EXHIBIT 10.34 SUIZA FOODS CORPORATION CREDIT AGREEMENT $1,250,000,000 Credit Facility Dated as of November 26, 1997 FIRST UNION NATIONAL BANK, as Administrative Agent THE FIRST NATIONAL BANK OF CHICAGO, as Syndication Agent 2 TABLE OF CONTENTS This...

EXHIBIT 10.34

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SUIZA FOODS CORPORATION

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CREDIT AGREEMENT

$1,250,000,000 Credit Facility

Dated as of November 26, 1997

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FIRST UNION NATIONAL BANK,
as Administrative Agent

THE FIRST NATIONAL BANK OF CHICAGO,
as Syndication Agent

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2
TABLE OF CONTENTS

This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.

Page

SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.01 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.03 Classes and Types of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

SECTION 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 21

2.01 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.02 Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.03 Changes of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.04 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.05 Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.06 Several Obligations; Remedies Independent . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.07 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.08 Optional Prepayments and Conversions or Continuations of Loans . . . . . . . . . . . . . . . . 24
2.09 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

3.01 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.02 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC. . . . . . . . . . . . . . . . . . . . . . . . 31

4.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.03 Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.04 Minimum Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.05 Certain Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.06 Non-Receipt of Funds by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.07 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

SECTION 5. YIELD PROTECTION, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

5.01 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.02 Limitation on Types of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.03 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

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5.04 Treatment of Affected Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.05 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.06 Net Payments; Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.07 Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.08 Additional Costs in Respect of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . 42

SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

6.01 Conditions to Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.02 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.03 Conditions to all Extensions of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

SECTION 7. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

7.01 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.02 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.03 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.04 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.05 Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.06 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.07 Use of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.10 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.11 Public Utility Holding Company act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.12 Material Agreements and Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.13 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.14 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.15 Subsidiaries, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.16 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.17 True and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.18 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

SECTION 8. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

8.01 Financial Statements, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.02 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.03 Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.04 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.05 Prohibition of Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.06 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.07 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
8.08 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.09 Intentionally Left Blank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.10 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

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8.11 Minimum Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.12 Fixed Charges Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.13 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.14 Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.15 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.16 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.17 Certain Obligations Respecting Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.18 Modifications of Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

SECTION 9. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

SECTION 10. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

10.01 Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.02 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.03 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.04 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.06 Non-Reliance on Agent and Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.07 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.08 Resignation or Removal of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.09 Agency Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.10 Consents under Other Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.11 Syndication Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

11.01 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
11.03 Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.04 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.05 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.06 Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.07 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.08 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.10 Governing Law; Submission to Jurisdiction;
Service of Process and Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.11 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.12 Treatment of Certain Information; Confidentiality . . . . . . . . . . . . . . . . . . . . . . 80

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SCHEDULE I - Existing Material Agreements and Liens
SCHEDULE II - Environmental Matters
SCHEDULE III - Subsidiaries and Investments
SCHEDULE IV - Litigation

EXHIBIT A-1 - Form of Facility A Note
EXHIBIT A-2 - Form of Facility B Note
EXHIBIT B - Form of Security Agreement
EXHIBIT C - Form of Subsidiary Guarantee and Security
Agreement and Supplemental Subsidiary
Guarantee and Security Agreement
EXHIBIT D - Form of Opinion of Counsel to the Obligors
EXHIBIT E - Form of Opinion of Puerto Rico Counsel to the
Obligors
EXHIBIT F - Form of Opinion of Special New York Counsel
to First Union
EXHIBIT G - Form of Confidentiality Agreement
EXHIBIT H - Form of Assignment and Acceptance
EXHIBIT I-1 - Form of Notice of Borrowing
EXHIBIT I-2 - Form of Notice of Prepayment
EXHIBIT I-3 - Form of Notice of Conversion/Continuation
EXHIBIT I-4 - Form of Notice of Account Designation

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CREDIT AGREEMENT dated as of November 26, 1997 between: SUIZA
FOODS CORPORATION, a corporation duly organized and validly existing under the
laws of the State of Delaware (the "Company"); each of the lenders that is a
signatory hereto identified under the caption "LENDERS" on the signature pages
hereto or that, pursuant to Section 11.06(b) hereof, shall become a "Lender"
hereunder (individually, a "Lender" and, collectively, the "Lenders"); and
FIRST UNION NATIONAL BANK, a national banking association, as administrative
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "Agent").

WHEREAS, the Company has requested that the Lenders provide to
the Company a revolving credit facility of up to but not exceeding $700,000,000
in aggregate principal amount at any one time outstanding and a term loan
facility of up to $550,000,000 in aggregate principal amount in order to
refinance indebtedness under the Existing Credit Agreements (as hereinafter
defined), to finance acquisitions and for general corporate purposes, and the
Lenders are willing to provide such revolving credit and term loan facilities
on the terms and conditions of this Agreement.

WHEREAS, each of the Obligors (as hereinafter defined) expects to
derive benefit, directly or indirectly, from the credit facilities so made
available to the Company, both in its separate capacity and as a member of the
integrated group, since the successful operation of each of the Company and its
Subsidiaries is dependent on the continued successful performance of the
functions of the integrated group as a whole.

Accordingly, the parties hereto hereby agree as follows:

Section 1. Definitions and Accounting Matters.

1.01 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in this Section 1.01
or in other provisions of this Agreement in the singular to have the same
meanings when used in the plural and vice versa):

"Affiliate" shall mean any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the Company
and, if such Person is an individual, any member of the immediate family
(including parents, spouse, children and siblings) of such individual and any
trust whose principal beneficiary is such individual or one or more members of
such immediate family and any Person who is controlled by any such member or
trust. As used in this definition, "control" (including, with its correlative
meanings, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), provided
that, in any event, any Person that owns directly or indirectly securities
having 10% or more of the voting power for the election of directors or other
governing body of a corporation or 10% or more of the partnership or other
ownership interests of any other Person (other than as a limited partner of
such other Person) will be deemed to control such corporation or other Person.
Notwithstanding the foregoing, (a) no individual shall be an Affiliate solely
by reason of his or her being a director, officer or employee

Credit Agreement 1
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of the Company or any of its Subsidiaries and (b) none of the Wholly Owned
Subsidiaries of the Company, nor Franklin Plastics, Inc., a Delaware
corporation, nor any of its Wholly-Owned Subsidiaries shall be Affiliates.

"Applicable Commitment Fee Rate" shall mean 0.20% per annum;
provided that if the Leverage Ratio as at the last day of any fiscal quarter of
the Company ending on or after the Effective Date shall fall within any of the
ranges set forth below then, upon the delivery to the Agent of a certificate of
a Responsible Financial Officer of the Company (which shall accompany the
financial statements for such fiscal quarter delivered under Section 8.01(a)
hereof on which the calculation of such Leverage Ratio is based) demonstrating
such fact prior to the end of the next succeeding fiscal quarter, the
"Applicable Commitment Fee Rate" shall be adjusted upwards or downwards, as the
case may be, to the rate per annum set forth below opposite such range during
the period commencing on the third Business Day following the date of receipt
of such certificate to but not including the date the next such certificate to
be delivered under this definition is delivered or due, whichever is earlier
(except that, notwithstanding the foregoing, the Applicable Commitment Fee Rate
shall not as a consequence of this proviso be so reduced for any period during
which an Event of Default shall have occurred and be continuing):

Range Applicable Commitment Fee Rate
of ------------------------------
Leverage Ratio
--------------

Less than or equal to 2.50:1 0.15%

Greater than 2.50:1 but less
than or equal to 3.50:1 0.20%

Greater than 3.50:1 0.25%

; provided that in the event that there is an Equity Issuance by the Company
resulting in Net Available Proceeds to the Company of at least $50,000,000, and
the Company provides the Agent with written notice of such Equity Issuance and
applies all or part of the Net Available Proceeds thereof to the prepayment of
the Facility B Loans, the Applicable Commitment Fee Rate shall upon such
application be immediately adjusted to give effect to the change in the
Leverage Ratio resulting from such application.

"Applicable Lending Office" shall mean, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an affiliate of
such Lender) designated for such Type of Loan on the signature pages hereof or
such other office of such Lender (or of an affiliate of such Lender) as such
Lender may from time to time specify to the Agent and the Company as the office
by which its Loans of such Type are to be made and maintained.

"Applicable Margin" shall mean: with respect to Loans that are
Base Rate Loans, 0% and/or Eurodollar Loans, 0.75% per annum; provided that if
the Leverage Ratio as at the last day of any fiscal quarter of the Company
ending on or after the Effective Date shall fall within any

Credit Agreement 2
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of the ranges set forth below then, upon the delivery to the Agent of a
certificate of a Responsible Financial Officer of the Company (which shall
accompany the financial statements for such fiscal quarter delivered under
Section 8.01(a) hereof on which the calculation of such Leverage Ratio is
based) demonstrating such fact prior to the end of the next succeeding fiscal
quarter, the "Applicable Margin" for each Loan shall be adjusted upwards or
downwards, as the case may be, to the rate per annum for the respective Type
and Class of Loan set forth below opposite such range during the period
commencing on the third Business Day following the date of receipt of such
certificate to but not including the date the next succeeding such certificate
to be delivered hereunder is delivered or due, whichever is earlier (except
that, notwithstanding the foregoing, the Applicable Margin for any such Loan
shall not as a consequence of this proviso be so reduced for any period during
which an Event of Default shall have occurred and be continuing):

Range Applicable Margin (% p.a.)
of --------------------------
Leverage Ratio Base Rate Loans Eurodollar Loans
-------------- --------------- ----------------

Less than or equal to 2.0:1 0% 0.40%

Greater than 2.0:1 but less
than or equal to 2.50:1 0% 0.50%

Greater than 2.50:1 but less
than or equal to 3.00:1 0% 0.625%

Greater than 3.00:1 but less
than or equal to 3.50:1 0% 0.75%

Greater than 3.50:1 0% 1.00%

; provided that in the event that there is an Equity Issuance by the Company
resulting in Net Available Proceeds to the Company of at least $50,000,000, and
the Company provides the Agent with the written notice of such Equity Issuance
and applies all or part of the Net Available Proceeds thereof to the prepayment
of the Facility B Loans, the Applicable Margin shall upon such application be
immediately adjusted to give effect to the change in the Leverage Ratio
resulting from such application.

"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978,
as amended from time to time.

"Base Rate" shall mean, for any day, a rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b)
the Prime Rate for such day. Each change in any interest rate provided for
herein based upon the Base Rate resulting from a change in the Base Rate shall
take effect at the time of such change in the Base Rate.

Credit Agreement 3
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"Base Rate Loans" shall mean Loans that bear interest at rates
based upon the Base Rate.

"Basic Documents" shall mean, collectively, the Loan Documents
and the Purchase Agreements.

"Business Day" shall mean any day on which (a) commercial banks
are not authorized or required to close in North Carolina and (b) if such day
relates to a borrowing of, a payment or prepayment of principal of or interest
on, a Conversion of or into, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment, prepayment,
Conversion or Interest Period, any day on which dealings in Dollar deposits are
carried out in the London interbank market.

"Capital Expenditures" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP.

"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.

"Class" shall have the meaning assigned to such term in Section
1.03 hereof.

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

"Collateral Account" shall mean with respect to the Company and
any of its Subsidiaries, the Collateral Account as defined in the Security
Agreement.

"Commission" shall mean the Securities and Exchange Commission or
any governmental agency substituted therefor.

"Commitments" shall mean the Facility A Commitments and the
Facility B Commitments.

"Commonwealth" shall mean the Commonwealth of Puerto Rico and its
political subdivisions, municipalities, agencies and instrumentalities.

"Company" shall have the meaning assigned to such term in the
preamble of this Agreement.

Credit Agreement 4
10
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.08 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.

"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 2.08 hereof of one Type of Loans into another
Type of Loans, which may be accompanied by the transfer by a Lender (at its
sole discretion) of a Loan from one Applicable Lending Office to another.

"Country Fresh" shall mean Country Fresh, Inc., a Michigan
corporation.

"Country Fresh Merger" shall mean the merger of CF Acquisition
Corp., a Michigan corporation and a Wholly Owned Subsidiary of the Company with
and into Country Fresh pursuant to which the issued and outstanding shares of
common stock of Country Fresh will be converted into the right to receive
shares of the common stock of the Company and the issued and outstanding shares
of preferred stock of Country Fresh will be converted into the right to receive
shares of the preferred stock of the Company, and Country Fresh will become a
Wholly Owned Subsidiary of the Company.

"Dairy Fresh" shall mean Dairy Fresh, Inc., a Delaware
corporation and a Wholly Owned Subsidiary of the Company.

"Debt Service" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all payments of
principal of Indebtedness (including, without limitation, the principal
component of any payments in respect of Capital Lease Obligations) scheduled to
be made during such period plus (b) all Interest Expense for such period, it
being understood that, if any installment of principal of the Facility B Loans
shall have been prepaid during or prior to such period, the amount of principal
of the Facility B Loans included in Debt Service for such period shall be equal
to the aggregate amount of principal of the Facility B Loans originally
scheduled to be paid hereunder during such period.

"Default" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.

"Disposition" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by the
Company or any of its Subsidiaries to any other Person, excluding any sale,
assignment, transfer or other disposition of any Property sold or disposed of
in the ordinary course of business and on ordinary business terms.

"Dividend Payment" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Company or of any warrants, options or other rights to
acquire the same

Credit Agreement 5
11
(or to make any payments to any Person, such as "phantom stock" payments, where
the amount thereof is calculated with reference to the fair market or equity
value of the Company or any of its Subsidiaries), but excluding dividends
payable solely in shares of common stock of the Company.

"Dollars" and "$" shall mean lawful money of the United States.

"EBITDA" shall mean, for any period, the sum, for the Company and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) operating income (calculated
before income taxes, Interest Expense, extraordinary and unusual items and
income or loss attributable to equity in Affiliates) for such period plus (b)
depreciation and amortization (to the extent deducted in determining operating
income) for such period plus (c) other income not exceeding $5,000,000 for such
period.

"Effective Date" shall mean the date on which all of the
conditions to effectiveness of this Agreement set forth in Section 6.01 hereof
shall have been satisfied or waived.

"Environmental Claim" shall mean, with respect to any Person, any
written or oral notice, claim, demand or other communication (collectively, a
"claim") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (a) the presence, or Release into
the environment, of any Hazardous Material at any location, whether or not
owned by such Person, or (b) circumstances forming the basis of any violation,
or alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.

"Environmental Laws" shall mean any and all present and future
Federal, state, local and foreign laws, rules or regulations, and any orders or
decrees, in each case as now or hereafter in effect, relating to the regulation
or protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or toxic or hazardous substances or wastes into the indoor or outdoor
environment, including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes.

"Equity Issuance" shall mean (a) any issuance or sale by the
Company or any of its Subsidiaries after the Effective Date of (i) any capital
stock, (ii) any warrants or options exercisable in respect of capital stock
(other than any warrants or options issued to directors, officers or employees
of the Company or any of its Subsidiaries, pursuant to employee benefit plans
established in the ordinary course of business and any capital stock of the
Company or any

Credit Agreement 6
12
of its Subsidiaries issued upon the exercise of such warrants or options) or
(iii) any other security or instrument representing an equity interest (or the
right to obtain any equity interest) in the Company or any of its Subsidiaries
or (b) the receipt by the Company or any of its Subsidiaries whether directly
(or indirectly through one or more of its Subsidiaries) after the Effective
Date of any capital contribution (whether or not evidenced by any equity
security issued by the recipient of such contribution); provided that Equity
Issuance shall not include (x) any such issuance or sale by any Subsidiary of
the Company to the Company or any Wholly Owned Subsidiary of the Company or (y)
any capital contribution by the Company or any Wholly Owned Subsidiary of the
Company to any Subsidiary of the Company.

"Equity Rights" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such Person.

"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.

"ERISA Affiliate" shall mean any corporation or trade or business
that is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which the Company is a member and (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which the Company is a member.

"Eurodollar Base Rate" shall mean, with respect to any Eurodollar
Loan for any Interest Period therefor, the rate per annum for deposits in
Dollars for a period comparable to such Interest Period which appears on
display page 3750 (British Bankers Association - LIBOR) of the Dow Xxxxx
Markets Service as of 11:00 a.m. London time two Business Days preceding the
first day of such Interest Period or, if such display page 3750 is unavailable
at such time, the rate which appears on the Reuters Screen ISDA Page as of such
date and time; provided, however, that if the Agent determines that the
relevant foregoing source is unavailable for the relevant Interest Period,
Eurodollar Base Rate shall mean the rate of interest determined by the Agent to
be the average (rounded upward, if necessary, to the nearest 1/100th of 1%) of
the rates per annum at which deposits in Dollars in immediately available funds
are offered to the Agent or other money center banks two Business Days
preceding the first day of such Interest Period by leading banks in the London
interbank market as of 11:00 a.m. London time for delivery on the first day of
such Interest Period, for the number of days comprised therein and in an amount
comparable to the amount of the relevant Loan.

"Eurodollar Loans" shall mean Loans that bear interest at rates
based on rates referred to in the definition of "Eurodollar Base Rate" in this
Section 1.01.

Credit Agreement 7
13
"Eurodollar Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Agent to be equal to the Eurodollar
Base Rate for such Loan for such Interest Period divided by 1 minus the Reserve
Requirement (if any) for such Loan for such Interest Period.

"Event of Default" shall have the meaning assigned to such term
in Section 9 hereof.

"Excluded Disposition" shall mean the Disposition of (i) an
Investment Tax Credit or (ii) any motor vehicles or other equipment no longer
used or useful in the business of the Company or any of its Subsidiaries to the
extent the proceeds thereof are used to acquire similar replacement Property.

"Existing Credit Agreements" shall mean, collectively, (i) the
Third Amended and Restated Credit Agreement dated as of July 31, 1997 (the
"Third Restated Agreement") between the Company, certain lenders named therein
and First Union as agent, and (ii) the Second Amended and Restated Supplemental
Credit Agreement dated as of July 31, 1997 (the "Restated Supplemental
Agreement") between the Company, certain lenders named therein and First Union
as agent.

"Facility A Commitment" shall mean, for each Facility A Lender,
the obligation of such Lender to make Facility A Loans to the Company in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount set opposite the name of such Lender on the signature pages hereof
under the caption "Facility A Commitment" (as the same may be reduced from time
to time pursuant to Section 2.03 hereof). The original aggregate principal
amount of the Facility A Commitments is $700,000,000.

"Facility A Commitment Percentage" shall mean, with respect to
any Facility A Lender, the ratio of (a) the amount of the Facility A Commitment
of such Lender to (b) the aggregate amount of the Facility A Commitments of all
of the Facility A Lenders.

"Facility A Lenders" shall mean the Lenders having Facility A
Commitments and/or holding Facility A Loans from time to time.

"Facility A Loans" shall mean the loans provided for by Section
2.01(a)(i) hereof, which may be Base Rate Loans and/or Eurodollar Loans.

"Facility A Notes" shall mean the promissory notes provided for
by Section 2.07(a) hereof and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.

"Facility B Commitment" shall mean, for each Facility B Lender,
the obligation of such Lender to make a Facility B Loan to the Company in a
principal amount up to but not exceeding the amount set opposite the name of
such Lender on the signature pages hereof under

Credit Agreement 8
14
the caption "Facility B Commitment" (as the same may be reduced from time to
time pursuant to Section 2.03 hereof). The original aggregate principal amount
of the Facility B Commitments is $550,000,000.

"Facility B Commitment Percentage" shall mean, with respect to
any Facility B Lender, the ratio of (a) the amount of the Facility B Commitment
of such Lender to (b) the aggregate amount of the Facility B Commitments of all
of the Facility B Lenders.

"Facility B Lenders" shall mean the Lenders having Facility B
Commitments and/or holding Facility B Loans from time to time.

"Facility B Loans" shall mean the loans provided for by Section
2.01(b) hereof, which may be Base Rate Loans and/or Eurodollar Loans.

"Facility B Notes" shall mean the promissory notes provided for
by Section 2.07(b) hereof and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time. The term "Facility B Notes" shall include any
Registered Notes evidencing Facility B Loans executed and delivered pursuant to
Section 2.07(e).

"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is
to be determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day and (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average rate charged to First Union on such Business Day on such
transactions as determined by the Agent.

"First Union" shall mean First Union National Bank.

"Fixed Charges" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) the aggregate
amount of Debt Service for such period, plus (b) the aggregate amount of taxes
paid in respect of the income or profit of the Company and its Subsidiaries for
such period, plus (c) Capital Expenditures made during such period, plus (d)
any Dividend Payments made for such period; provided that Capital Expenditures
shall not include the following: (i) the acquisition of replacement Property
in respect of an Excluded Disposition, (ii) the purchase price paid by the
Company or any of its Subsidiaries in respect of any acquisition permitted
under Section 8.05(b)(iii) hereof, and (iii) Capital Expenditures made with the
proceeds of property or casualty insurance for the purposes of repairing or
replacing damaged or destroyed fixed or capital assets.

Credit Agreement 9
15
"Fixed Charges Ratio" shall mean, as at any date, the ratio of
(a) EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date to (b) Fixed Charges for such period.

"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those that, in accordance with the last
sentence of Section 1.02(a) hereof, are to be used in making the calculations
for purposes of determining compliance with this Agreement.

"Xxxxxxx" shall mean Xxxxxxx y Compania, Inc., a Puerto Rico
corporation.

"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a verb
shall have a correlative meaning.

"Hazardous Material" shall mean, collectively, (a) any petroleum
or petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other
equipment that contain polychlorinated biphenyls ("PCB's"), (b) any chemicals
or other materials or substances that are now or hereafter become defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted hazardous
wastes", "toxic substances", "toxic pollutants", "contaminants", "pollutants"
or words of similar import under any Environmental Law and (c) any other
chemical or other material or substance, exposure to which is now or hereafter
prohibited, limited or regulated under any Environmental Law.

"Indebtedness" shall mean, for any Person: (a) obligations
created, issued or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of such Person to
pay the deferred purchase or acquisition price of Property or services, other
than trade accounts payable (other than for borrowed money) arising, and
accrued expenses incurred, in the ordinary course of business so long as such
trade accounts payable are payable within 120 days of the date the respective
goods are delivered or the respective services are rendered; (c) Indebtedness
of others secured by a Lien on the Property of such Person, whether or not the
respective indebtedness so secured has been assumed by such Person; (d)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for
account of such Person; (e) Capital Lease Obligations of such Person; and (f)
Indebtedness of others Guaranteed by such Person.

Credit Agreement 10
16
"Interest Coverage Ratio" shall mean, as at any date, the ratio
of (a) EBITDA for a period of four consecutive fiscal quarters ending on, or
most recently ended prior to, such date to (b) Interest Expense for such
period.

"Interest Expense" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness (including, without limitation, the interest component
of any payments in respect of Capital Lease Obligations, but excluding
amortization of any deferred loan costs incurred in connection with the
transactions contemplated hereby and in connection with Indebtedness permitted
under Section 8.07 hereof) capitalized or expensed during such period (whether
or not actually paid during such period), but excluding any non-cash interest,
plus (b) the net amount payable (or minus the net amount receivable) under
Interest Rate Protection Agreements during such period (whether or not actually
paid or received during such period) minus (c) all interest income for such
period.

"Interest Period" shall mean with respect to any Eurodollar Loan,
each period commencing on the date such Eurodollar Loan is made or Converted
from a Base Rate Loan or the last day of the next preceding Interest Period for
such Loan and ending on the numerically corresponding day in the first, second,
third or sixth calendar month thereafter, as the Company may select as provided
in Section 4.05 hereof, except that each Interest Period for a Eurodollar Loan
that commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (i) if any Interest
Period for any Facility A Loan would otherwise end after the Revolving Credit
Commitment Termination Date, such Interest Period shall end on the Revolving
Credit Commitment Termination Date; (ii) no Interest Period for any Facility B
Loan may commence before and end after any Principal Payment Date for such
Facility B Loan unless, after giving effect thereto, the aggregate principal
amount of the Facility B Loans having Interest Periods that end after such
Principal Payment Date shall be equal to or less than the aggregate principal
amount of such Facility B Loans scheduled to be outstanding after giving effect
to the payments of principal required to be made on such Principal Payment
Date; (iii) each Interest Period that would otherwise end on a day that is not
a Business Day shall end on the next succeeding Business Day (or, if such next
succeeding Business Day falls in the next succeeding calendar month, on the
next preceding Business Day); and (iv) notwithstanding clauses (i) through
(iii) above, no Interest Period shall have a duration of less than one month
for any Eurodollar Loan and, if the Interest Period for any such Loan would
otherwise be a shorter period, such Loan shall not be available as a Eurodollar
Loan hereunder for such period.

"Interest Rate Protection Agreement" shall mean, for any Person,
an interest rate swap, cap or collar agreement or similar arrangement between
such Person and one or more financial institutions providing for the transfer
or mitigation of interest risks either generally or under specific
contingencies.

Credit Agreement 11
17
"Interest Rate Protection Obligations" shall mean the obligations
of any Obligor in respect of Interest Rate Protection Agreements permitted
under Section 8.08(d) hereof.

"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such sale, but excluding any notes or other securities taken in
satisfaction of or in compromise of delinquent accounts or loans or advances);
(b) the making of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such Property to such Person), but excluding any such advance, loan or
extension of credit having a term not exceeding 90 days representing the
purchase price of inventory or supplies sold by such Person in the ordinary
course of business); (c) the entering into of any Guarantee of, or other
contingent obligation with respect to, Indebtedness or other liability of any
other Person and (without duplication) any amount committed to be advanced,
lent or extended to such Person; or (d) the entering into of any Interest Rate
Protection Agreement.

"Investment Tax Credit" shall mean an investment tax credit to
which the Company or any of its Subsidiaries may be entitled pursuant to the
Puerto Rico Agricultural Tax Incentives Act of 1995.

"Issuing Bank" shall mean First Union, as the issuer of Letters
of Credit under Section 2.09 hereof, together with its successors and assigns
in such capacity.

"Letter of Credit" shall have the meaning assigned to such term
in the first sentence of Section 2.09 hereof.

"Letter of Credit Documents" shall mean, with respect to any
Letter of Credit, collectively, any application therefor and any other
agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or providing
for (a) the rights and obligations of the parties concerned or at risk with
respect to such Letter of Credit or (b) any collateral security for any of such
obligations, each as the same shall be modified and supplemented and in effect
from time to time.

"Letter of Credit Interest" shall mean, for each Facility A
Lender, such Facility A Lender's participation interest in the Issuing Bank's
liability under Letters of Credit (or, in the case of the Issuing Bank, the
Issuing Bank's retained interest therein) and such Facility A Lender's rights
and interests in Reimbursement Obligations and fees, interest and other amounts
payable in connection with Letters of Credit and Reimbursement Obligations.

"Letter of Credit Liability" shall mean, without duplication, at
any time and in respect of any Letter of Credit, the sum of (a) the undrawn
face amount of such Letter of Credit plus (b) the aggregate unpaid principal
amount of all Reimbursement Obligations of the Company

Credit Agreement 12
18
at such time due and payable in respect of all drawings made under such Letter
of Credit. For purposes of this Agreement, a Facility A Lender (other than the
Issuing Bank) shall be deemed to hold a Letter of Credit Liability in an amount
equal to its participation interest in the related Letter of Credit under
Section 2.09 hereof, and the Issuing Bank shall be deemed to hold a Letter of
Credit Liability in an amount equal to its retained interest in such Letter of
Credit after giving effect to the acquisition by the Facility A Lenders other
than the Issuing Bank of their participation interests under said Section 2.09,
together with its successors and assigns in such capacity.

"Leverage Ratio" shall mean, as at any date, the ratio of (a) the
aggregate outstanding principal amount of Indebtedness of the Company and its
Subsidiaries, on a consolidated basis, at such date to (b) EBITDA for the
period of four consecutive fiscal quarters ending on, or most recently ended
prior to, such date; provided that if the Company or any of its Subsidiaries
shall have acquired any business, Property or Person during such period
(whether before, on or after the Effective Date), EBITDA shall, to the extent
the Company shall have delivered audited financial statements (or, if audited
financial statements are not available to the Company, unaudited financial
statements (i) reviewed by independent certified accountants of recognized
national standing and acceptable to the Agent and (ii) in form satisfactory to
the Agent) for the acquired business, Property or Person for such period, be
adjusted to reflect on a pro forma basis EBITDA for such business, Property or
Person as if such business, Property or Person had been acquired at the
beginning of such period.

"Lien" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such Property. For purposes of this Agreement and the other Loan Documents,
a Person shall be deemed to own, subject to a Lien, any Property that it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
(other than an operating lease) relating to such Property.

"Loans" shall mean the Facility A Loans and the Facility B Loans.

"Loan Documents" shall mean, collectively, this Agreement, the
Notes, the Letter of Credit Documents and the Security Documents.

"Majority Lenders" shall mean, as at any time, Facility A Lenders
and Facility B Lenders having at least a majority of the sum of (a) the
aggregate unused amount, if any, of the Facility A Commitments and the Facility
B Commitments as at such time plus (b) the aggregate outstanding principal
amount of the Facility A Loans and Facility B Loans at such time plus (c) the
aggregate amount of all Letter of Credit Liabilities at such time.

"Margin Stock" shall mean "margin stock" within the meaning of
Regulations U and X.

"Material Adverse Effect" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition, prospects,
liabilities or capitalization of the Company

Credit Agreement 13
19
and its Subsidiaries taken as a whole, (b) the ability of any Obligor to
perform its obligations under any of the Loan Documents to which it is a party,
(c) the validity or enforceability of any of the Loan Documents, (d) the rights
and remedies of the Lenders and the Agent under any of the Loan Documents or
(e) the timely payment of the principal of or interest on the Loans or the
Reimbursement Obligations or other amounts payable in connection therewith or
under the Loan Documents.

"Model Dairy" shall mean Model Dairy, Inc., a Delaware
corporation.

"Morningstar" shall mean The Morningstar Group, Inc., a Delaware
corporation.

"Morningstar Merger" shall mean the merger of SF Acquisition
Corporation, a Delaware corporation and a Wholly Owned Subsidiary of the
Company with and into Morningstar pursuant to which the issued and outstanding
shares of common stock of Morningstar will be converted into the right to
receive shares of the common stock of the Company and Morningstar will become a
Wholly Owned Subsidiary of the Company.

"Multiemployer Plan" shall mean a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been made by the
Company or any ERISA Affiliate and that is covered by Title IV of ERISA.

"Net Available Proceeds" shall mean, in the case of any Equity
Issuance, the aggregate amount of all cash received by the Company and its
Subsidiaries in respect of such Equity Issuance net of reasonable expenses
incurred by the Company and its Subsidiaries in connection therewith.

"Net Cash Payments" shall mean, with respect to any Disposition,
the aggregate amount of all cash payments, and the fair market value of any
non-cash consideration, received by the Company and its Subsidiaries directly
or indirectly in connection with such Disposition; provided that (a) Net Cash
Payments shall be net of (i) the amount of any legal, title and recording tax
expenses, commissions and other fees and expenses paid by the Company and its
Subsidiaries in connection with such Disposition and (ii) any Federal, state
and local income or other taxes estimated to be payable by the Company and its
Subsidiaries as a result of such Disposition (but only to the extent that such
estimated taxes are in fact paid to the relevant Federal, state or local
governmental authority within six months of the date of such Disposition) and
(b) Net Cash Payments shall be net of any repayments by the Company or any of
its Subsidiaries of Indebtedness to the extent that (i) such Indebtedness is
secured by a Lien on the Property that is the subject of such Disposition and
(ii) the transferee of (or holder of a Lien on) such Property requires that
such Indebtedness be repaid as a condition to the Disposition thereof.

"Net Purchase Price" shall mean 100% of the purchase price
(including noncash compensation) paid by the Company or any of its Subsidiaries
for any business, Property or Person in connection with a Permitted Acquisition
minus any cash on the balance sheet of the Person or included in the business
or Property being acquired pursuant to such Permitted Acquisition.

Credit Agreement 14
20
"Net Worth" shall mean, as at any date, the sum for the Company
and its Subsidiaries (determined on a consolidated basis without duplication)
of (a) the amount of capital stock plus (b) the amount of additional paid-in
capital plus (c) the amount of retained earnings (or, in the case of any
retained earnings deficit, minus the amount of such deficit).

"Xxxx Plastics" shall mean Xxxx Plastics Manufacturing Corp., a
Delaware corporation.

"Notes" shall mean the Facility A Notes and the Facility B Notes.

"Obligor" shall mean the Company and each Subsidiary of the
Company party to any Security Document.

"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.

"Permitted Acquisition" shall mean any acquisition by the Company
or any of its Subsidiaries of any business or Property from, or capital stock
of, any Person, provided that, (i) unless otherwise consented to in writing (a)
by the Majority Lenders, the Net Purchase Price of such acquisition shall not
equal or exceed $50,000,000, and (b) by the Supermajority Lenders, the Net
Purchase Price of such acquisition shall not equal or exceed $150,000,000
(except that the Country Fresh Merger and the Morningstar Merger shall not
require the consents set forth in sub-clauses (a) and (b) of this clause (i));
(ii) if the subject of such acquisition is a Person, the Company and/or its
Subsidiaries shall not acquire less than 90% of the issued and outstanding
ownership interests (including, without limitation, warrants, options or other
securities convertible into ownership interests) in such Person, (iii) if the
Net Purchase Price of such acquisition exceeds $15,000,000, prior to such
acquisition, the Company shall have delivered to the Agent for further
distribution to the Lenders copies of the proposed acquisition agreement
relating to such acquisition, all material documents related thereto and at the
reasonable request of the Agent, such other material information respecting
such business, Property or Person, as the case may be, obtained by the Company
in the exercise of its due diligence, (iv) at the time of such acquisition, the
Company or its Subsidiary, as the case may be, shall pledge any ownership
interests acquired to the Agent for the benefit of the Lenders, (v) such
business, Property or Persons shall be in the same line or lines of business
currently engaged in by the Company or any of its Subsidiaries, or as permitted
by Section 8.14 hereof, and (vi) on a pro forma basis, after giving effect to
such acquisition, the Company shall be in compliance with Sections 8.10, 8.11,
8.12 and 8.13 hereof.

"Permitted Investments" shall mean: (a) direct obligations of
the United States, or of any agency thereof, or obligations guaranteed as to
principal and interest by the United States, or of any agency thereof, in
either case maturing not more than one year from the date of acquisition
thereof; (b) direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of such acquisition, having the highest rating obtainable from either Standard
& Poor's Ratings Group, a division of XxXxxx-Xxxx, Inc.

Credit Agreement 15
21
("S&P") or Xxxxx'x Investors Services, Inc. ("Moody's"); (c) certificates of
deposit issued by any bank or trust company organized under the laws of the
United States or any state thereof or the Commonwealth and having capital,
surplus and undivided profits of at least $500,000,000, maturing not more than
six months from the date of acquisition thereof; (d) commercial paper rated A-1
or better or P-1 by S&P or Moody's, respectively, maturing not more than six
months from the date of acquisition thereof; and (e) Eurodollar time deposits
having a maturity of less than six months purchased directly from any bank
meeting the criteria set forth in clause (c) above (whether such deposit is
with such bank or any other such bank).

"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust, unincorporated
organization or government (or any agency, instrumentality or political
subdivision thereof).

"Plan" shall mean an employee benefit or other plan established
or maintained by the Company or any ERISA Affiliate and that is covered by
Title IV of ERISA, other than a Multiemployer Plan.

"Post-Default Rate" shall mean, in respect of any principal of
any Loan, any Reimbursement Obligation or any other amount under this
Agreement, any Note or any other Loan Document that is not paid when due
(whether at stated maturity, by acceleration, by mandatory prepayment or
otherwise), and in respect of any principal of any Loan during any period
commencing upon the occurrence of any Event of Default and thereafter for so
long as any Event of Default shall be continuing, a rate per annum during the
period from and including the due date to but excluding the earlier of the date
on which such amount is paid in full or such Event of Default ceases to be
continuing equal to 2% plus the Base Rate as in effect from time to time plus
the Applicable Margin for Base Rate Loans (provided that, if the amount so in
default is principal of a Eurodollar Loan and the due date thereof is a day
other than the last day of the Interest Period therefor, the "Post-Default
Rate" for such principal shall be, for the period from and including such due
date to but excluding the last day of such Interest Period, 2% plus the
interest rate for such Loan as provided in Section 3.02(b) hereof and,
thereafter, the rate provided for above in this definition).

"Prime Rate" shall mean the rate of interest from time to time
announced by First Union at its principal office as its prime commercial
lending rate.

"Principal Payment Dates" shall mean the Quarterly Dates falling
on or nearest to March 31, June 30, September 30 and December 31 of each year,
commencing with March 31, 1998, through and including December 31, 2003.

"Property" shall mean any right or interest in or to property of
any kind whatsoever, whether real, personal (including, without limitation,
cash) or mixed and whether tangible or intangible.

"Purchase Agreements" shall mean, collectively, each Purchase
Agreement between the Company or any of its Subsidiaries and the seller of the
business, Property or Person

Credit Agreement 16
22
purchased by the Company or such Subsidiary pursuant to a Permitted Acquisition
financed under this Agreement.

"Quarterly Dates" shall mean the last Business Day of March,
June, September and December in each year, the first of which shall be December
31, 1997.

"Register" shall have the meaning assigned to such term in
Section 11.06(g) hereof.

