rights
     and remedies, whether or not known as of the Closing Date, relating to
     either (1) Seller's ownership of the Purchased Assets or (2) the operation
     of the Business, but excluding causes of action and other legal rights and
     remedies of Seller (A) against the Buyer with respect to the transactions
     contemplated by this Agreement or (B) relating exclusively to Seller's
     assets not included in the Purchased Assets.

          2.3 Assumption of Liabilities. Subject to the terms and conditions set
     forth in this Agreement, on the Closing Date, Buyer shall only assume,
     become primarily liable for, and agree to pay and perform in due course,
     the Assumed Liabilities. Seller shall retain and be responsible for all
     Excluded Liabilities.

          2.4 Excluded Liabilities. Except as may be otherwise expressly
     provided in this Agreement, Buyer shall not assume, and shall not be liable
     or responsible for, any other liabilities or obligations of Seller other
     than the Assumed Liabilities (collectively, "Excluded Liabilities").

          2.5 Purchase Price.

               2.5.1 Amount of Purchase Price. The cash portion of the purchase
          price for the Purchased Assets shall be the amount of Six Million
          Dollars ($6,000,000) (the "Cash Purchase Price"), of which (i) Three
          Hundred Thousand Dollars ($300,000) shall be deposited into escrow in
          accordance with the provisions of subparagraph 3.3(ii) hereof as an
          earnest money deposit (the "Deposit") and (ii) Five Million Seven
          Hundred Thousand ($5,700,000) shall be paid on the Closing Date. The
          sum of (a) the amount of the Assumed Liabilities, plus (b) the Cash
          Purchase Price, is hereinafter sometimes referred to as the "Purchase
          Price."

               2.5.2 Allocation of Purchase Price. Set forth on Schedule 2.5.2
          is an allocation of the Purchase Price (the "Allocation Statement").
          Buyer and Seller shall each report the Tax consequences of the
          purchase and sale contemplated hereby (including the filing of United
          States Internal Revenue Service Form 8594) in a manner which is
          consistent with the allocation that is set forth on the Allocation
          Statement.

     3. Closing.

          3.1 Place and Date. The closing of the purchase and sale of the
     Purchased Assets pursuant hereto (the "Closing") shall take place (i) at
     the offices of Blank Rome Tenzer Greenblatt LLP, 405 Lexington Avenue, New
     York, NY 10174 at 10:00 A.M., local time, on the second Business Day
     following the day on which the last to be fulfilled or waived of the
     conditions set forth in paragraph 11 hereof shall have been fulfilled or
     waived, or (ii) at such other time, date and/or place as may be agreed upon
     by the parties hereto, but no earlier than January 1, 2001 and no later
     than January 5, 2001. The date on which the Closing occurs is hereinafter
     referred to as the "Closing Date." Notwithstanding the foregoing, Buyer
     shall have the right to accelerate the Closing Date to December 29, 2000 by
     notice to Seller, which notice must be received by Seller on or before
     December 27, 2000.

                                       7-
<PAGE>

          3.2 Actions by Seller. At the Closing, Seller shall execute and
     deliver to Buyer (or to such other party as identified below):

          (i) a Bill of Sale and Assignment in substantially the form of Exhibit
     A attached hereto and made a part hereof and such other instruments of
     transfer and assignment as may be required in order to transfer to Buyer
     all of Seller's right, title and interest in and to the Purchased Assets
     (other than the Real Property);

          (ii) one or more warranty deeds executed by Seller sufficient to
     convey the Real Property as required under this Agreement, together with
     any required transfer tax or ancillary conveyance documents;

          (iii) an assignment of all Assumed Contracts (including, without
     limitation, all warranties and guaranties in connection therewith) and all
     assignable Permits (including, without limitation, the Environmental
     Permits);

          (iv) such affidavits and/or certificates reasonably required by
     Buyer's title company to insure the title of the Real Property in the
     manner required to be delivered in Section 11.1.5; and

          (v) deliver to Escrow Agent (as defined in subparagraph 3.3(ii) below)
     the sum of One Hundred Thousand Dollars ($100,000) (the "Physical
     Improvements Fund") to be held in an interest bearing escrow account and
     disbursed pursuant to the terms set forth in subparagraphs 10.3(iii), (iv)
     and (v) below.

The documents referred to in clauses (i) through (iv) above are hereinafter
sometimes severally referred to as a "Seller Ancillary Agreement" and
collectively referred to as the "Seller Ancillary Agreements."

          3.3 Actions by Buyer. The Buyer shall:

          (i) deliver the Cash Purchase Price to Seller, by wire transfer of
     immediately available funds to an account designated by Seller at least two
     (2) business days prior to the Closing Date (less the Deposit);

          (ii) deliver the Deposit to First American Title Company of East
     Idaho, Inc., as escrow agent (the "Escrow Agent"), simultaneously with the
     execution of this Agreement, to be held in escrow pursuant the provisions
     of an escrow agreement (the "Escrow Agreement") in substantially the form
     attached hereto as Exhibit B, which Deposit (together with any accrued
     interest thereon) shall be released by the Escrow Agent in accordance with
     provisions of the Escrow Agreement; and

          (iii) execute and deliver to Seller, or cause to be executed and
     delivered to Seller, on or prior to the Closing Date, each of the Seller
     Ancillary Agreements to which Buyer or any of its Affiliates or designees
     is a party.

                                       8-
<PAGE>

The documents referred to in clauses (ii) and (iii) above are hereinafter
sometimes severally referred to as a "Buyer Ancillary Agreement" and
collectively referred to as the "Buyer Ancillary Agreements."

     4.   Representations and Warranties of Seller. Seller hereby represents and
warrants to Buyer as follows:

          4.1 Corporate Existence and Power. Seller is a limited liability
     company duly organized, validly existing and in good standing under the
     laws of the State of Idaho and has all power required to own and lease the
     Purchased Assets and to carry on and operate the Business as now conducted.
     Seller is duly qualified to do business as a foreign company and is in good
     standing in each jurisdiction where the character of the Purchased Assets
     owned or leased by it or the nature of its activities makes such
     qualification necessary to carry on the Business as now conducted. A copy
     of the Operating Agreement of Seller as amended to date (the "Operating
     Agreement") has been furnished to Buyer and is complete and correct.

          4.2 Authority. The execution and delivery by Seller of this Agreement
     and the Seller Ancillary Agreements, the consummation of the transactions
     contemplated hereby and thereby, and the performance by Seller of its
     obligations hereunder and thereunder, are within the powers of Seller, and
     have been duly authorized by all necessary action on the part of Seller,
     and the Seller has all necessary power with respect thereto. This Agreement
     constitutes, and each Seller Ancillary Agreement when executed and
     delivered by Seller pursuant to this Agreement shall constitute, a legal,
     valid and binding obligation of Seller in accordance with its terms.

          4.3 Ownership of Seller. The members of Seller set forth on Schedule
     4.3 (the "Members") own, beneficially and of record, all of the outstanding
     membership interests of Seller.

          4.4 Noncontravention. The execution and delivery by Seller of this
     Agreement and the Seller Ancillary Agreements, the performance by it of its
     obligations hereunder and thereunder, and the consummation of the
     transactions contemplated hereby and thereby, do not and will not (with or
     without the giving of notice or the passage of time) (a)(i) contravene or
     conflict with the Articles of Organization or Operating Agreement of
     Seller; (ii) contravene or conflict with or constitute a violation of any
     provision of Applicable Law; or (iii) result in a breach, conflict,
     violation, or constitute a default under or give rise to any right of
     termination, cancellation or acceleration of, or to a loss of any benefit
     to which Seller is entitled under, any Assumed Contract or Permit, or (b)
     result in the creation or imposition of any Lien upon any of the Purchased
     Assets.

          4.5 Consents. Except as set forth on Schedule 4.5, the execution and
     delivery by Seller of this Agreement and the Seller Ancillary Agreements,
     the performance by Seller of its obligations hereunder and thereunder, and
     the consummation of the transactions contemplated hereby and thereby,
     require no action by, consent or approval of, or filing with, any
     Governmental Authority or other Person.

                                       9-
<PAGE>

          4.6 Financial Statements of the Business. Seller has previously
     delivered to Buyer: (i) the unaudited balance sheets of the Seller as at
     December 1996, 1997 and 1998 , and (ii) the unaudited statements of
     operations of the Seller for the years then ended (collectively, the
     "Financial Statements"). The Financial Statements fairly present the
     financial position of the Business as at the dates thereof and its results
     of operations for the periods indicated.

          4.7 Absence of Certain Changes. Since December 31, 1998, Seller has
     not, with respect to the Purchased Assets:

          (i) experienced any event or circumstances which has had or would be
     reasonably expected to have a Material Adverse Effect;

          (ii) subjected any of the Purchased Assets to a Lien;

          (iii) except for the lease of the Plant to Beatrice Foods, which lease
     expires on November 30, 2000, sold, transferred, leased to others or
     otherwise disposed of any of the items included in the Purchased Assets, or
     cancelled or compromised any debt or claim, or waived or released any right
     of substantial value;

          (iv) suffered any damage, destruction or loss (whether or not covered
     by insurance) which, individually or in the aggregate, has had a Material
     Adverse Effect;

          (v) encountered any labor union organizing activity, had any actual or
     threatened employee strikes, work stoppages, slowdowns or lockouts, or had
     any material change in its relations with its employees, agents, customers
     or suppliers;

          (vi) instituted, settled or agreed to settle any Proceeding before any
     court or governmental body other than in the ordinary course of the
     Business consistent with past practice;

          (vii) entered into any Contract other than in the ordinary course of
     the Business; or

          (viii) agreed to do any of the foregoing.

