S-4

QuickLinks -- Click here to rapidly navigate through this document

As filed with the Securities and Exchange Commission on June 22, 2001.

Registration No. 333-       

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

MICHAEL FOODS, INC.*
(Exact name of registrant as specified in its charter)

Minnesota	2015	41-0498850
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Number)	(I.R.S. Employer Identification No.)

Suite 324
Signal Bank Building
5353 Wayzata Boulevard
Minneapolis, Minnesota 55416
Telephone: (952) 546-1500

(Address, including zip code, and telephone number, including area code, of registrants' principal executive offices)

John D. Reedy
Executive Vice President, Chief Financial Officer and Treasurer
Suite 324
Signal Bank Building
5353 Wayzata Boulevard
Minneapolis, Minnesota 55416
Telephone: (952) 546-1500
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:
Dennis M. Myers, Esq.
Kirkland & Ellis
200 E. Randolph Drive
Chicago, Illinois 60601
Telephone: (312) 861-2000

*

The companies listed on the next page are also included in this Form S-4 Registration Statement as additional Registrants.

Approximate date of commencement of proposed sale of the securities to the public: The exchange will occur as soon as practicable after the effective date of this Registration Statement.

       If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. / /

       If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

       If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit(2)	Amount of Registration Fee(1)
113/4% Senior Subordinated Notes due 2011, Series B	$200,000,000	100%	$50,000(1)
Guarantees on Senior Subordinated Notes(2)	—	—	—(3)

(1)

Calculated in accordance with Rule 457 under the Securities Act of 1933, as amended.

(2)

All subsidiary guarantors are wholly owned subsidiaries of the Registrant and have each guaranteed the Notes being registered.

(3)

Pursuant to Rule 457(n), no separate fee is payable with respect to the guarantees being registered hereby.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Exact Name of Additional Registrants*	Jurisdiction of Formation	I.R.S. Employer Identification No.
Farm Fresh Foods, Inc.	Nevada	91-2086470
Kohler Mix Specialties of Connecticut, Inc.	Connecticut	41-1938090
Michael Foods of Delaware, Inc.	Delaware	41-1579532
Casa Trucking, Inc.	Minnesota	22-3493806
Crystal Farms Refrigerated Distribution Company	Minnesota	41-1669454
Kohler Mix Specialties, Inc.	Minnesota	41-0845810
M-Foods Dairy, LLC	Delaware	84-1582879
M-Foods Dairy TXCT, LLC	Delaware	84-1583749
Midwest Mix, Inc.	Minnesota	41-0947334
Minnesota Products, Inc.	Minnesota	41-1394918
Papetti's Hygrade Egg Products, Inc.	Minnesota	22-3493805
Northern Star Co.	Minnesota	41-1468193
M.G. Waldbaum Company	Nebraska	47-0445304
Papetti Electroheating Corporation	New Jersey	22-3301353
WFC, Inc.	Wisconsin	41-1698341
Wisco Farm Cooperative	Wisconsin	39-1524981

*

The address for each of the additional Registrants is c/o Michael Foods, Inc., Suite 324, Signal Bank Building, 5353 Wayzata Boulevard, Minneapolis, Minnesota 55416, telephone (952) 546-1500. The primary standard industrial classification number for each of the additional Registrants is 2015.

SUBJECT TO COMPLETION, DATED JUNE  , 2001

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the SEC is effective. This prospectus is not an offer to sell nor is it an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS

MICHAEL FOODS, INC.

Exchange Offer for
$200,000,000
11³/4% Senior Subordinated Notes due 2011

We are offering to exchange:

up to $200,000,000 of our new 11³/4% Senior Subordinated Notes due 2011, Series B

for

a like amount of our outstanding 11³/4% Senior Subordinated Notes due 2011.

Material Terms of Exchange Offer

• The terms of the notes to be issued in the exchange offer are substantially identical to the outstanding notes, except that the transfer restrictions and registration rights relating to the outstanding notes will not apply to the exchange notes.

•
There is no existing public market for the outstanding notes or the exchange notes. We do not intend to list the exchange notes on any securities exchange or seek approval for quotation through any automated trading system.

•
Expires 5:00 p.m., New York City time,      , 2001, unless extended.

•
Based on the advice of counsel, the exchange of notes will not be a taxable event for U.S. federal income tax purposes.