"Registered Holder" shall have the meaning assigned to such term
in Section 5.06(b)(ii) hereof.

"Registered Loans" shall have the meaning assigned to such term
in Section 2.07(e) hereof.

"Registered Note" shall have the meaning assigned to such term in
Section 2.07(e) hereof.

"Regulations A, D, U and X" shall mean, respectively, Regulations
A, D, U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from
time to time.

"Regulatory Change" shall mean, with respect to any Lender, any
change after the date of this Agreement in United States Federal, state or
foreign law or regulations or in the law or regulations of the Commonwealth
(including, without limitation, Regulation D) or the adoption or making after
such date of any interpretation, directive or request applying to a class of
banks including such Lender of or under any Federal, state or foreign law or
regulations or in the law or regulations of the Commonwealth (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.

"Reimbursement Obligations" shall mean, at any time, the
obligations of the Company then outstanding, or that may thereafter arise in
respect of all Letters of Credit then outstanding, to reimburse amounts paid by
the Issuing Bank in respect of any drawings under a Letter of Credit.

"Release" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.

"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to
be maintained during such Interest Period under Regulation D by member banks of
the Federal Reserve System in New York City with

Credit Agreement 17
23
deposits exceeding one billion Dollars against "Eurocurrency liabilities" (as
such term is used in Regulation D). Without limiting the effect of the
foregoing, the Reserve Requirement shall include any other reserves required to
be maintained by such member banks by reason of any Regulatory Change with
respect to (i) any category of liabilities that includes deposits by reference
to which the Eurodollar Base Rate is to be determined as provided in the
definition of "Eurodollar Base Rate" in this Section 1.01 or (ii) any category
of extensions of credit or other assets that includes Eurodollar Loans.

"Responsible Financial Officer" shall mean, with respect to any
Person, the Chairman of the Board of Directors, the President, the Chief
Executive Officer, the Chief Financial Officer or the Treasurer of such Person.

"Revolving Credit Commitment Termination Date" shall mean the
Quarterly Date falling on or nearest to December 31, 2003.

"Security Agreement" shall mean a Security Agreement between the
Company and the Agent, substantially in the form of Exhibit B to this
Agreement, as the same may be amended, modified and supplemented and in effect
from time to time.

"Security Documents" shall mean, collectively, the Security
Agreement, each Supplemental Subsidiary Guarantee and Security Agreement, the
Subsidiary Guarantee and Security Agreement, and all Uniform Commercial Code
financing statements and/or other filings required hereby or thereby to be
filed with respect to the security interests in personal Property created
pursuant hereto or thereto.

"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned or controlled
by such Person or one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries of such Person.

"Subsidiary Guarantee and Security Agreement" shall mean a
Subsidiary Guarantee and Security Agreement between the Subsidiaries of the
Company listed on Schedule III hereto as of the Effective Date (other than
Xxxxxxx) and the Agent, substantially in the form of Exhibit C to this
Agreement, as the same may be amended, modified and supplemented and in effect
from time to time.

"Subsidiary Guarantors" shall mean Suiza Dairy, Suiza Fruit,
Model Dairy, Xxxx Plastics, Reddy Ice Corporation, Swiss Dairy, Xxxxx Farms,
Inc., Dairy Fresh and Suiza Management Corporation, each a Delaware
corporation, each of the other Subsidiaries of the

Credit Agreement 18
24
Company listed on Schedule III hereto as of the Effective Date (other than
Xxxxxxx), and each Supplemental Guarantor.

"Suiza Dairy" shall mean Suiza Dairy Corporation, a Delaware
corporation.

"Suiza Fruit" shall mean Suiza Fruit Corporation, a Delaware
corporation.

"Supermajority Lenders" shall mean, as at any time, Facility A
Lenders and Facility B Lenders having at least 66 2/3% of the sum of (a) the
aggregate unused amount, if any, of the Facility A Commitments and the Facility
B Commitments as at such time plus (b) the aggregate outstanding principal
amount of the Facility A Loans and Facility B Loans at such time plus (c) the
aggregate amount of all Letter of Credit Liabilities at such time.

"Supplemental Guarantor" shall mean each Subsidiary of the
Company party to a Supplemental Subsidiary Guarantee and Security Agreement.

"Supplemental Security Documents" shall mean, collectively, each
Supplemental Subsidiary Guarantee and Security Agreement between a Supplemental
Guarantor and the Agent, each amendment to the Security Agreement and to the
Subsidiary Guarantee and Security Agreement and all Uniform Commercial Code
financing statements and/or other filings required hereby or thereby to be
filed with respect to the security interests in personal Property created
pursuant hereto or thereto.

"Supplemental Subsidiary Guarantee and Security Agreement" shall
mean, collectively, each Supplemental Subsidiary Guarantee and Security
Agreement, substantially in the form of Exhibit C to this Agreement, as the
same shall be amended, modified and supplemented and in effect from time to
time.

"Swiss Dairy" shall mean Swiss Dairy Corporation, a Delaware
corporation and a Wholly Owned Subsidiary of the Company.

"Taxes" shall have the meaning assigned to such term in Section
5.06(a) hereof.

"Term Loan Commitment Termination Date" shall mean December 31,
1997.

"Type" shall have the meaning assigned to such term in Section
1.03 hereof.

"United States" shall mean the United States of America.

"U.S. Taxes" shall have the meaning assigned to such term in
Section 5.06(b) hereof.

"Wholly Owned Subsidiary" shall mean, with respect to any Person,
any corporation, partnership or other entity of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are directly or

Credit Agreement 19
25
indirectly owned or controlled by such Person or one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person.

"Working Capital" shall mean, for any period, the excess of (a)
the aggregate amount of inventory, accounts receivable and prepaid expenses of
the Company and its Subsidiaries over (b) the aggregate amount of accounts
payable and current accrued expenses of the Company and its Subsidiaries.

1.02 Accounting Terms and Determinations.

(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered
to the Lenders hereunder shall (unless otherwise disclosed to the Lenders in
writing at the time of delivery thereof in the manner described in subsection
(b) below) be prepared, in accordance with generally accepted accounting
principles applied on a basis consistent with those used in the preparation of
the latest financial statements furnished to the Lenders hereunder. All
calculations made for the purposes of determining compliance with this
Agreement shall (except as otherwise expressly provided herein) be made by
application of generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the latest annual or quarterly
financial statements furnished to the Lenders pursuant to Section 8.01 hereof
unless (i) the Company shall have objected to determining such compliance on
such basis at the time of delivery of such financial statements or (ii) the
Majority Lenders shall so object in writing within 30 days after delivery of
such financial statements, in either of which events such calculations shall be
made on a basis consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have been made.

(b) The Company shall deliver to the Lenders at the same
time as the delivery of any annual or quarterly financial statement under
Section 8.01 hereof (i) a description in reasonable detail of any material
variation between the application of accounting principles employed in the
preparation of such statement and the application of accounting principles
employed in the preparation of the next preceding annual or quarterly financial
statements as to which no objection has been made in accordance with the last
sentence of subsection (a) above and (ii) reasonable estimates of the
difference between such statements arising as a consequence thereof.

(c) To enable the ready and consistent determination of
compliance with the covenants set forth in Section 8 hereof, the Company will
not, without the prior consent of the Majority Lenders, change the last day of
its fiscal year from December 31 of each year, or the last days of the first
three fiscal quarters in each of its fiscal years from March 31, June 30 and
September 30 of each year, respectively.

1.03 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan (or of a
Commitment to make a Loan or the related Note) refers to whether such Loan is a
Facility A Loan, or a Facility B Loan, each of which constitutes a

Credit Agreement 20
26
Class. The "Type" of a Loan refers to whether such Loan is a Base Rate Loan or
a Eurodollar Loan, each of which constitutes a Type. Loans may be identified
by both Class and Type.

Section 2. Commitments, Loans, Notes and Prepayments.

2.01 Loans.

(a) Facility A Loans. Each Facility A Lender severally
agrees, on the terms and conditions of this Agreement, to make loans to the
Company in Dollars during the period from and including the Effective Date to
but not including the Revolving Credit Commitment Termination Date in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount of the Facility A Commitment of such Lender as in effect from time
to time (such Loans being herein called "Facility A Loans"); provided that in
no event shall the aggregate principal amount of all Facility A Loans, together
with the aggregate amount of all Letter of Credit Liabilities, exceed the
aggregate amount of the Facility A Commitments as in effect from time to time.
Subject to the terms and conditions of this Agreement, during such period the
Company may borrow, repay and reborrow the amount of the Facility A Commitments
by means of Base Rate Loans and/or Eurodollar Loans and may Convert Facility A
Loans of one Type into Facility A Loans of another Type (as provided in Section
2.08 hereof) or Continue Facility A Loans of one Type as Facility A Loans of
the same Type (as provided in Section 2.08 hereof).

(b) Facility B Loans. Each Facility B Lender severally
agrees, on the terms and conditions of this Agreement, to make a single term
loan to the Company in Dollars on the Effective Date (provided that the same
shall occur no later than the Term Loan Commitment Termination Date) in a
principal amount up to but not exceeding the amount of the Facility B
Commitment of such Lender. Subject to the terms and conditions of this
Agreement, the Company may borrow the amount of the Facility B Commitments by
means of Base Rate Loans and/or Eurodollar Loans and thereafter may Convert
Facility B Loans of one Type into Facility B Loans of another Type (as provided
in Section 2.08 hereof) or Continue Facility B Loans of one Type as Facility B
Loans of the same Type (as provided in Section 2.08 hereof).

(c) Limit on Certain Loans. No more than six separate
Interest Periods in respect of Eurodollar Loans of any Class from each Lender
may be outstanding at any one time.

2.02 Borrowings.

(a) The Company shall give the Agent notice of each
borrowing hereunder as provided in Section 4.05 hereof.

(b) With respect to each borrowing, not later than 3:30
p.m. Charlotte, North Carolina time on the date specified for such borrowing,
each Lender shall make available the amount of the Loan or Loans to be made by
it to the Company on such date to the Agent at any account designated by the
Agent, in immediately available funds, for account of the Company. The amount
so received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Company by depositing the same, in
immediately available funds, in the

Credit Agreement 21
27
deposit account of the Company identified in the most recent Notice of Account
Designation substantially in the form of Exhibit I-4 hereto delivered by the
Company to the Agent or as may be otherwise agreed by the Company and the Agent
from time to time.

2.03 Changes of Commitments.

(a) The aggregate amount of each of the Facility A
Commitments shall be automatically reduced to zero on the Revolving Credit
Commitment Termination Date.

(b) The Company shall have the right at any time or from
time to time (i) to terminate or reduce the aggregate unused amount of any of
the Facility B Commitments, (ii) so long as no Facility A Loans or Letter of
Credit Liabilities in respect of Letters of Credit are outstanding, to
terminate the Facility A Commitments, and (iii) to reduce the aggregate unused
amount of any of the Facility A Commitments (for which purpose use of the
Facility A Commitments shall be deemed to include the aggregate amount of
Letter of Credit Liabilities); provided that (x) the Company shall give notice
of each such termination or reduction as provided in Section 4.05 hereof and
(y) each such partial reduction shall be in an aggregate amount at least equal
to $2,000,000 (or a larger multiple of $1,000,000).

(d) The Commitments once terminated or reduced may not be
reinstated.

2.04 Commitment Fee. The Company shall pay to the Agent for
account of each Facility A Lender a commitment fee on the daily average unused
amount of such Lender's Facility A Commitment (for which purpose the aggregate
amount of any Letter of Credit Liabilities in respect of Letters of Credit
shall be deemed to be a pro rata (based on the Facility A Commitments) use of
each Facility A Lender's Facility A Commitment), for the period from and
including the Effective Date to but not including the earlier of the date such
Commitment is terminated and the Revolving Credit Commitment Termination Date,
at a rate per annum equal to the Applicable Commitment Fee Rate. Accrued
commitment fees shall be payable in arrears on each Quarterly Date and on the
earlier of (i) the date the relevant Commitments are terminated and (ii) the
Revolving Credit Commitment Termination Date.

2.05 Lending Offices. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.

2.06 Several Obligations; Remedies Independent. The failure
of any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but neither any Lender nor the Agent shall be responsible for the failure
of any other Lender to make a Loan to be made by such other Lender, and no
Lender shall have any obligation to the Agent or any other Lender for the
failure by such Lender to make any Loan required to be made by such Lender.
The amounts payable by the Company at any time hereunder and under the Notes to
each Lender shall be a separate and

Credit Agreement 22
28
independent debt and each Lender shall be entitled, subject to the prior
written consent of the Majority Lenders, to protect and enforce its rights
arising out of this Agreement and the Notes, and it shall not be necessary for
any other Lender or the Agent to be joined as an additional party in any
proceedings for such purposes.

2.07 Notes.

(a) The Facility A Loans made by each Lender shall be
evidenced by a single promissory note of the Company substantially in the form
of Exhibit A-1 hereto, dated the Effective Date, payable to such Lender in a
principal amount equal to the amount of its Facility A Commitment as originally
in effect and otherwise duly completed.

(b) The Facility B Loan made by each Lender shall be
evidenced by a single promissory note of the Company substantially in the form
of Exhibit A-2 hereto, dated the Effective Date, payable to such Lender in a
principal amount equal to the amount of its Facility B Commitment as originally
in effect and otherwise duly completed.

(c) The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Loan of each Class made by each Lender,
and each payment made on account of the principal thereof, shall be recorded by
such Lender on its books and, prior to any transfer of the Note evidencing the
Loans of such Class held by it, endorsed by such Lender on the schedule
attached to such Note or any continuation thereof; provided that the failure of
such Lender to make any such recordation or endorsement or an error therein
shall not affect the obligations of the Company to make a payment when due of
any amount owing hereunder or under such Note in respect of the Loans to be
evidenced by such Note.

(d) No Lender shall be entitled to have its Notes
subdivided, by exchange for promissory notes of lesser denominations or
otherwise, except in connection with a permitted assignment of all or any
portion of such Lender's relevant Commitments, Loans and Notes pursuant to
Section 11.06(b) hereof.

(e) Notwithstanding the foregoing, any Lender that is not a
U.S. Person and is not a "bank" within the meaning of Section 881(c)(3)(A) of
the Code may request the Company (through the Agent), and the Company agrees
thereupon, to record on the Register referred to in Section 11.06(g) hereof any
Facility B Loans held by such Lender under this Agreement. Loans recorded on
the Register ("Registered Loans") may not be evidenced by promissory notes
other than Registered Notes as defined below and, upon the registration of any
Facility B Loan, any promissory note (other than a Registered Note) evidencing
the same shall be null and void and shall be returned to the Company. The
Company agrees, at the request of any Lender that is the holder of Registered
Loans, to execute and deliver to such Lender a promissory note in registered
form to evidence such Registered Loans and registered as provided in Section
11.06(g) hereof (herein, a "Registered Note"), dated the Effective Date,
payable to such Lender and otherwise duly completed. A Facility B Loan once
recorded on the Register may not be removed from the Register so long as it
remains outstanding and a Registered Note may not be exchanged for a promissory
note that is not a Registered Note.

Credit Agreement 23
29
2.08 Optional Prepayments and Conversions or Continuations
of Loans. Subject to Section 4.04 hereof, the Company shall have the right to
prepay Loans, or to Convert Loans of one Type into Loans of another Type or
Continue Loans of one Type as Loans of the same Type, at any time or from time
to time, provided that:

(a) the Company shall give the Agent notice of each such
prepayment, Conversion or Continuation as provided in Section 4.05 hereof (and,
upon the date specified in any such notice of prepayment, the amount to be
prepaid shall become due and payable hereunder);

(b) Eurodollar Loans may be prepaid or Converted on any
Business Day, provided that, if such prepayment or Conversion falls on a day
other than the last day of an Interest Period for such Loans, the Company shall
pay any and all amounts required by Section 5.05 hereof as a result thereof;
and

(c) prepayments of the Facility B Loans under this Section
2.08 shall be applied ratably as among the remaining installments of the
Facility B Loans.

Notwithstanding the foregoing, and without limiting the rights and remedies of
the Lenders under Section 9 hereof, in the event that any Event of Default
shall have occurred and be continuing, the Agent may (and at the request of the
Majority Lenders shall) suspend the right of the Company to borrow any Loan as
a Eurodollar Loan or to Convert any Loan into a Eurodollar Loan, or to Continue
any Loan as a Eurodollar Loan, in which event all Eurodollar Loans outstanding
shall be automatically Converted (on the last day(s) of the respective Interest
Periods therefor) to, or all Base Rate Loans shall be Continued, as the case
may be, as Base Rate Loans.

2.09 Letters of Credit. Subject to the terms and conditions
of this Agreement, the Facility A Commitments may be utilized, upon the request
of the Company, in addition to the Facility A Loans provided for by Section
2.01(a) hereof, by the issuance by the Issuing Bank of letters of credit
(collectively, "Letters of Credit") including (a) Letters of Credit issued
under the Existing Credit Agreements and outstanding on the Effective Date, for
account of any of the Subsidiaries of the Company, and (b) in respect of all
(1) Letters of Credit described in clause (a) above that are amended, renewed
or otherwise modified and (2) other Letters of Credit, for account of the
Company and any of its Subsidiaries provided that in no event shall (i) the
aggregate amount of all Letter of Credit Liabilities, together with the
aggregate principal amount of the Facility A Loans, exceed the aggregate amount
of the Facility A Commitments as in effect from time to time and (ii) the
expiration date of any Letter of Credit extend beyond the earlier of (A) the
Revolving Credit Commitment Termination Date and (B)(1) the date 12 months
following the issuance of such Letter of Credit or (2) such later date as may
be requested by a beneficiary and approved in advance by the Agent and the
Issuing Bank, such approval not to be unreasonably withheld. The following
additional provisions shall apply to Letters of Credit:

(a) The Company shall give the Agent at least three
Business Days' irrevocable prior notice (effective upon receipt) specifying the
Business Day (which shall be no later than 30

Credit Agreement 24
30
days preceding the Revolving Credit Commitment Termination Date) each Letter of
Credit is to be issued and the account party or parties therefor and describing
in reasonable detail the proposed terms of such Letter of Credit (including the
beneficiary thereof) and the nature of the transactions or obligations proposed
to be supported thereby (including whether such Letter of Credit is to be a
commercial letter of credit or a standby letter of credit). Upon receipt of
any such notice, the Agent shall advise the Issuing Bank of the contents
thereof.

(b) On each day during the period commencing with the
issuance by the Issuing Bank of any Letter of Credit (from the Effective Date
in the case of outstanding Letters of Credit) and until such Letter of Credit
shall have expired or been terminated, the Facility A Commitment of each
Facility A Lender shall be deemed to be utilized for all purposes of this
Agreement in an amount equal to such Lender's Facility A Commitment Percentage
of the then undrawn face amount of such Letter of Credit. Each Facility A
Lender (other than the Issuing Bank) agrees that, upon the issuance of any
Letter of Credit hereunder (or on the Effective Date in the case of outstanding
Letters of Credit), it shall automatically acquire a participation in the
Issuing Bank's liability under such Letter of Credit in an amount equal to such
Lender's Facility A Commitment Percentage of such liability, and each Facility
A Lender (other than the Issuing Bank) thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and shall be unconditionally obligated to the Issuing Bank to pay and discharge
when due, its Facility A Commitment Percentage of the Issuing Bank's liability
under such Letter of Credit.

(c) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment under such Letter of Credit, the Issuing Bank
shall promptly notify the Company (through the Agent) of the amount to be paid
by the Issuing Bank as a result of such demand and the date on which payment is
to be made by the Issuing Bank to such beneficiary in respect of such demand
(but the failure to give such notice shall not impair the Company's obligations
in respect of such Letter of Credit). Notwithstanding the identity of the
account party of any Letter of Credit, the Company hereby unconditionally
agrees to pay and reimburse the Agent for account of the Issuing Bank for the
amount of each demand for payment under such Letter of Credit that is in
substantial compliance with the provisions of such Letter of Credit at or prior
to the date on which payment is to be made by the Issuing Bank to the
beneficiary thereunder, without presentment, demand, protest or other
formalities of any kind and irrespective of any claim, set-off, defense or
other right which the Company or any of its Subsidiaries or Affiliates may have
at any time against such Issuing Bank or any other Person, under all
circumstances, including without limitation, any of the following
circumstances: (i) any lack of validity or enforceability of this Agreement or
any of the Loan Documents; (ii) the existence of any claim, set- off, defense
or other right which the Company or any of its Subsidiaries or Affiliates may
have at any time against a beneficiary named in any Letter of Credit or any
transferee thereof (or any Person for whom any such transferee may be acting),
the Issuing Bank, any Lender or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transactions between the
Company or any of its Subsidiaries or Affiliates and the beneficiary named in
any Letter of Credit); (iii) any draft, certificate or any other document
presented under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or

Credit Agreement 25
31
inaccurate in any respect; (iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of the Loan Documents;
or (v) the existence of any Default.

(d) Forthwith upon its receipt of a notice referred to in
paragraph (c) of this Section 2.09, the Company shall advise the Agent whether
or not the Company intends to borrow hereunder to finance its obligation to
reimburse the Issuing Bank for the amount of the related demand for payment
and, if it does, submit a notice of such borrowing as provided in Section 4.05
hereof.

(e) Each Facility A Lender (other than the Issuing Bank)
shall pay to the Agent for account of the Issuing Bank at its principal office
in Dollars and in immediately available funds, the amount of such Lender's
Facility A Commitment Percentage of any payment under a Letter of Credit upon
notice by the Issuing Bank (through the Agent) to such Facility A Lender
requesting such payment and specifying such amount. Each such Facility A
Lender's obligation to make such payment to the Agent for account of the
Issuing Bank under this paragraph (e), and the Issuing Bank's right to receive
the same, shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever (except as provided in the proviso at the end of this
sentence), including, without limitation, the failure of any other Facility A
Lender to make its payment under this paragraph (e), the financial condition of
the Company (or any other account party), the existence of any Default or the
termination of the Commitments; provided that no Facility A Lender shall be
obligated to make any payment to the Agent for account of the Issuing Bank in
respect of any payment made by the Issuing Bank under a Letter of Credit where
such payment was made in respect of a demand for payment that was not in
substantial compliance with the provisions of such Letter of Credit or to the
extent that the Company shall not be required to indemnify any Lender or the
Agent in the circumstances provided in clause (x) of the penultimate sentence
of the last paragraph of this Section 2.09. Each such payment to the Issuing
Bank shall be made without any offset, abatement, withholding or reduction
whatsoever. If any Facility A Lender shall default in its obligation to make
any such payment to the Agent for account of the Issuing Bank, for so long as
such default shall continue the Agent may at the request of the Issuing Bank
withhold from any payments received by the Agent under this Agreement or any
Note for account of such Facility A Lender the amount so in default and, to the
extent so withheld, pay the same to the Issuing Bank in satisfaction of such
defaulted obligation.

(f) Upon the making of each payment by a Facility A Lender
to the Issuing Bank pursuant to paragraph (e) above in respect of any Letter of
Credit, such Lender shall, automatically and without any further action on the
part of the Agent, the Issuing Bank or such Lender, acquire (i) a participation
in an amount equal to such payment in the Reimbursement Obligation owing to the
Issuing Bank by the Company hereunder and under the Letter of Credit Documents
relating to such Letter of Credit and (ii) a participation in a percentage
equal to such Lender's Facility A Commitment Percentage in any interest or
other amounts payable by the Company hereunder and under such Letter of Credit
Documents in respect of such Reimbursement Obligation (other than the
commissions, charges, costs and expenses payable to the Issuing Bank pursuant
to paragraph (g) of this Section 2.09). Upon receipt by the Issuing Bank from
or for account of the Company of any payment in respect of any Reimbursement
Obligation or any such interest or other amount (including by way of setoff or
application of

Credit Agreement 26
32
proceeds of any collateral security), the Issuing Bank shall promptly pay to
the Agent for account of each Facility A Lender entitled thereto, such Facility
A Lender's Facility A Commitment Percentage of such payment, each such payment
by the Issuing Bank to be made in the same money and funds in which received by
the Issuing Bank. In the event any payment received by the Issuing Bank and so
paid to the Facility A Lenders hereunder is rescinded or must otherwise be
returned by the Issuing Bank, each Facility A Lender shall, upon the request of
the Issuing Bank (through the Agent), repay to the Issuing Bank (through the
Agent) the amount of such payment paid to such Lender, with interest at the
rate specified in paragraph (j) of this Section 2.09.

(g) The Company shall pay to the Agent for account of each
Facility A Lender (ratably in accordance with their respective Commitment
Percentages) a letter of credit fee in respect of each Letter of Credit in an
amount equal to the percentage equivalent of the Applicable Margin for
Eurodollar Loans of the daily average undrawn face amount of such Letter of
Credit for the period from and including the date of issuance of such Letter of
Credit (i) in the case of a Letter of Credit that expires in accordance with
its terms, to and including such expiration date and (ii) in the case of a
Letter of Credit that is drawn in full or is otherwise terminated other than on
the stated expiration date of such Letter of Credit, to but excluding the date
such Letter of Credit is drawn in full or is terminated (such fee to be
non-refundable, to be paid in arrears on each Quarterly Date and on the
Revolving Credit Commitment Termination Date and to be calculated for any day
after giving effect to any payments made under such Letter of Credit on such
day). In addition, the Company shall pay to the Agent for account of the
Issuing Bank a fronting fee in respect of each Letter of Credit in an amount
equal to 0.125% per annum of the daily average undrawn face amount of such
Letter of Credit for the period from and including the date of issuance of such
Letter of Credit (i) in the case of a Letter of Credit that expires in
accordance with its terms, to and including such expiration date and (ii) in
the case of a Letter of Credit that is drawn in full or is otherwise terminated
other than on the stated expiration date of such Letter of Credit, to but
excluding the date such Letter of Credit is drawn in full or is terminated
(such fee to be non-refundable, to be paid in arrears on each Quarterly Date
and on the Revolving Credit Commitment Termination Date and to be calculated
for any day after giving effect to any payments made under such Letter of
Credit on such day) plus all commissions, charges, costs and expenses in the
amounts customarily charged by the Issuing Bank from time to time in like
circumstances with respect to the issuance of each Letter of Credit and
drawings and other transactions relating thereto.

(h) Promptly following the end of each fiscal quarter, the
Issuing Bank shall deliver (through the Agent) to each Facility A Lender and
the Company a notice describing the aggregate amount of all Letters of Credit
outstanding at the end of such quarter. Upon the request of any Facility A
Lender from time to time, the Issuing Bank shall deliver any other information
reasonably requested by such Lender with respect to each Letter of Credit then
outstanding.

(i) The issuance by the Issuing Bank of each Letter of
Credit shall, in addition to the conditions precedent set forth in Section 6
hereof, be subject to the conditions precedent that (i) such Letter of Credit
shall be in such form, contain such terms and support such

Credit Agreement 27
33
transactions as shall be reasonably satisfactory to the Issuing Bank consistent
with its then current practices and procedures with respect to letters of
credit of the same type and (ii) the Company shall have executed and delivered
such applications, agreements and other instruments relating to such Letter of
Credit as the Issuing Bank shall have reasonably requested consistent with its
then current practices and procedures with respect to letters of credit of the
same type, provided that in the event of any conflict between any such
application, agreement or other instrument and the provisions of this Agreement
or any Security Document, the provisions of this Agreement and the Security
Documents shall control.

(j) To the extent that any Lender shall fail to pay any
amount required to be paid pursuant to paragraph (e) or (f) of this Section
2.09 on the due date therefor, such Lender shall pay interest to the Issuing
Bank (through the Agent) on such amount from and including such due date to but
excluding the date such payment is made at a rate per annum equal to the
Federal Funds Rate, provided that if such Lender shall fail to make such
payment to the Issuing Bank within three Business Days of such due date, then,
retroactively to the due date, such Lender shall be obligated to pay interest
on such amount at the Post-Default Rate.

(k) The issuance by the Issuing Bank of any modification or
supplement to any Letter of Credit hereunder shall be subject to the same
conditions applicable under this Section 2.09 to the issuance of new Letters of
Credit, and no such modification or supplement shall be issued hereunder unless
either (i) the respective Letter of Credit affected thereby would have complied
with such conditions had it originally been issued hereunder in such modified
or supplemented form or (ii) each Facility A Lender shall have consented
thereto.

The Company hereby indemnifies and holds harmless each Facility A Lender and
the Agent from and against any and all claims and damages, losses, liabilities,
costs or expenses that such Lender or the Agent may incur (or that may be
claimed against such Lender or the Agent by any Person whatsoever) by reason of
or in connection with the execution and delivery or transfer of or payment or
refusal to pay by the Issuing Bank under any Letter of Credit; provided that
the Company shall not be required to indemnify any Lender or the Agent for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (x) the willful misconduct or gross negligence of the
Issuing Bank in determining whether a request presented under any Letter of
Credit complied with the terms of such Letter of Credit or (y) in the case of
the Issuing Bank, such Lender's failure to pay under any Letter of Credit after
the presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit. Nothing in this Section 2.09 is intended
to limit the other obligations of the Company, any Lender or the Agent under
this Agreement.

Section 3. Payments of Principal and Interest.

3.01 Repayment of Loans.

(a) The Company hereby promises to pay to the Agent for
account of each Facility A Lender the entire outstanding principal amount of
such Lender's Facility A Loans, and each such Facility A Loan shall mature, on
the Revolving Credit Commitment Termination Date.

Credit Agreement 28
34
(b) The Company hereby promises to pay to the Agent for
account of each Facility B Lender the principal of such Lender's Facility B
Loan in 24 installments payable on the Principal Payment Dates falling on or
nearest to the dates specified below, each in an amount equal to such Lender's
ratable share of the aggregate amount set forth opposite such date, as follows:

Date Amount of Installment ($)
---- -------------------------

March 31, 1998 12,500,000
June 30, 1998 12,500,000
September 30, 1998 12,500,000
December 31, 1998 12,500,000
March 31, 1999 18,750,000
June 30, 1999 18,750,000
September 30, 1999 18,750,000
December 31, 1999 18,750,000
March 31, 2000 18,750,000
June 30, 2000 18,750,000
September 30, 2000 18,750,000
December 31, 2000 18,750,000
March 31, 2001 25,000,000
June 30, 2001 25,000,000
September 30, 2001 25,000,000
December 31, 2001 25,000,000
March 31, 2002 28,125,000
June 30, 2002 28,125,000
September 30, 2002 28,125,000
December 31, 2002 28,125,000
March 31, 2003 34,375,000
June 30, 2003 34,375,000
September 30, 2003 34,375,000
December 31, 2003 34,375,000
------------
$550,000,000

If the Company does not borrow the full amount of the aggregate Facility B
Commitments on or before the Term Loan Commitment Termination Date, the
shortfall shall be applied to reduce the foregoing installments ratably.

3.02 Interest. The Company hereby promises to pay to the
Agent for account of each Lender interest on the unpaid principal amount of
each Loan for the period from and including the date of such Loan to but
excluding the date such Loan shall be paid in full, at the following rates per
annum:

Credit Agreement 29
35
(a) during such periods as such Loan is a Base Rate Loan,
the Base Rate (as in effect from time to time) plus the Applicable Margin, and

(b) during such periods as such Loan is a Eurodollar Loan,
for each Interest Period relating thereto, the Eurodollar Rate for such Loan
for such Interest Period plus the Applicable Margin.

Notwithstanding the foregoing, the Company hereby promises to pay to the Agent
for account of each Lender interest at the applicable Post-Default Rate as
follows:

(i) on any principal of any Loan made by such Lender, on
any Reimbursement Obligation held by such Lender and on any other amount
payable by the Company hereunder or under the Notes held by such Lender to or
for account of such Lender that shall not be paid in full when due (whether at
stated maturity, by acceleration, or otherwise), for the period from and
including the due date thereof to but excluding the date the same is paid in
full; and

(ii) on the principal of all Loans made by such Lender
commencing upon the occurrence of any Event of Default, and thereafter for so
long as any Event of Default shall be continuing.

Accrued interest on each Loan shall be payable (i) in the case of a Base Rate
Loan, quarterly on the Quarterly Dates, (ii) in the case of a Eurodollar Loan,
on the last day of each Interest Period therefor and, if such Interest Period
is longer than three months, at three-month intervals following the first day
of such Interest Period, and (iii) at the option of the Agent, in the case of
any Loan upon the payment or prepayment thereof or the Conversion of such Loan
to a Loan of another Type (but only on the principal amount so paid, prepaid or
Converted) except that interest payable at the Post-Default Rate shall be
payable from time to time on demand. Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall give
notice thereof to the Lenders to which such interest is payable and to the
Company.

Section 4. Payments; Pro Rata Treatment; Computations; Etc.

4.01 Payments.

(a) Except to the extent otherwise provided herein, all
payments of principal, interest, Reimbursement Obligations and other amounts to
be made by the Company under this Agreement and the Notes of the Company, and,
except to the extent otherwise provided therein, all payments to be made by the
Obligors under any other Loan Document, shall be made in Dollars, in
immediately available funds, to the Agent at any account designated by the
Agent, not later than 2:00 p.m. Charlotte, North Carolina time on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day).

(b) Any Lender for whose account any such payment is to be
made may (but shall not be obligated to) debit the amount of any such payment
that is not made by such time to

Credit Agreement 30
36
any ordinary deposit account of the Company with such Lender (with notice to
the Company and the Agent).

(c) The Company shall, at the time of making each payment
under this Agreement or any Note for account of any Lender, specify to the
Agent (which shall so notify the intended recipient(s) thereof) the Loans,
Reimbursement Obligations or other amounts payable hereunder to which such
payment is to be applied (and in the event that the Company fails to so
specify, or if an Event of Default has occurred and is continuing, the Agent
may distribute such payment to the Lenders for application in such manner as it
or the Majority Lenders, subject to Section 4.02 hereof, may determine to be
appropriate).

(d) Except to the extent otherwise provided in the last
sentence of Section 2.09(e) hereof, each payment received by the Agent under
this Agreement or any Note for account of any Lender shall be paid by the Agent
promptly to such Lender, in immediately available funds, for account of such
Lender's Applicable Lending Office for the Loan or other obligation in respect
of which such payment is made.

(e) If the due date of any payment under this Agreement or
any Note would otherwise fall on a day that is not a Business Day, such date
shall be extended to the next succeeding Business Day, and interest shall be
payable for any principal so extended for the period of such extension.

4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each borrowing of Loans of a particular Class from the
Lenders under Section 2.01 hereof shall be made from the relevant Lenders, each
payment of commitment fee under Section 2.04 hereof in respect of Commitments
of a particular Class shall be made for account of the relevant Lenders, and
each termination or reduction of the amount of the Commitments of a particular
Class under Section 2.03 hereof shall be applied to the respective Commitments
of such Class of the relevant Lenders, pro rata according to the amounts of
their respective Commitments of such Class; (b) the making, Conversion and
Continuation of Loans of a particular Type and Class (other than Conversions
provided for by Section 5.04 hereof) shall be made pro rata among the relevant
Lenders according to the amounts of their respective Commitments (in the case
of making of Loans) or their respective Loans (in the case of Conversions and
Continuations of Loans); (c) each payment or prepayment of principal of Loans
of any Class by the Company shall be made for account of the relevant Lenders
pro rata in accordance with the respective unpaid principal amounts of the
Loans of such Class held by them; and (d) each payment of interest on any Loans
of any Class by the Company shall be made for account of the relevant Lenders
pro rata in accordance with the amounts of interest on such Loans then due and
payable to the respective Lenders.

4.03 Computations. Interest on Eurodollar Loans, commitment
fees and letter of credit fees shall be computed on the basis of a year of 360
days and actual days elapsed (including the first day but, except as otherwise
provided in Section 2.09(g) hereof, excluding the last day) occurring in the
period for which payable and interest on Base Rate Loans and Reimbursement
Obligations shall be computed on the basis of a year of 365 or 366 days, as the

Credit Agreement 31
37
case may be, and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable.

4.04 Minimum Amounts. Except for Conversions or prepayments
made pursuant to Section 5.04 hereof, (a) each borrowing and Conversion of
principal of Base Rate Loans shall be in an aggregate amount at least equal to
$1,000,000 or a larger multiple of $500,000, (b) each borrowing and Conversion
of Eurodollar Loans shall be in an aggregate amount at least equal to
$5,000,000 or a larger multiple of $1,000,000, and (c) each partial prepayment
of principal of Eurodollar Loans shall be in an aggregate amount at least equal
to $5,000,000 or a larger multiple of $1,000,000 and each partial prepayment of
principal of Base Rate Loans shall be in an aggregate amount at least equal to
$1,000,000 or a larger multiple of $500,000 (borrowings, Conversions or
prepayments of or into Loans of different Types or, in the case of Eurodollar
Loans, having different Interest Periods at the same time hereunder are to be
deemed separate borrowings, Conversions and prepayments for purposes of the
foregoing, one for each Type or Interest Period).