          4.8 Title to and Adequacy of Purchased Assets. The Purchased Assets
     and the rights granted to Buyer pursuant to the Seller Ancillary Agreements
     comprise all of the properties and assets used and/or owned by Seller
     (other than the Optioned Property). At the Closing, Buyer shall acquire
     good and valid title to the Purchased Assets free and clear of all Liens.
     Seller has good and valid title to all of the Purchased Assets, free and
     clear of all Liens. To the best of Seller's knowledge, the buildings,
     plants, structures and equipment of the Seller which are included among the
     Purchased Assets are in operating condition and are (i) structurally sound
     and (ii) in good condition and repair. Seller has no knowledge about
     whether the buildings, plants, structures and equipment of the Seller which
     are included among the Purchased Assets are (i) safe for the type of
     business currently conducted by the Seller or (ii) fit for the particular
     purpose for which they are intended. To the best of Seller's knowledge,
     none of such

                                      10-
<PAGE>

     buildings, plants, structures or equipment is in need of maintenance or
     repairs except for ordinary, routine maintenance or repairs that are not
     material in nature or cost.

          4.9 Legal Proceedings. There are no actions, suits, hearings,
     arbitrations, proceedings (public or private) or governmental
     investigations that have been brought by or against any Governmental
     Authority or any other Person (collectively, "Proceedings") pending or
     threatened against Seller with respect to the Business or any of the
     Purchased Assets or the Assumed Liabilities as to which there is a
     likelihood of a determination or resolution adverse to Seller; and there
     are no outstanding orders, judgments or decrees (other than those of
     general application) of any Governmental Authority which are binding upon
     any of the Purchased Assets or the Business. There are no Proceedings
     pending or threatened against Seller which seek to enjoin or rescind any of
     the transactions contemplated by this Agreement or otherwise prevent Seller
     or any of its Affiliates from complying with any of the terms and
     provisions of this Agreement or any of the Seller Ancillary Agreements.
     There is no condemnation proceeding pending with regard to all or any part
     of the Real Property and, to Seller's knowledge, there is no such
     proceeding contemplated by any Governmental Authority.

          4.10 Contracts and Leases. Schedule 4.10 sets forth a complete list of
     all Contracts that shall be assumed by Buyer hereunder (the "Assumed
     Contracts"). Each Assumed Contract is a legal, valid and binding obligation
     of the Seller and is enforceable against each other party thereto in
     accordance with its terms. Neither Seller nor any other party thereto is in
     default or has failed to perform any obligation thereunder. Complete and
     correct copies of each Contract have been previously delivered or made
     available to Buyer. There are no leases, tenancies or rights of occupancy
     affecting the Real Property and the Real Property shall be delivered free
     and clear of any of the foregoing.

          4.11 Permits. Schedule 2.2(iv) hereof sets forth all Permits which
     Seller has obtained and which, to the best of Seller's knowledge, are
     required to be obtained with the respect to the Purchased Assets. Except as
     set forth on Schedule 4.11 hereof, all such Permits have been duly obtained
     and are in full force and effect, all conditions and requirements
     applicable to such Permits have been complied with and there is no pending
     threat of modification or cancellation of any such Permit; and no
     buildings, improvements or Tangible Property located on the Real Property
     or the current use of the Real Property depend on any dedication, variance,
     subdivision, special exception or other special governmental approval which
     has not been unconditionally granted for their continuing legality; and
     neither the Real Property, the Tangible Property nor the maintenance or use
     thereof violates any Applicable Law relating thereto.

          4.12 Compliance with Laws. Except as set forth on Schedule 4.12, (i)
     to the best of Seller's knowledge, the use and ownership of the Purchased
     Assets by Seller do not violate any Applicable Law or Permits (including,
     but not limited to, any Environmental Laws or Environmental Permits); (ii)
     to the best of Seller's knowledge, no Applicable Laws are or shall be
     violated by the construction, maintenance, operation or use of the
     Purchased Assets, including, without limitation, any buildings or other
     improvements on the Real Property or by such continued maintenance
     operation or use of the parking of delivery areas; and (iii) Seller has

                                      11-
<PAGE>

     received no written notice of any violation of, or applicable to, any
     Applicable Law or Permit with respect to the Business or the Purchased
     Assets.

          4.13 Environmental Matters.

          (i) Except as set forth on Schedule 4.13(i), there are no underground
     or aboveground storage tanks, active or inactive waste treatment and/or
     disposal facilities including, but not limited to, incinerators or surface
     impoundments at, on, under or within any of the facilities of the Business;
     and none of the foregoing has been closed or removed by Seller;

          (ii) Except as set forth on Schedule 4.13(ii), Seller has not received
     any notice from a Governmental Authority that it is, or may be deemed to
     be, a "potentially responsible person" (as such term may be defined in any
     Environmental Law) or otherwise liable in connection with any waste
     disposal site allegedly containing any Hazardous Substances or other
     location used for the disposal of any Hazardous Substances, or notice of
     any failure by Seller to comply in any material respect with any
     Environmental Law or the requirements of any Environmental Permit held by
     Seller;

          (iii) Except for (x) those items identified in the environmental
     reports referenced in Schedule 4.13(i) and (y) de minimis quantities of
     substances stored and/or or disposed of in compliance with Environmental
     Laws, during the period of Seller's ownership of the Real Property and, to
     the best of the knowledge of Seller prior to Seller's ownership of the Real
     Property, the Real Property has not been used for the generation, storage
     or disposal of Hazardous Substances or as a land-fill or other waste
     disposal site and no Hazardous Substances or any toxic wastes, substances
     or materials (including, without limitation, asbestos) have been released
     or discharges from or onto the Real Property. The term "Hazardous
     Substances" includes, without limitation, petroleum, including crude oil or
     any fraction thereof, natural gas, natural gas liquids, liquified natural
     gas, or synthetic gas usable for fuel (or mixtures of natural gas or such
     synthetic gas), and any substance, material waste, pollutant or contaminant
     listed or defined as hazardous or toxic under any Environmental Law;

          (iv) Seller has not been required by any Governmental Authority to
     perform any remedial activity or other response action in connection with
     any Environmental Matter;

          (v) Seller has made available to Buyer all studies, analyses and test
     results in the possession, custody or control of Seller regarding
     Environmental Matters relating to the Business and the Purchased Assets
     (collectively, the "Environmental Reports");

          (vi) Except as described in the Environmental Reports and to the best
     of Seller's knowledge, there are no conditions, events, circumstances,
     facts, activities, practices, incidents, actions or omissions at or on the
     facilities of the Business, or with respect to the operation of the
     Business or the use or ownership of the Purchased Assets:

                                      12-
<PAGE>

               (a) that would reasonably be expected to give rise to any
          Environmental Costs to the Buyer; or

               (b) that would reasonably be expected to form the basis of any
          Proceedings relating to any Environmental Matter;

          (vii) To the best of Seller's knowledge, no event has occurred which,
     with the passage of time or the giving of notice or both, would constitute
     non-compliance with Environmental Laws. Seller has received no written
     notice of any actions, suits, claims, or proceedings relating to a
     violation or non-compliance with any Environmental Laws pending which may
     affect the Real Property, or with respect to the disposal, discharge or
     release of Hazardous Substances at or from the Real Property.

          4.14 Taxes. With respect to the Purchased Assets (including, without
     limitation, the Real Property), Seller has: (i) timely filed in accordance
     with all Applicable Laws, all material returns, statements, reports,
     estimates, declarations and forms (collectively, "Tax Returns") required to
     be filed by it with respect to Taxes, (ii) paid all Taxes shown to have
     become due pursuant to such Tax Returns, and (iii) paid all Taxes for which
     a notice of, or assessment or demand for, payment has been received, other
     than Taxes which are being contested in good faith. All Tax Returns filed
     by Seller are true, correct and complete in all material respects, and all
     Taxes for which Seller is liable have been paid or adequate provisions in
     the financial books of the Seller have been made. All material amounts
     required to be collected or withheld by Seller with respect to Taxes have
     been duly collected or withheld and any such amounts that are required to
     be remitted to any taxing authority have been duly remitted, no extension
     of time within which to file any Tax Return under which Buyer could be held
     responsible has been requested, which Tax Return has not since been filed,
     and there are no waivers or extensions of any applicable statute of
     limitations for the assessment or collection of Taxes with respect to any
     Tax Return for which Buyer could be held responsible which remain in
     effect.

          4.15 Employee Plans. Schedule 4.15 lists each stock bonus, stock
     option, stock purchase, bonus, incentive, deferred compensation, vacation,
     insurance, disability, severance, termination indemnity, or other plan,
     fund, program, policy, contract or arrangement providing employee benefits
     maintained or contributed to by Seller or any of its Affiliates in which
     any present or former employees of the Business participated or have
     participated and under which any of them or any beneficiaries of any of
     them has accrued and remains entitled to any benefits (collectively, the
     "Employee Plans"). Seller has heretofore delivered or made available to
     Buyer a copy of each Employee Plan, or a written summary thereof which is
     correct and complete in all material respects. Seller has also made
     available to Buyer copies of all material documents and instruments
     relating to each of the Employee Plans. Each of the Employee Plans which is
     intended to be qualified under Section 401(a) of the Code, and the trust
     (if any) forming a part thereof, has received a favorable determination
     letter from the Internal Revenue Service as to its qualification under the
     Code and to the effect that such trust is exempt from taxation under
     Section 501(a) of the Code. All contributions to the Employee Plans
     attributable to any period on or before the Closing Date shall have been
     paid or accrued prior to the Closing Date. Each of the Employee Plans has
     been operated and administered in all

                                      13-
<PAGE>

     material respects in accordance with Applicable Law, including, but not
     limited to, the Code and the Employee Retirement Income Security Act of
     1974, as amended.