•
The exchange offer is subject to customary conditions, including that it does not violate applicable law or any applicable interpretation of the staff of the SEC.

•
We will not receive any proceeds from the exchange offer.

For a discussion of certain factors that you should consider before participating in this exchange offer, see "Risk Factors" beginning on page 11 of this prospectus.

Neither the SEC nor any state securities commission has approved the notes to be distributed in the exchange offer, nor have any of these organizations determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

, 2001

We have not authorized anyone to give any information or represent anything to you other than the information contained in this prospectus. You must not rely on any unauthorized information or representations.

Until        , 2001, all dealers that, buy, sell or trade the exchange notes, whether or not participating in the exchange offer, may be required to deliver a prospectus. This requirement is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments and subscriptions.

TABLE OF CONTENTS

	Page
Prospectus Summary	1
Risk Factors	11
The Acquisition	22
Exchange Offer	23
Use of Proceeds	30
Capitalization	30
Unaudited Pro Forma Condensed Consolidated Statements of Earnings	31
Selected Historical Financial Data	34
Management's Discussion and Analysis of Financial Condition and Results of Operations	37
Business	49
Management	68
Security Ownership of Certain Beneficial Owners and Management	79
Certain Relationships and Related Transactions	81
Description of Senior Credit Facility	85
Description of Notes	87
United States Federal Income Tax Consequences	134
Plan of Distribution	135
Legal Matters	136
Independent Certified Public Accountants	136
Available Information	136
Index to Financial Statements	F-1

Sunny Side Up®, Simply Eggs®, Easy Eggs®, Crystal Farms®, Simply Potatoes® and Diner's Choice® are registered trademarks of Michael Foods. Deep Chill™, Better `n Eggs™, All Whites™, Chef's Omelet™, Table Ready™ and Farm Fresh™ are trademarks of Michael Foods. Other trademarks, service marks and trade names appearing in this prospectus are the property of their respective holders.

i

MARKET, RANKING AND OTHER DATA

    The data included in this prospectus regarding markets and ranking, including the size of certain product markets and our position and the position of our competitors within these markets, are based on independent industry publications, reports from government agencies or other published industry sources and our estimates based on our management's knowledge and experience in the markets in which we operate. Our estimates have been based on information obtained from our customers, distributors, suppliers, trade and business organizations and other contacts in the markets in which we operate. We believe these estimates to be accurate as of the date of this prospectus. However, this information may prove to be inaccurate because of the method by which we obtained some of the data for our estimates or because this information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in a survey of market size. In addition, consumption patterns and consumer preferences can and do change. As a result, you should be aware that market, ranking and other similar data included in this prospectus, and estimates and beliefs based on such data, may not be reliable.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

    This prospectus includes "forward-looking statements." Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future sales or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, our competitive strengths and weaknesses, our business strategy and the trends we anticipate in the industries and economies in which we operate and other information that is not historical information and, in particular, appear under the heading "Prospectus Summary," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business." When used in this prospectus, the words "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, our examination of historical operating trends, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them, but there can be no assurance that our expectations, beliefs and projections will be realized.

    There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this prospectus. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this prospectus are set forth in this prospectus, including the factors described in the section entitled "Risk Factors." If any of these risks or uncertainties materialize, or if any of our underlying assumptions are incorrect, our actual results may differ significantly from the results that we express in or imply by any of our forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect future events or circumstances.

ii

PROSPECTUS SUMMARY

This summary highlights the material information about our company and this exchange offer. This summary does not contain all of the information that may be important to you in deciding whether to participate in the exchange offer. We encourage you to read this prospectus in its entirety. Except as otherwise required by the context, references in this prospectus to "our company," "we," "us" or "our" refer to the combined businesses of Michael Foods, Inc., including its accounting predecessor, and all of their respective subsidiaries and references to "the issuer" refer to Michael Foods, Inc. exclusive of its subsidiaries.

General

    Michael Foods, Inc. is a diversified producer and distributor of specialty egg, potato and dairy products to the foodservice, retail and industrial ingredient markets. We also distribute refrigerated grocery items, primarily cheese and other dairy products, to the retail grocery market in the central United States. Our largest operating division, egg products, is the largest producer of processed egg products in the United States, and we believe it is three times larger than its nearest competitor. For the three months ended March 31, 2001, we generated net sales and EBITDA of $275.6 million and $31.7 million, respectively, and for the year ended December 31, 2000, we generated net sales and EBITDA of $1,080.6 million and $134.8 million, respectively.