4.05 Certain Notices. Notices by the Company to the Agent
of terminations or reductions of the Commitments, of Borrowings, Conversions,
Continuations and optional prepayments of Loans and of Classes of Loans, of
Types of Loans and of the duration of Interest Periods shall be irrevocable
(other than with respect to notices of optional prepayments, which shall be
revocable, provided that upon any such revocation the Company shall be
obligated to pay the Lenders any amounts payable under Section 5.05 hereof as a
consequence of such revocation) and shall be effective only if received by the
Agent not later than 1:30 p.m. Charlotte, North Carolina time on the number of
Business Days prior to the date of the relevant termination, reduction,
borrowing, Conversion, Continuation or prepayment or the first day of such
Interest Period specified below:

Number of
Business
Notice Days Prior
------ ----------

Termination or reduction
of Commitments 3

Borrowing or prepayment of,
or Conversions into,
Base Rate Loans Same Day

Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3

Each such notice of termination or reduction shall specify the amount and the
Class of the Commitments to be terminated or reduced. Each such notice of
borrowing, Conversion,

Credit Agreement 32
38
Continuation or optional prepayment shall specify the Class of Loans to be
borrowed, Converted, Continued or prepaid and the amount (subject to Section
4.04 hereof) and Type of each Loan to be borrowed, Converted, Continued or
prepaid and the date of borrowing, Conversion, Continuation or optional
prepayment (which shall be a Business Day). Each such notice of the duration
of an Interest Period shall specify the Loans to which such Interest Period is
to relate. The Agent shall promptly notify the Lenders of the contents of each
such notice. In the event that the Company fails to select the Type of Loan,
or the duration of any Interest Period for any Eurodollar Loan, within the time
period and otherwise as provided in this Section 4.05, such Loan (if
outstanding as a Eurodollar Loan) will be automatically Converted into a Base
Rate Loan on the last day of the then current Interest Period for such Loan or
(if outstanding as a Base Rate Loan) will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan. The Company agrees that each
notice of borrowing, each notice of prepayment and each notice of Conversion or
Continuation hereunder shall be substantially in the form of Exhibit I-1,
Exhibit I-2 and Exhibit I-3 hereto, respectively.

4.06 Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Lender or the Company (the "Payor") prior to the
date on which the Payor is to make payment to the Agent of (in the case of a
Lender) the proceeds of a Loan to be made by such Lender hereunder or (in the
case of the Company) a payment to the Agent for account of one or more of the
Lenders hereunder (such payment being herein called the "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient(s)
on such date; and, if the Payor has not in fact made the Required Payment to
the Agent, the recipient(s) of such payment shall, on demand, repay to the
Agent the amount so made available together with interest thereon in respect of
each day during the period commencing on the date (the "Advance Date") such
amount was so made available by the Agent until the date the Agent recovers
such amount at a rate per annum equal to the Federal Funds Rate for such day
and, if such recipient(s) shall fail promptly to make such payment, the Agent
shall be entitled to recover such amount, on demand, from the Payor, together
with interest as aforesaid, provided that if neither the recipient(s) nor the
Payor shall return the Required Payment to the Agent within three Business Days
of the Advance Date, then, retroactively to the Advance Date, the Payor and the
recipient(s) shall each be obligated to pay interest on the Required Payment as
follows:

(i) if the Required Payment shall represent a payment to be
made by the Company to the Lenders, the Company and the recipient(s)
shall each be obligated retroactively to the Advance Date to pay interest
in respect of the Required Payment at the Post-Default Rate (and, in case
the recipient(s) shall return the Required Payment to the Agent, without
limiting the obligation of the Company under Section 3.02 hereof to pay
interest to such recipient(s) at the Post-Default Rate in respect of the
Required Payment) and

(ii) if the Required Payment shall represent proceeds of a
Loan to be made by the Lenders to the Company, the Payor and the Company
shall each be obligated

Credit Agreement 33
39
retroactively to the Advance Date to pay interest in respect of the
Required Payment at the rate of interest provided for such Required
Payment pursuant to Section 3.02 hereof (and, in case the Company shall
return the Required Payment to the Agent, without limiting any claim the
Company may have against the Payor in respect of the Required Payment).

4.07 Sharing of Payments, Etc.

(a) The Company agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a Lender may
otherwise have, each Lender shall be entitled, at its option but with the prior
written consent of the Majority Lenders, to offset balances held by it for
account of the Company at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender's Loans,
Reimbursement Obligations or any other amount payable to such Lender hereunder,
that is not paid when due (regardless of whether such balances are then due to
the Company), in which case it shall promptly notify the Company and the Agent
thereof, provided that such Lender's failure to give such notice shall not
affect the validity thereof.

(b) If any Lender shall obtain from any Obligor payment of
any principal of or interest on any Loan of any Class or Letter of Credit
Liability owing to it or payment of any other amount under this Agreement or
any other Loan Document through the exercise of any right of set-off, banker's
lien or counterclaim or similar right or otherwise (other than from the Agent
as provided herein), and, as a result of such payment, such Lender shall have
received a greater percentage of the principal of or interest on the Loans of
such Class or Letter of Credit Liabilities or such other amounts then due
hereunder or thereunder by such Obligor to such Lender than the percentage
received by any other Lender, it shall promptly purchase from such other
Lenders participations in (or, if and to the extent specified by such Lender,
direct interests in) the Loans of such Class or such other amounts,
respectively, owing to such other Lenders (or in interest due thereon, as the
case may be) in such amounts, and make such other adjustments from time to time
as shall be equitable, to the end that all the Lenders shall share the benefit
of such excess payment (net of any expenses that may be incurred by such Lender
in obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans of such Class or Letter of
Credit Liabilities or such other amounts, respectively, owing to each of the
Lenders. To such end all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored.

(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as
fully as if such Lender were a direct holder of Loans or other amounts (as the
case may be) owing to such Lender in the amount of such participation.

(d) Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor. If, under any

Credit Agreement 34
40
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a set-off to which this Section 4.07 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section 4.07 to share in the benefits of any recovery on such
secured claim.

Section 5. Yield Protection, Etc.

5.01 Additional Costs.

(a) The Company shall pay directly to each Lender from time
to time such amounts as such Lender may determine to be necessary to compensate
such Lender for any costs that such Lender determines are attributable to its
making or maintaining of any Eurodollar Loans or its obligation to make any
Eurodollar Loans hereunder or any reduction in any amount receivable by such
Lender hereunder in respect of any of such Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change that:

(i) shall subject any Lender (or its Applicable Lending
Office for any of such Loans) to any tax, duty or other charge in respect
of such Loans or its Notes or changes the basis of taxation of any
amounts payable to such Lender under this Agreement or its Notes in
respect of any of such Loans (excluding changes in the rate of tax on the
overall net income of such Lender or of its Applicable Lending Office by
the jurisdiction in which such Lender is organized or has its principal
office or in which its Applicable Lending Office is organized or located
or, in each case, any political subdivision or taxing authority thereof
or therein); or

(ii) imposes or modifies any reserve, special deposit or
similar requirements (other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender (including, without limitation, any of such
Loans or any deposits referred to in the definition of "Eurodollar Base
Rate" in Section 1.01 hereof), or any commitment of such Lender
(including, without limitation, the Commitments of such Lender
hereunder); or

(iii) imposes any other condition affecting this Agreement or
its Notes (or any of such extensions of credit or liabilities) or its
Commitments.

If any Lender requests compensation from the Company under this Section
5.01(a), the Company may, by notice to such Lender (with a copy to the Agent),
suspend the obligation of such Lender thereafter to make or Continue Eurodollar
Loans, to Convert Loans of another Type into Eurodollar Loans or to Convert
Eurodollar Loans into Loans of another Type until the Regulatory Change giving
rise to such request ceases to be in effect (in which case the provisions of
Section 5.04 hereof shall be applicable), provided that such suspension shall
not affect the right of such Lender to receive the compensation so requested.

Credit Agreement 35
41
(b) Without limiting the effect of the provisions of
paragraph (a) of this Section 5.01, in the event that, by reason of any
Regulatory Change, any Lender (i) incurs Additional Costs based on or measured
by the excess above a specified level of the amount of a category of deposits
or other liabilities of such Lender that includes deposits by reference to
which the interest rate on Eurodollar Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Lender
that includes Eurodollar Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets that it may hold then, if
such Lender so elects by notice to the Company (with a copy to the Agent), the
obligation of such Lender to make or Continue, or to Convert Loans of another
type into, Eurodollar Loans, hereunder (as the case may be) shall be suspended
until any such Regulatory Change ceases to be in effect (in which case the
provisions of Section 5.04 hereof shall be applicable).

(c) Without limiting the effect of the foregoing provisions
of this Section 5.01 (but without duplication), the Company shall pay directly
to each Lender from time to time on request such amounts as such Lender may
determine to be necessary to compensate such Lender (or, without duplication,
the bank holding company of which such Lender is a subsidiary) for any costs
that it determines are attributable to the maintenance by such Lender (or any
Applicable Lending Office or such bank holding company), pursuant to any law or
regulation or any interpretation, directive or request (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) of any court or governmental or monetary authority (i) following any
Regulatory Change or (ii) hereafter implementing any risk-based capital
guideline or other requirement (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) heretofore or
hereafter issued by any government or governmental or supervisory authority
implementing at the national level the Basle Accord (including, without
limitation, the Final Risk-Based Capital Guidelines of the Board of Governors
of the Federal Reserve System (12 C.F.R. Part 208, Appendix A; 00 X.X.X. Xxxx
000, Xxxxxxxx X) and the Final Risk-Based Capital Guidelines of the Office of
the Comptroller of the Currency (12 C.F.R. Part 3, Appendix A)), of capital in
respect of its Commitments or Loans (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on assets or
equity of such Lender (or any Applicable Lending Office or such bank holding
company) to a level below that which such Lender (or any Applicable Lending
Office or such bank holding company) could have achieved but for such law,
regulation, interpretation, directive or request). For purposes of this
Section 5.01(c) and Section 5.08 hereof, "Basle Accord" shall mean the
proposals for risk-based capital framework described by the Basle Committee on
Banking Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital Standards" dated
July 1988, as amended, modified and supplemented and in effect from time to
time or any replacement thereof.

(d) Each Lender shall notify the Company of any event
occurring after the date of this Agreement entitling such Lender to
compensation under paragraph (a) or (c) of this Section 5.01 as promptly as
practicable, but in any event within 45 days, after such Lender obtains actual
knowledge thereof (unless such Lender decides not to seek compensation
hereunder); provided that (i) if any Lender fails to give such notice within 45
days after it obtains actual

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42
knowledge of such an event, such Lender shall, with respect to compensation
payable pursuant to this Section 5.01 in respect of any costs resulting from
such event, only be entitled to payment under this Section 5.01 for costs
incurred from and after the date 45 days prior to the date that such Lender
does give such notice and (ii) each Lender will designate a different
Applicable Lending Office for the Loans of such Lender affected by such event
if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender, except that such Lender shall have no
obligation to designate an Applicable Lending Office located in the United
States. Each Lender will furnish to the Company a certificate setting forth
the basis and amount of each request by such Lender for compensation under
paragraph (a) or (c) of this Section 5.01. Determinations and allocations by
any Lender for purposes of this Section 5.01 of the effect of any Regulatory
Change pursuant to paragraph (a) or (b) of this Section 5.01, or of the effect
of capital maintained pursuant to paragraph (c) of this Section 5.01, on its
costs or rate of return of maintaining Loans or its obligation to make Loans,
or on amounts receivable by it in respect of Loans, and of the amounts required
to compensate such Lender under this Section 5.01, shall be conclusive in the
absence of manifest error, provided that such determinations and allocations
are made on a reasonable basis.

5.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any
Eurodollar Base Rate for any Interest Period:

(a) the Agent determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
hereof are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for Eurodollar
Loans as provided herein; or

(b) The Majority Lenders determine, which determination
shall be conclusive, and notify the Agent that the relevant rates of
interest referred to in the definitions of "Eurodollar Base Rate" in
Section 1.01 hereof upon the basis of which the rate of interest for
Eurodollar Loans for such Interest Period is to be determined are not
likely adequately to cover the cost to such Lenders of making or
maintaining Eurodollar Loans for such Interest Period;

then the Agent shall give the Company and each Lender prompt notice thereof
(describing the circumstances giving rise to such event) and, so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Eurodollar Loans, to Continue Eurodollar Loans, to Convert Loans of
another Type into Eurodollar Loans and the Company shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans either
prepay such Loans or Convert such Loans into Loans of another Type in
accordance with Section 2.08 hereof.

5.03 Illegality. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain
Eurodollar Loans hereunder, then such Lender shall promptly

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43
notify the Company thereof (with a copy to the Agent) and such Lender's
obligation to make or Continue, or to Convert Loans of any other Type into,
Eurodollar Loans shall be suspended until such time as such Lender may again
make and maintain Eurodollar Loans (in which case the provisions of Section
5.04 hereof shall be applicable).

5.04 Treatment of Affected Loans. If the obligation of any
Lender to make Eurodollar Loans ("Affected Loans"), or to Continue, or to
Convert Loans of another Type into Affected Loans shall be suspended pursuant
to Section 5.01 or 5.03 hereof, such Lender's Affected Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) therefor (or, in the case of a Conversion required
by Section 5.01(b), 5.01(c) or 5.03 hereof, on such earlier date as such Lender
may specify to the Company with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 5.01 or 5.03 hereof that gave rise to such Conversion no longer exist:

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

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

If such Lender gives notice to the Company with a copy to the Agent that the
circumstances specified in Section 5.01 or 5.03 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 5.04 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Affected Loans made by other Lenders, and of
the same Class as such Lender's Loans are outstanding, such Lender's Base Rate
Loans of each Class (subject to Section 2.09 hereof) shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Affected Loans and of such Class, to the extent necessary so
that, after giving effect thereto, all Loans of such Class held by the Lenders
holding Affected Loans and by such Lender are held pro rata (as to principal
amounts, Types and Interest Periods) in accordance with their respective
Commitments.

5.05 Compensation. The Company shall pay to the Agent for
account of each Lender, upon the request of such Lender through the Agent, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost or expense that such Lender
determines is attributable to:

(a) any payment, mandatory or optional prepayment or
Conversion of a Eurodollar Loan made by the Company for any reason
(including, without limitation, the acceleration of the Loans pursuant to
Section 9 hereof) on a date other than the last day of the Interest
Period for such Loan; or

Credit Agreement 38
44
(b) any failure by the Company for any reason (including,
without limitation, the failure of any of the conditions precedent
specified in Section 6 hereof to be satisfied) to borrow a Eurodollar
Loan from such Lender on the date for such borrowing specified in the
relevant notice of borrowing given pursuant to Section 2.02 hereof;

(c) any failure for any reason (including, without
limitation, as provided in Section 5.02 or 5.03 hereof) of a Loan of such
Lender to be Continued as or Converted into a Eurodollar Loan on the date
for such Continuation or Conversion specified in the relevant notice
given under Section 4.05 hereof; or

(d) the revocation of any notice of optional prepayment or
any failure for any reason to make any optional prepayment on the date
specified therefor in the relevant notice of prepayment given pursuant to
Section 4.05 hereof.

Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not borrowed or prepaid for the period from the date of such
payment, prepayment, Conversion or failure to borrow or prepay to the last day
of the then current Interest Period for such Loan (or, in the case of a failure
to borrow, the Interest Period for such Loan that would have commenced on the
date specified for such borrowing) at the applicable rate of interest for such
Loan (minus the Applicable Margin) provided for herein over (ii) the amount of
interest that otherwise would have accrued on such principal amount at a rate
per annum equal to the interest component of the amount such Lender would have
bid on the date of such payment, prepayment, Conversion or failure to borrow or
prepay in the London interbank market for Dollar deposits of leading banks in
amounts comparable to such principal amount and with maturities comparable to
such period (as reasonably determined by such Lender).

5.06 Net Payments; Taxes.

(a) All payments to be made hereunder and under the Notes
and any other Loan Documents by the Company shall be made without setoff,
counterclaim or other defense. Subject to Section 5.06(b) hereof with respect
to U.S. Taxes, all such payments shall be made free and clear of and without
deduction for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
governmental authority (other than taxes imposed on the Agent, any Lender or
its Applicable Lending Office by the jurisdiction in which the Agent or such
Lender is organized or has its principal office or in which its Applicable
Lending Office is organized or located or, in each case, any political
subdivision or taxing authority thereof or therein) (collectively, "Taxes").
If any Taxes are imposed and required to be withheld from any amount payable by
the Company hereunder or under the Notes, the Company shall be obligated to (i)
pay such additional amount so that the Agent and the Lenders will receive a net
amount (after giving effect to the payment of such additional amount and to the
deduction of all Taxes) equal to the amount due hereunder, (ii) pay such Taxes
to the appropriate taxing authority for the account of the Agent, for the
benefit of the Lenders and (iii) as promptly as

Credit Agreement 39
45
possible thereafter, sending the Agent a certified copy of any original
official receipt showing payment thereof, together with such additional
documentary evidence as the Agent may from time to time reasonably require. If
the Company fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to the Agent the required receipts or other required
documentary evidence, the Company shall be obligated to indemnify the Agent and
each Lender for any incremental taxes, interest or penalties that may become
payable by the Agent or such Lender as a result of such failure. The
obligations of the Company under this Section 5.06(a) shall survive the
repayment of the Loans and the termination of the Commitments.

(b) The Company agrees to pay to each Lender that is not a
U.S. Person such additional amounts as are necessary in order that the net
payment of any amount due to and received by such non-U.S. Person hereunder
after deduction for or withholding in respect of any U.S. Tax imposed with
respect to such payment (or in lieu thereof, payment of such U.S. Tax by such
non-U.S. Person), will not be less than the amount stated herein to be then due
and payable, provided that the foregoing obligation to pay such additional
amounts shall not apply:

(i) to any payment to a Lender (other than in respect of a
Registered Loan) hereunder unless such Lender is, on the date hereof (or
on the date it becomes a Lender as provided in Section 11.06(b) hereof)
and on the date of any change in the Applicable Lending Office of such
Lender, either entitled to submit a Form 1001 (relating to such Lender
and entitling it to a complete exemption from withholding on all interest
to be received by it hereunder in respect of the Loans) or Form 4224
(relating to all interest to be received by such Lender hereunder in
respect of the Loans), or

(ii) to any payment to any Lender hereunder in respect of a
Registered Loan (a "Registered Holder"), unless such Registered Holder
(or, if such Registered Holder is not the beneficial owner of such
Registered Loan, the beneficial owner thereof) is, on the date hereof (or
on the date such Registered Holder becomes a Lender as provided in
Section 11.06(b) hereof) and on the date of any change in the Applicable
Lending Office of such Lender, entitled to submit a Form W-8, together
with an annual certificate stating that (x) such Registered Holder (or
beneficial owner, as the case may be) is not a "bank" within the meaning
of Section 881(c)(3)(A)of the Code, and (y) such Registered Holder (or
beneficial owner, as the case may be) shall promptly notify the Company
if at any time, such Registered Holder (or beneficial owner, as the case
may be) determines that it is no longer in a position to provide such
certificate to the Company (or any other form of certification adopted by
the relevant taxing authorities of the United States of America for such
purposes), or

(iii) to any U.S. Tax imposed solely by reason of the failure
by such non-U.S. Person (or, if such non- U.S. Person is not the
beneficial owner of the relevant Loan, such beneficial owner) to comply
with applicable certification, information, documentation or other
reporting requirements concerning the nationality, residence, identity or
connections with the United States of such non-U.S. Person (or such
beneficial owner, as the case may be) if such compliance is required by
statute or regulation of the United States as a precondition to relief or
exemption from such U.S. Tax.

Credit Agreement 40
46
For the purposes of this Section 5.06(b), (v) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States, (w) "Form 4224" shall mean Form 4224 (Exemption
from Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States) of the Department of the Treasury of
the United States, (x) "Form W-8" shall mean Form W-8 (Certificate of Foreign
Status of the Department of Treasury of the United States of America) (or in
relation to any of such Forms such successor and related forms as may from time
to time be adopted by the relevant taxing authorities of the United States to
document a claim to which such Form relates), (y) "U.S. Person" shall mean a
citizen, national or resident of the United States, a corporation, partnership
or other entity created or organized in or under any laws of the United States,
or any estate or trust that is subject to Federal income taxation regardless of
the source of its income and (z) "U.S. Taxes" shall mean any present or future
tax, assessment or other charge or levy imposed by or on behalf of the United
States or any taxing authority thereof or therein.

Within 30 days after paying any amount to the Agent or any Lender
from which it is required by law to make any deduction or withholding, and
within 30 days after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, the Company shall
deliver to the Agent for delivery to such non-U.S. Person evidence satisfactory
to such Person of such deduction, withholding or payment (as the case may be).

5.07 Replacement of Lenders. In the event that (x) any
Lender requests compensation pursuant to Section 5.01 or 5.06 hereof, or any
Lender's obligation to make or Continue, or to Convert Loans of any Type into,
any other Type of Loan shall be suspended pursuant to Section 5.01 or 5.03
hereof (any such Lender so requesting compensation, or whose obligations are so
suspended being herein called an "Additional Cost Lender") or (y) in connection
with any proposed modification, supplement or waiver pursuant to Section 11.04
hereof to which the Majority Lenders shall have consented, but to which one or
more of the Lenders shall not have consented (each such Lender a "Non-
Consenting Lender" and, collectively with each "Additional Cost Lender", a
"Relevant Lender"), the Company upon three Business Days notice may require
that any such Relevant Lender transfer all of its right, title and interest
under this Agreement and such Relevant Lender's Notes to any bank or other
financial institution identified by the Company that is reasonably satisfactory
to the Agent (i) if such bank or other financial institution (a "Proposed
Lender") agrees to assume all of the obligations of such Relevant Lender
hereunder, and to purchase all of such Relevant Lender's Loans hereunder for
consideration equal to the aggregate outstanding principal amount of such
Relevant Lender's Loans, together with accrued, but unpaid interest thereon to
the date of such purchase, and satisfactory arrangements are made for payment
to such Relevant Lender of all other amounts payable hereunder to such Relevant
Lender on or prior to the date of such transfer (including any fees accrued
hereunder and any amounts that would be payable under Section 5.05 hereof as if
all of such Relevant Lender's Loans were being prepaid in full on such date)
and (ii) if such Relevant Lender has requested compensation pursuant to Section
5.01 or 5.06 hereof, such Proposed Lender's aggregate requested compensation,
if any, pursuant to said Section 5.01 or 5.06 with respect to such Relevant
Lender's Loans is lower than that of the Relevant Lender. Subject to
compliance with the provisions of Section 11.06(b) hereof, such Proposed Lender
shall be a

Credit Agreement 41
47
"Lender" for all purposes hereunder. Without prejudice to the survival of any
other agreement of the Company hereunder, the agreements of the Company
contained in Sections 5.01, 5.06 and 11.03 hereof (without duplication of any
payments made to such Relevant Lender by the Company or the Proposed Lender)
shall survive for the benefit of such Relevant Lender under this Section 5.07
with respect to the time prior to such replacement.

5.08 Additional Costs in Respect of Letters of Credit.
Without limiting the obligations of the Company under Section 5.01 hereof (but
without duplication), if as a result of any Regulatory Change or any risk-based
capital guideline or other requirement heretofore or hereafter issued by any
government or governmental or supervisory authority implementing at the
national level the Basle Accord there shall be hereafter imposed, modified or
deemed applicable any tax, reserve, special deposit, capital adequacy or
similar requirement against or with respect to or measured by reference to
Letters of Credit issued or to be issued hereunder and the result shall be to
increase the cost to any Lender or Lenders of issuing (or purchasing
participations in) or maintaining its obligation hereunder to issue (or
purchase participations in) any Letter of Credit hereunder or reduce any amount
receivable by any Lender hereunder in respect of any Letter of Credit (which
increases in cost, or reductions in amount receivable, shall be the result of
such Lender's or Lenders' reasonable allocation of the aggregate of such
increases or reductions resulting from such event), then, upon demand by such
Lender or Lenders (through the Agent), the Company shall pay immediately to the
Agent for account of such Lender or Lenders, from time to time as specified by
such Lender or Lenders (through the Agent), such additional amounts as shall be
sufficient to compensate such Lender or Lenders (through the Agent) for such
increased costs or reductions in amount. A statement as to such increased
costs or reductions in amount incurred by any such Lender or Lenders, submitted
by such Lender or Lenders to the Company shall be conclusive in the absence of
manifest error as to the amount thereof.

Section 6. Conditions Precedent.

6.01 Conditions to Effectiveness. The effectiveness of this
Agreement, and the obligation of any Lender to extend credit hereunder on the
Effective Date, are subject to (i) the condition precedent that the Effective
Date shall occur on or before December 31, 1997 and (ii) the receipt by the
Agent of the following documents, each of which shall be satisfactory to the
Agent (and to the extent specified below, to each Lender or the Majority
Lenders, as the case may be) in form and substance:

(a) Corporate Documents. Certified copies of the charter
and by-laws (or equivalent documents) of each Obligor and of all
corporate authority for each Obligor (including, without limitation,
board of director resolutions and evidence of the incumbency of officers,
together with specimen signatures of each such officer) with respect to
the execution, delivery and performance of such of the Basic Documents to
which such Obligor is intended to be a party and each other document to
be delivered by such Obligor from time to time in connection herewith and
the extensions of credit hereunder (and the Agent and each Lender may
conclusively rely on such certificate until it receives notice in writing
from such Obligor to the contrary).

Credit Agreement 42
48
(b) Officer's Certificate. A certificate of a Responsible
Financial Officer of the Company, dated the Effective Date, to the effect
set forth in the first sentence of Section 6.03 hereof.

(c) Opinion of Counsel to the Obligors. Opinions, each
dated the Effective Date, of Xxxxxx & Xxxx, L.L.P., counsel to the
Obligors, substantially in the form of Exhibit D hereto, and of Axtmayer
Adsuar Xxxxx & Xxxxx, special Puerto Rico counsel to the Subsidiary
Guarantors operating in the Commonwealth, substantially in the form of
Exhibit E hereto and, in each case, covering such other matters as the
Agent or any Lender may reasonably request (and each Obligor hereby
instructs such counsel to deliver such opinion to the Lenders and the
Agent).

(d) Opinion of Counsel to First Union. An opinion, dated
the Effective Date, of Milbank, Tweed, Xxxxxx & XxXxxx, special New York
counsel to First Union, substantially in the form of Exhibit F hereto
(and First Union hereby instructs such counsel to deliver such opinion to
the Lenders).

(e) Notes. The Notes, duly completed and executed.

(f) Insurance. A certificate of a Responsible Financial
Officer of the Company setting forth the insurance obtained by it in
accordance with the requirements of Section 8.04 and stating that such
insurance is in full force and effect and that all premiums then due and
payable thereon have been paid.

(g) Solvency Analysis. A certificate from a Responsible
Financial Officer of the Company to the effect that, as of the Effective
Date and after giving effect to the initial extension of credit hereunder
and to the other transactions contemplated hereby, (i) the aggregate
value of all Properties of the Company and its Subsidiaries, at their
present fair saleable value (i.e., the amount that may be realized within
a reasonable time, considered to be six months to one year, either
through collection or sale at the regular market value, conceiving the
latter as the amount that could be obtained for the Property in question
within such period by a capable and diligent businessman from an
interested buyer who is willing to purchase under ordinary selling
conditions), exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated
liabilities) of the Company and its Subsidiaries, (ii) the Company and
its Subsidiaries will not have, on a consolidated basis, unreasonably
small capital with which to conduct their business operations as
heretofore conducted and (iii) the Company and its Subsidiaries will
have, on a consolidated basis, sufficient cash flow to enable them to pay
their debts as they mature. The Agent shall have also received (x) a
certificate from a Responsible Financial Officer of the Company
certifying that the financial projections and underlying assumptions
contained in such analyses were at the time made, and on the Effective
Date are, fair and reasonable and accurately computed and (y) appropriate
factual information supporting the conclusions of the solvency analyses
and the financial condition certificate required to be delivered as
provided above.

Credit Agreement 43
49
(h) Security Agreement. The Security Agreement, duly
executed and delivered by the Company and the Agent and the certificates
representing the capital stock of each of the direct Subsidiaries of the
Company on the Effective Date (65% of the capital stock in the case of
Xxxxxxx), accompanied by undated stock powers executed in blank. In
addition, upon request of the Agent, the Company shall have taken such
other action (including, without limitation, delivering to the Agent, (i)
Uniform Commercial Code searches for each jurisdiction in which the
Company conducts its business or in which any of its Properties are
located (or otherwise as the Agent may reasonably request) and (ii) for
filing, appropriately completed and duly executed copies of Uniform
Commercial Code financing statements) as the Agent shall have requested
in order to perfect the security interests created pursuant to the
Security Agreement.

(i) Subsidiary Guarantee and Security Agreement. The
Subsidiary Guarantee and Security Agreement, duly executed and delivered
by each Subsidiary of the Company on the Effective Date (other than
Xxxxxxx) and the Agent and the certificates representing the capital
stock of each of the indirect Subsidiaries of the Company on the
Effective Date, accompanied by appropriate undated stock powers executed
in blank. In addition, upon request of the Agent, the Company shall have
taken such other action (including, without limitation, delivering to the
Agent, (i) Uniform Commercial Code searches for each such Subsidiary
Guarantor for each jurisdiction in which such Subsidiary Guarantor
conducts its business or in which any of its Properties are located (or
otherwise as the Agent may reasonably request) and (ii) for filing,
appropriately completed and duly executed copies of Uniform Commercial
Code financing statements), as the Agent shall have requested in order to
perfect the security interests created pursuant to the Subsidiary
Guarantee and Security Agreement.

(j) Payment of Fees and Expenses, Etc. Evidence that the
Company shall have paid such fees and expenses as the Company shall have
agreed to pay to the Agent in connection herewith, including, without
limitation, the reasonable fees and expenses of Milbank, Tweed, Xxxxxx &
XxXxxx, special New York counsel to First Union, and Fiddler Xxxxxxxx &
Xxxxxxxxx, special Puerto Rico counsel to First Union, in connection with
the negotiation, preparation, execution and delivery of this Agreement
and the Notes and the other Loan Documents and the making of the Loans
hereunder (to the extent that statements for such fees and expenses have
been delivered to the Company).

(k) Existing Credit Agreements. Evidence that (i) all
principal of and interest accrued on the outstanding "Facility A Loans"
and "Facility B Loans" under the Third Restated Agreement and all accrued
commitment and other fees thereunder to the Effective Date, (ii) all
principal of and interest accrued on the outstanding "Facility C Loans"
and "Facility D Loans" under the Restated Supplemental Agreement and all
accrued commitment and other fees thereunder to the Effective Date, (iii)
all other amounts (if any) payable by the Company under or in respect of
the Existing Credit Agreements have been paid in full, and (iv) the
"Commitments" (as defined in each of the Third Restated Agreement and the
Restated Supplemental Agreement) have terminated.

Credit Agreement 44
50
(l) Other Documents. Such other documents as the Agent or
any Lender or special New York counsel to First Union may reasonably
request.

6.02 Conditions Precedent to Lending for Permitted
Acquisitions. The obligation of any Lender to make Loans hereunder to finance
any Permitted Acquisition (including the Country Fresh Merger and the
Morningstar Merger) is subject to the receipt by the Agent of the following
documents, each of which shall be satisfactory to the Agent (and to the extent
specified below, to each Lender, Majority Lenders, or Supermajority Lenders, as
the case may be) in form and substance:

(a) In connection with each Permitted Acquisition involving
the purchase of the capital stock or other ownership interests of a
Person (unless such Person is merged contemporaneously into the Company
or an existing Subsidiary of the Company) or the formation of a
corporation or other entity for the purpose of such Permitted
Acquisition:

(i) Corporate Documents. Certified copies of the
charter and by-laws (or equivalent documents) of the relevant
Person and of all corporate authority for such Person (including,
without limitation, board of directors resolutions and evidence
of the incumbency of officers, together with specimen signatures
of each such officer) with respect to the execution, delivery and
performance of such of the Basic Documents to which such Person
is intended to be a party and each other document to be delivered
by such Person from time to time in connection herewith and
therewith (and the Agent and each Lender may conclusively rely on
such certificate until it receives notice in writing from such
Person to the contrary).

(ii) Supplemental Subsidiary Guarantee and Security
Agreement. A Supplemental Subsidiary Guarantee and Security
Agreement, substantially in the form of Exhibit C hereto and duly
executed by the relevant Supplemental Guarantor, pursuant to
which such Supplemental Guarantor shall pledge all of its
ownership interests (including, without limitation, warrants,
options or other securities convertible into ownership interests)
in its Subsidiaries and Affiliates, if any, to the Agent for the
benefit of the Lenders, except as otherwise provided herein or
therein. In addition, upon the request of the Agent, the Company
shall have taken such other action (including, without
limitation, delivering to the Agent, (i) Uniform Commercial Code
searches for such Supplemental Guarantor for each jurisdiction in
which such Supplemental Guarantor conducts its business or in
which any of its Properties are located (or otherwise as the
Agent may reasonably request) and (ii) for filing, appropriately
completed and duly executed copies of Uniform Commercial Code
financing statements), as the Agent shall have requested in order
to perfect the security interest created pursuant to such
Supplemental Subsidiary Guarantee and Security Agreement.

(iii) Opinion of Counsel to the Supplemental
Guarantor. Opinions, appropriately dated, of counsel to the
relevant Supplemental Guarantor covering such matters as the
Agent or any Lender may reasonably request.

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51
(iv) Opinion of Counsel to First Union. An opinion,
appropriately dated, of Milbank, Tweed, Xxxxxx & XxXxxx, special
New York counsel to First Union, substantially in the form of
Exhibit F hereto but as to the relevant Supplemental Subsidiary
Guarantee and Security Agreement (and First Union hereby
instructs such counsel to deliver such opinion to the Lenders).

(v) Amendment to Security Agreement; Filings. An
amendment to the Security Agreement (or, if applicable, the
Subsidiary Guarantee and Security Agreement or the relevant
Supplemental Subsidiary Guarantee and Security Agreement), duly
executed and delivered by the Company (or the appropriate
Subsidiary) and the Agent and the certificates identified in
Annex 1 thereto, accompanied by undated stock powers executed in
blank. In addition, upon the request of the Agent, the Company
shall have taken such other action (including, without
limitation, delivering to the Agent, (i) Uniform Commercial Code
searches for each Supplemental Guarantor for each jurisdiction in
which such Supplemental Guarantor conducts its respective
business or in which any of its respective Properties are located
(or otherwise as the Agent may reasonably request) and (ii) for
filing, appropriately completed and duly executed copies of
Uniform Commercial Code financing statements) as the Agent shall
have requested in order to perfect the security interests created
pursuant to such amendment to the Security Agreement, the
Subsidiary Guarantee and Security Agreement, and/or the relevant
Supplemental Subsidiary Guarantee and Security Agreement.

(vi) Insurance. Certificates of insurance evidencing
the existence of all insurance required to be maintained by the
relevant Supplemental Guarantor pursuant to Section 8.04 hereof
and a certificate of a Responsible Financial Officer of the
Company or such Supplemental Guarantor stating that such
insurance is in full force and effect and that all premiums then
due and payable thereon have been paid.

(b) In connection with all Permitted Acquisitions with
respect to which the Net Purchase Price exceeds $15,000,000 (including
the Country Fresh Merger and the Morningstar Merger) (as appropriate):

(i) Consummation of Permitted Acquisition. Evidence
that the relevant Permitted Acquisition shall have been
consummated in all material respects in accordance with the terms
of the relevant Purchase Agreement, and the Agent shall have
received a certificate of a Responsible Financial Officer of the
Company to that effect (and attaching thereto a true and complete
copy of the relevant Purchase Agreement).

(ii) Solvency Analysis. A certificate from a
Responsible Financial Officer of the Company to the effect that,
as of the date of the respective Permitted Acquisition and after
giving effect to the Loans in connection with the relevant

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Permitted Acquisition hereunder and to the other transactions
contemplated hereby in connection with such Permitted
Acquisition, (i) the aggregate value of all Properties of the
Company and its Subsidiaries at their present fair saleable value
(i.e., the amount that may be realized within a reasonable time,
considered to be six months to one year, either through
collection or sale at the regular market value, conceiving the
latter as the amount that could be obtained for the Property in
question within such period by a capable and diligent businessman
from an interested buyer who is willing to purchase under
ordinary selling conditions), exceeds the amount of all the debts
and liabilities (including contingent, subordinated, unmatured
and unliquidated liabilities) of the Company and its
Subsidiaries, (ii) the Company and its Subsidiaries will not, on
a consolidated basis, have unreasonably small capital with which
to conduct their business operations as theretofore conducted and
(iii) the Company and its Subsidiaries will have, on a
consolidated basis, sufficient cash flow to enable them to pay
their debts as they mature. The Agent shall have also received
(x) a certificate from a Responsible Financial Officer of the
Company certifying that the financial projections and underlying
assumptions contained in such analyses were at the time made, and
on the date thereof are, fair and reasonable and accurately
computed and (y) appropriate factual information supporting the
conclusions of the solvency analyses and the financial condition
certificate required to be delivered as provided above.

(iii) Financial Information. (A) a certificate of
a Responsible Financial Officer of the Company to the effect that
on a pro forma basis after giving effect to the relevant
Permitted Acquisition, the Company shall remain in compliance
with Sections 8.10, 8.11, 8.12 and 8.13 hereof and (B) the most
recent audited consolidated balance sheet of the Person (if any)
to be acquired and its Subsidiaries and the related statement of
income, retained earnings and cash flow for the fiscal year ended
on said date, with opinions thereon of the auditors of such
Person(or, if audited financial statements are not available to
the Company, unaudited financial statements (i) reviewed by
independent certified accountants of recognized national standing
and acceptable to the Agent and (ii) in form satisfactory to the
Agent), and the most recent unaudited consolidated balance sheet
of such Person and its Subsidiaries and the related statements of
income and retained earnings for the period ended on the date of
such unaudited statements.