          4.16 Insurance. The Business and the Purchased Assets are, and prior
     to the date hereof have been, insured against risks normally insured
     against, in amounts normally carried, by companies engaged in similar
     businesses. Set forth on Schedule 4.16 attached hereto is a true, correct
     and complete list of the insurance policies in effect with respect to the
     Business and Purchased Assets (including the deductibles), which policies
     shall expire on November 30, 2000. Seller shall (i) cause to be maintained
     in full force and effect until November 30, 2000 all of the insurance
     policies listed on Schedule 4.16. and (ii) obtain and maintain property and
     casualty insurance with respect to the Purchased Assets in the minimum
     amount of Six Million Dollars ($6,000,000) from December 1, 2000 through
     the Closing Date. No written notice has been received from the insurance
     company which issued any of such insurance policies stating in effect that
     such policy will not be renewed or will be renewed at a higher premium than
     is presently payable thereunder.

          4.17 Tax Lots. The Real Property is comprised of tax lot 10343100.

          4.18 No Repairs Required. To the best of Seller's knowledge, all
     buildings and improvements (including all roads, parking areas, curbs,
     sidewalks, sewers, water system, heating, ventilation, air conditioning and
     other utilities and building systems) on the Real Property have been
     constructed on soil having sufficient density and installed in accordance
     with the plans and specifications approved by the governmental authorities
     having jurisdiction and are in good working order without defects in
     workmanship and do not require any repairs, other than such repairs as are
     necessary for normal maintenance or which may be necessary due to normal
     wear and tear; and Seller has not received any notice from any insurance
     company or underwriter requesting performance of any repairs or alterations
     to the Real Property or of any defect in the Real Property or that would
     adversely affect the insurability of the Real Property or cause an increase
     in insurance premiums.

          4.19 Building Systems. To the best of Seller's knowledge, all water,
     sewer, gas, electric, telephone, drainage facilities and other utilities
     required for the normal and proper operation of the Real Property are
     installed and connected to the Real Property with valid permits and are
     serving the Real Property and are adequate to serve the Real Property for
     its intended use and to permit full compliance with all requirements of
     Applicable Law; all permit and connection fees are fully paid and no action
     is necessary on the part of Buyer to transfer such permits to it; all
     utilities serving the Real Property either enter the Real Property through
     adjoining public streets or if they pass through adjoining private land, do
     so in accordance with valid public easements or private easements of
     unlimited duration; and no fact or condition exists which would result in
     the termination of such utilities services to the Real Property.

          4.20 Independent Unit. To the best of Seller's knowledge, the Real
     Property is an independent unit which does not now rely on any facilities
     (other than facilities covered by easements of unlimited duration
     appurtenant to the Real Property or facilities of municipalities or public
     utilities or the other Permitted Liens) located on any property that is not
     part of the Real Property to fulfill any municipal or other governmental
     requirement, or for the

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<PAGE>

     furnishing to the Real Property of any essential building systems or
     utilities (including drainage facilities, catch basins and retention
     ponds). No other building or other property that is not part of the Real
     Property relies upon any part of the Real Property to fill any municipal or
     other governmental requirement, or to provide any essential building
     systems or utilities.

          4.21 No Assessments. To the best of Seller's knowledge, no assessments
     or impact fees for public improvements have been made or charged or, to the
     best of Seller's knowledge, proposed against the Real Property which remain
     unpaid or which will remain unpaid at the Closing, including without
     limitation those for street widenings, intersection restructurings,
     construction of traffic signals, sewer, water, gas and electric lines and
     mains, streets, roads, sidewalks and curbs. In the event any such
     assessments or impact fees are pending or proposed or if any work for
     public improvements, including but not limited to street widenings,
     intersection restructurings, traffic signals, sewer, water, gas and
     electric lines and mains, streets, roads, sidewalks or curbs has commenced,
     Seller shall be responsible for the portions, or installments, if any, of
     such assessments due and payable prior to the Closing Date.

          4.22 Violations. To the best of Seller's knowledge, there is no
     violation of any covenant, condition or restriction or any agreement
     contained in any instrument encumbering or benefiting the Real Property.
     Seller has not granted any rights to adjoining land owners which shall be
     binding upon Buyer.

          4.23 Mechanic's Liens. To the best of Seller's knowledge, there are
     no, and on the Closing Date there shall be no, filed or inchoate
     mechanics', materialmen's or similar liens against the Real Property or any
     portion thereof.

          4.24 No Contracts or Agreements. Except as set forth on Schedule 4.24,
     there are no contracts or agreements of any kind relating to the Real
     Property to which Seller or its agents are a party which shall be binding
     on Buyer after the Closing. There are no facts or events which could
     materially affect the Real Property which have not been disclosed in
     writing to Buyer.

          4.25 No Liens. There are no Liens on the Real Property except (a) as
     disclosed in the title insurance report attached to Schedule 4.25 attached
     hereto and (b) zoning restrictions on the use of the Real Property
     (provided such zoning restrictions are not violated by present use or any
     reasonable expansion of extension of present use) and minor defects or
     irregularities in title, provided the same do not individually or in the
     aggregate render title unmarketable or otherwise adversely affect the
     Seller's Real Property. Seller has the right to use all easements and
     rights of way including, but not limited to easements for power lines,
     water lines, sewers and roadways and other means of ingress and egress,
     which are necessary for the use of the Real Property.

          4.26 Information as to Seller. None of the representations or
     warranties made by the Seller in this Agreement or in any agreement or
     document executed and delivered by or on behalf of it pursuant hereto are
     false or misleading with respect to any material fact, or omit to state any
     material fact necessary in order to make the statements therein contained
     not misleading.

                                      15-
<PAGE>

     5. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows:

          5.1 Corporate Existence and Power. Buyer is a corporation duly
     incorporated, validly existing and in good standing under the laws of the
     State of Delaware, and has all corporate power required to own, lease and
     operate its properties and assets and to carry on its business.

          5.2 Corporate Authorization. The execution and delivery by Buyer of
     this Agreement and the Buyer Ancillary Agreements, the consummation of the
     transactions contemplated hereby and thereby, and the performance by Buyer
     of its respective obligations hereunder and thereunder, are within the
     corporate powers of Buyer and has been duly authorized by all necessary
     corporate action on the part of Buyer. This Agreement constitutes, and each
     Buyer Ancillary Agreement when executed and delivered by Buyer pursuant to
     this Agreement shall constitute, a legal, valid and binding obligation of
     Buyer in accordance with its terms.

     6. Certain Covenants.

          6.1 Further Assurances. Subject to the terms and conditions herein
     contained, promptly after the date hereof each of the parties hereto shall
     cooperate with the other and use its reasonable best efforts to take, or
     cause to be taken, all actions, and to do, or cause to be done, all things
     necessary, proper or advisable, to ensure that the conditions set forth in
     paragraph 11 hereof are satisfied and to consummate the transactions
     contemplated by this Agreement and the Ancillary Agreements.

          6.2 Consents and Authorizations. Seller shall obtain, and shall
     cooperate with Buyer in obtaining, all authorizations, consents, orders and
     approvals of any Governmental Authority or any other Person that is
     necessary in connection with the consummation of the transactions
     contemplated by this Agreement and the Ancillary Agreements, and to take
     all reasonable actions to avoid the entry of any order or decree by any
     Governmental Authority prohibiting the consummation of the transactions
     contemplated hereby or thereby.

     6.3 Conduct of Business.

               6.3.1 Affirmative Covenants. During the period from the date of
          this Agreement until the Closing Date, except as Buyer may otherwise
          consent to in writing or as otherwise contemplated by this Agreement
          (including the Disclosure Schedules), Seller shall in respect of the
          Purchased Assets:

          (i) Except with respect to those employees that Buyer notifies Seller
     that Buyer does not intend to retain after the Closing, Seller shall use
     its best efforts to keep available the services of the employees who are
     currently working at the Plant up to and including the Closing Date.

                                      16-
<PAGE>

          (ii) maintain the Purchased Assets in the usual, regular and ordinary
     course and in accordance with past practice;

          (iii) use its best efforts to maintain insurance in full force and
     effect with respect to the Purchased Assets that is comparable in amount,
     scope and type to that in effect on the date of this Agreement;

          (iv) maintain the Books and Records in the usual, regular and ordinary
     manner, on a basis consistent with prior years;

          (v) perform and comply in all material respects with its obligations
     under the Assumed Contracts;

          (vi) maintain in existence all licenses, permits and approvals in
     existence now or in the future with respect to the ownership, operation or
     improvement of the Purchased Assets and shall not apply or consent to any
     action or proceeding which shall have the effect of terminating or changing
     such licenses, permits and approvals or the zoning of the Real Property;
     and

          (vii) comply with all notices of violations of law or municipal
     ordinances, orders or requirements noted in or issued by any Governmental
     Authority, against or affecting the Purchased Assets as of the Closing and
     the same shall be discharged of record prior to the Closing.

               6.3.2 Negative Covenants. During the period from the date of this
          Agreement until the Closing Date, except as Buyer may otherwise
          consent to in writing or as otherwise contemplated by this Agreement
          (including the Disclosure Schedules), Seller shall not in respect of
          the Purchased Assets.