    The following charts set forth the net sales and operating profit of our four divisions for the year ended December 31, 2000.

     Egg Products:  We believe the egg products division is the largest producer and supplier of processed egg products in the United States. For the year ended December 31, 2000, the egg products division represented approximately 59.0% of our net sales and 73.0% of our operating profit.

    Potato Products:  We believe the potato products division is the largest processor and distributor in the United States of a wide variety of refrigerated potato products sold to the retail grocery and foodservice markets. For the year ended December 31, 2000, the potato products division represented approximately 5.6% of our net sales and 8.3% of our operating profit.

    Dairy Products:  The dairy products division is a leading producer and marketer of dairy mixes, including soft serve ice cream and milkshake mix, and specialty processed dairy products to quick service restaurant chains and foodservice distributors. For the year ended December 31, 2000, the dairy products division represented approximately 13.1% of our net sales and 1.4% of our operating profit.

    Refrigerated Distribution:  The refrigerated distribution division is a distributor of over 400 branded and private label refrigerator case items to retailers and wholesale warehouses in 30 states. For the year ended December 31, 2000, the refrigerated distribution division represented approximately 22.3% of our net sales and 17.3% of our operating profit.

1

Industry Trends

    We believe that our egg, potato and dairy products divisions are well positioned to capitalize on the continued growth of the foodservice industry, which is being driven by an increase in food consumption away from the home. We also believe that the egg products division will benefit from several additional trends, including continued increases in processed egg consumption. Our business is influenced by the following industry trends:

•

Growth in the foodservice industry.



•

Consolidation in foodservice channel.



•

Growth in per capita egg consumption.



•

Growth in higher value-added processed egg products.

Competitive Strengths

    We believe we are able to compete favorably in our markets due to the following competitive strengths:

•

Extensive portfolio of specialty and branded products with leading regional and national market positions.



•

Long-standing customer relationships.



•

Large scale operator with efficient manufacturing operations.



•

Industry leading product development capability.



•

Strong, proven management team with significant equity interest.

Business Strategy

    Our strategy has enabled us to capitalize upon key industry trends, specifically the increases in both food prepared away from the home and the consumption of further-processed eggs. The primary components of our business strategy include the following:

•

Move customers up the "value chain," particularly for egg products.



•

Capitalize on growth opportunities in potato products, dairy products and refrigerated distribution divisions.



•

Integrate our egg operations.



•

Reduce commodity risks.



•

Pursue attractive acquisition and joint venture opportunities.

2

The Acquisition

    On April 10, 2001, pursuant to a merger agreement by and among Michael Foods, Inc., M-Foods Holdings, Inc. and its wholly owned subsidiary, Michael Foods Acquisition Corp., we entered into a series of transactions that resulted in Michael Foods becoming a wholly owned subsidiary of M-Foods Holdings, Inc. M-Foods Holdings is a corporation formed by M-Foods Investors, LLC, which is owned by affiliates of Vestar Capital Partners and Goldner Hawn Johnson & Morrison, which we collectively refer to as the "equity investors," and certain members of our management and affiliates of the Michael family. The merger agreement and related documents contemplated the occurrence of the following events, which we refer to as the "acquisition and related financing transactions":

•

an investment made by the equity investors totaling approximately $175.0 million in cash;



•

a rollover equity investment by certain members of our senior management team and affiliates of the Michael family of approximately $48.4 million;



•

the merger of Michael Foods Acquisition Corp. into Michael Foods, with Michael Foods as the surviving corporation;



•

the borrowing by Michael Foods of approximately $370.0 million in term loans;



•

the assumption of approximately $8.3 million of existing indebtedness; and



•

the offering of $200.0 million in aggregate principal amount of notes.

    Following the completion of the merger on April 10, 2001, our common stock ceased to be publicly traded, and we terminated the registration of our common stock under the Exchange Act.

    Michael Foods is a corporation organized under the laws of the State of Minnesota. Our principal executive offices are located at Suite 324, Signal Bank Building, 5353 Wayzata Boulevard, Minneapolis, Minnesota 55416, and our telephone number is (952) 546-1500. Our World Wide Web address is www.michaelfoods.com. Our Web site and the information contained on our Web site is not a part of this prospectus.