(iv) Payment of Fees and Expenses, Etc. Evidence that
the Company shall have paid such fees and expenses as the Company
shall have agreed to pay to the Agent in connection herewith,
including, without limitation, the reasonable fees and expenses
of Milbank, Tweed, Xxxxxx & XxXxxx, special New York counsel to
First Union, and Fiddler Xxxxxxxx & Xxxxxxxxx, special Puerto
Rico counsel to First Union, in connection with the satisfaction
of the conditions in this Section 6.02 and the making of the
Loans hereunder in connection with the relevant Permitted
Acquisition (to the extent that statements for such fees and
expenses have been delivered to the Company).

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53
(v) Other Documents. Such other documents as the
Agent or any Lender or special New York counsel to First Union
may reasonably request.

Environmental Matters. To the extent that a Permitted
Acquisition involves the direct or indirect acquisition of real
Property, upon the request of the Agent, environmental surveys
and assessments prepared by one or more firms of licensed
engineers (familiar with the identification of toxic and
hazardous substances) in form and substance satisfactory to the
Agent, such environmental survey and assessment to be based upon
physical on-site inspections by such firm of each of the existing
sites and facilities to be owned, operated or leased by the
Company or the relevant Supplemental Guarantor or any of its
Subsidiaries pursuant to such Permitted Acquisition as well as an
historical review of the uses of such sites and facilities and of
the business and operations of such Supplemental Guarantor or any
of its Subsidiaries (including any former Subsidiaries or
divisions thereof or any of its Subsidiaries that have been
disposed of prior to the date of such survey and assessment and
with respect to which such Supplemental Guarantor or any of its
Subsidiaries may have retained liability for Environmental
Claims), and if requested by the Agent, the Company shall have
agreed to take other reasonable steps after the date of such
Permitted Acquisition with respect to such matters as shall be
agreed in writing with the Agent.

6.03 Conditions to all Extensions of Credit. The
effectiveness of this Agreement and the obligation of the Lenders to make any
Loan or otherwise extend any credit to the Company upon the occasion of each
borrowing hereunder (including the borrowing on the Effective Date) are subject
to the further conditions precedent that, both immediately prior to such
effectiveness and to the making of such Loan or other extension of credit and
also after giving effect thereto and to the intended use thereof:

(i) no Default shall have occurred and be continuing;
and

(ii) the representations and warranties made by the
Company in Section 7 hereof, and by each Obligor in each of the
other Loan Documents to which it is a party, shall be true and
complete on and as of the date of such effectiveness or the date
of the making of such Loan or other extension of credit, as the
case may be, with the same force and effect as if made on and as
of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of
such specific date).

Each notice of borrowing or request for the issuance of a Letter of Credit by
the Company hereunder shall constitute a certification by the Company to the
effect set forth in the first sentence of this Section 6.03 (both as of the
date of such notice and, unless the Company otherwise notifies the Agent prior
to the date of such borrowing or issuance, as of the date of such borrowing or
issuance).

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Section 7. Representations and Warranties. The Company
represents and warrants to the Agent and the Lenders that (with respect to
matters pertaining to itself and each of its Subsidiaries):

7.01 Corporate Existence. Each of the Company and its
Subsidiaries: (a) is a corporation, partnership or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite corporate or other
power, and has all material governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being or
as proposed to be conducted; and (c) is qualified to do business and is in good
standing in all jurisdictions in which the nature of the business conducted by
it makes such qualification necessary and where failure so to qualify could
(either individually or in the aggregate) have a Material Adverse Effect.

7.02 Financial Condition. The Company has heretofore
furnished to each of the Lenders the following:

(a) unaudited consolidating balance sheets of the Company
and its Subsidiaries as at December 31, 1996, and the related
consolidating statements of income and operating cash flow for the
twelve-month period ended on said date; and

(b) an audited consolidated balance sheet of the Company
and its Subsidiaries as at December 31, 1996 and the related consolidated
statements of income, retained earnings and cash flow of the Company and
its Subsidiaries for the fiscal period ended on said date, with the
opinion thereon of Deloitte & Touche LLP.

All such financial statements fairly present the financial condition of the
respective entities as at the respective dates, and the respective results of
operations for the respective periods ended on said respective dates, all in
accordance with generally accepted accounting principles and practices applied
on a consistent basis. None of such respective entities has on the date hereof
any material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the
respective balance sheets referred to above. Since December 31, 1996 (with
respect to the Company and each of its Subsidiaries), there has been no
material adverse change in the respective financial condition, operations,
business or prospects of each such entity from that set forth in the respective
financial statements as at such date.

7.03 Litigation. Except as disclosed in Schedule IV hereto,
there are no legal or arbitral proceedings, or any proceedings by or before any
governmental or regulatory authority or agency, now pending or (to the
knowledge of the Company) threatened against the Company or any of its
Subsidiaries that, if adversely determined could (either individually or in the
aggregate) have a Material Adverse Effect.

7.04 No Breach. None of the execution and delivery of this
Agreement and the Notes and the other Basic Documents, the consummation of the
transactions herein and therein

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contemplated or compliance with the terms and provisions hereof and thereof
will conflict with or result in a breach of, or require any consent under, the
charter or by-laws of any Obligor, or any applicable law or regulation, or any
order, writ, injunction or decree of any court or governmental authority or
agency, or any material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which any of them or any of their Property is
bound or to which any of them is subject, or constitute a default under any
such agreement or instrument, or (except for the Liens created pursuant to the
Security Documents) result in the creation or imposition of any Lien upon any
Property of the Company or any of its Subsidiaries pursuant to the terms of any
such agreement or instrument.

7.05 Action. Each Obligor has all necessary corporate or
other power, authority and legal right to execute, deliver and perform its
obligations under each of the Basic Documents to which it is a party; the
execution, delivery and performance by each Obligor of each of the Basic
Documents to which it is a party have been duly authorized by all necessary
corporate or other action on its part (including, without limitation, any
required shareholder or member approvals); and this Agreement has been duly and
validly executed and delivered by each Obligor and constitutes, and each of the
Notes and the other Basic Documents to which it is a party when executed and
delivered by such Obligor (in the case of the Notes, for value) will
constitute, its legal, valid and binding obligation, enforceable against each
Obligor in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of creditors' rights
and (b) the application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law). Each
Security Document is effective to create in favor of the Agent for the benefit
of the Lenders a legal, valid and enforceable first priority Lien upon all
right, title and interest of the Obligor or Obligors party thereto in the
Property described therein and such Lien has been perfected, except as
otherwise permitted under Section 8.06 hereof or in such Security Document.

7.06 Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any governmental or regulatory
authority or agency, or any securities exchange, are necessary for the
execution, delivery or performance by any Obligor of the Basic Documents to
which it is a party or for the legality, validity or enforceability hereof or
thereof, except for filings and recordings in respect of the Liens created
pursuant to the Security Documents.

7.07 Use of Credit. None of the Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, other than purchases of the
Company's capital stock from employees of the Company or its Subsidiaries, and
no part of the proceeds of the Loans hereunder will be used to buy or carry any
Margin Stock.

7.08 ERISA. Each Plan, and, to the knowledge of the
Company, each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with,
the applicable provisions of ERISA, the Code and any other Federal or State
law, and no event or condition has occurred and is continuing as to which the

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Company would be under an obligation to furnish a report to the Lenders under
Section 8.01(e) hereof.

7.09 Taxes. The Company and its Subsidiaries (other than
the Obligors operating in the Commonwealth and Xxxxxxx) are members of an
affiliated group of corporations filing consolidated returns for Federal income
tax purposes, of which the Company is the "common parent" (within the meaning
of Section 1504 of the Code) of such group. The Company and its Subsidiaries
have filed all Federal income tax returns and all other material tax returns
that are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Company or any of
its Subsidiaries. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of taxes and other governmental charges
are, in the opinion of the Company, adequate. The Company has not given or
been requested to give a waiver of the statute of limitations relating to the
payment of Federal, state, local and foreign taxes or other impositions. Xxxx
Plastics and Suiza Fruit each hold industrial tax exemption grants entitling
each of them to a 90% exemption from income and property taxes and a 60%
exemption from municipal license taxes. The grant held by Xxxx Plastics will
expire on August 31, 2000 for income tax purposes, on June 30, 2001 for
municipal tax purposes and on January 1, 2000 for property tax purposes. The
grant held by Suiza Fruit will expire on October 12, 2002 for income and
property tax purposes and on June 30, 2003 for municipal license tax purposes.

7.10 Investment Company Act. Neither the Company nor any of
its Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.

7.11 Public Utility Holding Company Act. Neither the
Company nor any of its Subsidiaries is a "holding company", or an "affiliate"
of a "holding company" or a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.

7.12 Material Agreements and Liens.

(a) Part A of Schedule I hereto is a complete and correct
list, as of the Effective Date, and after giving effect to the transactions
contemplated hereunder to occur on such date, of each credit agreement, loan
agreement, indenture, purchase agreement, guarantee, letter of credit or other
arrangement providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or
guarantee by, the Company or any of its Subsidiaries, and the aggregate
principal or face amount outstanding or that may become outstanding under each
such arrangement is correctly described in Part A of said Schedule I.

(b) Part B of Schedule I hereto is a complete and correct
list, as of the Effective Date (and after giving effect to the transactions
contemplated hereunder to occur on such date), of each Lien securing
Indebtedness of any Person and covering any Property of the Company or any of
its Subsidiaries that will continue after the Effective Date, and the aggregate

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Indebtedness secured (or that may be secured) by each such Lien and the
Property covered by each such Lien is correctly described in Part B of said
Schedule I.

7.13 Environmental Matters. Each of the Company and its
Subsidiaries has obtained all environmental, health and safety permits,
licenses and other authorizations required under all Environmental Laws to
carry on its business as now being or as proposed to be conducted, except to
the extent failure to have any such permit, license or authorization would not
(either individually or in the aggregate) have a Material Adverse Effect. Each
of such permits, licenses and authorizations is in full force and effect and
each of the Company and its Subsidiaries is in compliance with the terms and
conditions thereof, and is also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law or in
any regulation, code, plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved thereunder, except to
the extent failure to comply therewith would not (either individually or in the
aggregate) have a Material Adverse Effect.

In addition, except as to matters with respect to which the
Company and its Subsidiaries could not reasonably be expected to incur
liabilities in excess of $5,000,000 in the aggregate:

(a) No notice, notification, demand, request for
information, citation, summons or order has been issued, no complaint has
been filed, no penalty has been assessed and no investigation or review
is pending or threatened by any governmental or other entity with respect
to any alleged failure by the Company or any of its Subsidiaries to have
any environmental, health or safety permit, license or other
authorization required under any Environmental Law in connection with the
conduct of the business of the Company or any of its Subsidiaries or with
respect to any generation, treatment, storage, recycling, transportation,
discharge or disposal, or any Release of any Hazardous Materials
generated by the Company or any of its Subsidiaries.

(b) Neither the Company nor any of its Subsidiaries owns,
operates or leases a treatment, storage or disposal facility requiring a
permit under the Resource Conservation and Recovery Act of 1976, as
amended, or under any comparable state or local statute; and

(i) no polychlorinated biphenyls (PCB's) is or has
been present at any site or facility now or previously owned,
operated or leased by the Company or any of its Subsidiaries;

(ii) no asbestos or asbestos-containing materials is or
has been present at any site or facility now or previously owned,
operated or leased by the Company or any of its Subsidiaries;

(iii) there are no underground storage tanks,
other than those disclosed in consultant reports provided to the
Agent by the Company or its Subsidiaries, or

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surface impoundments for Hazardous Materials, active or
abandoned, at any site or facility now or previously owned,
operated or leased by the Company or any of its Subsidiaries;

(iv) no Hazardous Materials have been Released at, on
or under any site or facility now or previously owned, operated
or leased by the Company or any of its Subsidiaries in a
reportable quantity established by statute, ordinance, rule,
regulation or order; and

(v) no Hazardous Materials have been otherwise
Released at, on or under any site or facility now or previously
owned, operated or leased by the Company or any of its
Subsidiaries that would (either individually or in the aggregate)
have a Material Adverse Effect.

(c) Neither the Company nor any of its Subsidiaries has
transported or arranged for the transportation of any Hazardous Material
to any location that is listed on the National Priorities List ("NPL")
under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), listed for possible
inclusion on the NPL by the Environmental Protection Agency in the
Comprehensive Environmental Response and Liability Information System, as
provided for by 40 C.F.R. Section 300.5 ("CERCLIS"), or on any similar
state or local list or that is the subject of Federal, state or local
enforcement actions or other investigations that may lead to
Environmental Claims against the Company or any of its Subsidiaries.

(d) No Hazardous Material generated by the Company or any
of its Subsidiaries has been recycled, treated, stored, disposed of or
Released by the Company or any of its Subsidiaries at any location other
than those listed in Schedule II hereto.

(e) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Company or any
of its Subsidiaries and no site or facility now or previously owned,
operated or leased by the Company or any of its Subsidiaries is listed or
proposed for listing on the NPL, CERCLIS or any similar state list of
sites requiring investigation or clean-up.

(f) No Liens have arisen under or pursuant to any
Environmental Laws on any site or facility owned, operated or leased by
the Company or any of its Subsidiaries, and no government action has been
taken or is in process that could subject any such site or facility to
such Liens and neither the Company nor any of its Subsidiaries would be
required to place any notice or restriction relating to the presence of
Hazardous Materials at any site or facility owned by it in any deed to
the real property on which such site or facility is located.

(g) All environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or that are in the
possession of the Company or any of its Subsidiaries in relation to
facts, circumstances or conditions at or affecting any site or

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facility now or previously owned, operated or leased by the Company or
any of its Subsidiaries and that could result in a Material Adverse
Effect have been made available to the Lenders.

7.14 Capitalization.

(a) As of the Effective Date, the authorized capital stock
of the Company consists of 101,000,000 shares, consisting of 100,000,000 shares
of common stock, par value $0.01 per share, and 1,000,000 shares of preferred
stock, par value $0.01 per share;

(b) As of October 31, 1997, the Company has 15,810,800
shares of issued and outstanding common stock, and all of such issued shares
are duly and validly issued and outstanding and are not held in treasury;

(c) As of the Effective Date (after consummation of the
Country Fresh Merger), the Company has 11,691 shares of issued and outstanding
Series A preferred stock and all of such issued shares are duly and validly
authorized and outstanding and are not held in treasury; and

(d) As of the Effective Date, there are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem, or
otherwise acquire any shares of capital stock of the Company or any of its
Subsidiaries or to make payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market value or equity value of the Company or any of its Subsidiaries, except
for the right of the holders of certain warrants for the purchase of stock of
Franklin Plastics, Inc., a Delaware corporation and a Subsidiary of the
Company, to put such stock or warrants to the issuer thereof or the Company.

7.15 Subsidiaries, Etc.

(a) Set forth in Part A of Schedule III hereto is a
complete and correct list, as of the Effective Date after the consummation of
the Country Fresh Merger and the Morningstar Merger, of all of the Subsidiaries
of the Company, together with, for each such Subsidiary, (i) the jurisdiction
of organization of such Subsidiary, (ii) each Person holding ownership
interests in such Subsidiary and (iii) the nature of the ownership interests
held by each such Person and the percentage of ownership of such Subsidiary
represented by such ownership interests. Except as disclosed in Part A of
Schedule III hereto, (x) each of the Company and its Subsidiaries owns, free
and clear of Liens (other than Liens permitted by Section 8.06(c) hereof and
Liens created pursuant to the Security Documents), and has the unencumbered
right to vote, all outstanding ownership interests in each Person shown to be
held by it in Part A of Schedule III hereto, (y) all of the issued and
outstanding capital stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable and (z) except for warrants for
the purchase of stock of Franklin Plastics, Inc., a Delaware corporation, there
are no outstanding Equity Rights with respect to such Person.

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(b) Set forth in Part B of Schedule III hereto is a
complete and correct list, as of the Effective Date after the consummation of
the Country Fresh Merger and the Morningstar Merger, of all Investments (other
than Investments disclosed in Part A of said Schedule III hereto) held by the
Company or any of its Subsidiaries in any Person and, for each such Investment,
(x) the identity of the Person or Persons holding such Investment and (y) the
nature of such Investment. Except as disclosed in Part B of Schedule III
hereto, each of the Company and its Subsidiaries owns, free and clear of all
Liens (other than Liens permitted by Section 8.06(c) hereof and Liens created
pursuant to the Security Documents), all such Investments.

(c) None of the Subsidiaries of the Company is, on the
Effective Date, subject to any indenture, agreement, instrument or other
arrangement of the type described in Section 8.17(b) hereof, except as
permitted thereby.

7.16 Title to Assets. The Company owns and has on the date
hereof, and will own and have on the Effective Date, good and marketable title
(subject only to Liens permitted by Section 8.06 hereof) to the Properties
shown to be owned in the most recent financial statements referred to in
Section 7.02 hereof (other than Properties disposed of in the ordinary course
of business or otherwise permitted to be disposed of pursuant to Section 8.05
hereof). The Company owns and has on the date hereof, and will own and have on
the Effective Date, good and marketable title to, and enjoys on the date
hereof, and will enjoy on the Effective Date, peaceful and undisturbed
possession of, all Properties (subject only to Liens permitted by Section 8.06
hereof) that are necessary for the operation and conduct of its businesses.

7.17 True and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules furnished in writing by
or on behalf of the Obligors to the Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement and the other Loan
Documents or included herein or therein or delivered pursuant hereto or
thereto, when taken as a whole do not contain any untrue statement of material
fact or omit to state any material fact necessary to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading. The pro forma projections of the Company and its Subsidiaries
dated October 2, 1997, assuming the completion of the Country Fresh Merger and
the Morningstar Merger, heretofore delivered to the Agent and the Lenders, are
made in good faith based on reasonable estimates and assumptions on the date
hereof. All written information furnished after the date hereof by the Company
and its Subsidiaries to the Agent and the Lenders in connection with this
Agreement and the other Loan Documents and the transactions contemplated hereby
and thereby will be true, complete and accurate in every material respect, or
(in the case of projections) based on reasonable estimates, on the date as of
which such information is stated or certified. There is no fact known to the
Company that could have a Material Adverse Effect that has not been disclosed
herein, in the other Loan Documents or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished to the Lenders
for use in connection with the transactions contemplated hereby or thereby.

7.18 Solvency. As of the Effective Date and after giving
effect to the initial extension of credit hereunder and the other transactions
contemplated hereby, (a) the aggregate value of all Properties of the Company
and its Subsidiaries at their present fair saleable value (i.e.,

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the amount that may be realized within a reasonable time, considered to be six
months to one year, either through collection or sale at the regular market
value, conceiving the latter as the amount that could be obtained for the
Property in question within such period by a capable and diligent businessman
from an interested buyer who is willing to purchase under ordinary selling
conditions), exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities) of the
Company and its Subsidiaries, (b) the Company and its Subsidiaries will not, on
a consolidated basis, have unreasonably small capital with which to conduct
their business operations as heretofore conducted and (c) the Company and its
Subsidiaries will have, on a consolidated basis, sufficient cash flow to enable
them to pay their debts as they mature.

Section 8. Covenants of the Company. The Company covenants
and agrees with the Lenders and the Agent that, so long as any Commitment or
Loan or Letter of Credit Liability is outstanding and until payment in full of
all amounts payable by the Company hereunder:

8.01 Financial Statements, Etc. The Company shall deliver,
or shall cause to be delivered, to each of the Lenders:

(a) as soon as available and in any event within 45 days
after the end of each quarterly fiscal period of each fiscal year of the
Company, consolidated statements of income, retained earnings and cash
flow of the Company and its Subsidiaries for such period and for the
period from the beginning of the respective fiscal year to the end of
such period, and the related consolidated balance sheet of the Company
and its Subsidiaries as at the end of such period, setting forth in each
case in comparative form the corresponding consolidated figures for the
corresponding periods in the preceding fiscal year, accompanied by a
certificate of a Responsible Financial Officer of the Company, which
certificate shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of
operations of the Company and its Subsidiaries, in accordance with
generally accepted accounting principles, consistently applied, as at the
end of, and for, such period (subject to normal year-end audit
adjustments);

(b) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, consolidated statements
of income, retained earnings and cash flow of the Company and its
Subsidiaries for such fiscal year and the related consolidated balance
sheet of the Company and its Subsidiaries as at the end of such fiscal
year, setting forth in each case in comparative form the corresponding
consolidated figures for the preceding fiscal year, and accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall state that said consolidated
financial statements fairly present the consolidated financial condition
and results of operations of the Company and its Subsidiaries as at the
end of, and for, such fiscal year in accordance with generally accepted
accounting principles, and a certificate of such accountants stating
that, in making the examination necessary for their opinion, they
obtained no knowledge, except as specifically stated, of any Default;

Credit Agreement 56
62
(c) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that the
Company shall have filed with the Commission or any national securities
exchange;

(d) promptly upon mailing thereof to the shareholders of
the Company generally, copies of all financial statements, reports and
proxy statements so mailed;

(e) as soon as possible, and in any event within ten days
after the Company knows or has reason to believe that any of the events
or conditions specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, a statement signed by a Responsible
Financial Officer of the Company setting forth details respecting such
event or condition and the action, if any, that the Company or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report
or notice required to be filed with or given to PBGC by the Company or an
ERISA Affiliate with respect to such event or condition):

(i) any reportable event, as defined in Section
4043(b) of ERISA and the regulations issued thereunder, with
respect to a Plan, as to which PBGC has not by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of Section 412 of
the Code or Section 302 of ERISA, including, without limitation,
the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of
ERISA, shall be a reportable event regardless of the issuance of
any waivers in accordance with Section 412(d) of the Code); and
any request for a waiver under Section 412(d) of the Code for any
Plan;

(ii) the distribution under Section 4041 of ERISA of a
notice of intent to terminate any Plan or any action taken by the
Company or an ERISA Affiliate to terminate any Plan;

(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by PBGC with respect to such
Multiemployer Plan;

(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Company or any ERISA Affiliate that
results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt by the Company or
any ERISA Affiliate of notice from a Multiemployer Plan that it
is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA;

Credit Agreement 57
63
(v) the institution of a proceeding by a fiduciary of
any Multiemployer Plan against the Company or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days; and

(vi) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the trust
of which such Plan is a part if the Company or an ERISA Affiliate
fails to timely provide security to the Plan in accordance with
the provisions of said Sections;

(f) promptly after the Company knows or has reason to
believe that any Default has occurred, a notice of such Default
describing the same in reasonable detail and, together with such notice
or as soon thereafter as possible, a description of the action that the
Company has taken or proposes to take with respect thereto;

(g) promptly upon receipt thereof, copies of all management
letters and other material reports which are submitted to the Board of
Directors of the Company or any of its Subsidiaries by their independent
certified public accountants in connection with any annual audit of the
Company and/or any such Subsidiary by such accountants;

(h) as soon as available and in any event on or before
December 31 of each fiscal year, a budget for the next following fiscal
year setting forth for each Subsidiary of the Company and for the Company
and its Subsidiaries as a whole, anticipated income, expense and capital
expenditure items for each quarter during such fiscal year, together with
pro forma unaudited balance sheets of the Company and its Subsidiaries
and the related pro forma statements of retained earnings, and quarterly,
concurrently with the delivery of the financial statements for such
fiscal year pursuant to clause (a) above, a report setting forth a
detailed comparison of actual performance to the budget referred to
above; and

(i) from time to time such other information regarding the
financial condition, operations, business or prospects of the Company or
any of its Subsidiaries (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information required to be
filed under ERISA) as any Lender or the Agent may reasonably request.

The Company will furnish to each Lender, at the time it furnishes each set of
financial statements pursuant to clause (a) above, a certificate of a
Responsible Financial Officer of the Company (i) to the effect that no Default
has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail and describing the action
that the Company has taken or proposes to take with respect thereto) and (ii)
setting forth in reasonable detail the computations necessary to determine
whether the Company is in compliance with Sections 8.10, 8.11, 8.12 and 8.13
hereof as of the end of the respective quarterly fiscal period or fiscal year.

Credit Agreement 58
64
8.02 Litigation. The Company will promptly give to each
Lender notice of all legal or arbitral proceedings, and of all proceedings by
or before any governmental or regulatory authority or agency, and any material
development in respect of such legal or other proceedings, affecting the
Company or any of its Subsidiaries, except proceedings that, if adversely
determined, would not (either individually or in the aggregate) have a Material
Adverse Effect. Without limiting the generality of the foregoing, the Company
will give to each Lender notice of the assertion of any Environmental Claim by
any Person against, or with respect to the activities of, the Company or any of
its Subsidiaries and notice of any alleged violation of or non-compliance with
any Environmental Laws or any permits, licenses or authorizations, other than
any Environmental Claim or alleged violation that, if adversely determined,
would not (either individually or in the aggregate) have a Material Adverse
Effect.

8.03 Existence, Etc. The Company will, and will cause each
of its Subsidiaries to:

(a) preserve and maintain its legal existence and all of
its material rights, privileges, licenses and franchises (provided that
nothing in this Section 8.03 shall prohibit any transaction expressly
permitted under Section 8.05 hereof);

(b) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities
if failure to comply with such requirements could (either individually or
in the aggregate) have a Material Adverse Effect;

(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or profits
or on any of its Property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained;

(d) maintain all of its Properties used or useful in its
business in good working order and condition, ordinary wear and tear
excepted;

(e) keep adequate records and books of account, in which
complete entries will be made in accordance with generally accepted
accounting principles consistently applied; and

(f) upon reasonable prior notice, permit representatives of
any Lender or the Agent, during normal business hours, to examine, copy
and make extracts from its books and records, to inspect any of its
Properties, and to discuss its business and affairs with its officers,
all to the extent reasonably requested by such Lender or the Agent (as
the case may be).

8.04 Insurance. The Company will, and will cause each of
its Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to

Credit Agreement 59
65
Property and risks of a character usually maintained by corporations engaged in
the same or similar business similarly situated, against loss, damage and
liability of the kinds and in the amounts customarily maintained by such
corporations.

On or before the Effective Date, the Company will deliver to the
Agent certificates of insurance satisfactory to the Agent evidencing the
existence of all insurance required to be maintained by the Company hereunder
setting forth the respective coverages, limits of liability, carrier, policy
number and period of coverage. Thereafter, each year the Company will deliver
to the Agent certificates of insurance evidencing that all insurance required
to be maintained by the Company hereunder will be in effect through the
calendar year following the date of such certificates, subject only to the
payment of premiums as they become due.

8.05 Prohibition of Fundamental Changes. (a) The Company
will not, nor will it permit any of its Subsidiaries to, enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution).

(b) The Company will not, nor will it permit any of its
Subsidiaries to, acquire any business or Property from, or capital stock of, or
be a party to any acquisition of, any Person except:

(i) for purchases of inventory and other Property to
be sold or used in the ordinary course of business;

(ii) Investments permitted under Section 8.08 hereof; and

(iii) Permitted Acquisitions.

(c) The Company will not, nor will it permit any of its
Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, any part of its business or Property,
whether now owned or hereafter acquired (including, without limitation,
receivables and leasehold interests), but excluding:

(i) any Excluded Disposition;

(ii) obsolete or worn-out Property, tools or equipment
no longer used or useful in its business (other than any Excluded
Disposition) or real Property no longer used or useful in its
business so long as the aggregate amount thereof sold in any
single fiscal year by the Company and its Subsidiaries shall not
have a fair market value in excess of $10,000,000;

(iii) any inventory or other Property sold or
disposed of in the ordinary course of business and on ordinary
business terms; and

Credit Agreement 60
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(iv) other Property so long as the aggregate amount
thereof sold or otherwise disposed of in any single fiscal year
by the Company and its Subsidiaries shall not have a fair market
value in excess of $25,000,000.

(d) Notwithstanding the foregoing provisions of this
Section 8.05, so long as no Default shall have occurred and be continuing, and
after giving effect to any of the succeeding transactions, no Default would
exist hereunder and so long as the Liens created under the Security Documents
continue to be in effect:

(i) any Subsidiary of the Company may be merged or
consolidated with or into: (x) the Company if the Company shall
be the continuing or surviving corporation or (y) any other such
Subsidiary; and

(ii) any Subsidiary of the Company may sell, lease,
transfer or otherwise dispose of any or all of its Property (upon
voluntary liquidation or otherwise) to the Company or a
Subsidiary of the Company.

8.06 Limitation on Liens. The Company will not, nor will it
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon any of its Property, whether now owned or hereafter acquired, except:

(a) Liens created pursuant to the Security Documents;

(b) Liens in existence on the date hereof and listed in
Part B of Schedule I hereto;

(c) Liens imposed by any governmental authority for taxes,
assessments or charges not yet delinquent or that are being contested in
good faith and by appropriate proceedings if, unless the amount thereof
is not material with respect to it or its financial condition, adequate
reserves with respect thereto are maintained on the books of the Company
or the affected Subsidiaries, as the case may be, in accordance with
GAAP;

(d) carriers', warehousemen's, mechanics', materialmen's,
landlord's, repairmen's or other like Liens arising in the ordinary
course of business that are not overdue for a period of more than 30 days
or that are being contested in good faith and by appropriate proceedings;

(e) Liens securing judgments but only to the extent for an
amount and for a period not resulting in an Event of Default under
Section 9(i) hereof;

(f) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;

(g) deposits or pledges to secure the performance of bids,
trade contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds,

Credit Agreement 61
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performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(h) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto that, in the aggregate, are not material in amount, and that do
not in any case materially detract from the value of the Property subject
thereto or interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries;

(i) Liens upon tangible personal Property acquired after
the date hereof (by purchase, construction or otherwise), or upon other
property acquired after the date hereof as a Capital Expenditure, by the
Company or any of its Subsidiaries, each of which Liens either (A)
existed on such Property before the time of its acquisition and was not
created in anticipation thereof or (B) was created solely for the purpose
of securing Indebtedness representing, or incurred to finance, refinance
or refund, the cost of such Property; provided that (i) no such Lien
shall extend to or cover any Property of the Company or such Subsidiary
other than the Property so acquired, (ii) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed the fair
market value (as determined in good faith by a Responsible Financial
Officer of the Company) of such Property at the time it was acquired, and
(iii) the principal amount of all Indebtedness (other than Indebtedness
permitted by Section 8.07(d) hereof) secured by such Liens shall not
exceed $10,000,000 in the aggregate;

(j) Liens upon real Property heretofore leased or leased
after the date hereof (under operating or capital leases) in the ordinary
course of business by the Company or any of its Subsidiaries in favor of
the lessor created at the inception of the lease transaction, securing
obligations of the Company or any of its Subsidiaries under or in respect
of such lease and extending to or covering only the Property subject to
such lease and improvements thereon;

(k) Liens of sellers or creditors of sellers of farm
products encumbering such farm products when sold to any of the Obligors
pursuant to the Food Security Act of 1985 or pursuant to similar state
laws to the extent such Liens may be deemed to extend to the assets of
such Obligors;

(l) protective Uniform Commercial Code filings with respect
to personal Property leased by, or consigned to, any Obligor;

(m) Liens securing Indebtedness of up to $25,000,000 in
aggregate principal amount at any one time outstanding which Indebtedness
is permitted under Section 8.07(g) hereof; and

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68
(n) any extension, renewal or replacement of the foregoing,
provided, however, that the Liens permitted hereunder shall not be spread
to cover any additional Indebtedness or Property.

8.07 Indebtedness. The Company will not, nor will it permit
any of its Subsidiaries to, create, incur or suffer to exist any Indebtedness
except:

(a) Indebtedness to the Lenders hereunder and under the
other Loan Documents;

(b) Indebtedness outstanding on the date hereof and listed
in Part A of Schedule I hereto and any Indebtedness issued or incurred to
refinance such Indebtedness, provided, however, that the principal amount
thereof shall not be increased;

(c) Indebtedness of Subsidiaries of the Company to the
Company or to other Subsidiaries of the Company or of the Company to any
of its Subsidiaries to the extent permitted under Section 8.08(e) or (g)
hereof;

(d) Indebtedness (including Capital Lease Obligations)
incurred to finance the purchase of equipment, and other Capital Lease
Obligations, not to exceed $50,000,000 in the aggregate outstanding at
any time;

(e) Indebtedness in respect of an irrevocable letter of
credit issued by a financial institution located in the State of Nevada
in favor of the State of Nevada Department of Insurance for account of
the Company or any of its Subsidiaries, and any extensions or renewals
thereof, in an aggregate amount not exceeding $5,000,000 at any one time
outstanding;

(f) Indebtedness in respect of certain irrevocable letters
of credit outstanding on the date hereof issued by Fleet National Bank,
BankBoston, N.A., Michigan National Bank, Old Kent Bank, The Long Term
Credit Bank of Japan and NationsBank of Texas, N.A., respectively, and
described in Part C of Schedule I hereto; and

(g) additional Indebtedness of the Company and its
Subsidiaries up to but not exceeding $50,000,000 at any one time
outstanding.

8.08 Investments. The Company will not, nor will it permit
any of its Subsidiaries to, make or permit to remain outstanding any
Investments except:

(a) Investments outstanding as of the Effective Date and
identified in Part B of Schedule III hereto (including, without
limitation, Indebtedness of any Subsidiary of the Company to the Company
or any other Subsidiary of the Company);

(b) operating deposit accounts with depository
institutions;

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(c) Permitted Investments;

(d) Interest Rate Protection Agreements;

(e) (i) Investments permitted under Section 8.05(b) hereof
and (ii) indemnities executed in connection with the sale of Investment
Tax Credits;

(f) Investments by the Company in the capital stock of its
Subsidiaries to the extent outstanding as of the Effective Date;

(g) Investments (other than of a type specified in clause
(f) above and other than the Investments permitted under clause (a) above
and Investments in Subsidiaries made in connection with Investments
pursuant to clause (e)(i) above) by the Company in its Subsidiaries or by
any Subsidiary of the Company in the Company or any other Subsidiary of
the Company;

(h) loans and advances to employees;

(i) deposits to secure bids, tenders, utilities, vendors,
leases, statutory obligations, surety and appeal bonds and other deposits
of like nature arising in the ordinary course of business not exceeding
$2,000,000 in the aggregate;

(j) additional Investments up to but not exceeding
$20,000,000 in the aggregate;

(k) Investments by the Company or any of its Subsidiaries,
each of which (A) existed before the time of acquisition of the Person or
Property of the Person who made such Investment and (B) was not made in
anticipation of such acquisition; and

(l) any guarantees permitted under Section 8.07 hereof.

8.09 [Intentionally left blank]

8.10 Leverage Ratio. The Company will not permit the
Leverage Ratio to exceed the following ratios for the following respective
periods:

PERIOD PERCENTAGE
------ ----------

From the Effective Date through and 3.90 to 1
including December 31, 1998
From January 1, 1999 through and 3.75 to 1
including December 31, 1999
From and after January 1, 2000 3.50 to 1

8.11 Minimum Net Worth. The Company will not permit its Net
Worth at any time to be less than $300,000,000 plus 50% of net income for all
preceding fiscal quarters

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(without including the results of any fiscal quarter in respect of which there
was a net loss) commencing with the fiscal quarter beginning October 1, 1997.
The amount of required Net Worth set forth above shall be increased by 75% of
the amount by which the "total stockholders equity" of the Company is increased
as a result of any public or private offering of common stock of the Company
after October 1, 1997. Promptly upon consummation of each such public or
private offering, the Company shall notify the Agent in writing of the amount
of such increase in total stockholders equity.

8.12 Fixed Charges Ratio. The Company will not permit the
Fixed Charges Ratio to be less than (i) 1.0 to 1 during the period from the
Effective Date through and including December 31, 1998 and (ii) 1.10 to 1 at
any time after December 31, 1998.

8.13 Interest Coverage Ratio. The Company will not permit
the Interest Coverage Ratio to be less than 3.0 to 1 at any time.

8.14 Lines of Business. Neither the Company nor any of its
Subsidiaries will engage to any substantial extent in any line or lines of
business activity other than operations involved in the manufacture, processing
or distribution of ice, ice-related products, coffee, dairy products or bottled
water which is similar to the water products that are currently processed,
bottled and distributed from the dairy facilities of the Company and/or its
Subsidiaries, or the manufacture of blow molded plastic bottles, or the lines
of business conducted by the Company or any of its Subsidiaries as of the
Effective Date or which are related thereto.

8.15 Transactions with Affiliates. Except as expressly
permitted by this Agreement, the Company will not, nor will it permit any of
its Subsidiaries to, directly or indirectly: (a) make any Investment in an
Affiliate other than Investments permitted under Section 8.08 hereof; (b)
transfer, sell, lease, assign or otherwise dispose of any Property to an
Affiliate; (c) merge into or consolidate with or purchase or acquire Property
from an Affiliate; or (d) enter into any other transaction directly or
indirectly with or for the benefit of an Affiliate (including, without
limitation, Guarantees and assumptions of obligations of an Affiliate);
provided that (i) any Affiliate who is an individual may serve as a director,
officer or employee of the Company or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity and (ii) the
Company and its Subsidiaries may enter into transactions (other than extensions
of credit by the Company or any of its Subsidiaries to an Affiliate) if the
monetary or business consideration arising therefrom would be substantially as
advantageous to the Company and its Subsidiaries as the monetary or business
consideration that would obtain in a comparable transaction with a Person not
an Affiliate.