          (i) vary or amend the terms of any of the Assumed Liabilities other
     than in the ordinary course of business consistent with past practice;

          (ii) subject any of the Purchased Assets to any Lien;

          (iii) sell, lease, transfer, assign or otherwise dispose of any
     material portion of the Purchased Assets;

          (iv) enter into any material Contract, or materially modify,
     terminate, amend or grant any waiver in respect of any Contract, except, in
     either case, in the ordinary course of the Business consistent with past
     practice;

          (v) hire executive Employees, grant to any Employee any increase in
     compensation in any form (other than pursuant to existing Contracts and
     Employee Plans, and except for regularly scheduled increases made in the
     ordinary course of the Business and consistent with past practice);

                                      17-
<PAGE>

          (vi) enter into any transaction, take any action, or by inaction
     permit any event to occur, that would result in any of the representations
     and warranties of Seller contained herein not being true and correct in all
     material respects immediately after the occurrence of such transaction,
     action or event or on the Closing Date;

          (vii) mortgage or charge any of the Purchased Assets;

          (viii) sell, assign, create, terminate, or modify any right, title or
     interest whatsoever in or to the Real Property or create, or permit to
     exist, any lien, encumbrance, easement, or charge thereon, without properly
     discharging same prior to Closing;

          (ix) list the Real Property with any broker or otherwise solicit or
     make or accept any offers to sell the Real Property, engage in any
     discussions or negotiations with any third party with respect to the sale
     or other disposition of the Real Property, or enter into any contracts or
     agreements (whether binding or not) regarding any disposition of the Real
     Property, other than such offers, discussions, negotiations, contracts or
     agreements which are contingent upon the failure of the transactions
     contemplated in this Agreement to be consummated in accordance with the
     terms hereof;

          (x) assign, transfer, encumber or remove any intangible property or
     Tangible Property at the Real Property;

          (xi) engage in any activity that would permit any party to file a Lien
     against the Purchased Assets after the Closing Date; or

          (xii) agree or otherwise commit to take any of the actions prohibited
     by the foregoing clauses (i) through (xi).

     6.4 Access to Information. During the period commencing on the date of this
Agreement and ending on the Closing Date (i) Seller shall provide, or cause to
be provided to, Buyer and its representatives (A) such financial and operating
data and other information as Buyer or its representatives may from time to time
reasonably request with respect to the Business and the Purchased Assets, and
(B) access during normal business hours to the assets, properties, plants,
offices, warehouses and other facilities, Books and Records of and Contracts
relating to the Business and the Purchased Assets as Buyer may from time to time
reasonably request; and (ii) Buyer and its representatives shall be entitled to
consult with the representatives, officers and employees of Seller with respect
to the Business. Seller agrees that no investigation by Buyer or its
representatives shall affect or limit the scope of the representations and
warranties of Seller contained herein or in any of the Seller Ancillary
Agreements.

     6.5 Mail; Payments. Seller shall promptly deliver to Buyer any mail or
other communication received by it after the Closing Date pertaining to the
Business or the Purchased Assets. Seller and Buyer shall promptly (but, in any
event, not more than five Business Days after receipt thereof) pay or deliver to
the other party any cash or checks which have been mistakenly sent to it but
which should properly have been sent to such other party.

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<PAGE>

     6.6 Access to Records. (a) For a period of at least three years from the
Closing Date, Seller shall retain or cause to be retained all agreements,
documents, books, records and files in its possession or in the possession of
any of its Affiliates relating to the Business or the Purchased Assets
(collectively, the "Records"). After the Closing, upon reasonable advance notice
given to Seller, Seller shall give, or cause to be given, to the
representatives, employees, counsel and accountants of Buyer, access during
normal business hours to the books and records relating to the Business and the
Purchased Assets, and shall permit such representatives to examine and copy such
Records to the extent reasonably requested by the other party in connection with
the preparation of tax and financial reporting matters, audits, legal
proceedings, governmental investigations and other valid business purposes.

     6.7 Further Assurances. At any time and from time to time after the Closing
Date, Buyer and Seller shall each execute or cause to be executed and deliver or
cause to be delivered all such documents and instruments, and do or cause to be
done all such acts, as the other may reasonably request in order to: (i)
transfer, assign, deliver and convey to Buyer the Business and the Purchased
Assets free and clear of all Liens; (ii) implement the assumption by Buyer of
the Assumed Liabilities; (iii) implement the provisions of the Ancillary
Agreements; or (iv) otherwise carry out the intent of the parties under this
Agreement and the Ancillary Agreements.

     6.8 Public Announcements. Each of the parties hereto (i) shall consult with
each other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby, and (ii)
shall not, except as may be required by Applicable Law, issue any such public
statement without the prior verbal consent of the other parties (such consent
not to be unreasonably withheld or delayed).

     6.9 Waiver of Compliance with Bulk Transfer Laws. Buyer waives compliance
by Seller with the provisions of Article 6 of the Uniform Commercial Code ("Bulk
Sales Laws") in each applicable jurisdiction. Seller shall comply with all other
Laws relating to bulk sales and/or the sale and purchase of the Purchased
Assets.

     6.10 Noncompetition. Until the third anniversary of the Closing Date,
neither Seller nor the Members (other than Gary Seamons) shall and shall cause
each of their Affiliates not to, directly or indirectly, (A) engage or become
interested in any entity (whether as owner, manager, operator, licensor,
licensee, lender, partner, stockholder, joint venturer, employee, consultant or
otherwise) which sells manufactures, distributes or markets any products or
services within a radius of one hundred (100) miles of the Plant that are
competitive with the products and services sold, manufactured, distributed or
marketed by the Business or (B) take any other action which constitutes an
interference with or a disruption of Buyer's use, ownership and enjoyment of the
Purchased Assets. On or prior to the Closing Date, Seller shall cause Gary
Seamons to execute and deliver to Buyer a noncompetition agreement containing
provisions substantially similar to the provisions of this subparagraph 6.10.

     6.11 Supplemental Disclosure Schedules. Seller shall, from time to time
after the date of this Agreement and prior to the Closing Date (but no later
than three days prior to the Closing), by notice given in accordance with this
Agreement, supplement or amend

                                      19-
<PAGE>

any Disclosure Schedule to correct any matter which would constitute a breach of
any of its representations and warranties herein contained; provided, however,
that Buyer shall not be obligated to consummate the transactions contemplated by
this Agreement if any such amended disclosure shall modify the terms and
conditions set forth herein to Buyer's material detriment. No such supplemental
or amended Disclosure Schedule shall be deemed to cure any breach of such
representation or warranty for any purpose if the Closing does not occur as a
result of such breach.

     6.12 Purchase Option. At any time during a six (6) month period commencing
on the Closing Date, Buyer shall have the option, but not the obligation, to
purchase the Optioned Property (as described in Schedule 6.12), at a purchase
price of One Hundred Twenty-Five Thousand Dollars ($125,000), by notifying the
Seller in writing of its desire to do so. The closing of the transaction for the
purchase by Buyer of the Optioned Property shall take place on the date
designated by Buyer in its notice to Seller, which date shall not be more than
sixty (60) nor less than thirty (30) days following the date of such notice,
whereupon Buyer shall pay to Seller the aforesaid purchase price and Seller
shall deliver to Buyer such duly executed deeds, conveyance documents and bills
of sale and any other documents reasonably requested by the Buyer to transfer
title to the Optioned Property to the Buyer, free and clear of all Liens.

     7. Certain Tax Matters.

          7.1 Transfer Taxes. Seller shall be responsible for any and all (i)
     sales, use, transfer, stamp, conveyance, recording, value-added and other
     similar Taxes (other than any Income Taxes) imposed under Applicable Law,
     and (ii) recording and filing fees, notarial fees and other similar costs
     of Closing, with respect to the purchase and sale of the Purchased Assets
     and the Business or otherwise on account of this Agreement or any of the
     Ancillary Agreements, or any of the transactions contemplated hereby or
     thereby.

          7.2 Apportionment of Certain Taxes. As of the Closing Date, any
     personal property taxes, real estate taxes, assessments and penalties and
     water, sewer, utility charges and other items in respect of the Purchased
     Assets and the Assumed Liabilities shall be apportioned (on a pro rata
     basis, based upon the number of days in the relevant taxable period)
     between Seller and Buyer. Seller shall be responsible for all such Taxes
     relating (as determined under Applicable Law) to periods up to and
     including the Closing, and Buyer shall be responsible for all such taxes
     relating to post-Closing periods. Any payments or reimbursements of such
     Taxes required to be made by Seller to Buyer or by Buyer to Seller pursuant
     to this subparagraph 7.2 shall be paid by Seller or Buyer within the later
     of five days of Seller's or Buyer's request therefor or five days prior to
     the date on which Seller is required to pay or cause to be paid the related
     Tax liability.

                                      20-
<PAGE>

     8. Employment. Buyer may, but shall not be obligated to offer employment,
effective as of the Closing Date, to certain of the Employees. Buyer shall not
assume nor be liable to pay any pre-closing liabilities of Seller in respect of
the Employees.

     9. Environmental Matters. Seller shall be responsible for all Environmental
Costs relating to the Business or the Purchased Assets to the extent arising out
of events occurring or conditions existing prior to the Closing Date and Buyer
shall be responsible or all Environmental Costs relating to the Business or the
Purchased Assets arising out of events occurring or conditions existing
subsequent to the Closing Date.

     10. Survival; Indemnification.

          10.1 Survival of Representations, Warranties and Covenants. Each
     representation and warranty contained in this Agreement or any of the
     Ancillary Agreements shall survive the execution and delivery hereof and
     the Closing Date indefinitely. The covenants and agreements contained in
     this Agreement or any of the Ancillary Agreements shall survive the Closing
     Date and shall continue in effect in accordance with their respective
     terms.

          10.2 Indemnification by Seller. Subject to the terms and conditions
     herein contained, from and after the Closing Date, Seller shall indemnify
     and hold harmless Buyer, its Affiliates, and their respective officers,
     directors, employees, agents, consultants, representatives and successors
     from and against any Losses which may be sustained or incurred by any of
     them and which arise out of or result from:

          (i) any breach by Seller of any representation or warranty made by
     them in this Agreement or in any of the Seller Ancillary Agreements;

          (ii) any failure by Seller to perform any of their obligations
     contained in this Agreement or in any of the Seller Ancillary Agreements
     (subject, in the case of each of the Seller Ancillary Agreements, to any
     and all limitations upon and qualifications with respect to the liability
     of Seller or any of its Affiliates which may be set forth therein);

          (iii) Buyer's waiver of or Seller's noncompliance with any applicable
     Bulk Sales Laws; and/or

          (iv) the Excluded Liabilities.