3

Summary of the Exchange Offer

The Initial Offering of Outstanding Notes	We sold the outstanding notes on March 16, 2001 to Banc of America Securities LLC and Bear, Stearns & Co. Inc. We collectively refer to those parties in this prospectus as the "initial purchasers." The initial purchasers subsequently resold the outstanding notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended and to non-U.S. Persons within the meaning of Regulation S under the Securities Act.
Registration Rights Agreement	Simultaneously with the initial sale of the outstanding notes, we entered into a registration rights agreement for the exchange offer. In the registration rights agreement, we agreed, among other things, to use our reasonable best efforts to file a registration statement with the SEC and to complete this exchange offer within 210 days of issuing the outstanding notes. The exchange offer is intended to satisfy your rights under the registration rights agreement. After the exchange offer is complete, you will no longer be entitled to any exchange or registration rights with respect to your outstanding notes.
The Exchange Offer	We are offering to exchange the exchange notes, which have been registered under the Securities Act for your outstanding notes. In order to be exchanged, an outstanding note must be properly tendered and accepted. All outstanding notes that are validly tendered and not validly withdrawn will be exchanged. We will issue exchange notes promptly after the expiration of the exchange offer.
Resales	We believe that the exchange notes issued in the exchange offer may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act provided that:
	• the exchange notes are being acquired in the ordinary course of your business;
	• you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the exchange notes issued to you in the exchange offer; and

4

	• you are not an affiliate of ours.
	If any of these conditions are not satisfied and you transfer any exchange notes issued to you in the exchange offer without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from registration of your exchange notes from these requirements, you may incur liability under the Securities Act. We will not assume, nor will we indemnify you against, any such liability.
	Each broker-dealer that is issued exchange notes in the exchange offer for its own account in exchange for outstanding notes that were acquired by that broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the exchange notes. A broker-dealer may use this prospectus for an offer to resell, resale or other retransfer of the exchange notes issued to it in the exchange offer.
Record Date	We mailed this prospectus and the related exchange offer documents to registered holders of outstanding notes on           , 2001.
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time,           , 2001, unless we decide to extend the expiration date.
Conditions to the Exchange Offer	The exchange offer is subject to customary conditions, including that it does not violate applicable law or any applicable interpretation of the staff of the SEC.
Procedures for Tendering Outstanding Notes	If you wish to tender your notes for exchange in this exchange offer, you must transmit to the exchange agent on or before the expiration date either:
	•    an original or a facsimile of a properly completed and duly executed copy of the letter of transmittal, which accompanies this prospectus, together with your outstanding notes and any other documentation required by the letter of transmittal, at the address provided on the cover page of the letter of transmittal; or
	•    If the notes you own are held of record by The Depository Trust Company, or "DTC" in book-entry form and you are making delivery by book-entry transfer, a computer-generated message transmitted by means of the Automated Tender Offer Program System of DTC, or "ATOP," in which you acknowledge and agree to be bound by the terms of the letter of transmittal and which, when received by the exchange agent, forms a part of a confirmation of book-entry transfer. As part of the book-entry transfer, DTC will facilitate the exchange of your notes and update your account to reflect the issuance of the exchange notes to you. ATOP allows you to electronically transmit your acceptance of the exchange offer to DTC instead of physically completing and delivering a letter of transmittal to the notes exchange agent.

5

	In addition, you must deliver to the exchange agent on or before the expiration date:
	•    If you are effecting delivery by book-entry transfer, a timely confirmation of book-entry transfer of your outstanding notes into the account of the notes exchange agent at DTC; or
	•    if necessary, the documents required for compliance with the guaranteed delivery procedures.
Special Procedures for Beneficial Owners	If you are the beneficial owner of book-entry interests and your name does not appear on a security position listing of DTC as the holder of the book-entry interests or if you are a beneficial owner of outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender the book-entry interest or outstanding notes in the exchange offer, you should contact the person in whose name your book-entry interests or outstanding notes are registered promptly and instruct that person to tender on your behalf.
Withdrawal Rights	You may withdraw the tender of your outstanding notes at any time prior to 5:00 p.m., New York City time on           , 2001.
Federal Income Tax Considerations	Based on the advice of counsel, the exchange of outstanding notes will not be a taxable event for U.S. federal income tax purposes.
Use of Proceeds	We will not receive any proceeds from the issuance of exchange notes pursuant to the exchange offer. We will pay all of our expenses incident to the exchange offer.
Exchange Agent	BNY Midwest Trust Company is serving as the exchange agent in connection with the exchange offer.