8.16 Use of Proceeds. The Company will use the proceeds of
the Facility A Loans and the Facility B Loans to be made at any time hereunder
solely to repay Indebtedness outstanding under the Existing Credit Agreements,
for working capital or for other general corporate purposes (including, without
limitation, to finance Permitted Acquisitions). The Company will use the
proceeds of all Loans hereunder in compliance with all applicable legal and
regulatory requirements. Neither the Agent nor any Lender shall have any
responsibility as to the use of any of such proceeds.

Credit Agreement 65
71
8.17 Certain Obligations Respecting Subsidiaries.

(a) The Company will, and will cause each of its
Subsidiaries to, take such action from time to time as shall be necessary to
ensure that each of its Subsidiaries is a Wholly Owned Subsidiary unless as the
result of the exercise of warrants outstanding on the Effective Date or
otherwise permitted or agreed in connection with a Permitted Acquisition. In
the event that any additional shares of stock shall be issued by any
Subsidiary, the respective Obligor agrees forthwith to deliver to the Agent
pursuant to the relevant Security Document the certificates evidencing such
shares of stock, accompanied by undated stock powers executed in blank and to
take such other action as the Agent shall request to perfect the security
interest created therein pursuant to such Security Document.

(b) The Company will not permit any of its Subsidiaries to
enter into, after the date of this Agreement, any indenture, agreement,
instrument or other arrangement that, directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the incurrence or payment of Indebtedness,
the granting of Liens, the declaration or payment of dividends, the making of
loans, advances or Investments or the sale, assignment, transfer or other
disposition of Property; provided, that the foregoing shall not apply to (i)
restrictions and conditions imposed by law or by this Agreement, (ii) customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary or Property pending such sale, provided such restrictions and
conditions apply only to the Subsidiary or Property that is to be sold and such
sale is permitted hereunder, (iii) restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the Property securing such
Indebtedness, (iv) restrictions or conditions as the result of the issuance of
preferred stock by a Subsidiary pursuant to currently outstanding warrants for
the acquisition thereof, and (v) customary provisions in leases and other
contracts restricting the assignment thereof.

(c) The Company will take such action, and will cause each
of its Subsidiaries (other than Xxxxxxx and any Subsidiary (having no material
assets) formed with the intent of merging with or into a Person that will be a
Subsidiary subject to this provision) to take such action, from time to time as
shall be necessary to ensure that all Subsidiaries of the Company (other than
Xxxxxxx and any such Subsidiary having no material assets) are party to, as
Obligors, the Subsidiary Guarantee and Security Agreement or a Supplemental
Subsidiary Guarantee and Security Agreement. Without limiting the generality
of the foregoing, in the event that the Company or any of its Subsidiaries
shall form or acquire any new Subsidiary, the Company or the respective
Subsidiary will cause such new Subsidiary to (i) become a party to the
Subsidiary Guarantee and Security Agreement or a Supplemental Subsidiary
Guarantee and Security Agreement pursuant to a written instrument in form and
substance satisfactory to the Agent, and (ii) deliver such proof of corporate
action, incumbency of officers, opinions of counsel and other documents
relating to the foregoing as is consistent with those delivered by each Obligor
pursuant to Section 6.02 hereof, or as any Lender or the Agent shall have
reasonably requested.

Credit Agreement 66
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8.18 Modifications of Certain Documents. The Company will
furnish to the Agent a copy of each modification, supplement or waiver of any
provisions of any agreement, instrument or other document evidencing or
relating to the charter or by-laws of the Company or any of its Subsidiaries
promptly upon the effectiveness thereof (and the Agent will promptly furnish a
copy thereof to each Lender).

Section 9. Events of Default. If one or more of the
following events (herein called "Events of Default") shall occur and be
continuing:

(a) The Company shall: (i) default in the payment of any
principal of any Loan when due (whether at stated maturity or otherwise);
or (ii) default in the payment of any interest on any Loan or
Reimbursement Obligation, any fee or any other amount payable by it
hereunder or under any other Loan Document when due and such default
shall have continued unremedied for three or more Business Days; or

(b) The Company or any of its Subsidiaries shall default in
the payment when due of any principal of or interest on any of its other
Indebtedness aggregating $5,000,000 or more, or in the payment when due
of any amount under any Interest Rate Protection Agreement; or any event
specified in any note, agreement, indenture or other document evidencing
or relating to any such Indebtedness or any event specified in any
Interest Rate Protection Agreement shall occur if the effect of such
event is to cause, or (with the giving of any notice or the lapse of time
or both) to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause, such
Indebtedness to become due, or to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior to its
stated maturity or to have the interest rate thereon reset to a level so
that securities evidencing such Indebtedness trade at a level specified
in relation to the par value thereof or, in the case of an Interest Rate
Protection Agreement, to permit the payments owing under such Interest
Rate Protection Agreement to be liquidated; or

(c) Any representation, warranty or certification made or
deemed made herein or in any other Loan Document (or in any modification
or supplement hereto or thereto) by any Obligor, or any certificate
furnished to any Lender or the Agent pursuant to the provisions hereof or
thereof, shall prove to have been false or misleading as of the time made
or furnished in any material respect; or

(d) The Company shall default in the performance of any of
its obligations under any of Sections 8.01(f), 8.05, 8.06, 8.07, 8.08,
8.10, 8.11, 8.12, 8.13, 8.14, 8.15 or 8.17 hereof; or the Company shall
default in the performance of any of its other obligations in this
Agreement and such default shall continue unremedied for a period of 30
or more days after notice thereof to the Company by the Agent or any
Lender (through the Agent); or

(e) The Company shall default in the performance of any of
its obligations under Section 4.02 of the Security Agreement; any Obligor
party to the Subsidiary

Credit Agreement 67
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Guarantee and Security Agreement or any Supplemental Subsidiary Guarantee
and Security Agreement shall default in the performance of any of its
obligations under Section 2 or 5.02 thereof; or any Obligor shall default
in the performance of any of its other obligations in any Loan Document
(other than this Agreement) to which it is party and such default shall
continue unremedied for a period of 30 or more days after notice thereof
to the Company by the Agent or any Lender (through the Agent); or

(f) The Company or any of its Subsidiaries shall admit in
writing its inability to, or be generally unable to, pay its debts as
such debts become due; or

(g) The Company or any of its Subsidiaries shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of itself or of all
or a substantial part of its Property, (ii) make a general assignment for
the benefit of its creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement or winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code (or such similar laws) or (vi)
take any corporate action for the purpose of effecting any of the
foregoing; or

(h) A proceeding or case shall be commenced, without the
application or consent of the Company or the relevant Subsidiary affected
thereby, in any court of competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement or winding-up, or
the composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the like of the
Company or such Subsidiary, as the case may be, or of all or any
substantial part of its Property, or (iii) similar relief in respect of
the Company or such Subsidiary, as the case may be, under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and
in effect, for a period of 60 or more days; or an order for relief
against the Company or any of its Subsidiaries shall be entered in an
involuntary case under the Bankruptcy Code; or

(i) A final judgment or judgments for the payment of money
in excess of $5,000,000 in the aggregate (exclusive of judgment amounts
fully bonded or covered by insurance where the surety or the insurer, as
the case may be, has admitted liability in respect of such judgment)
shall be rendered by one or more courts, administrative tribunals or
other bodies having jurisdiction against the Company or any of its
Subsidiaries and the same shall not be discharged (or provision shall not
be made for such discharge), or a stay of execution thereof shall not be
procured, within 30 days from the date of entry thereof and the Company
or any such Subsidiary, as the case may be, shall not, within said period
of 30 days, or such longer period during which execution of the same
shall have

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been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal; or

(j) An event or condition specified in Section 8.01(e)
hereof shall occur or exist with respect to any Plan or Multiemployer
Plan and, as a result of such event or condition, together with all other
such events or conditions, the Company or any ERISA Affiliate shall incur
or shall be reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or PBGC (or any combination of the foregoing) that, in
the determination of the Majority Lenders, would (either individually or
in the aggregate) have a Material Adverse Effect; or

(k) A reasonable basis shall exist for the assertion
against the Company or any of its Subsidiaries, or any predecessor in
interest of the Company or any of its Subsidiaries, of (or there shall
have been asserted against the Company or any of its Subsidiaries) an
Environmental Claim that, in the judgment of the Majority Lenders, is
reasonably likely to be determined adversely to the Company or any of its
Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect
(insofar as such amount is payable by the Company or any of its
Subsidiaries but after deducting any portion thereof that is reasonably
expected to be paid by other creditworthy Persons jointly and severally
liable therefor); or

(l) During any period of 25 consecutive calendar months, a
majority of the Board of Directors of the Company shall no longer be
composed of individuals (i) who were members of said Board on the first
day of such period or (ii) whose election or nomination to said Board was
approved by individuals referred to in clause (i) above constituting at
the time of such election or nomination at least a majority of said
Board; or any Person or group of Persons acting in concert, other than
Xx. Xxxxx X. Xxxxxx or any other shareholder of the Company as of the
Effective Date, shall at any time own or control, directly or indirectly,
20% or more of the Company's voting capital stock; or

(m) The Liens created by the Security Documents shall at
any time not constitute a valid and perfected Lien on any material
portion of the collateral intended to be covered thereby (to the extent
perfection by filing, registration, recordation or possession is required
herein or therein) in favor of the Agent, free and clear of all other
Liens (other than Liens permitted under Section 8.06 hereof or under the
respective Security Documents), or, except for expiration in accordance
with its terms, any of the Security Documents shall for whatever reason
be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by any Obligor.

THEREUPON: (1) in the case of an Event of Default other than one referred to
in clause (g) or (h) of this Section 9 with respect to any Obligor, the Agent
may (and, if requested by the Majority Lenders shall), by notice to the
Company, terminate the Commitments and/or declare the principal amount then
outstanding of, and the accrued interest on, the Loans, the Reimbursement
Obligations and all other amounts payable by the Obligors hereunder, under the
other Loan Documents and under the Notes (including, without limitation, any
amounts payable under

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Section 5.05 or 5.08 hereof) to be forthwith due and payable, whereupon such
amounts shall be immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by each Obligor; and (2) in the case of the occurrence of an Event of
Default referred to in clause (g) or (h) of this Section 9 with respect to any
Obligor, the Commitments shall automatically be terminated and the principal
amount then outstanding of, and the accrued interest on, the Loans, the
Reimbursement Obligations and all other amounts payable by the Company
hereunder and under the Notes (including, without limitation, any amounts
payable under Section 5.05 or 5.08 hereof) shall automatically become
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by each
Obligor.

In addition, upon the occurrence and during the continuance of
any Event of Default (if the Agent has declared the principal amount then
outstanding of, and accrued interest on, the Loans, the Reimbursement
Obligations and all other amounts payable by the Company hereunder and under
the Notes to be due and payable), the Company agrees that it shall, if
requested by the Agent or the Majority Lenders through the Agent (and, in the
case of any Event of Default referred to in clause (g) or (h) of this Section 9
with respect to the Company, forthwith, without any demand or the taking of any
other action by the Agent or such Lenders) provide cover for the Letter of
Credit Liabilities by paying to the Agent immediately available funds in an
amount equal to the then aggregate undrawn face amount of all Letters of
Credit, which funds shall be held by the Agent in the Collateral Account as
collateral security in the first instance for the Letter of Credit Liabilities
and be subject to withdrawal only as therein provided.

Section 10. The Agent.

10.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated
to the Agent by the terms of this Agreement and of the other Loan Documents,
together with such other powers as are reasonably incidental thereto. The
Agent (which term as used in this sentence and in Section 10.05 and the first
sentence of Section 10.06 hereof shall include reference to its affiliates and
its own and its affiliates' officers, directors, employees and agents): (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and in the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Lender; (b) shall not
be responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any other Loan Document, or in any
certificate or other document referred to or provided for in, or received by
any of them under, this Agreement or any other Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Note or any other Loan Document or any other document referred
to or provided for herein or therein or for any failure by the Company or any
other Person to perform any of its obligations hereunder or thereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Loan Document; and (d) shall not be
responsible for any action taken or omitted to be taken by it hereunder or
under any other Loan Document or under any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, except for its

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own gross negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it in good faith. The
Agent may deem and treat the payee of any Note as the holder thereof for all
purposes hereof unless and until a notice of the assignment or transfer thereof
shall have been filed with the Agent.

10.02 Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including, without
limitation, any thereof by telephone, telecopy, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the Agent.
As to any matters not expressly provided for by this Agreement or any other
Loan Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions
given by the Majority Lenders or, if provided herein, in accordance with the
instructions given by all of the Lenders as is required in such circumstance,
and such instructions of such Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.

10.03 Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default (other than a failure by the
Company to pay when due any principal of or interest on the Loans) unless the
Agent has received notice from a Lender or any Obligor specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Company fails to pay when due any principal of or interest on the Loans or the
Agent receives such a notice of the occurrence of a Default, the Agent shall
give prompt notice thereof to the Lenders. The Agent shall (subject to Section
10.07 hereof) take such action with respect to such failure or Default as shall
be directed by the Majority Lenders, provided that, unless and until the Agent
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interest of the Lenders except
to the extent that this Agreement expressly requires that such action be taken,
or not be taken, only with the consent or upon the authorization of the
Majority Lenders, or all of the Lenders.

10.04 Rights as a Lender. With respect to its Commitments
and the Loans made by it, First Union (and any successor acting as Agent) in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity.
First Union (and any successor acting as Agent) and its affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in and generally engage in any kind of banking, trust or other
business with the Obligors (and any of their Subsidiaries or Affiliates) as if
it were not acting as the Agent, and First Union and its affiliates may accept
fees and other consideration from the Obligors for services in connection with
this Agreement or otherwise without having to account for the same to the
Lenders.

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10.05 Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed under Section 11.03 hereof, but without
limiting the obligations of the Company under said Section 11.03, ratably in
accordance with the aggregate principal amount of the Loans and Reimbursement
Obligations held by the Lenders (or, if no Loans or Reimbursement Obligations
are at the time outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever that may be imposed on, incurred by or asserted
against the Agent (including by any Lender) arising out of or by reason of any
investigation in or in any way relating to or arising out of this Agreement or
any other Loan Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses that the Company is
obligated to pay under Section 11.03 hereof, but excluding, unless a Default
has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent they
arise from the gross negligence or willful misconduct of the party to be
indemnified.

10.06 Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this
Agreement or under any other Loan Document. The Agent shall not be required to
keep itself informed as to the performance or observance by any Obligor of this
Agreement or any of the other Loan Documents or any other document referred to
or provided for herein or therein or to inspect the Properties or books of the
Company or any of its Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder or under the Security Documents, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Company or any of its Subsidiaries (or any of their affiliates) that may come
into the possession of the Agent or any of its affiliates.

10.07 Failure to Act. Except for action expressly required
of the Agent hereunder and under the other Loan Documents, the Agent shall in
all cases be fully justified in failing or refusing to act hereunder and
thereunder unless it shall receive further assurances to its satisfaction from
the Lenders of their indemnification obligations under Section 10.05 hereof
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action.

10.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent
may resign at any time by giving notice thereof to the Lenders and the Company,
and the Agent may be removed at any time with

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or without cause by the Majority Lenders. Upon any such resignation or
removal, the Majority Lenders shall have the right to appoint a successor Agent
with the prior consent of the Company (which consent shall not be unreasonably
withheld); provided that no such consent of the Company shall be required if an
Event of Default has occurred and is continuing and the Commitments have been
terminated and/or the Loans and other amounts payable by the Obligors hereunder
have been declared forthwith due and payable. If no successor Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, that
shall be a bank with a combined capital and surplus of at least $500,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Section 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.

10.09 Agency Fee. So long as the Commitments are in effect
and until payment in full of the principal of and interest on the Loans and all
other amounts payable by the Company hereunder, the Company will pay to the
Agent an agency fee in the amount agreed in writing between the Company and the
Agent, payable quarterly in arrears commencing on December 31, 1997 and on the
last day of each calendar quarter thereafter; provided that if the Commitments
shall have been terminated prior to such date, the agency fee shall be payable
on the date of such termination. Such fee, once paid, shall be non-refundable.

10.10 Consents under Other Loan Documents. Except as
otherwise provided in Section 11.04 hereof with respect to this Agreement, the
Agent may, with the prior consent of the Majority Lenders (but not otherwise),
consent to any modification, supplement or waiver under any of the Loan
Documents, provided that the Agent may (without any such prior consent),
consent to amendments of the Security Documents which merely increase the
collateral security provided thereunder, and further provided that, without the
prior consent of each Lender, the Agent shall not (except as provided herein or
in the Security Documents) release any guarantee or collateral or otherwise
terminate any Lien under any Loan Document providing for collateral security,
or agree to additional obligations being secured by such collateral security,
except that no such consent shall be required, and the Agent is hereby
authorized, to release any Lien covering Property that is the subject of a
disposition of Property permitted hereunder or to which the Majority Lenders
have consented or to release any guarantee of any Obligor that is the subject
of a disposition to which the Majority Lenders have consented.

10.11 Syndication Agent. The Syndication Agent named on the
cover page of this Agreement shall have no duties, obligations or
responsibilities hereunder except in its capacity as a Lender.

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Section 11. Miscellaneous.

11.01 Waiver. No failure on the part of the Agent or any
Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or any Note
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement or any Note preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of
any remedies provided by law.

11.02 Notices. All notices, requests and other
communications provided for herein and under the Security Documents (including,
without limitation, any modifications of, or waivers, requests or consents
under, this Agreement) shall be given or made in writing (including, without
limitation, by telex or telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof;
or, as to any party, at such other address as shall be designated by such party
in a notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telex or telecopier or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid.

11.03 Expenses, Etc. The Company agrees to pay or reimburse
each of the Lenders and the Agent for: (a) all reasonable out-of-pocket costs
and expenses of the Agent (including, without limitation, the reasonable fees
and expenses of Milbank, Tweed, Xxxxxx & XxXxxx, special New York counsel to
First Union, and Fiddler Xxxxxxxx & Xxxxxxxxx, special Puerto Rico counsel to
First Union) in connection with (i) the negotiation, preparation, execution and
delivery of this Agreement and the other Loan Documents and the extensions of
credit hereunder and (ii) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any of the other
Loan Documents (whether or not consummated); (b) all reasonable out-of-pocket
costs or allocated costs and expenses of the Lenders and the Agent (including,
without limitation, the reasonable fees, allocated costs and expenses of legal
counsel, which may be employees of the Lenders or the Agent) in connection with
(i) any Default and any enforcement or collection proceedings resulting
therefrom, including, without limitation, all manner of participation in or
other involvement with (x) bankruptcy, insolvency, receivership, foreclosure,
winding up or liquidation proceedings, (y) judicial or regulatory proceedings
and (z) workout, restructuring or other negotiations or proceedings (whether or
not the workout, restructuring or transaction contemplated thereby is
consummated) and (ii) the enforcement of this Section 11.03; and (c) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement or
any of the other Loan Documents or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and other charges incurred
in connection with any filing, registration, recording or perfection of any
security interest contemplated by any Loan Document or any other document
referred to therein.

The Company hereby agrees to indemnify the Agent and each Lender
and their respective directors, officers, employees, attorneys and agents from,
and hold each of them harmless against, any and all losses, liabilities,
claims, damages or expenses incurred by any of

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them (including, without limitation, any and all losses, liabilities, claims,
damages or expenses incurred by the Agent to any Lender, whether or not the
Agent or any Lender is a party thereto) arising out of or by reason of any
investigation or litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to the extensions of
credit hereunder or any actual or proposed use by the Company or any of its
Subsidiaries of the proceeds of any of the extensions of credit hereunder,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation or litigation or other
proceedings (but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified). Without limiting the generality of the
foregoing, the Company will indemnify the Agent and each Lender from, and hold
the Agent and each Lender harmless against, any losses, liabilities, claims,
damages or expenses described in the preceding sentence (including any Lien
filed against all or any part of the Property of the Company and its
Subsidiaries in favor of any governmental entity, but excluding, as provided in
the preceding sentence, any loss, liability, claim, damage or expense incurred
by reason of the gross negligence or willful misconduct of the Person to be
indemnified) arising under any Environmental Law as a result of the past,
present or future operations of the Company or any of its Subsidiaries (or any
predecessor in interest to the Company or any of its Subsidiaries), or the
past, present or future condition of any site or facility owned, operated or
leased at any time by the Company or any of its Subsidiaries (or any such
predecessor in interest), or any Release or threatened Release of any Hazardous
Materials at or from any such site or facility, including any such Release or
threatened Release that shall occur during any period prior to the termination
of the Commitments and the payment in full of the Loans and other amounts owing
hereunder and under the other Loan Documents when the Agent or any Lender shall
be in possession of any such site or facility following the exercise by the
Agent or any Lender of any of its rights and remedies hereunder or under any of
the Security Documents to the extent such Release results from a continuation
of conditions previously in existence at, or practices theretofore employed in
connection with the operation of, such site or facility.

11.04 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be modified or
supplemented only by an instrument in writing signed by the Company, the Agent
and the Majority Lenders, or by the Company and the Agent acting with the
consent of the Majority Lenders, and any provision of this Agreement may be
waived by the Majority Lenders or by the Agent acting with the consent of the
Majority Lenders; provided that: (a) no modification, supplement or waiver
shall, unless by an instrument signed by all of the Lenders or by the Agent
acting with the consent of all of the Lenders: (i) increase, or extend the
term of any of the Commitments, or extend the time or waive any requirement for
the reduction or termination of any of the Commitments, (ii) extend the date
fixed for the payment of principal of or interest on any Loan, the
Reimbursement Obligations or any fee hereunder, (iii) reduce the amount of any
such payment of principal, (iv) reduce the rate at which interest is payable
thereon or any fee is payable hereunder, (v) alter the rights or obligations of
the Company to prepay Loans, (vi) alter the terms of this Section 11.04, (vii)
modify the definition of the terms "Majority Lenders" or "Supermajority
Lenders", or modify in any other manner the number or percentage of the Lenders
required to make any determinations or waive any rights hereunder or to modify
any provision hereof or modify Section 4.07(b) or Section 11.06(b)(ii) or (iii)
hereof, (viii) release any Subsidiary Guarantor or Supplemental Guarantor

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from any of its guarantee obligations under the Subsidiary Guarantee and
Security Agreement or any Supplemental Subsidiary Guarantee and Security
Agreement or release (or terminate any Lien on) all or substantially all of the
Collateral (as defined in the Security Documents) except as provided in the
Security Documents with respect to such Collateral in any of the Security
Documents or (ix) waive any of the conditions precedent set forth in Section
6.01, 6.02 or 6.03 hereof; (b) Sub-clause (i)(b) of the definition of
"Permitted Acquisition" may be modified, supplemented or waived only by an
instrument in writing signed by the Company, the Agent and the Supermajority
Lenders, or by the Company and the Agent acting with the consent of the
Supermajority Lenders; and (c) any modification of any of the rights or
obligations of the Agent or any Issuing Bank shall require the consent of the
Agent or the Issuing Bank, as the case may be.

11.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

11.06 Assignments and Participations.

(a) The Company may not assign any of its rights or
obligations hereunder or under the Notes without the prior consent of all of
the Lenders and the Agent.

(b) Each Lender may assign any of its Loans, its Notes, its
Commitments, and, if such Lender is a Facility A Lender, its Letter of Credit
Interest with the consent of the Company and the Agent, and in the case of the
Facility A Commitment or Letter of Credit Interest, the Issuing Bank (which
consents shall not be unreasonably withheld) pursuant to an Assignment and
Acceptance substantially in the form of Exhibit H hereto; provided that:

(i) no such consent by the Company shall be required
in the case of any assignment to another Lender or in any case if
an Event of Default has occurred and is continuing;

(ii) each assignment by a Lender of its Loans, Notes or
Commitment of any Class or Letter of Credit Interest shall be
made in such a manner so that the same portion of such Loans,
Notes, Commitment and (if applicable) Letter of Credit Interest
is assigned to the respective assignee; and

(iii) any such assignment of less than all of such
Lender's interests in the Facility A Loans and Facility B Loans,
Facility A Notes and Facility B Notes and Facility A Commitments
and Facility B Commitments, as the case may be, shall be in an
aggregate amount at least equal to $10,000,000 ($5,000,000 if the
assignee is already a Lender).

Upon execution and delivery by the assignor and assignee to the Company, the
Agent and, if applicable, the Issuing Bank of such Assignment and Acceptance ,
and upon consent thereto by the Company, the Agent and Issuing Bank, to the
extent required above, the assignee shall have, to the extent of such
assignment, the obligations, rights and benefits of a Lender hereunder

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holding the Commitment(s) and Loans and, if applicable, Letter of Credit
Interests (or portions thereof) assigned to it as specified in such Assignment
and Acceptance (in addition to the Commitment(s), Loans and/or Letter of Credit
Interests, if any, theretofore held by such assignee) and the assigning Lender
shall, to the extent of such assignment, be released from the Commitment(s) (or
portion(s) thereof) so assigned. Upon each such assignment (other than an
assignment required under Section 5.07 hereof) the assigning Lender shall pay
the Agent an assignment fee of $3,000.

(c) A Lender may sell or agree to sell to one or more other
Persons a participation in all or any part (in a minimum amount of $5,000,000)
of any Loans or Letter of Credit Interests held by it, or in its Commitments,
in which event each purchaser of a participation (a "Participant") shall be
entitled to the rights and benefits of the provisions of Section 8.01(i) hereof
with respect to its participation in such Loans, Letter of Credit Interests and
Commitments as if (and the Company shall be directly obligated to such
Participant under such provisions as if) such Participant were a "Lender" for
purposes of said Section, but, except as otherwise provided in Section 4.07(c)
hereof, shall not have any other rights or benefits under this Agreement or any
Note or any other Loan Document (the Participant's rights against such Lender
in respect of such participation to be those set forth in the agreements
executed by such Lender in favor of the Participant). All amounts payable by
the Company to any Lender under Section 5 hereof in respect of Loans or Letter
of Credit Interests held by it, and its Commitments, shall be determined as if
such Lender had not sold or agreed to sell any participations in such Loans,
Letter of Credit Interests and Commitments, and as if such Lender were funding
each of such Loans, Letter of Credit Interests and Commitments in the same way
that it is funding the portion of such Loans, Letter of Credit Interests and
Commitments in which no participations have been sold. In no event shall a
Lender that sells a participation agree with the Participant to take or refrain
from taking any action hereunder or under any other Loan Document except that
such Lender may agree with the Participant that it will not, without the
consent of the Participant, agree to (i) increase or extend the term, or extend
the time or waive any requirement for the reduction or termination, of such
Lender's related Commitment, (ii) extend the date fixed for the payment of
principal of or interest on the related Loan or Loans, Reimbursement
Obligations or any portion of any fee hereunder payable to the Participant,
(iii) reduce the amount of any such payment of principal, (iv) reduce the rate
at which interest is payable thereon, or any fee hereunder payable to the
Participant, to a level below the rate at which the Participant is entitled to
receive such interest or fee, (v) alter the rights or obligations of the
Company to prepay the related Loans, (vi) consent to any modification,
supplement or waiver hereof or of any of the other Loan Documents to the extent
that the same, under Section 10.10 or 11.04 hereof, requires the consent of
each Lender or (vii) release any Subsidiary Guarantor or Supplemental Guarantor
from any of its guarantee obligations under the Subsidiary Guarantee and
Security Agreement or any Supplemental Subsidiary Guarantee and Security
Agreement or release (or terminate any Lien on) all or substantially all of the
Collateral except as provided in the Security Documents with respect to such
Collateral in any of the Security Documents.

(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 11.06, any Lender may
(without notice to the Company, the Agent or any other Lender and without
payment of any fee) (i) assign and pledge all or any

Credit Agreement 77
83
portion of its Loans, Notes and/or Letter of Credit Interests to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank and (ii) assign all or any portion
of its rights under this Agreement and its Loans, Notes and Letter of Credit
Interests to an affiliate. No such assignment shall release the assigning
Lender from its obligations hereunder.

(e) A Lender may furnish any information concerning the
Company or any of its Subsidiaries in the possession of such Lender from time
to time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.12(b) hereof.

(f) Anything in this Section 11.06 to the contrary
notwithstanding, no Lender may assign or participate any interest in any Loan
or Reimbursement Obligation held by it hereunder to the Company or any of its
Subsidiaries or Affiliates without the prior consent of each Lender.

(g) At the request of any Lender that is not a U.S. Person
and is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, the
Company shall maintain, or cause to be maintained, a register (the "Register")
that, at the request of the Company, shall be kept by the Agent on behalf of
the Company at no charge to the Company at the address to which notices to the
Agent are to be sent hereunder, on which it enters the name of such Lender as
the registered owner of each Registered Loan held by such Lender. A Registered
Loan (and the Registered Note, if any, evidencing the same) may be assigned or
otherwise transferred in whole or in part by registration of such assignment or
transfer on the Register (and each Registered Note shall expressly so provide).
Any assignment or transfer of all or part of such Registered Loan (and the
Registered Note, if any, evidencing the same) may be effected by registration
of such assignment or transfer on the Register, together with the surrender of
the Registered Note, if any, evidencing the same duly endorsed by (or
accompanied by a written instrument of assignment or transfer duly executed by)
the holder of such Registered Note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new Registered Notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or transfer of any
Registered Loan (and the Registered Note, if any, evidencing the same), the
Company shall treat the Person in whose name such Registered Loan (and the
Registered Note, if any, evidencing the same) is registered as the owner
thereof for the purpose of receiving all payments thereon and for all other
purposes, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company and any Lender that is a Registered
Holder at any reasonable time upon reasonable prior notice.

11.07 Survival. The obligations of the Company under
Sections 5.01, 5.05, 5.06, 5.08 and 11.03 hereof, and the obligations of the
Lenders under Section 10.05 hereof, shall survive the repayment of the Loans
and Reimbursement Obligations and the termination of the Commitments. In
addition, each representation and warranty made, or deemed to be made by a
notice of any extension of credit (whether by means of a Loan or the issuance
of a Letter of Credit), herein or pursuant hereto shall survive the making of
such representation and warranty, and no Lender shall be deemed to have waived,
by reason of making any extension of credit

Credit Agreement 78
84
hereunder (whether by means of a Loan or the issuance of a Letter of Credit),
any Default that may arise by reason of such representation or warranty proving
to have been false or misleading, notwithstanding that such Lender or the Agent
may have had notice or knowledge or reason to believe that such representation
or warranty was false or misleading at the time such extension of credit was
made.

11.08 Captions. The table of contents and captions and
section headings appearing herein are included solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement.

11.09 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.

11.10 Governing Law; Submission to Jurisdiction; Service of
Process and Venue.

(a) This Agreement and the Notes shall be governed by, and
construed in accordance with, the law of the State of New York.

(b) The Company hereby agrees that any suit, action or
proceeding with respect to this Agreement, any Note or any other Loan Document
to which it is a party or any judgment entered by any court in respect thereof
may be brought in the United States District Court for the Southern District of
New York, in the Supreme Court of the State of New York sitting in New York
County (including its Appellate Division), or in any other appellate court in
the State of New York, as the party commencing such suit, action or proceeding
may elect in its sole discretion; and each party hereto hereby irrevocably
submits to the non-exclusive jurisdiction of such court for the purpose of any
such suit, action, proceeding or judgment. Each party hereto further submits,
for the purpose of any such suit, action, proceeding or judgment brought or
rendered against it, to the appropriate courts of the jurisdiction of its
domicile.

(c) The Company hereby irrevocably consents to the service
of process in any suit, action or proceeding in such courts by the mailing
thereof by the Agent or any Lender by registered or certified mail, postage
prepaid, at its address set forth beneath its signature hereto. Nothing herein
shall in any way be deemed to limit the ability of the Agent or any Lender to
serve any such writs, process or summonses in any other manner permitted by
applicable law or to obtain jurisdiction over the Company in such other
jurisdictions, and in such manner, as may be permitted by applicable law.

(d) The Company hereby irrevocably waives any objection
that it may now or hereafter have to the laying of the venue of any suit,
action or proceeding arising out of or relating to this Agreement, the Notes or
the other Loan Documents brought in any such court and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.

Credit Agreement 79
85
11.11 Waiver of Jury Trial. EACH OF THE COMPANY, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

11.12 Treatment of Certain Information; Confidentiality.

(a) The Company acknowledges that from time to time
financial advisory, investment banking and other services may be offered or
provided to the Company or one or more of its Subsidiaries (in connection with
this Agreement or otherwise) by any Lender or by one or more subsidiaries or
affiliates of such Lender and the Company hereby authorizes each Lender to
share any information delivered to such Lender by the Company and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such subsidiary or affiliate,
it being understood that any such subsidiary or affiliate receiving such
information shall be bound by the provisions of clause (b) below as if it were
a Lender hereunder. Such authorization shall survive the repayment of the
Loans and Reimbursement Obligations and the termination of the Commitments.

(b) Each Lender and the Agent agree (on behalf of itself
and each of its affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance with their
customary procedures for handling confidential information of the same nature
and in accordance with safe and sound banking practices, any non-public
information supplied to it by any Obligor pursuant to this Agreement that is
identified by such Person as being confidential at the time the same is
delivered to the Lenders or the Agent, provided that nothing herein shall limit
the disclosure of any such information (i) to the extent required by statute,
rule, regulation or judicial process, (ii) to counsel for any of the Lenders or
the Agent, (iii) to any Lender's examiners, auditors or accountants, (iv) to
the Agent, the Syndication Agent named on the cover page of this Agreement or
any other Lender, (v) in connection with any litigation to which any one or
more of the Lenders or the Agent is a party, (vi) to a subsidiary or affiliate
of such Lender as provided in clause (a) above or (vii) to any assignee or
participant (or prospective assignee or participant) so long as such assignee
or participant (or prospective assignee or participant) first executes and
delivers to the respective Lender a Confidentiality Agreement substantially in
the form of Exhibit G hereto; provided, further, that in no event shall any
Lender or the Agent be obligated or required to return any materials furnished
by any Obligor. The obligations of any assignee that has executed a
Confidentiality Agreement in the form of Exhibit G hereto shall be superseded
by this Section 11.12 upon the date upon which such assignee becomes a Lender
hereunder pursuant to Section 11.06 hereof.

Credit Agreement 80
86
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed and delivered as of the day and year first above
written.