This indemnification obligation shall also apply to claims directly by Buyer
against the Seller as well as to third party claims.

          10.3 Seller's Undertaking.

          (i) Seller hereby undertakes to cause to be completed the physical
     improvements, including, without limitation, the installation of up to six
     (6) monitoring wells if required by Idaho DEQ (the "Physical Improvements")
     and other recommendations identified in paragraph 4 of that certain letter
     dated September 12,

                                      21-
<PAGE>

     2000 from Idaho DEQ (the "DEQ Letter") regarding Permit LA-000084-03 (the
     "DEQ Permit") no later than June 30, 2001. If Seller has not caused the
     Physical Improvements and such other recommendations to be completed on or
     before June 30, 2001, or immediately in the event of an emergency,
     including, without limitation, the threat of the Idaho DEQ canceling the
     DEQ Permit ("Emergency"), Buyer may cause the Physical Improvements or such
     other recommendations to be completed and may withdraw the money in the
     Physical Improvements Fund and apply the proceeds of such fund to the cost
     of the Physical Improvements and such other recommendations. Seller further
     undertakes to cooperate with Buyer to cause Gary Seamons, the operator (the
     "Operator") of the land subject of the Permit, to comply with his
     obligations under the Whey Transport and Disposal Agreement (included in
     Schedule 4.10) and with the recommendations set forth in paragraph 4 of the
     DEQ Letter. Notwithstanding the foregoing, Seller specifically does not
     assume any of the management or reporting obligations or responsibilities
     of Buyer (as opposed to requirements under paragraph 4 of the DEQ Letter to
     perform installations or physical work or improvements to effectuate such
     management or reporting obligations or responsibilities) which may arise
     from and after the Closing as the holder of the DEQ Permit (such
     obligations or responsibilities hereinafter the "Excluded Obligations").

          (ii) Seller shall indemnify and hold harmless Buyer, its Affiliates,
     and their respective officers, directors, employees, agents, consultants,
     representatives and successors from and against any Losses which Buyer may
     sustain or incur which arise out of or result from any matters described in
     the DEQ Letter; provided, however, that Seller shall not be required to
     indemnify Buyer from any Losses which Buyer may sustain or incur which
     arise out of Buyer's action or inaction with respect to the Excluded
     Obligations.

          (iii) On or prior to June 30, 2000, (x) Seller shall obtain a letter
     from Idaho DEQ confirming that the recommendations identified in paragraph
     4 of the DEQ Letter (other than the Excluded Obligations) have been
     completed to the satisfaction of Idaho DEQ ("Confirmation Letter"), and
     Buyer shall cooperate with Seller with respect thereto, and (y) Seller
     shall deliver to each of Escrow Agent and Buyer a copy of the Confirmation
     Letter and a statement from Seller that the Physical Improvements have been
     completed. Unless Escrow Agent has already disbursed the Physical
     Improvement Funds pursuant to subparagraph 10.3(i) or unless Escrow Agent
     has received an objection from Buyer not later than ten (10) days after the
     date Buyer received from Seller a copy of the Confirmation Letter and said
     statement from Seller, Escrow Agent shall deliver the Physical Improvements
     Fund to Seller, less Escrow Agent's fees and expenses.

          (iv) If Seller has not caused the Physical Improvements and other
     recommendations identified in paragraph 4 of the DEQ Letter (other than the
     Excluded Obligations) to be completed by June 30, 2001 (as evidenced by the
     delivery of the Confirmation Letter to Escrow Agent and Buyer), or earlier
     in the event of an Emergency, Buyer may notify Escrow Agent in writing and
     Escrow Agent shall provide a copy of such notice to Seller, and, unless
     Escrow Agent has received an objection from Seller not later than ten (10)
     days after the date such notice was given to Seller, Escrow

                                      22-
<PAGE>

     Agent shall deliver the Physical Improvements Fund to Buyer, less Escrow
     Agent's fees and expenses.

          (v) If Escrow Agent has received no notice from either party hereto
     pursuant to this subparagraph 10.3 by December 31, 2001, Escrow Agent shall
     deliver the Physical Improvements Fund to Seller, less Escrow Agent's fees
     and expenses.

          10.4 Indemnification by Buyer. Subject to the terms and conditions
     herein contained, from and after the Closing Date, Buyer shall indemnify
     and hold harmless Seller and its Affiliates, and their respective officers,
     directors, employees, agents, consultants, representatives and successors
     from and against any Losses which may be sustained or incurred by any of
     them and which arise out of or result from any breach by Buyer or any of
     its Affiliates of any representation or warranty made by it in this
     Agreement or in any of the Buyer Ancillary Agreements or the Assumed
     Liabilities.

          10.5 Third Party Claims. Promptly after receipt by an Indemnitee of
     written notice of the assertion of a claim or the commencement of any
     action, litigation or proceeding by any third party (a "Third-Party Claim")
     with respect to any matter for which indemnification is or may be owing
     pursuant to subparagraphs 10.2, 10.3 or 10.4, the Indemnitee shall give
     written notice thereof (the "Notice") to the Indemnitor; provided, however,
     that failure of the Indemnitee to give the Indemnitor the Notice as
     provided herein shall not relieve the Indemnitor of any of its obligations
     hereunder unless the Indemnitor shall have been materially prejudiced
     thereby. The Indemnitor shall have the right, at its option and at its own
     expense, to participate in or, by giving notice to the Indemnitee no later
     than 30 days after delivery of the Notice, to take control of, the defense,
     negotiation and/or settlement of any such Third-Party Claim with counsel
     reasonably satisfactory to the Indemnitee. The Indemnitee shall have the
     right to participate in the defense, negotiation and/or settlement of any
     such Third-Party Claim with counsel of its own choosing. Notwithstanding
     the foregoing, with respect to any such Third-Party Claim, the defense,
     negotiation and/or settlement of which the Indemnitor has taken control,
     the Indemnitee shall have the right to retain separate counsel to represent
     it, and the Indemnitor shall pay the reasonable fees and expenses of such
     separate counsel, if the named parties to any such Third Party Claim
     include both the Indemnitee and Indemnitor and the Indemnitee reasonably
     determines that defenses are available to it that are unavailable to the
     Indemnitor. The Indemnitor and the Indemnitee shall each cooperate with and
     render to each other such assistance as may reasonably be requested in
     order to insure the proper and adequate defense of any such Third Party
     Claim or proceeding, which assistance shall include, without limitation,
     making appropriate personnel reasonably available for any discovery or
     trial. If the Indemnitor fails or refuses to undertake the defense of any
     such Third-Party Claim within 30 days after delivery of the Notice, the
     Indemnitee shall have the right to take exclusive control of the defense,
     negotiation and/or settlement of such Third-Party Claim at the Indemnitor's
     expense. Neither the Indemnitor nor the Indemnitee shall settle or
     compromise any Third-Party Claim without the consent of the other, which
     consent shall not be unreasonably withheld. The provisions of this
     subparagraph 10.5 shall also govern any right of indemnification granted
     pursuant to any other provision of this Agreement or any of the Ancillary
     Agreements (unless such other provision of this Agreement or the relevant
     Ancillary Agreement specifically sets forth a different procedure).

                                      23-
<PAGE>

     11. Conditions to Closing.

          11.1 Conditions to Obligations of Buyer. The obligations of Buyer to
     consummate the transactions contemplated hereby shall be subject to the
     satisfaction or written waiver by Buyer, on or before the Closing Date, of
     each of the following conditions:

               11.1.1 Representations, Warranties and Covenants.

               (i) Seller shall have performed in all material respects each of
          the agreements and covenants made by it herein and required to be
          performed on or prior to the Closing Date; and

               (ii) the representations and warranties of Seller contained
          herein shall be true, complete and correct at and as of the Closing
          Date, as if made at and as of such date except for the passage of
          time.

               11.1.2 Deliveries. Seller shall have delivered, or caused to be
          delivered to Buyer, duly executed counterparts of each of the Seller
          Ancillary Agreements.

               11.1.3 Opinion of Counsel. Buyer shall have received an opinion
          of counsel for Seller and its Affiliates, dated the Closing Date, to
          the effect specified in Exhibit C attached hereto and made a part
          hereof.

               11.1.4 Consents and Approvals. All consents, waivers, approvals,
          licenses and authorizations by third parties and Governmental
          Authorities (and all amendments and modifications to existing
          agreements with third parties) required as a precondition to the
          performance by Seller of its obligations hereunder (including, without
          limitation, the assignment by Seller of the Assumed Contracts and
          Permits to Buyer) shall have been duly obtained and shall be in full
          force and effect.

               11.1.5 Title of the Real Property.

               (i) Seller shall have given to Buyer, and Buyer shall have
          accepted from Seller, good, marketable and insurable fee simple title
          to the Real Property, subject only to the title exceptions listed on
          Schedule 11.1.5 and any title exceptions caused by Buyer or its
          employees or agents, and any title exceptions approved by Buyer in
          writing after the date hereof. Title shall be evidenced by an ALTA
          Owner's Policy and shall contain at Buyer's election, the expense of
          which shall be borne by Buyer, to the extent available under the laws
          of the State of Idaho, the following endorsements: (i) separate tax
          lot, (ii) legal lot, (iii) access, (iv) owner's comprehensive, (v)
          legal description same as survey, (vi) zoning 3.1 with parking and
          (vii) contiguity endorsements. Such policy shall, in addition, insure
          that any covenants, conditions or restrictions listed on Schedule
          11.1.5 have not been violated and, if violated, shall not cause a
          forfeiture or reverter of title.