6

Summary of Terms of the Exchange Notes

The form and terms of the exchange notes are the same as the form and terms of the outstanding notes, except that the exchange notes will be registered under the Securities Act. As a result, the exchange notes will not bear legends restricting their transfer and will not contain the registration rights and liquidated damage provisions contained in the outstanding notes. The exchange notes represent the same debt as the outstanding notes. Both the outstanding notes and the exchange notes are governed by the same indentures. Unless otherwise required by the context, use the term notes in this prospectus to collectively refer to the outstanding notes and the exchange notes.

Issuer	Michael Foods, Inc., a Minnesota corporation.
Securities	$200.0 million in principal amount of 113/4% Senior Subordinated Notes due 2011, Series B.
Maturity	April 1, 2011.
Interest	Annual rate: 113/4%.
	Payment frequency: every six months on April 1 and October 1.
	First payment: October 1, 2001.
Ranking	The exchange notes are senior subordinated debt. Accordingly, they will rank:
	• behind all of the issuer's and subsidiary guarantors' existing and future senior debt;
	• equally with all of the issuer's existing and future subordinated, unsecured debt that does not expressly provide that it is subordinated to the exchange notes;
	• ahead of any of the issuer's future debt that expressly provides that it is subordinated to the exchange notes; and
	• structurally behind the liabilities of any of the issuer's subsidiaries that do not guarantee the exchange notes.
	The acquisition and the related financing transactions, including the offering of the notes and the senior credit facility, were completed on April 10, 2001. At April 1, 2001, the date the acquisition was consummated for financial reporting purposes, the notes were subordinated to approximately $394 million of senior debt of the issuer and the subsidiary guarantees were subordinated to approximately $402 million of senior debt of the subsidiary guarantors, $394 million of which represented guarantees of the issuer's senior debt.
Guarantees	The exchange notes will be unconditionally guaranteed on a senior subordinated basis by each of the issuer's existing and future domestic subsidiaries, other than subsidiaries treated as unrestricted subsidiaries. If the issuer cannot make payments on the exchange notes when they are due, the guarantor subsidiaries must make them instead.

7

Optional Redemption	On or after April 1, 2006, the issuer may redeem some or all of the notes at any time at the redemption prices described in the section "Description of Notes—Optional Redemption."
	Prior to April 1, 2004, the issuer may redeem up to 35% of the notes with the proceeds of qualified sales of our equity at the price listed in the section "Description of Notes—Optional Redemption."
Mandatory Offer to Repurchase	If we sell certain assets or experience specific kinds of changes in control, we must offer to repurchase the notes at the prices listed in the section "Description of Notes—Repurchase at the Option of Holders."
Basic Covenants of Indenture	The indenture under which the outstanding notes were issued will govern the exchange notes. This indenture contains covenants restricting our ability and the ability of our restricted subsidiaries to:
	• borrow money;
	• pay dividends on or redeem or repurchase stock;
	• make investments;
	• create liens;
	• use assets as security in other transactions;
	• sell certain assets or merge with or into other companies;
	• enter into certain transactions with affiliates;
	• sell stock in our restricted subsidiaries; and
	• restrict dividends or other payments from our subsidiaries.
	For more details, see the section "Description of Notes—Certain Covenants."

You should refer to the section entitled "Risk Factors" for an explanation of certain risks of participating in the exchange offer.

8

SUMMARY HISTORICAL AND CONDENSED CONSOLIDATED PRO FORMA FINANCIAL DATA

    The following summary historical financial data of the accounting predecessor for the three years ended December 31, 2000 and the three months ended March 31, 2001 were derived from our audited consolidated financial statements. The summary historical financial data of the accounting predecessor for the three month period ended March 31, 2000 are derived from our unaudited consolidated financial statements. We prepared the summary unaudited condensed consolidated pro forma financial data for the year ended December 31, 2000 and the three months ended March 31, 2001 to illustrate the estimated effects of the acquisition and related financing transactions, including the offering of the notes and the application of the proceeds therefrom. The balance sheet data as of April 1, 2001 was derived from the audited balance sheet giving effect to the acquisition and related financing transactions as if they had occurred on that date. The pro forma statement of earnings data for the year ended December 31, 2000 and the three months ended March 31, 2001 is presented as if the acquisition and related financing transactions had occurred on January 1, 2000. We believe that the assumptions used provide a reasonable basis for presenting the significant effects directly attributable to these transactions; however, the pro forma data does not purport to represent what our results of operations would actually have been if such transactions had in fact occurred on such dates or to project results for any future period. Operating results for the three months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2001.