COMPANY

SUIZA FOODS CORPORATION

By /s/ Xxxxx X. Xxxx
------------------------------------
Title: Vice President

Address for Notices:

0000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000

Attention: Xxxxx X. Xxxxxx

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 81
87
LENDERS

FACILITY A LENDERS AND FACILITY B
---------------------------------
LENDERS
-------

Facility A Commitment THE FIRST NATIONAL BANK OF CHICAGO
---------------------
$29,960,000

Facility B Commitment By /s/ Xxxxx X. Xxxxxx
--------------------- -------------------------------------------
$23,540,000 Title: First Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

The First National Bank of Chicago
One First Xxxxxxxx Xxxxx
Xxxxx 0000, 00xx Xxxxx
Xxxxxxx, XX 00000

Address for Notices:

The First National Bank of Chicago
One First Xxxxxxxx Xxxxx
Xxxxx 0000, 00xx Xxxxx
Xxxxxxx, XX 00000

Attention: Xxxxxx Xxxx

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 82
88
Facility A Commitment FIRST UNION NATIONAL BANK
---------------------
$29,960,000

Facility B Commitment By /s/ Xxxxxx X. Xxxxxxx
--------------------- ---------------------------------------
$23,540,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

First Union National Bank
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000

Address for Notices:

First Union National Bank
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000

Attention: Sana Alkoor - Suiza

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 83
89
Facility A Commitment NATIONSBANK OF TEXAS, N.A.
---------------------
$25,200,000

Facility B Commitment By /s/ Xxxxxx Xxxxxx
--------------------- --------------------------------------
$19,800,000 Title: Senior Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

NATIONSBANK of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000

Address for Notices:

NATIONSBANK of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000

Attention: Xx. Xxxxxx Xxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 84
90
Facility A Commitment BANK OF AMERICA NT&SA
---------------------
$25,200,000

Facility B Commitment By /s/ X. Xxxxxx Queen
--------------------- ----------------------------------
$19,800,000 Title: Managing Director

Lending Office for Base Rate Loans and
Eurodollar Loans:

Bank of America
000 Xxxxx XxXxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000

Address for Notices:

Bank of America Illinois
000 Xxxxx XxXxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000

Attention: W. Xxxxxx Xxxxxxx

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 85
91
Facility A Commitment THE BANK OF NOVA SCOTIA
---------------------
$23,520,000

Facility B Commitment By /s/ F.C.H. Xxxxx
--------------------- --------------------------------------
$18,480,000 Title: Senior Manager Loan
Operations

Lending Office for Base Rate Loans and
Eurodollar Loans:

The Bank of Nova Scotia
Atlanta Agency
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000

Address for Notices:

The Bank of Nova Scotia
Atlanta Agency
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000

Attention: F.C.H. Xxxxx
Senior Assistant Agent

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

with a copy to:

The Bank of Nova Scotia
Houston Representative Xxxxxx
0000 Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000

Attention: Xxxxxx Xxxxxxxx
Relationship Manager

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 86
92
Facility A Commitment CREDIT AGRICOLE INDOSUEZ
---------------------
$23,520,000

Facility B Commitment By /s/ Xxxx Xxxxxx
--------------------- -------------------------------------------
$18,480,000 Title: Senior Vice President Branch
Manager

By /s/ Xxxxxxxxx X. Xxxxxx
-------------------------------------

Title: First Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Credit Agricole Indosuez
00 X. Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Mr. Xxxx Xxxxxxxx

Address for Notices:

Credit Agricole Indosuez
00 X. Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000

Attention: Xx. Xxx Xxxx

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 87
93
Facility A Commitment CREDIT LYONNAIS NEW YORK BRANCH
---------------------
$23,520,000

Facility B Commitment By /s/ Xxxxxx Xxxxxxxxx
--------------------- -------------------------------------------
$18,480,000 Title: Senior Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Credit Lyonnais New York Branch
c/o Credit Lyonnais Dallas
0000 Xxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxxx, Xxxxx 00000

Address for Notices:

Credit Lyonnais New York Branch
c/o Credit Lyonnais Dallas
0000 Xxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxxx, Xxxxx 00000

Attention: Xxxxx Xxxxxx

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 88
94
Facility A Commitment FLEET NATIONAL BANK
---------------------
$23,520,000

Facility B Commitment By /s/ Xxxxxx Xxxxx
--------------------- --------------------------------------
$18,480,000 Title: Assistant Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Fleet National Bank
One Landmark Square
Mailstop CTFD 0752
Xxxxxxxx, XX 00000

Address for Notices:

Fleet National Bank
One Landmark Square
Mailstop CTFD 0752
Xxxxxxxx, XX 00000

Attention: Xxxxx Xxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 89
95
Facility A Commitment THE FUJI BANK, LIMITED, Houston Agency
---------------------
$23,520,000

Facility B Commitment By /s/ Xxxxxx X. Xxxxxxxx III
--------------------- --------------------------------------
$18,480,000 Title: Vice President & Manager

Lending Office for Base Rate Loans and
Eurodollar Loans:

The Fuji Bank, Limited,
Houston Agency
One Houston Center
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000

Telecopier No.: (000) 000-0000

Address for Notices:

The Fuji Bank, Limited,
Houston Agency
One Houston Center
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000

Attention: Xxxx Xxxxxx

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 90
96
Facility A Commitment XXXXXX TRUST AND SAVINGS BANK
---------------------
$23,520,000

Facility B Commitment By /s/ Xxxx Xxxxx
--------------------- -------------------------------------------
$18,480,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx Xxxx
Xxxxxxx, XX 00000

Address for Notices:

Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx Xxxx
Xxxxxxx, XX 00000

Attention: Xxxxx Xxxx/Marielcy Xxxxxxx

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000/7664

Credit Agreement 91
97
Facility A Commitment THE LONG-TERM CREDIT BANK OF JAPAN,
---------------------
$23,520,000 LIMITED, NEW YORK BRANCH

Facility B Commitment By /s/ Xxxxx Xxxxxxx
--------------------- --------------------------------------
$18,480,000 Title: Head of Southwest Region

Lending Office for Base Rate Loans and
Eurodollar Loans:

The Long-Term Credit Bank of Japan,
Limited, New York Branch
000 Xxxxxxxx
Xxx Xxxx, XX 00000

Address for Notices:

The Long-Term Credit Bank of Japan,
Limited, New York Branch
Dallas Representative Xxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000 Xxxx
Xxxxxx, XX 00000

Attention: Xxxxxx X. Xxxxxx

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 92
98
Facility A Commitment BANQUE PARIBAS
---------------------
$23,520,000

Facility B Commitment By /s/ Xxxxx Xxxxx
--------------------- ---------------------------
$18,480,000 Title: Vice President

By /s/ Xxxxx Xxxxxxxx
-------------------------
Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Banque Paribas
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000

Address for Notices:

Banque Paribas
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000

Attention: Xxxxx X. Xxxxx

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 93
99
Facility A Commitment XXXXX FARGO BANK (TEXAS), N.A.
---------------------
$23,520,000

Facility B Commitment By /s/ Xxxxxxx X.X. Xxxx
--------------------- -------------------------------------------
$18,480,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Xxxxx Fargo Bank (Texas), N.A.
0000 Xxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000

Address for Notices:

Xxxxx Fargo Bank (Texas), N.A.
0000 Xxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000

Attention: Xxxxxxx Xxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 94
100
Facility A Commitment BANCO POPULAR DE PUERTO RICO
---------------------
$22,400,000

Facility B Commitment By /s/ Xxxx Xxxxxxx Xxxxxx
--------------------- -------------------------------------------
$17,600,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Banco Popular de Puerto Rico
0 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000

Address for Notices:

Banco Popular de Puerto Rico
0 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000

Attention: C. Xxxxxx Xxx
Vice President

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

With a copy to:

Xxxxxx Xxxx
Banco Popular de Puerto Rico
Xxxxx de Xxxx 000
Xxxxxxx Xxxxxx Xxxxxxxx
Xxxxx Xxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000

Credit Agreement 95
101
Facility A Commitment CIBC INC.
---------------------
$22,400,000

Facility B Commitment By /s/ Xxxxxxxxxxx X. Xxxxxxxxxxx
--------------------- -------------------------------------------
$17,600,000 Title: Director, CIBC Xxxxxxxxxxx
AS AGENT

Lending Office for Base Rate Loans and
Eurodollar Loans:

CIBC Inc.
0000 Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000

Address for Notices:

CIBC Xxxxxxxxxxx Corp.
Two Houston Center, Suite 1200
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000

Attention: Xxxx Xxxxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

With a copy to:

CIBC Xxxxxxxxxxx Corp.
0000 Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000

Attention: Xxxxxx Xxxxxx (Borrowings)
Xxx Xxxxxxx
(Other Notices)

Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
(Xxxxxxx)
000-000-0000
(Xxxxxx)

Credit Agreement 96
102
Facility A Commitment BANKBOSTON, N.A.
---------------------
$19,600,000

Facility B Commitment By /s/ Xxxxx Xxxxxxxxx
--------------------- -------------------------------------------
$15,400,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

BANKBOSTON, N.A.
000 Xxxxxxx Xxxxxx
Mail Code 01-09-04
Xxxxxx, XX 00000

Address for Notices:

BANKBOSTON, N.A.
000 Xxxxxxx Xxxxxx
Mail Code 01-09-04
Xxxxxx, XX 00000

Attention: Xxxx Xxxxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 97
103
Facility A Commitment NATEXIS BANQUE BFCE
---------------------
$19,600,000

Facility B Commitment By /s/ Xxxx X. Xxxxxxxxxx
--------------------- -------------------------------------------
$15,400,000 Title: Vice President and Regional
Manager

By /s/ Xxxx X. Xxxxxx
-------------------------------------
Title: Assistant Treasurer

Lending Office for Base Rate Loans and
Eurodollar Loans:

NATEXIS Banque BFCE
New York Branch
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000

Address for Notices:

NATEXIS Banque BFCE
Southwest Representative Xxxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000

Attention: Xxxxx XxXxxxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

With a copy to:

NATEXIS Banque
New York Branch
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000

Attention: Xxxx Xxxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 98
104
Facility A Commitment BHF BANK AKTIENGESELLSCHAFT
---------------------
$19,600,000

Facility B Commitment By /s/ Xxxx Xxxxx
--------------------- ----------------------------------------
$15,400,000 Title: Assistant Vice President

By /s/ Xxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

BHF Bank Aktiengesellschaft
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000

Address for Notices:

BHF Bank Aktiengesellschaft
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000

Attention: Xxxx Xxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 99
105
Facility A Commitment THE BANK OF TOKYO - MITSUBISHI, LTD.
---------------------
$19,600,000

Facility B Commitment By /s/ X. Xxxxxx
--------------------- -------------------------------------------
$15,400,000 Title: Vice President & Manager

Lending Office for Base Rate Loans and
Eurodollar Loans:

The Bank of Tokyo - Mitsubishi, Ltd.
0000 Xxxx Xxxxxx, Xxxxx 0000
Lock Box 118
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxx, XX 00000

Address for Notices:

The Bank of Tokyo - Mitsubishi, Ltd.
0000 Xxxx Xxxxxx, Xxxxx 0000
Lock Box 118
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxx, XX 00000

Attention: Xxxx Xxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000 x000

Credit Agreement 100
106
Facility A Commitment COMPAGNIE FINANCIERE DE
--------------------- CIC ET DE L'UNION EUROPEENNE
$19,600,000

Facility B Commitment By /s/ Xxxxx X'Xxxxx
--------------------- -------------------------------------------
$15,400,000 Title: Vice President

By /s/ Xxxx Xxxxxxx
-------------------------------------
Title: First Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Compagnie Financiere de
CIC et de l'Union Europeenne
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000

Address for Notices:

Compagnie Financiere de
CIC et de l'Union Europeenne
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000

Attention: Xxxxx X. X'Xxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 101
107
Facility A Commitment COOPERATIEVE CENTRALE RAIFFEISEN-
--------------------- BOERENLEENBANK B.A., "RABOBANK
$19,600,000 NEDERLAND", NEW YORK BRANCH

Facility B Commitment
---------------------
$15,400,000 By /s/ Xxxxxxxx X. Xxxxxxxxxx
-------------------------------------
Title: Vice President

By /s/ Xxx Xxxxx
-------------------------------------
Title: Senior Credit Officer

Lending Office for Base Rate Loans and
Eurodollar Loans:

Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank
Nederland", New York Branch
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000

Address for Notices:

Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank
Nederland", New York Branch
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000

Attention: Corporate Services
Department

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

With a copy to:

Rabobank Nederland
One Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxx Xxx 00
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000

Credit Agreement 102
108
Facility A Commitment SOCIETE GENERALE, Southwest Agency
---------------------
$19,600,000

Facility B Commitment By /s/ Xxxxxxx X. Xxxxx
--------------------- -------------------------------------------
$15,400,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Societe Generale
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000

Address for Notices:

Societe Generale
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000

Attention: Xxxx Xxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 103
109
Facility A Commitment THE SUMITOMO BANK, LIMITED
---------------------
$19,600,000

Facility B Commitment By /s/ Xxxxx Xxxx
--------------------- -------------------------------------------
$15,400,000 Title: Joint General Manager

Lending Office for Base Rate Loans and
Eurodollar Loans:

The Sumitomo Bank, Limited
New York Branch
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000

Address for Notices:

The Sumitomo Bank, Limited
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000

Attention: Xxxxxxx Xxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 104
110
Facility A Commitment THE TOYO TRUST & BANKING CO., LTD.
---------------------
$19,600,000

Facility B Commitment By /s/ Xxxxxxx Xxxxxx
--------------------- -------------------------------------------
$15,400,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

The Toyo Trust and Banking Co., Ltd.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000

Address for Notices:

The Toyo Trust and Banking Co., Ltd.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000

Attention: Xxxxxx Xxxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 105
111
Facility A Commitment THE SUMITOMO TRUST & BANKING
--------------------- CO. LTD., New York Branch
$16,800,000

Facility B Commitment By /s/ Xxxxx X. Xxxxxx
--------------------- -------------------------------------------
$13,200,000 Title: Senior Vice President
Manager Corporate Finance
Dept.

Lending Office for Base Rate Loans and
Eurodollar Loans:

The Sumitomo Trust & Banking Co. Ltd.,
New York Branch
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000

Address for Notices:

The Sumitomo Trust & Banking Co. Ltd.,
New York Branch
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000

Attention: Xxxxxxxxx Xxxxx

Telecopier No.: 212-418-4848

Telephone No.: 000-000-0000

Credit Agreement 106
112
Facility A Commitment AMSOUTH BANK
---------------------
$14,000,000

Facility B Commitment By /s/ Xxxxxx X. Xxxxxxxx
--------------------- ---------------------------------------
$11,000,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

AmSouth Bank
0000 0xx Xxxxxx, Xxxxx
Sonat Tower - 7th
Xxxxxxxxxx, XX 00000

Address for Notices:

AmSouth Bank
0000 0xx Xxxxxx, Xxxxx
Sonat Tower - 7th
Xxxxxxxxxx, XX 00000

Attention: Xxxxxx X. Xxxxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 107
113
Facility A Commitment BANQUE NATIONALE DE PARIS,
---------------------
$14,000,000 Houston Agency

Facility B Commitment By /s/ Xxxxx X. Xxxx
--------------------- ------------------------------------------
$11,000,000 Title: Banking Officer

Lending Office for Base Rate Loans and
Eurodollar Loans:

Banque Nationale de Paris
333 Clay Street, Suite 0000
Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000

Attention: Xxxxx Xxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Address for Notices:

Banque Nationale de Paris
000 Xxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000

Attention: Xxxxx Xxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 108
114
Facility A Commitment COMERICA BANK
---------------------
$14,000,000

Facility B Commitment By /s/ Xxx X. Xxxxxxxx
--------------------- ------------------------------------
$11,000,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Comerica Bank
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000

Address for Notices:

Comerica Bank
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000

Attention: Xx. Xxx X. Xxxxxxxx
Vice President

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 109
115
Facility A Commitment INDUSTRIAL BANK OF JAPAN, LIMITED
---------------------
$14,000,000

Facility B Commitment By /s/ Xxxxxx Xxxxx
--------------------- -------------------------------------------
$11,000,000 Title: Senior Vice President/
Deputy General Manager

Lending Office for Base Rate Loans and
Eurodollar Loans:

Industrial Bank of Japan
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000

Address for Notices:

Industrial Bank of Japan
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000

Attention: Xxxxxxx Xxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 110
116
Facility A Commitment MELLON BANK, N.A.
---------------------
$14,000,000

Facility B Commitment By /s/ Xxxx X. Xxxxxxx
--------------------- ----------------------------------
$11,000,000 Title: Assistant Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Mellon Bank, N.A.
Three Mellon Bank Center
Room 153-1200
Xxxxxxxxxx, XX 00000

Attention: Loan Administrator
Telecopier No: 000-000-0000
Telephone No: 000-000-0000

Address for Notices:

Mellon Bank, N.A.
Three Mellon Bank Center
Room 153-1200
Xxxxxxxxxx, XX 00000

Attention: Loan Administrator
Telecopier No: 000-000-0000
Telephone No: 000-000-0000

With a copy to:
Mellon Bank, N.A.
One Mellon Bank Center
Room 151-4535
Xxxxxxxxxx, XX 00000

Attention: Xxxx Xxxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 111
117
Facility A Commitment THE MITSUBISHI TRUST AND BANKING
---------------------
$14,000,000 CORPORATION, CHICAGO BRANCH

Facility B Commitment By /s/ Xxxxx Xxxxxxxx
--------------------- -------------------------------------------
$11,000,000 Title: Chief Manager

Lending Office for Base Rate Loans and
Eurodollar Loans:

The Mitsubishi Trust and Banking
Corporation, Chicago Branch
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000

Address for Notices:

The Mitsubishi Trust and Banking
Corporation, Chicago Branch
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000

Attention: Xxxxx Xxxx XxXxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 112
118
Facility A Commitment NATIONAL CITY BANK OF KENTUCKY
---------------------
$14,000,000

Facility B Commitment By /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------- -------------------------------------------
$11,000,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

National City Bank
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000

Address for Notices:

National City Bank
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000

Attention: Xxx Xxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 113
119
Facility A Commitment THE ROYAL BANK OF SCOTLAND plc
---------------------
$14,000,000

Facility B Commitment By /s/ Xxxxx Xxxxxx
--------------------- -------------------------------------------
$11,000,000 Title: Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

The Royal Bank of Scotland plc
00 Xxxx Xxxxxx
Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000

Attention: Xxxxxxx Xxxxxxx

Address for Notices:

The Royal Bank of Scotland plc
00 Xxxx Xxxxxx
Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000

Attention: Xxxxx Xxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 114
120
Facility A Commitment SANWA BANK, LIMITED
---------------------
$14,000,000

Facility B Commitment By /s/ Xxxx Xxxxxx
--------------------- ----------------------------------------
$11,000,000 Title: Assistant Vice President

Lending Office for Base Rate Loans and
Eurodollar Loans:

Sanwa Bank, Limited
Park Avenue Plaza
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000

Attention: Xx. Xxxxx Hara
Loan Administration

Address for Notices:

Sanwa Bank, Limited
0000 Xxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000

Attention: Xxxx Xxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 115
121
Facility A Commitment THE TOKAI BANK, LIMITED, New York Branch
---------------------
$14,000,000

Facility B Commitment By /s/ Xxxxx Xxx
--------------------- -------------------------------------------
$11,000,000 Title: Assistant General Manager

Lending Office for Base Rate Loans and
Eurodollar Loans:

The Tokai Bank, Limited, New York
Branch
00 Xxxx 00xx Xxxxxx
Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 10055

Address for Notices:

The Tokai Bank, Limited, New York
Branch
00 Xxxx 00xx Xxxxxx
Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 10055

Attention: Xx. Xxxxxxx Xxxxxx

Telecopier No.: 000-000-0000

Telephone No.: 000-000-0000

Credit Agreement 116
122
AGENT
-----

FIRST UNION NATIONAL BANK,
as Agent

By /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President

Address for Notices to
the Agent:

First Union National Bank
000 X. Xxxxxxx Xxxxxx XX-00
Xxxxxxxxx, XX 00000-0000

Attention: Syndication Agency Services

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Credit Agreement 117
123
EXHIBIT A-1

[Form of Facility A Note]

PROMISSORY NOTE

$ , 1997
--------------- ---------------
New York, New York

FOR VALUE RECEIVED, SUIZA FOODS CORPORATION, a Delaware
corporation (the "Company"), hereby promises to pay to __________________ (the
"Lender"), for account of its respective Applicable Lending Offices provided
for by the Credit Agreement referred to below, at the principal office of First
Union National Bank (the "Agent"), the principal sum of _______________ Dollars
(or such lesser amount as shall equal the aggregate unpaid principal amount of
the Facility A Loans made by the Lender to the Company under the Credit
Agreement), in lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount of each
such Facility A Loan, at such office, in like money and funds, for the period
commencing on the date of such Facility A Loan until such Facility A Loan shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.

The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Facility A Loan made by the Lender to the
Company, and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of this Note,
endorsed by the Lender on the schedule attached hereto or any continuation
thereof, provided that the failure of the Lender to make any such recordation
or endorsement shall not affect the obligations of the Company to make a
payment when due of any amount owing under the Credit Agreement or hereunder in
respect of the Facility A Loans made by the Lender.

This Note is one of the Facility A Notes referred to in the
Credit Agreement dated as of November __, 1997 (as modified and supplemented
and in effect from time to time, the "Credit Agreement") between the Company,
the lenders party thereto and the Agent, and evidences Facility A Loans made by
the Lender thereunder. Terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.

The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and for prepayments
of Facility A Loans upon the terms and conditions specified therein.

Except as permitted by Section 11.06(b) of the Credit Agreement,
this Note may not be assigned by the Lender to any other Person.

Schedule II 1
124
This Note shall be governed by, and construed in accordance with,
the law of the State of New York.

SUIZA FOODS CORPORATION

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

Schedule II 2
125
SCHEDULE OF FACILITY A LOANS

This Note evidences Facility A Loans made, Continued or Converted
under the within-described Credit Agreement to the Company, on the dates, in
the principal amounts, of the Types, bearing interest at the rates and having
Interest Periods (if applicable) of the durations set forth below, subject to
the payments, Continuations, Conversions and prepayments of principal set forth
below:

Amount
Date Made, Duration Prepaid, Paid,
Continued Principal of Continued Unpaid
or Amount Type Interest Interest or Principal Notation
Converted of Loan of Loan Rate Period Converted Amount Made By
--------- ------- ------- ---- ------ --------- ------ -------

Schedule II 3
126
EXHIBIT A-2

[Form of Facility B Note]

PROMISSORY NOTE

$ , 1997
--------------- ---------------
New York, New York

FOR VALUE RECEIVED, SUIZA FOODS CORPORATION, a Delaware
corporation (the "Company"), hereby promises to pay to __________________ (the
"Lender"), for account of its respective Applicable Lending Offices provided
for by the Credit Agreement referred to below, at the principal office of First
Union National Bank (the "Agent"), the principal sum of _______________ Dollars
(or such lesser amount as shall equal the unpaid principal amount of the
Facility B Loan made by the Lender to the Company under the Credit Agreement),
in lawful money of the United States of America and in immediately available
funds, on the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount of such Facility
B Loan, at such office, in like money and funds, for the period commencing on
the date of such Facility B Loan until such Facility B Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement.

The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of the Facility B Loan made by the Lender to the
Company, and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of this Note,
endorsed by the Lender on the schedule attached hereto or any continuation
thereof, provided that the failure of the Lender to make any such recordation
or endorsement shall not affect the obligations of the Company to make a
payment when due of any amount owing under the Credit Agreement or hereunder in
respect of the Facility B Loan made by the Lender.

This Note is one of the Facility B Notes referred to in the
Credit Agreement dated as of November __, 1997 (as modified and supplemented
and in effect from time to time, the "Credit Agreement") between the Company,
the lenders party thereto and the Agent, and evidences the Facility B Loan made
by the Lender thereunder. Terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.

The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and for prepayments
of Facility B Loans upon the terms and conditions specified therein.

Except as permitted by Section 11.06(b) of the Credit Agreement,
this Note may not be assigned by the Lender to any other Person.

Facility B Note 1

127
This Note shall be governed by, and construed in accordance with,
the law of the State of New York.

SUIZA FOODS CORPORATION

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

Facility B Note 2

128
SCHEDULE OF FACILITY B LOAN

This Note evidences the Facility B Loan made, Continued or
Converted under the within-described Credit Agreement to the Company, on the
dates, in the principal amounts, of the Types, bearing interest at the rates
and having Interest Periods (if applicable) of the durations set forth below,
subject to the payments, Continuations, Conversions and prepayments of
principal set forth below:

Facility B Note 3

129
EXHIBIT B
Conformed Copy

SECURITY AGREEMENT

SECURITY AGREEMENT dated as of November 26, 1997 between: SUIZA
FOODS CORPORATION, a corporation duly organized and validly existing under the
laws of the State of Delaware (the "Company"); and FIRST UNION NATIONAL BANK,
as administrative agent for the banks or other financial institutions or
entities party, as lenders, to the Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the "Agent").

The Company, certain lenders and the Agent are parties to a
Credit Agreement dated as of November 26, 1997 (as modified and supplemented
and in effect from time to time, the "Credit Agreement"), providing, subject to
the terms and conditions thereof, for extensions of credit (by making of loans
and issuing letters of credit) to be made by said lenders to the Company in an
aggregate principal or face amount not exceeding $1,250,000,000.

To induce said lenders to enter into the Credit Agreement, to
extend credit thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company has
agreed to pledge and grant a security interest in the Collateral (as
hereinafter defined) as security for the Secured Obligations (as so defined).
Accordingly, the parties hereto agree as follows:

Section 1. Definitions. Terms defined in the Credit
Agreement are used herein as defined therein. In addition, as used herein:

"Collateral" shall have the meaning ascribed thereto in Section 3
hereof.

"Collateral Account" shall have the meaning ascribed thereto in
Section 4.01 hereof.

"Issuers" shall mean, collectively, (a) the respective
corporations identified on Annex 1 hereto under the caption "Issuer" and (b)
any entity that shall, after the date hereof, become a Subsidiary of the
Company.

"Pledged Stock" shall have the meaning ascribed thereto in
Section 3(a) hereof.

"Secured Obligations" shall mean, collectively, (a) the principal
of and interest (including post-petition interest, if any) on the Loans made by
the Lenders to, and the Note(s) held by each Lender of, the Company and all
other amounts from time to time owing to the Lenders or the Agent by the
Company under the Credit Agreement (including, without limitation, Section 5
thereof) and the other Loan Documents to which the Company is a party and all

Security Agreement 1

130
Reimbursement Obligations and (b) all obligations of the Company to the Lenders
and the Agent hereunder.

"Stock Collateral" shall have the meaning ascribed thereto in
Section 3(c) hereof.

"Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect from time to time in the State of New York.

Section 2. Representations and Warranties. The Company
represents and warrants to the Lenders and the Agent that:

(a) The Company is the sole beneficial owner of the
Collateral and no Lien exists or will exist upon the Collateral at any time
(and no right or option to acquire the same exists in favor of any other
Person), except for Liens permitted under Section 8.06 of the Credit Agreement
and except for the pledge and security interest in favor of the Agent for the
benefit of the Lenders created or provided for herein, which pledge and
security interest constitute a first priority perfected pledge and security
interest in and to all of the Collateral (except for such Liens as are
permitted under Section 8.06 of the Credit Agreement and except as otherwise
provided herein).

(b) The Pledged Stock represented by the certificates
identified in Annex 1 hereto is, and all other Pledged Stock in which the
Company shall hereafter grant a security interest pursuant to Section 3 hereof
will be, duly authorized, validly existing, fully paid and non-assessable and
none of such Pledged Stock is or will be subject to any contractual
restriction, or any restriction under the charter or by-laws of the respective
Issuer of such Pledged Stock, upon the transfer of such Pledged Stock (except
for any such restriction contained herein or in, or permitted in, the Credit
Agreement).

(c) Except as permitted under the Credit Agreement and
indicated on Annex 1, the Pledged Stock represented by the certificates
identified in Annex 1 hereto constitutes all of the issued and outstanding
shares of capital stock of any class of the Issuers beneficially owned by the
Company on the date hereof (whether or not registered in the name of the
Company) and said Annex 1 correctly identifies, as at the date hereof, the
respective Issuers of such Pledged Stock, the respective class and par value of
the shares comprising such Pledged Stock and the respective number of shares
(and registered owners thereof) represented by each such certificate.

Section 3. Collateral. As collateral security for the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Company hereby pledges and grants to
the Agent, for the benefit of the Lenders as hereinafter provided, a security
interest in all of the Company's right, title and interest in the following
property, whether now owned by the Company or hereafter acquired and whether
now existing or hereafter coming into existence (all being collectively
referred to herein as "Collateral"):

(a) the shares of common stock of the Issuers represented
by the certificates identified in Part A of Annex 1 hereto, the limited
liability company ownership interests identified

Security Agreement 2
131
in Part B of Annex 1 hereto and all other shares of capital stock and ownership
interests of whatever class of any Issuer (other than Xxxxxxx), now or
hereafter owned by the Company, in each case together with the certificates
evidencing the same (collectively, the "Pledged Stock");

(b) all shares, securities, ownership interests, moneys or
property representing a dividend on any of the Pledged Stock, or representing a
distribution or return of capital upon or in respect of the Pledged Stock, or
resulting from a split-up, revision, reclassification or other like change of
the Pledged Stock or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or otherwise
in respect of, the Pledged Stock;

(c) without affecting the obligations of the Company under
any provision prohibiting such action hereunder or under the Credit Agreement,
in the event of any consolidation or merger in which an Issuer is not the
surviving corporation, all shares of each class of the capital stock of the
successor corporation (unless such successor corporation is the Company itself)
formed by or resulting from such consolidation or merger (the Pledged Stock,
together with all other certificates, shares, securities, ownership interests,
properties or moneys as may from time to time be pledged hereunder pursuant to
clause (a) or (b) above and this clause (c) being herein collectively called
the "Stock Collateral");

(d) the balance from time to time in the Collateral
Account; and

(e) all proceeds, rents, profits, income, benefits,
substitutions and replacements of and to any of the property of the Company
described in the preceding clauses of this Section 3 (including, without
limitation, any proceeds of insurance thereon and all causes of action, claims
and warranties now or hereafter held by the Company in respect of any of the
items listed above) and, to the extent related to any property described in
said clauses or such proceeds, all books, correspondence, credit files,
records, invoices and other papers, including without limitation all tapes,
cards, computer runs and other papers and documents in the possession or under
the control of the Company or any computer bureau or service company from time
to time acting for the Company.

Section 4. Cash Proceeds of Collateral.

4.01 Collateral Account. There is hereby established with
the Agent a cash collateral account (the "Collateral Account") in the name and
under the control of the Agent into which there shall be deposited from time to
time the cash proceeds of any of the Collateral (including proceeds of
insurance thereon) required to be delivered to the Agent pursuant hereto and
into which the Company may from time to time deposit any additional amounts
that it wishes to pledge to the Agent for the benefit of the Lenders as
additional collateral security hereunder. The balance from time to time in the
Collateral Account shall constitute part of the Collateral hereunder and shall
not constitute payment of the Secured Obligations until applied as hereinafter
provided. Except as expressly provided in the next sentence, the Agent shall
remit the collected balance outstanding to the credit of the Collateral Account
to or upon the order of the Company as the Company shall from time to time
instruct. However, at any time following the occurrence

Security Agreement 3
132
and during the continuance of an Event of Default, the Agent may (and, if
instructed by the Lenders as specified in Section 10.03 of the Credit
Agreement, shall) in its (or their) discretion apply or cause to be applied
(subject to collection) the balance from time to time outstanding to the credit
of the Collateral Account to the payment of the Secured Obligations in the
manner specified in Section 5.09 hereof. The balance from time to time in the
Collateral Account shall be subject to withdrawal only as provided herein.

4.02 Proceeds. The Company agrees that, at any time after
the occurrence and during the continuance of an Event of Default, if the
proceeds of any Collateral hereunder shall be received by it, the Company
shall, upon the request of the Agent, as promptly as possible deposit such
proceeds into the Collateral Account. Until so deposited, all such proceeds
shall be held in trust by the Company for and as the property of the Agent and
shall not be commingled with any other funds or property of the Company.

4.03 Investment of Balance in Collateral Account. Amounts
on deposit in the Collateral Account shall be invested from time to time in
such Permitted Investments as the Company (or, after the occurrence and during
the continuance of an Event of Default, the Agent) shall determine, which
Permitted Investments shall be held in the name and be under the control of the
Agent, provided that at any time after the occurrence and during the
continuance of an Event of Default, the Agent may (and, if instructed by the
Lenders as specified in Section 10.03 of the Credit Agreement, shall) in its
(or their) discretion at any time and from time to time elect to liquidate any
such Permitted Investments and to apply or cause to be applied the proceeds
thereof to the payment of the Secured Obligations in the manner specified in
Section 5.09 hereof.

4.04 Cover for Letter of Credit Liabilities. Amounts
deposited into the Collateral Account as cover for Letter of Credit Liabilities
under the Credit Agreement pursuant to Section 2.09(f) or Section 9 thereof
shall be held by the Agent in a separate sub-account (designated "Letter of
Credit Liabilities Sub-Account") and all amounts held in such sub-account shall
constitute collateral security first for the Letter of Credit Liabilities
outstanding from time to time and second as collateral security for the other
Secured Obligations hereunder.

Section 5. Further Assurances; Remedies. In furtherance of
the grant of the pledge and security interest pursuant to Section 3 hereof, the
Company hereby agrees with each Lender and the Agent as follows:

5.01 Delivery and Other Perfection. The Company shall:

(a) if any of the shares, securities, moneys or property
required to be pledged by the Company under clauses (a), (b) and (c) of Section
3 hereof are received by the Company, forthwith either (x) transfer and deliver
to the Agent such shares or securities so received by the Company (together
with the certificates for any such shares and securities duly endorsed in blank
or accompanied by undated stock powers duly executed in blank), all of which
thereafter shall be held by the Agent, pursuant to the terms of this Agreement,
as part of the Collateral or (y) take such other action as the Agent shall deem
necessary or appropriate to duly record the Lien created hereunder in such
shares, securities, moneys or property in said clauses (a), (b) and (c);

Security Agreement 4
133
(b) give, execute, deliver, file and/or record any
financing statement, notice, instrument, document, agreement or other papers
that may be necessary or desirable (in the reasonable judgment of the Agent) to
create, preserve, perfect or validate the security interest granted pursuant
hereto or to enable the Agent to exercise and enforce its rights hereunder with
respect to such pledge and security interest, including, without limitation,
causing any or all of the Stock Collateral to be transferred of record into the
name of the Agent or its nominee (and the Agent agrees that if any Stock
Collateral is transferred into its name or the name of its nominee, the Agent
will thereafter promptly give to the Company copies of any notices and
communications received by it with respect to the Stock Collateral);

(c) keep full and accurate books and records relating to
the Collateral, and stamp or otherwise xxxx such books and records in such
manner as the Agent may reasonably require in order to reflect the security
interests granted by this Agreement; and

(d) permit representatives of the Agent, upon reasonable
notice, at any time during normal business hours to inspect and make abstracts
from its books and records pertaining to the Collateral, and after the
occurrence and during the continuance of any Event of Default, permit
representatives of the Agent to be present at the Company's place of business
to receive copies of all communications and remittances relating to the
Collateral, and forward copies of any notices or communications received by the
Company with respect to the Collateral, all in such manner as the Agent may
require.

5.02 Other Financing Statements and Liens. Except as
otherwise permitted under Section 8.06 of the Credit Agreement, without the
prior written consent of the Agent (granted with the authorization of the
Lenders as specified in Section 10.10 of the Credit Agreement), the Company
shall not file or suffer to be on file, or authorize or permit to be filed or
to be on file, in any jurisdiction, any financing statement or like instrument
with respect to the Collateral in which the Agent is not named as the sole
secured party for the benefit of the Lenders.

5.03 Preservation of Rights. The Agent shall not be
required to take steps necessary to preserve any rights against prior parties
to any of the Collateral.

5.04 Special Provisions Relating to Stock Collateral.

(a) Except as permitted under the Credit Agreement and
indicated on Annex 1, the Company will cause the Stock Collateral to constitute
at all times 100% of the total number of shares of each class of capital stock
of each Issuer then outstanding.

(b) So long as no Event of Default shall have occurred and
be continuing, the Company shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Stock Collateral for
all purposes not inconsistent with the terms of this Agreement, the Credit
Agreement, the Notes or any other Loan Document, provided that the Company
agrees that it will not vote the Stock Collateral in any manner that is
inconsistent with

Security Agreement 5
134
the terms of this Agreement, the Credit Agreement, the Notes or any such other
Loan Document; and the Agent shall execute and deliver to the Company or cause
to be executed and delivered to the Company all such proxies, powers of
attorney, dividend and other orders, and all such instruments, without
recourse, as the Company may reasonably request for the purpose of enabling the
Company to exercise the rights and powers that it is entitled to exercise
pursuant to this Section 5.04(b).

(c) Unless and until an Event of Default has occurred and
is continuing, the Company shall be entitled to receive and retain any
dividends on the Stock Collateral other than shares or securities to be
transferred or delivered to the Agent in accordance with Section 5.01(a)
hereof.

(d) If any Event of Default shall have occurred, then so
long as such Event of Default shall continue, and whether or not the Agent or
any Lender exercises any available right to declare any Secured Obligation due
and payable or seeks or pursues any other relief or remedy available to it
under applicable law or under this Agreement, the Credit Agreement, the Notes
or any other agreement relating to such Secured Obligation, all dividends and
other distributions on the Stock Collateral shall be paid directly to the Agent
and retained by it in the Collateral Account as part of the Stock Collateral,
subject to the terms of this Agreement, and, if the Agent shall so request in
writing, the Company agrees to execute and deliver to the Agent appropriate
additional dividend, distribution and other orders and documents to that end,
provided that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Agent shall, upon request of the Company
(except to the extent theretofore applied to the Secured Obligations), be
returned by the Agent to the Company.

5.05 Events of Default, Etc. During the period during which
an Event of Default shall have occurred and be continuing:

(a) the Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or otherwise
modify the terms of, any of the Collateral;

(b) the Agent shall have all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform Commercial
Code (whether or not said Code is in effect in the jurisdiction where the
rights and remedies are asserted) and such additional rights and remedies to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights and remedies hereunder may be asserted, including, without
limitation, the right, to the maximum extent permitted by law, to exercise all
voting, consensual and other powers of ownership pertaining to the Collateral
as if the Agent were the sole and absolute owner thereof (and the Company
agrees to take all such action as may be appropriate to give effect to such
right);

(c) the Agent in its discretion may, in its name or in the
name of the Company or otherwise, demand, xxx for, collect or receive any money
or property at any time payable or

Security Agreement 6
135
receivable on account of or in exchange for any of the Collateral, but shall be
under no obligation to do so; and

(d) the Agent may, upon ten Business Days' prior written
notice to the Company of the time and place, with respect to the Collateral or
any part thereof that shall then be or shall thereafter come into the
possession, custody or control of the Agent, the Lenders or any of their
respective agents, sell, lease, assign or otherwise dispose of all or any part
of such Collateral, at such place or places as the Agent deems best, and for
cash or for credit or for future delivery (without thereby assuming any credit
risk), at public or private sale, without demand of performance or notice of
intention to effect any such disposition or of the time or place thereof
(except such notice as is required above or by applicable statute and cannot be
waived), and the Agent or any Lender or anyone else may be the purchaser,
lessee, assignee or recipient of any or all of the Collateral so disposed of at
any public sale (or, to the extent permitted by law, at any private sale) and
thereafter hold the same absolutely, free from any claim or right of whatsoever
kind, including any right or equity of redemption (statutory or otherwise), of
the Company, any such demand, notice and right or equity being hereby expressly
waived and released. The Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the sale may be so adjourned.

The proceeds of each collection, sale or other disposition under this Section
5.05, shall be applied in accordance with Section 5.09 hereof.