               (ii) Buyer shall have procured the title policy and a current
          ALTA-ACSM survey of the Real Property certified to Buyer and Buyer's
          lender and title

                                      24-
<PAGE>

          company in form acceptable to Buyer. Seller shall pay the premium for
          the title policy and the Buyer shall pay the surveyor's fees for the
          survey.

               11.1.6 Confidentiality Agreement. Seller and the Members shall
          have executed and delivered an agreement, in form and substance
          reasonably satisfactory to the Buyer, not to disclose confidential
          information relating to the Purchased Assets for a period of two (2)
          years from the Closing Date.

               11.1.7 Certificate of Manager. Seller shall have furnished the
          Buyer with a certificate, executed by the Manager of Seller, dated the
          Closing Date, to the effect that it has fulfilled the conditions
          specified in subparagraphs 11.1.1(i) and (ii) hereof.

               11.1.8 Consent of the Members. Seller shall have furnished Buyer
          with a copy of the consent of the Members, authorizing Seller to
          execute and deliver this Agreement and the Seller Ancillary
          Agreements, to perform its obligations hereunder and thereunder and to
          consummate the transactions contemplated hereunder and thereunder,
          duly certified by the Manager of the Seller.

               11.1.9 Incumbency. Seller shall have furnished the Buyer with a
          certificate of the Managers of Seller certifying as to the incumbency
          and specimen signatures of the Manager of the Seller executing the
          this Agreement and the Seller Ancillary Documents on behalf of such
          corporation.

               11.1.10 Milk Supply Contract. The Buyer shall have entered into a
          milk supply contract with Snake River Dairymen's Association (the
          "Association"); provided that this condition shall be deemed satisfied
          if the Association is willing to enter into a contract with Buyer
          substantially similar to the contract that was negotiated and agreed
          to between Buyer and the Association on November 27, 2000.

               11.1.11 Escrow Agreement. Buyer, Seller and Escrow Agent shall
          have entered into an escrow agreement with respect to the Physical
          Improvements Fund in a form reasonably satisfactory to Buyer and
          Seller and containing the provisions set forth in subparagraphs
          10.3(iii), (iv) and (v) hereof.

          11.2 Conditions to Obligations of Seller. The obligations of Seller to
     consummate the transactions contemplated hereby shall be subject to the
     satisfaction or written waiver by Seller, on or before the Closing Date, of
     each of the following conditions:

               11.2.1 Representations, Warranties and Covenants.

          (i) Buyer shall have performed in all material respects each of the
     agreements and covenants made by it herein and required to be performed on
     or prior to the Closing Date; and

          (ii) The representations and warranties of Buyer contained herein
     shall be true, complete and correct at and as of the Closing Date, as if
     made at and as of such

                                      25-
<PAGE>

     date (except that any representation and warranty made as of a specified
     date shall continue to be true, complete and correct on and as of such
     date).

               11.2.2 Deliveries. Buyer shall have delivered or caused to be
          delivered to Seller, duly executed counterparts of each of the Buyer
          Ancillary Agreements.

     12. Termination Prior to Closing.

          12.1 Grounds for Termination. This Agreement may be terminated at any
     time prior to the Closing:

          (i) by the mutual written consent of Seller and Buyer;

          (ii) by either Seller or Buyer if the Closing shall not have occurred
     on or before January 5, 2001, provided, however, that neither Seller nor
     Buyer may terminate this Agreement pursuant to this clause (ii) if the
     Closing shall not have been consummated within such time period by reason
     of the failure of the party electing to terminate this Agreement to perform
     in all material respects any of its covenants and agreements contained in
     this Agreement;

          (iii) by either Seller or Buyer if any Applicable Law shall be enacted
     that makes the purchase and sale of the Business and the Purchased Assets
     pursuant hereto illegal or otherwise prohibited;

          (iv) by either Seller or Buyer in the event that a judgment,
     injunction, decree, cease and desist order or other order issued by any
     Governmental Authority prohibiting or preventing the purchase and sale of
     the Business pursuant hereto shall be in effect and shall have become final
     and nonappealable; or

          (v) by Buyer if (a) a survey of the Real Property reveals a defect or
     other matter that has a Material Adverse Effect and Seller, within a
     reasonable time after notice from Buyer, fails to cure such defect or other
     matter; or (b) a deficiency or noncompliance exists with respect to a
     Permit that has a Material Adverse Effect or Buyer determines that Seller
     does not have one or more Permits required to maintain the Plant or operate
     the Business or the Purchased Assets and Seller, within a reasonable time
     after notice from Buyer, fails to cure such deficiency or noncompliance;
     provided, however, that the Buyer may only terminate this Agreement
     pursuant to this clause (v) on or prior to December 1, 2000.

          12.2 Effect of Termination. Upon the termination of this Agreement in
     accordance with the terms hereof, it shall forthwith become void and of no
     further force and effect, except for the provisions of subparagraph 13.10
     hereof; provided, however, that no such termination shall be deemed to
     relieve any party hereto of liability for its breach of any of the terms
     and provisions hereof.

                                      26-
<PAGE>

     13. General Provisions.

          13.1 Execution in Counterparts. This Agreement (A) may be executed in
     one or more counterparts, each of which shall be deemed an original, but
     all of which together shall constitute one and the same document, and (B)
     shall become effective when one or more counterparts have been signed by
     each of the parties hereto and delivered to each of the other parties
     hereto.

          13.2 Notices. All notices, requests, demands and other communications
     given hereunder shall be in writing and shall be deemed to have been duly
     given: (i) on the date of delivery, if delivered personally or by
     messenger, (ii) on the first business day following the date of timely
     deposit with Federal Express or other nationally recognized overnight
     courier service, if sent by such courier specifying next day delivery,
     (iii) upon receipt of confirmation of transmission, if transmitted by
     telecopier; and (iv) on the third business day after mailing, if mailed by
     registered or certified mail (postage prepaid, return receipt requested);
     provided, however, that a notice of change of address or telecopier number
     shall not be deemed to have been given until actually received by the
     addressee. All such notices, requests, demands and other communications
     shall be directed to the address or telecopier number set forth below or to
     such other address or telecopier number as any party hereto may designate
     to the other party hereto by like notice:

          If to Seller or
          the Members, to:          Dairyland, Inc.
                                    320 Memorial Drive
                                    Idaho Falls, Idaho 83401
                                    Attn:  Secretary
                                    Fax No.: 208-528-6636

          Copy to:

          If to Buyer, to:          Suprema Specialties Northwest Inc.
                                    510 East 35th Street
                                    P.O. Box 280
                                    Patterson, NJ  07543-0280
                                    Attn: Steven Venechanos, CFO

          Copy to:                  Blank Rome Tenzer Greenblatt LLP
                                    405 Lexington Avenue
                                    New York, New York 10174
                                    Telecopier No. (212) 885-5001
                                    Attn: Martin Luskin, Esq.

                                      27-
<PAGE>

          13.3 Amendments. This Agreement may only be amended or modified by a
     written instrument executed by all of the parties hereto.

          13.4 Entire Agreement. This Agreement, together with the Ancillary
     Agreements, constitutes the entire agreement of the parties hereto with
     respect to the subject matter hereof, and supersedes all prior agreements
     and understandings among the parties hereto, oral and written, with respect
     to the subject matter hereof.

          13.5 Applicable Law Jurisdiction. This Agreement shall be governed by
     and construed in accordance with the laws of the State of Idaho, without
     regard to the principles of conflicts of law thereof, and any action
     brought hereunder shall be brought exclusively in the Federal courts
     located in the State of Idaho or in the state courts located in Bonneville
     County, Idaho. With respect to any action brought hereunder in said courts,
     each party hereto (a) irrevocably waives any objection on the grounds of
     venue, forum non-conveniens or any similar grounds and (b) irrevocably
     consents to service of process in any manner permitted by applicable law
     and consents to the jurisdiction of said courts.

          13.6 Headings. The headings contained herein are for the sole purpose
     of convenience of reference, and shall not in any way limit or affect the
     meaning or interpretation of any of the provisions of this Agreement.

          13.7 Assignment; Binding Effect. Neither this Agreement nor any of the
     rights, interests or obligations hereunder may be assigned by any of the
     parties hereto, by operation of law or otherwise, without the prior written
     consent of the other parties hereto, and any such purported assignment
     without such consent shall be null and void; provided, however, that Buyer
     may assign any or all of its rights, interests and obligations hereunder to
     any direct or indirect wholly owned subsidiary of Buyer. Subject to the
     provisions of the immediately preceding sentence, this Agreement shall
     inure to the benefit of, and be binding upon, the parties hereto and their
     respective successors and permitted assigns.

          13.8 Third Party Beneficiaries. Except as otherwise provided in
     subparagraphs 10.2, 10.3 and 10.4 hereof, nothing in this Agreement,
     express or implied, is intended to confer upon any person or entity other
     than the parties hereto and their respective successors and permitted
     assigns, any rights, remedies, obligations or liabilities under or by
     reason of this Agreement.

          13.9 Waiver, etc. The failure of any of the parties hereto to at any
     time enforce any of the provisions of this Agreement shall not be deemed or
     construed to be a waiver of any such provision, nor to in any way affect
     the validity of this Agreement or any provision hereof or the right of any
     of the parties hereto to thereafter enforce each and every provision of
     this Agreement. No waiver of any breach of any of the provisions of this
     Agreement shall be effective unless set forth in a written instrument
     executed by the party against which enforcement of such waiver is sought;
     and no waiver of any such breach shall be construed or deemed to be a
     waiver of any other or subsequent breach.