The Company recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Agent may be compelled, with respect to any sale of all or
any part of the Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. The Company
acknowledges that any such private sales may be at prices and on terms less
favorable to the Agent than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Agent shall have no obligation to engage in public sales
and no obligation to delay the sale of any Collateral for the period of time
necessary to permit the respective Issuer or issuer thereof to register it for
public sale.

5.06 Deficiency. If the proceeds of sale, collection or
other realization of or upon the Collateral pursuant to Section 5.05 hereof are
insufficient to cover the costs and expenses of such realization and the
payment in full of the Secured Obligations, the Company shall remain liable for
any deficiency.

5.07 Removals, Etc. Without at least 30 days' prior written
notice to the Agent, the Company shall not (a) maintain any of its books and
records with respect to the Collateral at any office or maintain its principal
place of business at any place, other than at the address indicated beneath the
signature of the Company to the Credit Agreement or at the offices of its

Security Agreement 7
136
legal counsel, or (b) change its name, or the name under which it does
business, from the name shown on the signature pages hereto.

5.08 Private Sale. The Agent and the Lenders shall incur no
liability as a result of the sale of the Collateral, or any part thereof, at
any private sale pursuant to Section 5.05 hereof conducted in a commercially
reasonable manner. The Company hereby waives any claims against the Agent or
any Lender arising by reason of the fact that the price at which the Collateral
may have been sold at such a private sale was less than the price that might
have been obtained at a public sale or was less than the aggregate amount of
the Secured Obligations, even if the Agent accepts the first offer received and
does not offer the Collateral to more than one offeree.

5.09 Application of Proceeds. Except as otherwise herein
expressly provided and except as provided below in this Section 5.09, the
proceeds of any collection, sale or other realization of all or any part of the
Collateral pursuant hereto, and any other cash at the time held by the Agent
under Section 4 hereof or this Section 5, shall be applied by the Agent:

First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable out-of-pocket costs
and expenses of the Agent and the fees and expenses of its agents and counsel,
and all expenses incurred and advances made by the Agent in connection
therewith;

Next, to the payment in full of the Secured Obligations, in each
case equally and ratably in accordance with the respective amounts thereof then
due and owing or as the Lenders holding the same may otherwise agree; and

Finally, to the payment to the Company, or its successors or
assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining.

Notwithstanding the foregoing, the proceeds of any cash or other amounts held
in the "Letter of Credit Liabilities Sub- Account" of the Collateral Account
pursuant to Section 4.04 hereof shall be applied first to the Letter of Credit
Liabilities outstanding from time to time and second to the other Secured
Obligations in the manner provided above in this Section 5.09.

As used in this Section 5, "proceeds" of Collateral shall mean
cash, securities and other property realized in respect of, and distributions
in kind of, Collateral, including any thereof received under any
reorganization, liquidation or adjustment of debt of the Company or any issuer
of or obligor on any of the Collateral.

5.10 Attorney-in-Fact. Without limiting any rights or
powers granted by this Agreement to the Agent while no Event of Default has
occurred and is continuing, upon the occurrence and during the continuance of
any Event of Default, the Agent is hereby appointed the attorney-in-fact of the
Company for the purpose of carrying out the provisions of this Section 5 and
taking any action and executing any instruments that the Agent may deem
necessary or advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, so long as the

Security Agreement 8
137
Agent shall be entitled under this Section 5 to make collections in respect of
the Collateral, the Agent shall have the right and power to receive, endorse
and collect all checks made payable to the order of the Company representing
any dividend, payment or other distribution in respect of the Collateral or any
part thereof and to give full discharge for the same.

5.11 Perfection. Prior to or concurrently with the
execution and delivery of this Agreement, the Company shall (a) file such
financing statements and other documents in such offices as the Agent may
request to perfect the security interests granted by Section 3 of this
Agreement and (b) deliver to the Agent all certificates identified in Annex 1
hereto, accompanied by undated stock powers duly executed in blank.

5.12 Termination. When all Secured Obligations shall have
been paid in full and the Commitments of the Lenders under the Credit Agreement
and all Letter of Credit Liabilities shall have expired or been terminated,
this Agreement shall terminate, and the Agent shall forthwith cause to be
assigned, transferred and delivered, against receipt but without any recourse,
warranty or representation whatsoever, any remaining Collateral and money
received in respect thereof, to or on the order of the Company. The Agent
shall also execute and deliver to the Company upon such termination such
Uniform Commercial Code termination statements, and such other documentation as
shall be reasonably requested by the Company to effect the termination and
release of the Liens on the Collateral.

5.13 Further Assurances. The Company agrees that, from time
to time upon the written request of the Agent, the Company will execute and
deliver such further documents and do such other acts and things as the Agent
may reasonably request in order fully to effect the purposes of this Agreement.

Section 6. Miscellaneous.

6.01 No Waiver. No failure on the part of the Agent or any
Lender to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Agent or any Lender of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies
herein are cumulative and are not exclusive of any remedies provided by law.

6.02 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at its "Address for Notices" specified pursuant to Section 11.02 of
the Credit Agreement and shall be deemed to have been given at the times
specified in said Section 11.02.

6.03 Expenses. The Company agrees to reimburse each of the
Lenders and the Agent for all reasonable costs and expenses of the Lenders and
the Agent (including, without limitation, the reasonable fees and expenses of
legal counsel) in connection with (a) any Default and any enforcement or
collection proceeding resulting therefrom, including, without limitation, all
manner of participation in or other involvement with (i) performance by the
Agent of any

Security Agreement 9
138
obligations of the Company in respect of the Collateral that the Company has
failed or refused to perform, (ii) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, or any actual or attempted
sale, or any exchange, enforcement, collection, compromise or settlement in
respect of any of the Collateral, and for the care of the Collateral and
defending or asserting rights and claims of the Agent in respect thereof, by
litigation or otherwise, including expenses of insurance, (iii) judicial or
regulatory proceedings and (iv) workout, restructuring or other negotiations or
proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (b) the enforcement of this Section
6.03, and all such costs and expenses shall be Secured Obligations entitled to
the benefits of the collateral security provided pursuant to Section 3 hereof.

6.04 Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by
the Company and the Agent (with the consent of the Lenders as specified in
Section 10.10 of the Credit Agreement). Any such amendment or waiver shall be
binding upon the Agent and each Lender, each holder of any of the Secured
Obligations and the Company.

6.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Company, the Agent, the Lenders and each holder of any of the Secured
Obligations; provided, however, that the Company shall not assign or transfer
its rights hereunder without the prior written consent of the Agent.

6.06 Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.

6.07 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and either of the parties hereto may execute this Agreement
by signing any such counterpart.

6.08 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the law of the State of New York.

6.09 Agents and Attorneys-in-Fact. The Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.

6.10 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (a) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of the Agent and
the Lenders in order to carry out the intentions of the parties hereto as
nearly as may be possible and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.

Security Agreement 10
139
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the day and year first above
written.

SUIZA FOODS CORPORATION

By /s/ Xxxxx X. Xxxx
--------------------------------------
Title: Vice President

FIRST UNION NATIONAL BANK,
as Agent

By /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Vice President

Security Agreement 11
140
ANNEX 1

PLEDGED STOCK

[See Section 2(b) and (c)]

PART A

Certificate Registered
Issuer Nos. Owner Number of Shares
---------------- ---------------- ---------------- ----------------
----------------

PART B

Registered Number of
Issuer Owner Ownership Interests
---------------- ---------------- -------------------
----------------

Annex I to Security Agreement- 1
141
EXHIBIT C
Conformed Copy

SUBSIDIARY GUARANTEE
AND SECURITY AGREEMENT

SUBSIDIARY GUARANTEE AND SECURITY AGREEMENT dated as of November
26, 1997 between: the corporations and limited liability company identified
under the caption "GUARANTORS" on the signature pages hereto (the
"Guarantors"); and FIRST UNION NATIONAL BANK, as agent for the banks or other
financial institutions or entities party, as lenders (collectively, the
"Lenders"), to the Credit Agreement referred to below (in such capacity,
together with its successors in such capacity, the "Agent").

Suiza Foods Corporation, a Delaware corporation (the "Company"),
certain lenders and the Agent are parties to a Credit Agreement dated as of
November 26, 1997 (said Credit Agreement as further modified and supplemented
and in effect from time to time, the "Credit Agreement"), providing, subject to
the terms and conditions thereof, for extensions of credit (by making of loans
and issuing letters of credit) to be made by said lenders to the Company in an
aggregate principal or face amount not exceeding $1,250,000,000.

To induce the Lenders to enter into the Credit Agreement and to
extend credit thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Guarantors have
agreed to guarantee the Guaranteed Obligations (as hereinafter defined), and to
pledge and grant a security interest in the Collateral (as so defined) as
security for the Secured Obligations (as so defined). Accordingly, the parties
hereto agree as follows:

Section 1. Definitions. Terms defined in the Credit
Agreement are used herein as defined therein. In addition, as used herein:

"Collateral" shall have the meaning ascribed thereto in Section 4
hereof.

"Collateral Account" shall have the meaning ascribed thereto in
Section 5.01 hereof.

"Guaranteed Obligations" shall mean the Guaranteed Obligations
(as defined in Section 2.01 hereof).

"Issuers" shall mean, collectively, (a) the respective
corporations and the limited liability company identified beneath the names of
the Guarantors on Annex 1 hereto and (b) any entity that shall, after the date
hereof, become a Subsidiary of a Guarantor.

"Loans" shall mean, collectively, the Facility A Loans and the
Facility B Loans (as defined in the Credit Agreement).

Subsidiary Guarantee and Security Agreement - 1
142
"Notes" shall mean, collectively, the Facility A Notes and the
Facility B Notes (as defined in the Credit Agreement).

"Pledged Stock" shall have the meaning ascribed thereto in
Section 4(a) hereof.

"Secured Obligations" shall mean (a) all Guaranteed Obligations
of the Guarantors and (b) all other obligations of the Guarantors to the
Lenders and the Agent hereunder.

"Stock Collateral" shall mean, collectively, the Collateral
described in clauses (a) through (c) of Section 4 hereof and the proceeds of
and to any such property and, to the extent related to any such property or
such proceeds, all books, correspondence, credit files, records, invoices and
other papers.

"Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect from time to time in the State of New York.

Section 2. The Guarantee.

2.01 The Guarantee. The Guarantors hereby jointly and
severally guarantee to each Lender and the Agent and their respective
successors and assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of (i) the principal of and interest
(including post-petition interest, if any) on the Loans made by the Lenders to,
and the Notes held by each Lender of, the Company and all Reimbursement
Obligations and all other amounts from time to time owing to the Lenders or the
Agent by the Company under the Credit Agreement and the Notes, (ii) all amounts
from time to time owing to the Lenders or the Agent by the Company under any
other Loan Document to which the Company is a party and (iii) all amounts from
time to time owing to the Lenders or the Agent by any Obligor (other than the
Company) under any Loan Document to which such Obligor is a party, in each case
strictly in accordance with the terms thereof (such obligations being herein
collectively called the "Guaranteed Obligations"). The Guarantors hereby
further jointly and severally agree that if the Company or any such other
Obligor shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors
will promptly pay the same, without any demand or notice whatsoever, and that
in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with
the terms of such extension or renewal.

2.02 Obligations Unconditional. The obligations of the
Guarantors under Section 2.01 hereof are joint and several, absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of the Credit Agreement, the Notes or any other agreement or
instrument referred to herein or therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the

Subsidiary Guarantee and Security Agreement - 2
143
intent of this Section 2.02 that the obligations of the Guarantors hereunder
shall be absolute and unconditional under any and all circumstances. Without
limiting the generality of the foregoing, it is agreed that the occurrence of
any one or more of the following shall not alter or impair the liability of the
Guarantors hereunder which shall remain absolute and unconditional as described
above:

(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;

(ii) any of the acts mentioned in any of the provisions of
the Credit Agreement or the Notes or any other agreement or instrument
referred to herein or therein shall be done or omitted;

(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under the Credit
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or

(iv) any lien or security interest granted to, or in favor
of, the Agent or any Lender or Lenders as security for any of the
Guaranteed Obligations shall fail to be perfected.

The Guarantors hereby expressly jointly and severally waive diligence,
presentment, demand of payment, protest and all notices whatsoever, and any
requirement that the Agent or any Lender exhaust any right, power or remedy or
proceed against any Obligor under the Credit Agreement or the Notes or any
other agreement or instrument referred to herein or therein, or against any
other Person under any other guarantee of, or security for, any of the
Guaranteed Obligations.

2.03 Reinstatement. The obligations of the Guarantors under
this Section 2 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of the Company in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Guarantors jointly and
severally agree that they will indemnify the Agent and each Lender on demand
for all reasonable costs and expenses (including, without limitation, fees of
counsel) incurred by the Agent or such Lender in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.

2.04 Subrogation. Until payment in full of the Guaranteed
Obligations, the Guarantors hereby waive all rights of subrogation or
contribution, whether arising by contract or operation of law (including,
without limitation, any such right arising under the Federal

Subsidiary Guarantee and Security Agreement - 3
144
Bankruptcy Code) or otherwise by reason of any payment by them pursuant to the
provisions of this Section 2 and further agree with the Company for the benefit
of each of its creditors (including, without limitation, each Lender and the
Agent) that any such payment by them shall constitute a contribution of capital
by the Guarantors to the Company (or an investment in the equity capital of the
Company by the Guarantors).

2.05 Remedies. The Guarantors agree that, as between the
Guarantors and the Lenders, the obligations of the Lenders under the Credit
Agreement and the Notes may be declared to be forthwith due and payable as
provided in Section 9 of the Credit Agreement (and shall be deemed to have
become automatically due and payable in the circumstances provided in said
Section 9 of the Credit Agreement) for purposes of Section 2.01 hereof
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable)
as against the Company and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Company) shall forthwith
become due and payable by the Guarantors for purposes of said Section 2.01.

2.06 Instrument for the Payment of Money. The Guarantors
hereby acknowledge that the guarantee in this Section 2 constitutes an
instrument for the payment of money, and consent and agree that any Lender or
the Agent, at its sole option but with the prior written consent of the
Majority Lenders (as defined in the Credit Agreement), in the event of a
dispute with the Guarantors in the payment of any moneys due hereunder, shall
have the right to bring motion-action under New York CPLR Section 3213.

2.07 Continuing Guarantee. The guarantee in this Section 2
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.

2.08 Rights of Contribution. Each Guarantor hereby agrees,
as between itself and any other Subsidiary of the Company which has guaranteed
the Guaranteed Obligations, that if any thereof shall become an Excess Funding
Guarantor (as defined below) by reason of the payment by such guarantor of any
Guaranteed Obligations, such Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Guarantor's Pro Rata Share (as defined below
and determined, for this purpose, without reference to the Properties, debts
and liabilities of such Excess Funding Guarantor) of the Excess Payment (as
defined below) in respect of such Guaranteed Obligations. The payment
obligation of such Guarantor to any Excess Funding Guarantor under this Section
2.08 shall be subordinate and subject in right of payment to the prior payment
in full of the obligations of such Guarantor under the other provisions of this
Section 2 and such Excess Funding Guarantor shall not exercise any right or
remedy with respect to such excess until payment and satisfaction in full of
all of such obligations.

For purposes of this Section 2.08, (a) "Excess Funding Guarantor"
shall mean, in respect of any Guaranteed Obligations, a guarantor that has paid
an amount in excess of its Pro

Subsidiary Guarantee and Security Agreement - 4
145
Rata Share of such Guaranteed Obligations, (b) "Excess Payment" shall mean, in
respect of any Guaranteed Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and
(c) "Pro Rata Share" shall mean, for any guarantor, the ratio (expressed as a
percentage) of (x) the amount by which the aggregate fair saleable value of all
Properties of such guarantor (excluding any shares of stock of any other
guarantor) exceeds the amount of all the debts and liabilities of such
guarantor (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of such Guarantor hereunder and any
obligations of any other guarantor that have been Guaranteed by such Guarantor)
to (y) the amount by which the aggregate fair saleable value of all Properties
of all of the guarantors, including such Guarantor, exceeds the amount of all
the debts and liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of the Company and such
Guarantor hereunder and the other guarantors under their respective guaranties
of the Guaranteed Obligations) of all of the guarantors, including such
Guarantor, as of the date hereof. If any entity becomes a guarantor of the
Guaranteed Obligations subsequent to the date hereof, then for purposes of this
Section 2.08 such subsequent guarantor shall be deemed to have been a guarantor
as of the date hereof and the aggregate present fair saleable value of
Properties, and the amount of the debts and liabilities, of such guarantor as
of the date hereof shall be deemed to be equal to such value and amount on the
date such guarantor becomes a guarantor of the Guaranteed Obligations.

2.09 General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 2.01
hereof would otherwise, taking into account the provisions of Section 2.08
hereof, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under said Section 2.01, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by the Guarantor, the Agent, the Lenders or any other
Person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.

2.10 U.S. Taxes.

(a) All payments to be made hereunder by the Guarantors
shall be made without setoff, counterclaim or other defense. Subject to clause
(b) below with respect to U.S. Taxes, all such payments shall be made free and
clear of and without deduction for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any governmental authority (other than taxes imposed on
the Agent, any Lender or its Applicable Lending Office by the jurisdiction in
which the Agent or such Lender is organized or has its principal office or in
which its Applicable Lending Office is organized or located or, in each case,
any political subdivision or taxing authority thereof or therein)
(collectively, "Taxes"). If any Taxes are imposed and required to be withheld
from any amount payable by any Guarantor hereunder, such Guarantor shall be
obligated to (i) pay such additional amount so that the Agent and the Lenders
will receive a net amount (after giving effect to the payment of such
additional amount and to the deduction of all Taxes) equal to the amount due
hereunder, (ii) pay such Taxes to the appropriate taxing authority for the
account of the Agent, for the benefit of the Lenders and

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(iii) as promptly as possible thereafter, send the Agent a certified copy of
any original official receipt showing payment thereof, together with such
additional documentary evidence as the Agent may from time to time reasonably
require. If any Guarantor fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, such Guarantor shall be obligated to indemnify
the Agent and each Lender for any incremental taxes, interest or penalties that
may become payable by the Agent or such Lender as a result of such failure.
The obligations of the Guarantors under this Section 2.10(a) shall survive the
repayment of the Loans and the termination of the commitments under the Credit
Agreement.

(b) The Guarantors agree to pay to each Lender that is not
a U.S. Person such additional amounts as are necessary in order that the net
payment of any amount due to such non-U.S. Person under this Agreement after
deduction for or withholding in respect of any U.S. Tax imposed with respect to
such payment (or in lieu thereof, payment of such U.S. Tax by such non-U.S.
Person), will not be less than the amount stated herein to be due and payable,
provided that the foregoing obligation to pay such additional amounts shall not
apply:

(i) to any payment to a Lender hereunder unless such Lender
is, on the date hereof (or on the date it becomes a Lender as provided in
Section 11.06(b) of the Credit Agreement) and on the date of any change
in the Applicable Lending Office of such Lender, either entitled to
submit a Form 1001 (relating to such Lender and entitling it to a
complete exemption from withholding on all interest to be received by it
hereunder in respect of the Loans under the Credit Agreement) or Form
4224 (relating to all interest to be received by such Lender hereunder in
respect of the Loans under the Credit Agreement), or

(ii) to any U.S. Tax imposed solely by reason of the failure
by such non-U.S. Person to comply with applicable certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connections with the United States of
America of such non-U.S. Person if such compliance is required by statute
or regulation of the United States of America as a precondition to relief
or exemption from such U.S. Tax.

Section 3. Representations and Warranties. Each Guarantor
represents and warrants to the Lenders and the Agent that:

3.01 Corporate Existence. Each of the Guarantor and its
Subsidiaries: (a) is a corporation or a limited liability company duly
organized and validly existing under the laws of the jurisdiction of its
formation; (b) has all requisite corporate power, and has all material
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions in which
the nature of the business conducted by it makes such qualification necessary
and where failure so to qualify would (either individually or in the aggregate)
have a Material Adverse Effect.

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3.02 Litigation. Except as disclosed in Schedule IV to the
Credit Agreement, there are no legal or arbitral proceedings or any proceedings
by or before any governmental or regulatory authority or agency, now pending or
(to the knowledge of such Guarantor) threatened against such Guarantor or any
of its Subsidiaries that, if adversely determined, could (either individually
or in the aggregate) have a Material Adverse Effect.

3.03 No Breach. None of the execution and delivery of this
Agreement, the consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, the charter or by-laws of such
Guarantor, or any applicable law or regulation, or any order, writ, injunction
or decree of any court or governmental authority or agency, or any material
agreement or instrument to which such Guarantor or any of its Subsidiaries is a
party or by which any of them is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or assets of such
Guarantor or any of its Subsidiaries pursuant to the terms of any such
agreement or instrument.

3.04 Corporate Action. Such Guarantor has all necessary
corporate or limited liability company power and authority to execute, deliver
and perform its obligations under this Agreement; the execution, delivery and
performance by such Guarantor of this Agreement have been duly authorized by
all necessary corporate or limited liability company action on its part; and
this Agreement has been duly and validly executed and delivered by such
Guarantor and constitutes its legal, valid and binding obligation, enforceable
in accordance with its terms.

3.05 Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any governmental or regulatory
authority or agency, or any securities exchange are necessary for the
execution, delivery or performance by such Guarantor of this Agreement or for
the validity or enforceability hereof, except for filings and recordings in
respect of the Liens created hereunder.

3.06 ERISA. Each Plan, and, to the knowledge of such
Guarantor, each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with,
the applicable provisions of ERISA, the Code and any other Federal or State
law, and no event or condition has occurred and is continuing as to which such
Guarantor would be under an obligation to furnish a report to the Lenders under
Section 8.01(e) of the Credit Agreement.

3.07 Collateral.

(a) Such Guarantor is the sole beneficial owner of the
Collateral in which it purports to grant a security interest pursuant to
Section 4 hereof and no Lien exists or will exist upon such Collateral at any
time (and no right or option to acquire the same exists in favor of any other
Person), except for Liens permitted under Section 8.06 of the Credit Agreement
and except for the pledge and security interest in favor of the Agent for the
benefit of the Lenders created or provided for herein, which pledge and
security interest constitute a first priority perfected pledge

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148
and security interest (except as otherwise provided herein) in and to all of
such Collateral (except for such Liens as are permitted under Section 8.06 of
the Credit Agreement).

(b) The Pledged Stock represented by the certificates
identified under the name of such Guarantor in Annex 1 hereto is, and all other
Pledged Stock in which such Guarantor shall hereafter grant a security interest
pursuant to Section 4 hereof will be, duly authorized, validly existing, fully
paid and non-assessable and none of such Pledged Stock is or will be subject to
any contractual restriction, or any restriction under the charter or by-laws of
the respective Issuer of such Pledged Stock, upon the transfer of such Pledged
Stock (except for any such restriction contained herein).

(c) Except as permitted under the Credit Agreement and
indicated on Annex 1, the Pledged Stock represented by the certificates
identified under the name of such Guarantor in Annex 1 hereto constitutes all
of the issued and outstanding shares of capital stock of any class of the
Issuers beneficially owned by such Guarantor on the date hereof (whether or not
registered in the name of such Guarantor) and said Annex 1 correctly
identifies, as at the date hereof, the respective Issuers of such Pledged
Stock, the respective class and par value of the shares comprising such Pledged
Stock and the respective number of shares (and registered owners thereof)
represented by each such certificate.

Section 4. Collateral. As collateral security for the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, each Guarantor hereby pledges and grants
to the Agent, for the benefit of the Lenders as hereinafter provided, a
security interest in all of such Guarantor's right, title and interest in the
following property, whether now owned by such Guarantor or hereafter acquired
and whether now existing or hereafter coming into existence (all being
collectively referred to herein as "Collateral"):

(a) the shares of common stock of the Issuers represented
by the certificates identified in Part A of Annex 1 hereto and the
limited liability company ownership interests identified in Part B of
Annex 1 hereto under the name of such Guarantor and all other shares of
capital stock and ownership interests, of whatever class of any Issuer,
now or hereafter owned by such Guarantor, in each case together with the
certificates evidencing the same (collectively, the "Pledged Stock");

(b) all shares, securities, ownership interests, moneys or
property representing a dividend on any of the Pledged Stock, or
representing a distribution or return of capital upon or in respect of
the Pledged Stock, or resulting from a split-up, revision,
reclassification or other like change of the Pledged Stock or otherwise
received in exchange therefor, and any subscription warrants, rights or
options issued to the holders of, or otherwise in respect of, the Pledged
Stock;

(c) without affecting the obligations of such Guarantor
under any provision prohibiting such action hereunder or under the Credit
Agreement, in the event of any consolidation or merger in which an Issuer
is not the surviving corporation, all shares

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149
of each class of the capital stock of the successor corporation (unless
such successor corporation is such Guarantor itself or the Company)
formed by or resulting from such consolidation or merger (the Pledged
Stock, together with all other certificates, shares, securities,
ownership interests, properties or moneys as may from time to time be
pledged hereunder pursuant to clause (a) or (b) above and this clause (c)
being herein collectively called the "Stock Collateral");

(d) the balance from time to time in the Collateral
Account; and

(e) all proceeds, rents, profits, income, benefits,
substitutions and replacements of and to any of the property of such
Guarantor described in the preceding clauses of this Section 4
(including, without limitation, any proceeds of insurance thereon and all
causes of action, claims and warranties now or hereafter held by such
Guarantor in respect of any of the items listed above) and, to the extent
related to any property described in said clauses or such proceeds, all
books, correspondence, credit files, records, invoices and other papers,
including without limitation all tapes, cards, computer runs and other
papers and documents in the possession or under the control of such
Guarantor or any computer bureau or service company from time to time
acting for such Guarantor.

Section 5. Cash Proceeds of Collateral.

5.01 Collateral Account. There is hereby established with
the Agent a cash collateral account (the "Collateral Account") in the name and
under the control of the Agent into which there shall be deposited from time to
time the cash proceeds of any of the Collateral (including proceeds of
insurance thereon) required to be delivered to the Agent pursuant hereto and
into which the Guarantors may from time to time deposit any additional amounts
that they wish to pledge to the Agent for the benefit of the Lenders as
additional collateral security hereunder. The balance from time to time in the
Collateral Account shall constitute part of the Collateral hereunder and shall
not constitute payment of the Secured Obligations until applied as hereinafter
provided. Except as expressly provided in the next sentence, the Agent shall
remit the collected balance outstanding to the credit of the Collateral Account
to or upon the order of the Guarantors as the Guarantors shall from time to
time instruct. However, at any time following the occurrence and during the
continuance of an Event of Default, the Agent may (and, if instructed by the
Lenders as specified in Section 10.03 of the Credit Agreement, shall) in its
(or their) discretion apply or cause to be applied (subject to collection) the
balance from time to time outstanding to the credit of the Collateral Account
to the payment of the Secured Obligations in the manner specified in Section
6.09 hereof. The balance from time to time in the Collateral Account shall be
subject to withdrawal only as provided herein.

5.02 Proceeds of Accounts. Each Guarantor agrees that, at
any time after the occurrence and during the continuance of an Event of
Default, if the proceeds of any Collateral hereunder shall be received by it,
such Guarantor shall, upon the request of the Agent, as promptly as possible,
deposit such proceeds into the Collateral Account. Until so deposited, all
such proceeds shall be held in trust by such Guarantor for and as the property
of the Agent and shall not be commingled with any other funds or property of
the Guarantor.

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5.03 Investment of Balance in Collateral Account. Amounts
on deposit in the Collateral Account shall be invested from time to time in
such Permitted Investments as the Guarantors (or, after the occurrence and
during the continuance of an Event of Default, the Agent) shall determine,
which Permitted Investments shall be held in the name and be under the control
of the Agent, provided that at any time after the occurrence and during the
continuance of an Event of Default, the Agent may (and, if instructed by the
Lenders as specified in Section 10.03 of the Credit Agreement, shall) in its
(or their) discretion at any time and from time to time elect to liquidate any
such Permitted Investments and to apply or cause to be applied the proceeds
thereof to the payment of the Secured Obligations in the manner specified in
Section 6.09 hereof.

5.04 Cover for Letter of Credit Liabilities. Amounts
deposited into the Collateral Account as cover for Letter of Credit Liabilities
under the Credit Agreement pursuant to Section 2.09(f) or Section 9 thereof
shall be held by the Agent in a separate sub-account (designated "Letter of
Credit Liabilities Sub-Account") and all amounts held in such sub-account shall
constitute collateral security first for the Letter of Credit Liabilities
outstanding from time to time and second as collateral security for the other
Secured Obligations hereunder.

Section 6. Further Assurances; Remedies. In furtherance of
the grant of the pledge and security interest pursuant to Section 4 hereof,
each Guarantor hereby agrees with each Lender and the Agent as follows:

6.01 Delivery and Other Perfection. Such Guarantor shall:

(a) if any of the shares, securities, moneys or property
required to be pledged by such Guarantor under clauses (a), (b) and (c)
of Section 4 hereof are received by such Guarantor, forthwith either (x)
transfer and deliver to the Agent such shares or securities so received
by such Guarantor (together with the certificates for any such shares and
securities duly endorsed in blank or accompanied by undated stock powers
duly executed in blank), all of which thereafter shall be held by the
Agent, pursuant to the terms of this Agreement, as part of the Collateral
or (y) take such other action as the Agent shall deem necessary or
appropriate to duly record the Lien created hereunder in such shares,
securities, moneys or property in said clauses (a), (b) and (c);

(b) give, execute, deliver, file and/or record any
financing statement, notice, instrument, document, agreement or other
papers that may be necessary or desirable (in the reasonable judgment of
the Agent) to create, preserve, perfect or validate the security interest
granted pursuant hereto or to enable the Agent to exercise and enforce
its rights hereunder with respect to such pledge and security interest,
including, without limitation, causing any or all of the Stock Collateral
to be transferred of record into the name of the Agent or its nominee
(and the Agent agrees that if any Stock Collateral is transferred into
its name or the name of its nominee, the Agent will thereafter promptly
give to such Guarantor copies of any notices and communications received
by it with respect to the Stock Collateral pledged by such Guarantor
hereunder);

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(c) keep full and accurate books and records relating to
the Collateral, and stamp or otherwise xxxx such books and records in
such manner as the Agent may reasonably require in order to reflect the
security interests granted by this Agreement; and

(d) permit representatives of the Agent, upon reasonable
notice, at any time during normal business hours to inspect and make
abstracts from its books and records pertaining to the Collateral, and
after the occurrence and during the continuance of any Event of Default
permit representatives of the Agent to be present at such Guarantor's
place of business to receive copies of all communications and remittances
relating to the Collateral, and forward copies of any notices or
communications received by such Guarantor with respect to the Collateral,
all in such manner as the Agent may require.

6.02 Other Financing Statements and Liens. Except as
otherwise permitted under Section 8.06 of the Credit Agreement, without the
prior written consent of the Agent (granted with the authorization of the
Lenders as specified in Section 10.10 of the Credit Agreement), the Guarantors
shall not file or suffer to be on file, or authorize or permit to be filed or
to be on file, in any jurisdiction, any financing statement or like instrument
with respect to the Collateral in which the Agent is not named as the sole
secured party for the benefit of the Lenders.

6.03 Preservation of Rights. The Agent shall not be
required to take steps necessary to preserve any rights against prior parties
to any of the Collateral.

6.04 Special Provisions Relating to Stock Collateral.

(a) Except as permitted under the Credit Agreement and
indicated on Annex 1, each Guarantor will cause the Stock Collateral to
constitute at all times 100% of the total number of shares of each class of
capital stock of each Issuer then outstanding.

(b) So long as no Event of Default shall have occurred and
be continuing, each Guarantor shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Stock Collateral for
all purposes not inconsistent with the terms of this Agreement, the Credit
Agreement, the Notes or any other Loan Document, provided that such Guarantor
agrees that it will not vote the Stock Collateral in any manner that is
inconsistent with the terms of this Agreement, the Credit Agreement, the Notes
or any such other Loan Document; and the Agent shall execute and deliver to
such Guarantor or cause to be executed and delivered to such Guarantor all such
proxies, powers of attorney, dividend and other orders, and all such
instruments, without recourse, as such Guarantor may reasonably request for the
purpose of enabling such Guarantor to exercise the rights and powers that it is
entitled to exercise pursuant to this Section 6.04(b).

(c) Unless and until an Event of Default has occurred and
is continuing, each Guarantor shall be entitled to receive and retain any
dividends on the Stock Collateral other than

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shares or securities to be transferred or delivered to the Agent in accordance
with Section 6.01(a) hereof.

(d) If any Event of Default shall have occurred, then so
long as such Event of Default shall continue, and whether or not the Agent or
any Lender exercises any available right to declare any Secured Obligation due
and payable or seeks or pursues any other relief or remedy available to it
under applicable law or under this Agreement, the Credit Agreement, the Notes
or any other agreement relating to such Secured Obligation, all dividends and
other distributions on the Stock Collateral shall be paid directly to the Agent
and retained by it in the Collateral Account as part of the Stock Collateral,
subject to the terms of this Agreement, and, if the Agent shall so request in
writing, each Guarantor agrees to execute and deliver to the Agent appropriate
additional dividend, distribution and other orders and documents to that end,
provided that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Agent shall, upon request of such
Guarantor (except to the extent theretofore applied to the Secured
Obligations), be returned by the Agent to such Guarantor.

6.05 Events of Default, Etc. During the period during which
an Event of Default shall have occurred and be continuing:

(a) the Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, any of the Collateral;

(b) the Agent shall have all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled under
the laws in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including, without limitation, the right, to
the maximum extent permitted by law, to exercise all voting, consensual
and other powers of ownership pertaining to the Collateral as if the
Agent were the sole and absolute owner thereof (and each Guarantor agrees
to take all such action as may be appropriate to give effect to such
right);

(c) the Agent in its discretion may, in its name or in the
name of the Guarantors or otherwise, demand, xxx for, collect or receive
any money or property at any time payable or receivable on account of or
in exchange for any of the Collateral, but shall be under no obligation
to do so; and

(d) the Agent may, upon ten Business Days' prior written
notice to the Guarantors of the time and place, with respect to the
Collateral or any part thereof that shall then be or shall thereafter
come into the possession, custody or control of the Agent, the Lenders or
any of their respective agents, sell, lease, assign or otherwise dispose
of all or any part of such Collateral, at such place or places as the
Agent deems best, and for cash or for credit or for future delivery
(without thereby assuming any credit risk), at

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public or private sale, without demand of performance or notice of
intention to effect any such disposition or of the time or place thereof
(except such notice as is required above or by applicable statute and
cannot be waived), and the Agent or any Lender or anyone else may be the
purchaser, lessee, assignee or recipient of any or all of the Collateral
so disposed of at any public sale (or, to the extent permitted by law, at
any private sale) and thereafter hold the same absolutely, free from any
claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise), of any Guarantor, any such demand,
notice and right or equity being hereby expressly waived and released.
The Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may
be made at any time or place to which the sale may be so adjourned.

The proceeds of each collection, sale or other disposition under this Section
6.05 shall be applied in accordance with Section 6.09 hereof.

Each Guarantor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Agent may be compelled, with respect to any sale of all or
any part of the Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. Each Guarantor
acknowledges that any such private sales may be at prices and on terms less
favorable to the Agent than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Agent shall have no obligation to engage in public sales
and no obligation to delay the sale of any Collateral for the period of time
necessary to permit the respective Issuer or issuer thereof to register it for
public sale.

6.06 Deficiency. If the proceeds of sale, collection or
other realization of or upon the Collateral pursuant to Section 6.05 hereof are
insufficient to cover the costs and expenses of such realization and the
payment in full of the Secured Obligations, the Guarantors shall remain jointly
and severally liable for any deficiency.

6.07 Removals, Etc. Without at least 30 days' prior written
notice to the Agent, each Guarantor shall not (a) maintain any of its books and
records with respect to the Collateral at any office or maintain its principal
place of business at any place, other than at the address indicated beneath its
signature hereto or the offices of its legal counsel, or (b) change its
corporate name, or the name under which it does business, from the name shown
on the signature pages hereto.

6.08 Private Sale. The Agent and the Lenders shall incur no
liability as a result of the sale of the Collateral, or any part thereof, at
any private sale pursuant to Section 6.05 hereof conducted in a commercially
reasonable manner. Each Guarantor hereby waives any claims against the Agent
or any Lender arising by reason of the fact that the price at which the
Collateral may have been sold at such a private sale was less than the price
that might have been

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obtained at a public sale or was less than the aggregate amount of the Secured
Obligations, even if the Agent accepts the first offer received and does not
offer the Collateral to more than one offeree.

6.09 Application of Proceeds. Except as otherwise herein
expressly provided and except as provided below in this Section 6.09, the
proceeds of any collection, sale or other realization of all or any part of the
Collateral pursuant hereto, and any other cash at the time held by the Agent
under Section 5 hereof or this Section 6, shall be applied by the Agent:

Finally, to the payment to the Guarantors, or their successors or
assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining.

Notwithstanding the foregoing, the proceeds of any cash or other amounts held
in the "Letter of Credit Liabilities Sub- Account" of the Collateral Account
pursuant to Section 5.04 hereof shall be applied first to the Letter of Credit
Liabilities outstanding from time to time and second to the other Secured
Obligations in the manner provided above in this Section 6.09.

As used in this Section 6, "proceeds" of Collateral shall mean
cash, securities and other property realized in respect of, and distributions
in kind of, Collateral, including any thereof received under any
reorganization, liquidation or adjustment of debt of any Guarantor or any
issuer of or obligor on any of the Collateral.

6.10 Attorney-in-Fact. Without limiting any rights or
powers granted by this Agreement to the Agent while no Event of Default has
occurred and is continuing, upon the occurrence and during the continuance of
any Event of Default, the Agent is hereby appointed the attorney-in-fact of
each Guarantor for the purpose of carrying out the provisions of this Section 6
and taking any action and executing any instruments that the Agent may deem
necessary or advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, so long as the Agent shall be entitled under
this Section 6 to make collections in respect of the Collateral, the Agent
shall have the right and power to receive, endorse and collect all checks made
payable to the order of any Guarantor representing any dividend, payment or
other distribution in respect of the Collateral or any part thereof and to give
full discharge for the same.

6.11 Perfection. Prior to or concurrently with the
execution and delivery of this Agreement, each Guarantor shall (a) file such
financing statements and other documents in such

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155
offices as the Agent may request to perfect the security interests granted by
Section 4 of this Agreement and (b) deliver to the Agent all certificates
identified in Annex 1 hereto, accompanied by undated stock powers duly executed
in blank.

6.12 Termination. When all Secured Obligations shall have
been paid in full and the commitments of the Lenders under the Credit Agreement
and all Letter of Credit Liabilities shall have expired or been terminated,
this Agreement shall terminate, and the Agent shall forthwith cause to be
assigned, transferred and delivered, against receipt but without any recourse,
warranty or representation whatsoever, any remaining Collateral and money
received in respect thereof, to or on the order of the Guarantors. The Agent
shall also execute and deliver to each Guarantor upon such termination such
Uniform Commercial Code termination statements and such other documentation as
shall be reasonably requested by such Guarantor to effect the termination and
release of the Liens on the Collateral.

6.13 Further Assurances. Each Guarantor agrees that, from
time to time upon the written request of the Agent, such Guarantor will execute
and deliver such further documents and do such other acts and things as the
Agent may reasonably request in order fully to effect the purposes of this
Agreement.

Section 7. Miscellaneous.

7.01 No Waiver. No failure on the part of the Agent or any
Lender to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Agent or any Lender of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies
herein are cumulative and are not exclusive of any remedies provided by law.

7.02 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at the "Address for Notices" specified on the signature pages hereof,
and, in each case, any such notice shall be deemed to have been given at the
times specified in Section 11.02 of the Credit Agreement.

7.03 Expenses. The Guarantors jointly and severally agrees
to reimburse each of the Lenders and the Agent for all reasonable costs and
expenses of the Lenders and the Agent (including, without limitation, the
reasonable fees and expenses of legal counsel) in connection with (a) any
Default and any enforcement or collection proceeding resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with (i) performance by the Agent of any obligations of any
Guarantor in respect of the Collateral that such Guarantor has failed or
refused to perform, (ii) bankruptcy, insolvency, receivership, foreclosure,
winding up or liquidation proceedings, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in respect of any
of the Collateral, and for the care of the Collateral and defending or
asserting rights and claims of the Agent in respect thereof, by litigation or
otherwise, including expenses of insurance, (iii) judicial or regulatory
proceedings and (iv) workout, restructuring or other negotiations or proceedings
(whether or not the workout,

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156

restructuring or transaction contemplated thereby is consummated) and (b) the
enforcement of this Section 7.03, and all such costs and expenses shall be
Secured Obligations entitled to the benefits of the collateral security
provided pursuant to Section 4 hereof.

7.04 Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by
the Guarantors and the Agent (with the consent of the Lenders as specified in
Section 10.10 of the Credit Agreement). Any such amendment or waiver shall be
binding upon the Agent and each Lender, each holder of any of the Secured
Obligations and the Guarantors.

7.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Guarantors, the Agent, the Lenders and each holder of any of the Secured
Obligations; provided, however, that the Guarantors shall not assign or
transfer their rights hereunder without the prior written consent of the Agent.

7.06 Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.

7.07 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.

7.08 Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with, the law of
the State of New York. Each Guarantor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. Each Guarantor irrevocably waives, to
the fullest extent permitted by applicable law, any objection that it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.

7.09 Waiver of Jury Trial. EACH OF THE GUARANTORS, THE
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

7.10 Agents and Attorneys-in-Fact. The Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.

7.11 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (a) the other provisions hereof shall

Subsidiary Guarantee and Security Agreement - 16
157
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Agent and the Lenders in order to carry out the
intentions of the parties hereto as nearly as may be possible and (b) the
invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other
jurisdiction.

Subsidiary Guarantee and Security Agreement - 17
158
IN WITNESS WHEREOF, the parties hereto have caused this
Subsidiary Guarantee and Security Agreement to be duly executed and delivered
as of the day and year first above written.

GUARANTORS
----------

ALLENTOWN PLASTICS, INC.
ATLANTA CONTAINER, INC.
BURGER DAIRY COMPANY
CFI-TMP, INC.
XXXXXXX COUNTY CONTAINER CORPORATION
COUNTRY DELITE FARMS, INC.
COUNTRY FRESH XXXXXX, INC.
COUNTRY FRESH, INC.
DAIRY FRESH, INC.
FAIRDALE FARMS, INC.
FIRST CAPITAL PLASTICS, INC.
FLORIDA PLASTICS, INC.
FRANKLIN PLASTICS, INC., A DELAWARE
CORPORATION
FRANKLIN PLASTICS, INC., A
MASSACHUSETTS CORPORATION
FROSTBITE BRANDS, INC.
GR BEST, INC.
GARELICK FARMS, INC.
GRANT'S DAIRY, INC.
ILLINOIS PLASTICS, INC.
KENTWOOD PLASTICS, INC.
MAINE PLASTICS, INC.
MARLBOROUGH PLASTICS, INC.
MIDDLESEX PLASTICS, INC.
MISCOE SPRINGS, INC.
MODEL DAIRY, INC.
MORNINGSTAR FOODS, INC.
MSTAR, INC.
XXXX PLASTICS MANUFACTURING CORP.
NEW JERSEY PLASTICS, INC.
NORTH CAROLINA PLASTICS, INC.
OHIO STATE PLASTICS, INC.
PLASTICS MANAGEMENT GROUP, LLC
PRESTO TRANSPORTATION, INC.
REDDY ICE CORPORATION
RICHMOND CONTAINER, INC.

Subsidiary Guarantee and Security Agreement - 18

159
XXXXXXX PLASTICS, INC.
SOUTHEASTERN JUICE PACKERS, INC.
SUIZA DAIRY CORPORATION
SUIZA FRUIT CORPORATION
SUIZA MANAGEMENT CORPORATION
SWISS DAIRY CORPORATION
THE MORNINGSTAR GROUP, INC.
XXXXX FARMS, INC.

By: /s/ Xxxxx X. Xxxx
------------------------------------
Title: Vice President of each

Address for Notices for all
Guarantors:

0000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000

Attention: Xxxxx X. Xxxxxx

Telecopier No.: (000) 000-0000

Telephone No.: (000) 000-0000

Subsidiary Guarantee and Security Agreement - 19
160
AGENT
-----

FIRST UNION NATIONAL BANK,
as Agent

By /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Title: Vice President

Address for Notices:

First Union National Bank
000 X. Xxxxxxx Xxxxxx XX-00
Xxxxxxxxx, XX 00000-0000
Attn.: Syndication Agency
Services
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000

Subsidiary Guarantee and Security Agreement - 20
161
ANNEX 1

PLEDGED STOCK

[See Section 3.07(b) and (c)]

PART A

Certificate Registered
Issuer Nos. Owner Number of Shares
------------ ------------ ------------ ----------------
------------ ------------ ------------ ----------------

PART B

Registered Number of
Issuer Owner Ownership Interests
------------ ------------ -------------------
------------ ------------ -------------------

Annex 1 to Subsidiary Guarantee and Security Agreement - 1

162
EXHIBIT D

[Form of Opinion of Counsel to the Obligors]

Annex 1 to Subsidiary Guarantee and Security Agreement - 2

163
EXHIBIT E

[Form of Opinion of Puerto Rico Counsel to the Obligors]

, 1997
----------

To the Agent and each of the
Lenders party to the Credit Agreement
referred to below

Ladies and Gentlemen:

We have acted as special counsel in the Commonwealth of Puerto
Rico to Suiza Foods Corporation, a Delaware corporation (the "Company"), Suiza
Dairy Corporation, Suiza Fruit Corporation and Xxxx Plastics Manufacturing
Corp., each a Delaware corporation (each a "P.R. Subsidiary Guarantor" and,
collectively, the "P.R. Subsidiary Guarantors"), in connection with the
execution and delivery of the Credit Agreement dated as of even date herewith
(the "Credit Agreement") among the Company, the lending institutions party
thereto (individually, a "Lender" and, collectively, the "Lenders") and First
Union National Bank, as administrative agent for itself and for the Lenders
(the "Agent"), and in connection with the other loan and security documentation
contemplated thereunder.

This opinion is rendered to you pursuant to Section 6.01(c) of
the Credit Agreement. Terms used herein which are defined in the Credit
Agreement shall have the respective meanings set forth in the Credit Agreement
unless otherwise defined herein.

In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such
documents as we have deemed necessary or appropriate as a basis for the
opinions set forth herein, including without limitation, (a) the Credit
Agreement, (b) the Facility A Notes and the Facility B Notes, (c) the
Subsidiary Guarantee and Security Agreement (the "Guarantee Agreement"), (d)
the other Loan Documents and (e) such other public and corporate documents and
records as we deem necessary or appropriate in connection with this opinion.

In our examination we have assumed, without investigation, the
genuineness of all signatures (other than as to the P.R. Subsidiary
Guarantors), the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such
copies. As to questions of fact relevant to the opinions expressed herein not
independently verified by us we have relied, to the extent we deemed
appropriate, upon certificates of officers of the P.R. Subsidiary Guarantors,
public officials and other appropriate Persons.

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164
For purposes of this opinion, we are also assuming that the
Agent and the Lenders are duly organized, validly existing and in good standing
in their respective jurisdictions and have all requisite power and have taken
all necessary corporate action to enter into the Credit Agreement and the other
Loan Documents to which they are a party, and to effect the transactions
contemplated thereby and that the Agent has duly executed and delivered the
Credit Agreement and the other Loan Documents to which it is a party.

Based upon the foregoing, and subject to the assumptions,
exceptions, and/or qualifications herein stated, we are of the opinion that:

1. Each P.R. Subsidiary Guarantor is duly qualified
and is authorized to do business and is in good standing in the Commonwealth of
Puerto Rico. The Company is not required to qualify to do business in the
Commonwealth of Puerto Rico as a result of the Credit Agreement, the other Loan
Documents or the other transactions contemplated thereunder.

2. Each P.R. Subsidiary Guarantor has duly executed
and delivered the Guarantee Agreement in accordance with the laws of the
Commonwealth of Puerto Rico.

3. Neither the execution, delivery or performance by
any P.R. Subsidiary Guarantor of the Guarantee Agreement, nor compliance by it
with the terms and provisions thereof, (a) will contravene any provision of any
Commonwealth of Puerto Rico law, statute, rule or regulation or, to the best of
our knowledge, after reasonable inquiry, any order, writ, injunction or decree
of any court or governmental instrumentality, (b) to the best of our knowledge
after reasonable inquiry will conflict with or result in any breach of, any of
the material terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of any P.R.
Subsidiary Guarantor pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument to which any P.R. Subsidiary Guarantor is a party or by
which it or any of its property or assets is bound.

4. To the best of our knowledge, after reasonable
inquiry, there are no actions, suits or proceedings pending or threatened (i)
with respect to the Guarantee Agreement, (ii) with respect to any material
Indebtedness of any P.R. Subsidiary Guarantor or (iii) that are reasonably
likely to have a Material Adverse Effect.

5. Except as may be otherwise stated in this opinion,
no order, consent, approval, license, authorization, or validation of, or
filing, recording or registration with (except as have been obtained or made
prior to the date hereof), or exemption by, any Commonwealth of Puerto Rico
governmental or public body or authority or any subdivision thereof, is
required to authorize, or is required in connection with, (a) the execution,
delivery and performance by each P.R. Subsidiary Guarantor of the Guarantee
Agreement or (b) the legality, validity, binding effect or enforceability of
the Guarantee Agreement.

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165
6. The execution, delivery, performance and
observance by the P.R. Subsidiary Guarantors of the Guarantee Agreement will
not result in a violation of any law, rule or regulation of the Commonwealth of
Puerto Rico that will limit or prohibit the P.R. Subsidiary Guarantors' right
to execute, deliver, perform and observe the Guarantee Agreement.

7. The enforceability of the Guarantee Agreement is
subject where relevant, to the following limitations:

(a) The validity or enforceability of provisions
waiving (expressly or by implication) defenses or rights granted by laws,
where such waivers are against public policy; or such provisions
establishing alternate methods of service of process other than those
provided or allowed by applicable statutes.

(b) Limitations, prohibitions and/or restrictions on
the sale, transfer and/or encumbrance of Property may be unenforceable
under applicable local laws or judicial precedents.

We are members of the Bar of the Commonwealth of Puerto Rico
and we do not hold ourselves out as being conversant with, and express no
opinion as to, the laws of any jurisdiction other than those of the
Commonwealth of Puerto Rico and the United States of America applicable to the
Commonwealth of Puerto Rico.

This opinion is being furnished only to the addresses hereof
and the Lenders now or hereafter parties to the Credit Agreement and is solely
for their benefit and the benefit of their participants and assigns in
connection with the above transactions. This opinion may not be relied upon
for any other purpose, or relied upon by any other person, firm or corporation
for any purpose, without our prior written consent. The opinions are based on
the laws of the Commonwealth of Puerto Rico as in effect on the date hereof and
we disavow any obligation to update this opinion letter or advise you of any
changes in our opinion in the event of changes in applicable law or facts
becoming effective after the date hereof.

Very truly yours,

AXTMAYER ADSUAR XXXXX & XXXXX

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

3
166
EXHIBIT F

[FORM OF OPINION OF SPECIAL NEW YORK COUNSEL TO FIRST UNION]

, 1997
----------

To the Lenders party to the
Credit Agreement referred
to below and First
Union National Bank,
as Administrative Agent

Ladies and Gentlemen:

We have acted as special New York counsel to First Union
National Bank in connection with (i) the Credit Agreement dated as of November
__, 1997 (the "Credit Agreement") between Suiza Foods Corporation (the
"Company"), the lenders named therein (the "Lenders"), and First Union National
Bank, as Administrative Agent (in such capacity, the "Agent"), providing for
extensions of credit to be made by the Lenders to the Company in an aggregate
principal amount not exceeding $1,250,000,000 at any one time outstanding and
(ii) the various other agreements and instruments referred to in the next
following paragraph. All capitalized terms used but not defined herein have
the respective meanings given to such terms in the Credit Agreement or, if not
defined in the Credit Agreement, in Annex 1 hereto. This opinion is being
delivered pursuant to Section 6.01(d) of the Credit Agreement.

In rendering the opinion expressed below, we have examined the
following agreements, instruments and other documents:

(a) the Credit Agreement;

(b) the Facility A Notes and the Facility B Notes;

(d) the Subsidiary Guarantee and Security Agreement;
and

1
167
(e) such corporate records of the Obligors (as defined
below) and such other documents as we have deemed
necessary as a basis for the opinions expressed
below.

The agreements, instruments and other documents referred to in the foregoing
lettered clauses (other than clause (e) above) are collectively referred to as
the "Credit Documents"; the Company and its Subsidiaries party thereto are
herein collectively referred to as the "Obligors".

In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity with authentic original documents of all documents submitted to
us as copies. When relevant facts were not independently established, we have
relied upon statements of governmental officials and upon representations made
in or pursuant to the Credit Documents and certificates of appropriate
representatives of the Obligors.

In rendering the opinions expressed below, we have assumed,
with respect to all of the documents referred to in this opinion letter, that:

(i) such documents have been duly authorized by, have
been duly executed and delivered by, and (except
to the extent set forth in the opinions below as
to the Obligors) constitute legal, valid, binding
and enforceable obligations of, all of the parties
to such documents;

(ii) all signatories to such documents have been duly
authorized; and

(iii) all of the parties to such documents are duly
organized and validly existing and have the power
and authority (corporate or other) to execute,
deliver and perform such documents.

Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that:

1. Each of the Credit Documents constitutes the
legal, valid and binding obligation of each Obligor party thereto,
enforceable against such Obligor in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer or other similar laws relating to or
affecting the rights of creditors generally and except as the
enforceability of the Credit Documents is subject to the application of
general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance, injunctive relief or any
other equitable remedy and (b) concepts of materiality, reasonableness,
good faith and fair dealing.

2. The Security Agreement and the Subsidiary
Guarantee and Security Agreement each is effective to create, in favor of
the Agent for the benefit of the Agent

2
168
and the Lenders, a valid security interest under the Uniform Commercial
Code as in effect in the State of New York (the "Uniform Commercial Code")
in all of the right, title and interest of the Company in, to and under
the Stock Collateral (as respectively defined therein) as collateral
security for the payment when due of the Secured Obligations (as
respectively defined therein), except that (a) such security interest will
continue in Collateral after its sale, exchange or other disposition and
in any Proceeds thereof only to the extent provided in Section 9-306 of
the Uniform Commercial Code, and (b) such security interest in any portion
of such Collateral in which the Company or a Subsidiary Guarantor acquires
rights after the commencement of a case under the Bankruptcy Code in
respect of it may be limited by Section 552 of the Bankruptcy Code.

3. The security interest referred to in paragraph 2
in that portion of the Collateral consisting of a Certificated Security
represented by a Security Certificate in bearer form or in registered form
Indorsed to the Agent or in blank by an effective Indorsement or
registered in the name of the Agent will, upon the creation of such
security interest, be perfected by the Agent taking possession in the
State of New York of such Security Certificate, and such perfected
security interest will remain perfected thereafter so long as such
Security Certificate is retained by the Agent in its possession in the
State of New York.

4. With respect to the security interest referred to
in paragraph 2 above in any Collateral perfected as described in paragraph
3 above, if such Collateral consists of a Certificated Security and such
security interest therein is perfected by the Agent in the manner
specified in paragraph 3 above for value without notice (within the
meaning of Section 8-105 of the Uniform Commercial Code) of any Adverse
Claim to the Certificated Security, then the Agent will acquire such
security interest free of any Adverse Claim (as so defined).

The foregoing opinions are subject to the following comments
and qualifications:

(A) The enforceability of Section 11.03 of the Credit
Agreement (and any similar provisions in any of the other Credit
Documents) may be limited by (i) laws rendering unenforceable
indemnification contrary to Federal or state securities laws and the
public policy underlying such laws and (ii) laws limiting the
enforceability of provisions exculpating or exempting a party from, or
requiring indemnification of a party for, its own action or inaction, to
the extent such action or inaction involves gross negligence, recklessness
or wilful or unlawful conduct.

(B) The enforceability of provisions in the Credit
Documents to the effect that terms may not be waived or modified except in
writing may be limited under certain circumstances.

(C) Clause (iii) of the second sentence of Section
2.02 of the Subsidiary Guarantee and Security Agreement may not be
enforceable to the extent that the Guaranteed Obligations (as defined
therein) are materially modified.

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169
(D) We express no opinion as to (i) the effect of the
laws of any jurisdiction in which any Lender is located (other than the
State of New York) that limit the interest, fees or other charges such
Lender may impose, (ii) Section 4.07(c) of the Credit Agreement, (iii)
Section 11.10(b) of the Credit Agreement (and any similar provisions in
any of the other Credit Documents), insofar as such Section relates to the
subject matter jurisdiction of the United States District Court for the
Southern District of New York to adjudicate any controversy related to the
Credit Documents, (iv) the waiver of inconvenient forum set forth in
Section 11.10(d) of the Credit Agreement (and any similar provisions in
any of the other Credit Documents) with respect to proceedings in the
United States District Court for the Southern District of New York, and
(v) Section 2.06 of the Subsidiary Guarantee and Security Agreement.

(E) We wish to point out that the obligations of the
Company and the Subsidiary Guarantors, and the rights and remedies of the
Agent and the Lenders, under the Security Agreement and the Subsidiary
Guarantee and Security Agreement, respectively, may be subject to possible
limitations upon the exercise of remedial or procedural provisions
contained therein, provided that such limitations do not, in our opinion
(but subject to the other comments and qualifications set forth in this
opinion letter), make the remedies and procedures that will be afforded to
the Agent and the Lenders inadequate for the practical realization of the
substantive benefits purported to be provided to the Agent and the Lenders
by the Security Agreement and the Subsidiary Guarantee and Security
Agreement, respectively.

(F) We express no opinion as to the applicability to
the obligations of any Subsidiary Guarantor (or the enforceability of such
obligations) of Section 548 of the Bankruptcy Code, Article 10 of the New
York Debtor and Creditor Law or any other provision of law relating to
fraudulent conveyances, transfers or obligations or of the provisions of
the law of the jurisdiction of incorporation of any Subsidiary Guarantor
restricting dividends, loans or other distributions by a corporation for
the benefit of its stockholders.

(G) With respect to our opinion in paragraphs 2, 3 and
4 above, (i) we express no opinion as to the creation, perfection or
priority of any security interest in (or other lien on) any portion of the
Collateral (as respectively defined in the Security Agreement and the
Subsidiary Guarantee and Security Agreement) to the extent that, pursuant
to Section 9-104 of the Uniform Commercial Code, Article 9 of the Uniform
Commercial Code does not apply thereto, and (ii) we have assumed that each
Indorsement referred to therein is effective in accordance with Section
8-107 of the Uniform Commercial Code.

(H) We wish to point out that the acquisition by the
Company or any Subsidiary Guarantor after the initial Loans under the
Credit Agreement of an interest in any Property that becomes subject to
the Lien of the Security Agreement or the Subsidiary Guarantee and
Security Agreement, as the case may be, may constitute a voidable
preference under Section 547 of the Bankruptcy Code.

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170
(I) We express no opinion as to the existence of, or
the right, title or interest of the Company, or any Subsidiary Guarantor,
as the case may be, in, to or under, any of the Collateral (as
respectively defined in the Security Agreement and the Subsidiary
Guarantee and Security Agreement). We express no opinion as to the
priority of any security interest in any Proceeds (whether of such
Collateral or otherwise).

(J) Except as expressly provided in paragraphs 2
through 4 above, we express no opinion as to the creation, perfection or
priority of any security interest in, or other lien on, the Collateral (as
respectively defined in the Security Agreement and the Subsidiary
Guarantee and Security Agreement).

The foregoing opinions are limited to matters involving the
Federal laws of the United States and the law of the State of New York, and we
do not express any opinion as to the laws of any other jurisdiction.

This opinion letter is, pursuant to Section 6.01(d) of the
Credit Agreement, provided to you by us in our capacity as special New York
counsel to First Union National Bank and may not be relied upon by any Person
for any purpose other than in connection with the transactions contemplated by
the Credit Agreement without, in each instance, our prior written consent.

Very truly yours,

___/___

5
171
Annex 1

DEFINED TERMS

"Adverse Claim" has the meaning given to such term in Section
8-102(a)(1) of the UCC.

"bearer form", when used with respect to a Certificated
Security, means a form in which the Security is payable to the bearer of the
Security Certificate according to its terms but not by reason of an
Indorsement.

"Certificated Security" means a Security that is represented
by a certificate.

"Indorsement" has the meaning given to such term in Section
8-102(a)(11) of the UCC.

"Proceeds" has the meaning given to such term in Section
9-306(1) of the UCC.

"registered form", when used with respect to a Certificated
Security, means a form in which: (a) the Security Certificate specifies a
Person entitled to the Security; and (b) a transfer of the Security may be
registered upon books maintained for that purpose by or on behalf of the issuer
of such Security, or the Security Certificate so states.

"Security Certificate" means a certificate representing a
Security.

"Security", except as otherwise provided in Section 8-103 of
the UCC, means an obligation of an issuer or a share, participation or other
interest in an issuer or in property or an enterprise of an issuer: (a) which
is represented by a Security Certificate in bearer or registered form, or the
transfer of which may be registered upon books maintained for that purpose by
or on behalf of the issuer; (b) which is one of a class or series or by its
terms is divisible into a class or series of shares, participations, interests
or obligations; and (c) which either (i) is, or is of a type, dealt in or
traded on securities exchanges or securities markets; or (ii) is a medium for
investment and by its terms expressly provides that it is a security governed
by Article 8 of the UCC.

172
EXHIBIT G

[Form of Confidentiality Agreement]

CONFIDENTIALITY AGREEMENT

[Date]

[Insert Name and
Address of Prospective
Participant or Assignee]

Re: Credit Agreement dated as of __________, 1997 (as
modified and supplemented and in effect from time
to time, the "Credit Agreement"), between Suiza
Foods Corporation (the "Company"), the lenders
named therein and First Union National Bank, as
Agent.

Dear Ladies and Gentlemen:

As a Lender party to the Credit Agreement, we have agreed with
the Company pursuant to Section 11.12 of the Credit Agreement to use reasonable
precautions to keep confidential, except as otherwise provided therein, all
non-public information supplied to us by the Company or any of its Subsidiaries
identified by such Person as being confidential at the time the same is
delivered to us pursuant to the Credit Agreement.

As provided in said Section 11.12, we are permitted to provide
you, as a prospective [holder of a participation in the Facility A Loans and
Facility B Loans (as defined in the Credit Agreement)] [assignee Lender], with
certain of such non-public information subject to the execution and delivery by
you, prior to receiving such non-public information, of a Confidentiality
Agreement in this form. Such information will not be made available to you
until your execution and return to us of this Confidentiality Agreement.

Accordingly, in consideration of the foregoing, you agree (on
behalf of yourself and each of your affiliates, directors, officers, employees
and representatives and for the benefit of us and each Obligor) that (A) such
information will not be used by you except in connection with the proposed
[participation][assignment] mentioned above and (B) you shall use reasonable
precautions, in accordance with your customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, to keep such information confidential, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any of the Lenders or the Agent, (iii) to bank
examiners, auditors or

Confidentiality Agreement 1
173
accountants, (iv) to the Agent or any other Lender, (v) in connection with any
litigation to which you or any one or more of the Lenders or the Agent are a
party, (vi) to a subsidiary or affiliate of yours as provided in Section
11.12(a) of the Credit Agreement or (vii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant
(or prospective assignee or participant) first executes and delivers to you a
Confidentiality Agreement substantially in the form hereof; provided, further,
that in no event shall you be obligated to return any materials furnished to
you pursuant to this Confidentiality Agreement.

If you are a prospective assignee, your obligations under this
Confidentiality Agreement shall be superseded by Section 11.12 of the Credit
Agreement on the date upon which you become a Lender under the Credit Agreement
pursuant to Section 11.06 thereof.

Please indicate your agreement to the foregoing by signing as
provided below the enclosed copy of this Confidentiality Agreement and
returning the same to us.

Very truly yours,

[INSERT NAME OF LENDER]

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

The foregoing is agreed to
as of the date of this letter.

[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]

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

Confidentiality Agreement 2
174
EXHIBIT H

[Form of Assignment and Acceptance]

ASSIGNMENT AND ACCEPTANCE

Reference is made to the Credit Agreement, dated as of
__________, 1997, as amended, supplemented or otherwise modified from time to
time (the "Credit Agreement"), among Suiza Foods Corporation (the "Company"),
the Lenders named therein, and First Union National Bank, as agent for the
Lenders (in such capacity, the "Agent"). Terms defined in the Credit Agreement
are used herein with the same meanings. This Assignment and Acceptance,
between the Assignor (as identified on SCHEDULE 1 hereto) and the Assignee (as
identified on SCHEDULE 1 hereto) is dated as of the Effective Date (as
specified on SCHEDULE 1 hereto, the "Effective Date").

1. The Assignor hereby irrevocably sells and assigns
to the Assignee without recourse to the Assignor, and the Assignee hereby
irrevocably purchases and assumes from the Assignor without recourse to the
Assignor, as of the Effective Date, a ___% interest (the "Assigned Interest")
in and to the Assignor's rights and obligations under the Credit Agreement with
respect to those credit facilities contained in the Credit Agreement as set
forth on SCHEDULE 1 (individually, an "Assigned Facility"; collectively, the
"Assigned Facilities"), in a principal amount for each Assigned Facility as set
forth on SCHEDULE 1.

2. The Assignor (a) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other instrument or
document furnished pursuant thereto, other than that it has not created any
adverse claim upon the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (b) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Company, any of its Subsidiaries or any other obligor for the
performance or observance by the Company, any of its Subsidiaries or any other
obligor of any of their respective obligations under the Credit Agreement or
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; and (c) attaches the Facility A Note(s) and Facility B
Note(s) held by it evidencing the Assigned Facilities and requests that the
Agent exchange such Facility A Note(s) and Facility B Note(s) for new Facility
A Note(s) and Facility B Note(s) payable to the Assignor (if the Assignor has
retained any interest in the Assigned Facility) and new Facility A Note(s) and
Facility B Note(s) payable to the Assignee in the respective amounts which
reflect the assignment being made hereby (and after giving effect to any other
assignments which have become effective on the Effective Date).

3. The Assignee (a) represents and warrants that it
is legally authorized to enter into this Assignment and Acceptance; (b)
confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements delivered pursuant to Section 7.02

Assignment and Acceptance 1
175
thereof and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon
the Assignor, the Agent or any other person which has become a Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (d) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Agreement
as are delegated to the Agent by the terms thereof, together with such powers
as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its
terms all the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Lender including, if it is organized under
the laws of a jurisdiction outside the United States, its obligation pursuant
to Section 5.06 of the Credit Agreement to deliver the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee's
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement, or such other documents as
are necessary to indicate that all such payments are subject to such tax at a
rate reduced by an applicable tax treaty.

4. Following the execution of this Assignment and
Acceptance, it will be delivered to the Agent for acceptance by it, effective
as of the Effective Date (which shall not, unless otherwise agreed to by the
Agent, be earlier than five Business Days after the date of acceptance by the
Agent of the executed Assignment and Acceptance).

5. Upon such acceptance, from and after the Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignee whether such amounts have accrued prior to the Effective Date or
accrue subsequent to the Effective Date. The Assignor and the Assignee shall
make all appropriate adjustments in payments by the Agent for periods prior to
the Effective Date or with respect to the making of this assignment directly
between themselves.

6. From and after the Effective Date, (a) the
Assignee shall be a party to the Credit Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.

7. This Assignment and Acceptance shall be governed
by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed on SCHEDULE 1 hereto by their
respective duly authorized officers.

Assignment and Acceptance 2
176
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE
CREDIT AGREEMENT BETWEEN
SUIZA FOODS CORPORATION,
THE LENDERS PARTY THERETO
AND
FIRST UNION NATIONAL BANK,
AS AGENT

--------------------------------------------------------------------------------

Name of Assignor:

Name of Assignee:

Effective Date of Assignment:

Principal Assigned Commitment Percentage
Amount Assigned Facilities Assigned
--------------- ---------- ---------------------

[Assignor] [Assignee]

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

Lending Office for all Loans:

Address for Notices:

Attention:

Telecopier No.:

Telephone No.:

Assignment and Acceptance 3
177
Accepted (if necessary):

FIRST UNION NATIONAL BANK, as Agent

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

SUIZA FOODS CORPORATION

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

Assignment and Acceptance 4
178
EXHIBIT I-1

FORM OF

NOTICE OF BORROWING

First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-000
Attn: Syndication Agency Services

Ladies and Gentlemen:

This irrevocable Notice of Borrowing is delivered to you under
Section 2.02(a) of the Credit Agreement dated as of ___________, ____ (as
amended, restated or otherwise modified, the "Credit Agreement"), between Suiza
Foods Corporation (the "Company"), the lenders party thereto (the "Lenders"),
and First Union National Bank as Administrative Agent.

1. The Company hereby requests that the Lenders make
Loans in the aggregate principal amount of $__________ (the "Loans"). (1)

2. The Company hereby requests that the Loans be made
on the following Business Day: ____________________. (2)

3. The Company hereby requests that the Loans be of
the Class(es), Type(s) and bear interest at the following interest rate, plus
the Applicable Margin, as set forth below:

Termination Date
Principal for
Class and Type Component Interest Period Interest Period
of Loans of Loans Interest Rate (if applicable) (if applicable)
-------------- -------- ------------- --------------- ---------------

4. The principal amount of all Loans [and Letter of
Credit Liabilities] outstanding as of the date hereof (including the requested
Loans) does not exceed the maximum amount permitted to be outstanding pursuant
to the terms of the Credit Agreement.

---------------

(1) Complete with an amount in accordance with Section 4.04 of the Credit
Agreement.
(2) Complete with a Business Day in accordance with Section 4.05 of the
Credit Agreement.

Assignment and Acceptance 1
179
5. All of the conditions applicable to the Loans
requested herein as set forth in the Credit Agreement have been satisfied as of
the date hereof and will remain satisfied to the date of such Loans.

6. All capitalized undefined terms used herein have
the meanings assigned thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Notice
of Borrowing this ______ day of ________________, _____.

SUIZA FOODS CORPORATION

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

Assignment and Acceptance 2
180
EXHIBIT I-2

FORM OF

NOTICE OF PREPAYMENT

First Union National Bank,
as Administrative Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services

Ladies and Gentlemen:

This irrevocable Notice of Prepayment is delivered to you by
Suiza Foods Corporation, a corporation organized under the laws of Delaware
(the "Company"), under Section 2.08(a) of the Credit Agreement dated as of
_______________, ____ (as amended, restated or otherwise modified, the "Credit
Agreement"), between the Company, the lenders party thereto, and First Union
National Bank, as Administrative Agent.

1. The Company hereby provides notice to the Agent
that the Company shall repay the following [Class] [Base Rate Loans] and/or
[Eurodollar Loans]: ________________. (3)

2. The Company shall repay the above referenced Loans
on the following Business Day:______________________. (4)

3. All capitalized undefined terms used herein have
the meanings assigned thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Notice
of Prepayment this ____ day of _______________, 19___.

SUIZA FOODS CORPORATION

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

---------------

(3) Complete with an amount in accordance with Section 4.04 of the Credit
Agreement.
(4) Complete with a Business Day in accordance with Section 4.05 of the
Credit Agreement.

Assignment and Acceptance 1
181
EXHIBIT I-3

FORM OF

NOTICE OF CONVERSION/CONTINUATION

First Union National Bank
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services

Ladies and Gentlemen:

This irrevocable Notice of Conversion/Continuation (the
"Notice") is delivered to you under Section 2.08(a) of the Credit Agreement
dated as of ____________, ____ (as amended, restated or otherwise modified, the
"Credit Agreement"), between Suiza Foods Corporation (the "Company"), the
lenders party thereto (the "Lenders"), and First Union National Bank as
Administrative Agent.

1. This Notice of Conversion/Continuation is
submitted for the purpose of: (Complete applicable information.)

(a) [Converting] [Continuing] a ____________ Loan
[into] [as] a ______________ Loan. (5)

(b) The aggregate outstanding principal balance of
such Loan is $__________________.

(d) The principal amount of such Loan to be
[Converted] [Continued] is $__________________. (7)

---------------

(5) Delete the bracketed language and insert Class and Type "Base Rate" or
"Eurodollar", as applicable, in each blank.

(6) Insert applicable date for any Eurodollar Loan being converted or
continued.

(7) Complete with an amount in compliance with Section 4.04 of the Credit
Agreement.

Assignment and Acceptance 1
182
(e) The requested effective date of the [Conversion]
[Continuation] of such Loan is ________________. (8)

(f) The requested Interest Period applicable to the
[Converted] [Continued] Loan is _______________. (9)

2. No Default or Event of Default exists, and none
will exist upon the Conversion or Continuation of the Loan requested herein.

3. All capitalized undefined terms used herein have
the meanings assigned thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Notice
of Conversion/Continuation this ____ day of ____________, 19___.

SUIZA FOODS CORPORATION

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

---------------

(8) Complete with a Business Day at least three (3) Business Days after
the date of this Notice.

(9) Complete for any Eurodollar Loan with an Interest Period in compliance
with the definition of "Interest Period" of the Credit Agreement.

Assignment and Acceptance 2
183
EXHIBIT I-4

FORM OF

NOTICE OF ACCOUNT DESIGNATION

Dated
---------------

First Union National Bank,
as Administrative Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services

Ladies and Gentlemen:

This Notice of Account Designation is delivered to you by
Suiza Foods Corporation (the "Company"), a corporation organized under the laws
of Delaware, under Section 2.02(b) of the Credit Agreement dated as of
_____________ (as amended, restated or otherwise modified, the "Credit
Agreement") between the Company, the lenders party thereto, and First Union
National Bank as Administrative Agent.

The Agent is hereby authorized to disburse all Loan proceeds
into the following account(s):

[Insert name of bank/
ABA Routing Number/
and Account Number]

IN WITNESS WHEREOF, the undersigned has executed this Notice
of Account Designation this _____ day of ______________, 19___.

SUIZA FOODS CORPORATION

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

Assignment and Acceptance 1

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EXHIBIT 10.34 SUIZA FOODS CORPORATION CREDIT AGREEMENT $1,250,000,000 Credit Facility Dated as of November 26, 1997 FIRST UNION NATIONAL BANK, as Administrative Agent THE FIRST NATIONAL BANK OF CHICAGO, as Syndication Agent 2 TABLE OF CONTENTS This...

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