                                      28-
<PAGE>

          13.10 Expenses. Except as otherwise specifically provided in this
     Agreement or any of the Ancillary Agreements, all costs and expenses
     incurred in connection with this Agreement and the transactions
     contemplated hereby shall be paid by the party incurring such costs or
     expenses, whether or not the transactions contemplated hereby are
     consummated.

          13.11 Telefacsimile Execution. Delivery of an executed counterpart of
     this Agreement or any of the Ancillary Agreements by telefacsimile shall be
     equally as effective as delivery of an original executed counterpart of
     this Agreement or any of the Ancillary Agreements. Any party delivering an
     executed counterpart of this Agreement or any of the Ancillary Agreements
     by telefacsimile also shall deliver an original executed counterpart of
     such instrument, but the failure to deliver an original executed
     counterpart thereof shall not affect the validity, enforceability or
     binding effect of this Agreement or any of the Ancillary Agreements.

                         (SIGNATURES ON FOLLOWING PAGE)

                                      29-
<PAGE>

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed on its behalf as of the date first above written.

                                        BUYER:

                                        SUPREMA SPECIALTIES NORTHWEST INC.

                                        By: /s/  Mark Cocchiola
                                            ------------------------------------
                                             Name:  Mark Cocchiola
                                             Title: President

                                        SELLER:

                                        SNAKE RIVER CHEESE, L.L.C.

                                        By:  Dairyland, Inc., its Manager

                                        By: /s/ Frank L. VanderSloot
                                            ------------------------------------
                                             Name:  Frank L. VanderSloot
                                             Title: President

AGREED TO ACCEPTED BY
WITH RESPECT TO
SUBPARAGRAPH 6.10:

MEMBERS:

/s/ Frank L. VanderSloot
------------------------------
Frank L. VanderSloot

Dairyland, Inc.

By: Frank L. VanderSloot
    -------------------------
     Name:  Frank L. VanderSloot
     Title: President

                                      30-
<PAGE>

                                                                       EXHIBIT A

                           BILL OF SALE AND ASSIGNMENT

     Bill of Sale and Assignment, made by Snake River Cheese, L.L.C., an Idaho
limited liability company ("Seller"), in favor of Suprema Specialties Northwest
Inc., a Delaware corporation, or its designee ("Buyer").

     WHEREAS, pursuant to the provisions of the Assets Purchase Agreement (the
"Agreement"), dated as of November ___, 2000, by and between Seller and Buyer,
Seller agreed to sell to Buyer, and Buyer agreed to purchase from Seller, the
Purchased Assets (as defined in subparagraph 2.2 of the Agreement); and

     WHEREAS, in accordance with the foregoing, Seller is executing and
delivering this Bill of Sale and Assignment to Buyer for the purpose of
transferring to and vesting in Buyer all of the properties and assets (excluding
the Real Property as defined in the Agreement) comprising the Purchased Assets;

     NOW, THEREFORE, in consideration of the covenants in the Agreement
contained, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Seller hereby sells, conveys,
transfers and assigns to, and vests in, Buyer, all of its right, title and
interest in and to, all of the properties and assets (excluding the Real
Property) comprising the Purchased Assets, free and clear of any and all liens,
claims, charges or encumbrances of any nature whatsoever.

     TO HAVE AND TO HOLD all of the Purchased Assets (excluding the Real
Property) unto Buyer, its successors and assigns, forever.

     Seller hereby irrevocably constitutes and appoints Buyer, its successors
and assigns, its true and lawful attorney and attorneys, with full power of
substitution, in its name and stead, but on behalf and for the benefit of Buyer,
its successors and assigns, to demand and receive any and all of the Purchased
Assets (excluding the Real Property), and to give receipts and releases for and
in respect of the same, and any part thereof, and from time to time to prosecute
in its name, or otherwise, for the benefit of Buyer, its successors and assigns,
any and all proceedings at law, in equity or otherwise, which Buyer, its
successors or assigns, may deem proper for the collection or reduction to
possession of any of the properties or assets (excluding the Real Property)
comprising the Purchased Assets or for the collection and enforcement of any
claim or right of any kind hereby sold, conveyed, transferred and assigned, and
to take all such other actions with respect to the Purchased Assets (excluding
the Real Property) as Buyer, its successors or assigns, in its sole discretion,
shall deem to be desirable in order to carry out the intent hereof.

<PAGE>

           IN WITNESS WHEREOF, Seller has caused this Bill of Sale and
Assignment to be executed on its behalf by it duly authorized officer this ___
day of _________, ______.

                                       SNAKE RIVER CHEESE, L.L.C.

                                       By:__________________________
                                          Name:
                                          Title:

                                      32-
<PAGE>

                                                                       EXHIBIT B

                FIRST AMERICAN TITLE COMPANY OF EAST IDAHO, INC.
                               ESCROW INSTRUCTIONS

ORDER NO.: 843029
DATE OPENED: November 27, 2000

TO:  FIRST AMERICAN TITLE COMPANY OF EAST IDAHO, INC.

     THE UNDERSIGNED, First American Title Company of East Idaho, Inc.
(hereinafter referred to as First American), Snake River Cheese, L.L.C.
("Seller") and Suprema Specialties Northwest Inc. ("Buyer"), in consideration of
the premises and the consent of First American, to act as holder of the escrow
deposited herewith, (and as a neutral escrow depository pursuant to I.C.
54-2049) agree and represent as follows:

     Seller has agreed to sell, and Buyer has agreed to purchase, the Purchased
Assets (as defined in the Purchase Agreement dated November 27, 2000 (the
"Purchase Agreement"), between Buyer and Seller, a copy of which is attached
hereto, for the consideration and under the terms as set forth therein and have
concurrently handed you the sum of Three Hundred Thousand and 00/100 Dollars
($300,000.00) as the deposit described in the Purchase Agreement to hold said
deposit under the terms and conditions of these instructions.

     You are hereby authorized and instructed to deposit said $300,000 with
__________, into its ___________, with interest to be assessed and payable to
Buyer or Seller, as the case may be, in accordance with the provisions hereof.

     1.   The account will read: First American Title Company, Trustee for Snake
          River Cheese, L.L.C. and Suprema Specialties Northwest Inc.

     2.   First American will not be held responsible for any loss of principal
          and/or interest in said account (collectively, the "Escrow Fund"),
          except if such loss is caused by First American's willful misconduct
          or gross negligence.

     3.   First American has not represented nor is it guaranteeing any interest
          or yield in said account.

     4.   Any fees or commissions of said deposit shall be paid 50% by Seller
          and 50% by Buyer.

     5.   If said funds have not previously been withdrawn and unless notified
          in writing to the contrary by both parties on or prior to January 5,
          2001, First American shall

<PAGE>

          close said account and disburse the Escrow Fund into its general trust
          account to be held pursuant to these instructions.

     You are hereby authorized and instructed to hold the Escrow Fund until
happening of the following events, whichever first occurs:

     A. If on or before January 5, 2001, First American receives a notice signed
by Buyer and Seller stating that the Closing (as defined in the Purchase
Agreement) has occurred, First American shall deliver the Escrow Fund (less the
Indemnification Fund) to Seller in accordance with such notice from Buyer.

     B. If on or after January 5, 2001, First American receives a notice signed
by Seller stating that the conditions to Closing set forth in the Purchase
Agreement have not been satisfied (solely by reason of Buyer's failure to
perform its covenants and agreements thereunder in all material respects), First
American shall provide a copy of such notice to Buyer and, unless First American
has received an objection from Buyer no later than ten (10) days after the date
such notice was given to Buyer, First American shall deliver the Escrow Fund to
Seller in accordance with such notice from Seller.

     C. If First American receives a notice signed by Buyer stating that the
Purchase Agreement was terminated for any reason other than Buyer's failure to
perform it covenants and agreements under the Purchase Agreement in all material
respects and the Closing has not occurred, First American shall provide a copy
of such notice to Seller and, unless First American has received an objection
from Seller no later than ten (10) days after the date such notice was given to
Seller, First American shall deliver the Escrow Fund to Buyer in accordance with
such notice from Buyer.

and each event, you are hereby authorized and instructed to pay over such funds
after first deducting additional fees and costs of the escrow, if any.

     The parties to these instructions have instructed First American where and
how to deposit said funds. They thus agree that First American has no liability
for loss of funds caused by the deposits being placed in the account or
investment designated by the parties. First American shall not be liable for any
business failure of the depository or institution holding such deposits, or
investment. The parties acknowledge that the placement of the funds is being
directed by the parties based upon independent advice and not from any
recommendation of First American or its employees. The parties further agree
that any loss caused by the deposit being placed in the designated account or
investment is the responsibility of the parties; and if additional funds are
required to complete the escrow by reason of the loss of the funds, the parties
assume responsibility and agree to provide the funds. The parties and each of
them agree to hold First American harmless from any costs, expenses, attorneys'
fees or other loss which may arise by reason of the designation.

     It is expressly understood among the parties hereto that First American
shall not be responsible or liable in any manner whatsoever for the sufficiency
of any deposit in this escrow, nor as to the identity, authority or rights of
any person executing the same; also that First

<PAGE>

American assumes no responsibility, nor is it to be held liable as to the
condition of the title to any of the property affected hereby, nor as to any
assignments, liens, or encumbrances, against said deposit or property; and that
its duties hereunder shall be limited to the safekeeping of such money
consistent with these instructions and for the delivery of the same; it is
further agreed that First American shall in no case or event be liable for the
failure of any of the conditions of this escrow or damage or loss caused by the
exercise of First American's discretion in any particular manner, or for any
other reasons, except gross negligence or willful misconduct with reference to
the escrow.

     If any dispute among the parties hereto by reason of the terms and
conditions hereof results in adverse claims and demands by Seller or Buyer
against First American, First American shall be entitled, at its option, to
refuse to comply with said demands so long as such dispute shall continue; and
in so refusing, First American may refuse to deliver any monies involved in or
affected by this escrow and in so refusing, First American shall not be or
become liable to the Buyer or Seller for First American's failure and/or refusal
to comply with the conflicting or adverse demands of the such party. Further,
First American shall be entitled to continue to so refrain to act until:

     (a)  Buyer and Seller have reached an agreement resolving their differences
          and shall have notified First American in writing of such agreement,
          or

     (b)  the rights of the parties have been duly adjudicated by a court of
          competent jurisdiction.

     In the event that First American shall be uncertain as to its duties or
rights hereunder or shall receive instructions, claims or demands from either
Buyer or Seller which, in its opinion, conflict with any of the provisions of
this Escrow Agreement or with instructions received from the other of Buyer or
Seller, as the case may be, First American shall be entitled to refrain from
taking any action and its sole obligation shall be (i) to keep safely all Escrow
Funds held in escrow until it shall be directed otherwise by an order or
judgment of a court of competent jurisdiction or (ii) to deliver the Escrow
Funds to a court of competent jurisdiction and commence an action for
interpleader or its equivalent. The costs of the foregoing shall be borne by
whichever of Buyer or Seller is the losing party.

     If any dispute among the parties hereto by reason of the terms and
conditions hereof results in adverse claims and demands by Seller or Buyer or by
any other party against First American, First American shall have the right to
employ legal counsel to advise it and/or to represent it in any suit or action,
including an action in interpleader brought affecting this escrow and the Buyer
and Seller shall be jointly and severally liable to First American for any and
all attorneys' fees, costs, and disbursements incurred by First American in
connection herewith, and upon demand shall forthwith pay the same. First
American shall have a lien upon all monies, held in connection herewith for any
fees, costs, expenses or disbursements incurred.

     The parties acknowledge that they have been specifically informed that
First American is not licensed to practice law and no legal advice has been
offered by First American or any of its employees and have been further informed
that First American is acting only as

                                      35-
<PAGE>

escrow holder and that it is forbidden by law from offering any advice to any
party respecting the merits of this escrow transaction or the nature of the
instruments utilized, and that it has not done so. The parties acknowledge that
they have not been referred by First American to any named attorney or attorneys
or discouraged from seeking advice of any attorney, but have been requested to
seek legal counsel of their own choosing at their own expense, if they have
doubt concerning any aspect of this transaction .

     The parties understand and acknowledge that (i) First American is a title
insurance company agent for First American Title Insurance Company and in the
primary business of insuring land titles and (ii) simultaneously with the
execution of these instructions, First American shall issue a title commitment
to insure title to the real property described in the Purchase Agreement and in
the manner more particularly described in said commitment.

     Any amendments of and/or supplement to any instructions contained herein
must be in writing and accepted by First American. If there is any conflict or
inconsistency between the provisions of these instructions and the provisions of
the attached Agreement these instructions shall prevail to the extent of any
inconsistency.

     Notices or other written communications placed in the United States mail,
postage prepaid and addressed to the undersigned, or any of them, at their or
his post office address, shall be deemed to have been given to them or him on
the date of mailing.

                           [Signature page to follow]

                                      36-
<PAGE>

BUYER:

SUPREMA SPECIALTIES NORTHWEST INC.

By:
   ------------------------------------------------------

SSN#
    ----------------------------------

SELLER:

SNAKE RIVER CHEESE, L.L.C.

By:
   -----------------------------------------

SSN#
     ---------------------------------------

Accepted by:

FIRST AMERICAN TITLE COMPANY OF EAST IDAHO, INC.

By:__________________________
    Name:
    Title:

                                      37-
<PAGE>

                                                                       Exhibit C

                                 FORM OF OPINION

1.   The Company is a limited liability company duly organized and validly
     existing in good standing under the laws of the State of Idaho with all
     requisite power and authority to execute, deliver, and perform its
     obligations under the Transaction Documents, to carry on its business as
     now conducted, and to own its property and assets, including, without
     limitation, the Purchased Assets. The Company has no subsidiaries.

2.   To the best of our knowledge, each of Frank L. VanderSloot and Gary Seamons
     is an individual with the requisite capacity, to execute, deliver and
     perform his obligations under the Transaction Documents to which he is a
     party. Dairyland, Inc. is an Idaho corporation with the requisite corporate
     authority to execute, deliver and perform its obligations under the
     Transaction Documents to which it is a party.

3.   The execution and delivery of the Transaction Documents, and the
     consummation of the transactions contemplated thereby, have been duly
     authorized by all necessary action on the part of the Company. The
     Transaction Documents have been duly executed and delivered by the Company,
     and are valid and binding benefits and obligations of the Company
     enforceable by and against the Company, as the case may be, in accordance
     with their respective terms, except that such enforceability may be limited
     by applicable bankruptcy, insolvency, reorganization, fraudulent
     conveyance, moratorium or other similar laws or court decisions relating to
     or affecting the enforcement of creditors' rights generally.

4.   The execution, delivery and performance by the Company of the Transaction
     Documents to which it is a party will not (i) violate or conflict with any
     term of either the Articles of Organization or Operating Agreement of the
     Company; or (ii) violate or, alone or with the passage of time, result in
     the breach or termination of, or otherwise (with or without the giving of
     notice or the passage of time or both) entitle any party to terminate or
     declare a default under any agreement to which the Company is a party or by
     which it is bound, or to which any of the Company's properties, assets or
     businesses are subject; or (iii) violate any judgment, order, injunction,
     decree or award binding upon the Company or the business or assets of the
     Company.

5.   There is no (i) claim, suit, action, arbitration or legal, administrative
     or other proceeding or governmental investigation or tax audit, pending or
     threatened against or related to the Company or (ii) judgment, order,
     injunction or decree of any court, governmental authority or regulatory
     agency, to which either the Company or any Member is subject, which might
     adversely affect or restrict the ability of the Company to consummate the
     transactions in the manner contemplated by the Transaction Documents or
     have an adverse effect on the Company.

6.   Except as provided in the Schedules to the Purchase Agreement, no consent,
     approval or

                                      38-
<PAGE>

     authorization of or by, or any designation, declaration, filing,
     registration, or qualification with any governmental authority is required
     in connection with the execution, delivery and performance of the Company's
     obligations under the Transaction Documents.

                                      39-
<PAGE>

                                    SCHEDULES
                                       TO
                            ASSET PURCHASE AGREEMENT

Schedule 2.2(i) - Tangible Property
1.   The personal property listed on the appraisal commissioned by Buyer.

Schedule 2.2(ii) - Real Property
1.   The land described in Schedule A.4 of the title report and all buildings
     and improvements located thereon.

Schedule 2.2(iv) - Permits
1.   Wastewater-Land Application Permit, LA-000084-03, Idaho Division of
     Environmental Quality.
2.   City of Blackfoot Industrial Wastewater Acceptance Permit dated October 12,
     2000.

Schedule 2.5.2 - Allocation Statement
The Cash Purchase Price shall be allocated $1.5 million to the land, buildings
and improvements and $4.5 million to the equipment.

Schedule 4.3 - List of Members
The Members of Snake River Cheese LLC are:

     Dairyland, Inc., an Idaho corporation (Managing Member)
     Frank VanderSloot, and individual (Member)
     Gary Seamons, an individual (Member)

Schedule 4.10 - Consents
1.   The consent of the Idaho Department of Environmental Quality will be
     required for the assignment to Buyer of the Wastewater Land Application
     Permit, LA-000084-03.

Schedule 4.11 - Exceptions to Permits
1.   Letter from Idaho DEQ dated September 12, 2000 regarding Permit
     LA-000084-03.

Schedule 4.12 - Exceptions to Applicable Laws and Permits
1.   Letter from Idaho DEQ dated September 12, 2000 regarding Permit
     LA-000084-03.

Schedule 4.13(i) - Storage Tanks
1.   Underground storage tanks identified in paragraph 6.2.4, and aboveground
     storage tanks identified in paragraph 6.2.5 of the Phase I Site
     Environmental Assessment prepared for Kraft General Foods by Triad
     Engineering Incorporate, dated March 1994.

Schedule 4.13(ii) - Potentially Responsible Party Notices
None

Schedule 4.13(iii) - Environmental Reports
1.   Phase I Site Environmental Assessment prepared for Kraft General Foods by
     Triad Engineering Incorporated, dated March 1994.

<PAGE>

2.   All environmental reports with respect to the Purchased Assets obtained by
     Buyer.

Schedule 4.15 - Employee Plans
None, other than the company vacation policy and insurance benefits.

Schedule 4.16 - Insurance Policies
1.   $45,000,000 comprehensive all risk property and casualty policy issued by
     ACE American Insurance Co. to ConAgra, Inc. - Beatrice Cheese naming Snake
     River Cheese LLC as Additional Insured.

Schedule 4.24 - Title Report
1.   Commitment for Title Insurance issued to Seller by First American Title
     Insurance Company dated November 7, 2000 at 7:30 A.M., Order No., B43029.

Schedule 6.12 - Description of Optioned Property
The land, together with all buildings and improvements thereon, described as
follows:

     Lots 11 through 16, Block 41, Danielson's Addition to the City of
     Blackfoot, Bingham County, Idaho, as shown on the recorded plat thereof.

     TOGETHER WITH all and singular the tenements, hereditaments, and
     appurtenances thereunto belonging or in anywise appertaining, including all
     water, water rights, ditch and ditch rights.

Schedule 11.1.5 - Exceptions to Title
1.   Exceptions 1, 2, 3, 4, 5, 7, 8 and 9 of Schedule B - Section 2 of the Title
     Report.

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