    The following summary historical and pro forma financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Unaudited Pro Forma Condensed Consolidated Statements of Earnings" and our consolidated financial statements and related notes included elsewhere in this prospectus.

											Three Months Ended March 31,
																	Pro Forma
		Predecessor
																			Three Months Ended March 31, 2001
		Year Ended December 31,
																	Year Ended December 31, 2000
		1998			1999			2000			2000			2001
											(unaudited)						(unaudited)
		(dollars in thousands)
Statement of Earnings Data:
Net sales		$	1,020,484		$	1,053,272		$	1,080,601		$	251,926		$	275,627		$	1,080,601	$	275,627
Costs of sales			847,383			860,256			889,138			205,071			227,707			889,138		227,707
Gross profit			173,101			193,016			191,463			46,855			47,920			191,463		47,920
Selling, general and administrative expenses			93,548			106,686			104,657			27,956			27,376			115,405		30,064
Transaction expenses			—			—			—			—			3,298			—		—
Operating profit			79,553			86,330			86,806			18,899			17,246			76,058		17,856
Interest expense, net			10,136			11,664			13,206			2,950			3,293			56,340		14,192
Earnings before income taxes and extraordinary item			69,417			74,666			73,600			15,949			13,953			19,718		3,664
Income tax expense			29,160			30,610			28,890			6,460			5,480			7,741		1,434
	Net earnings (loss) before extraordinary item	$	40,257		$	44,056		$	44,710		$	9,489		$	8,473		$	11,977	$	2,230
Other Financial Data:
EBITDA(1)		$	115,357		$	128,894		$	134,789		$	30,850		$	29,781		$	133,789	$	32,333
Cash provided by (used in):
Operating activities			68,910			107,653			69,085			16,424			14,016			N/A		N/A
Investing activities			(63,983	)		(93,530	)		(38,500	)		(8,117	)		(6,949	)		N/A		N/A
Financing activities			(6,918	)		(11,209	)		(31,125	)		(8,742	)		(7,218	)		N/A		N/A
Depreciation and amortization			35,804			42,564			47,983			11,951			12,535			57,731		14,477
Capital expenditures			64,777			74,125			37,373			8,131			10,837			37,373		10,837
Ratio of earnings to fixed charges(2)			6.16x			6.11x			5.83x						2.75x			1.35x		1.26x

9

	Predecessor										Company
	As of December 31,						As of March 31,
											As of April 1, 2001
	1998		1999		2000		2000		2001
							(unaudited)
	(in thousands)
Balance Sheet Data:
Working capital	$	61,297	$	51,764	$	78,628	$	57,343	$	73,459	$	88,663
Total assets		551,516		597,917		612,904		599,499		619,721		910,301
Total debt		166,107		178,534		198,809		184,597		192,200		602,276
Stockholders' equity		244,149		264,599		258,733		259,949		257,151		146,185

(1)

EBITDA represents earnings before interest, income taxes, depreciation and amortization. We believe EBITDA is a widely accepted financial indicator used to analyze and compare companies on the basis of operating performance. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles and is not indicative of operating profit or cash flow from operations as determined under generally accepted accounting principles.

(2)

For purposes of determining the ratio of earnings to fixed charges, earnings are defined as earnings before income taxes and extraordinary items, plus fixed charges. Fixed charges consist of interest expense, including amortization of debt issuance costs and a portion of operating lease rental expense deemed to be representative of the interest factor.

10

RISK FACTORS

You should read and consider carefully each of the following factors, as well as the other information contained in this prospectus, before making a decision on whether to participate in the exchange offer.

Risks Associated with the Exchange Offer

Because there is no public market for the notes, you may not be able to resell your notes.

    The exchange notes will be registered under the Securities Act, but will constitute a new issue of securities with no established trading market, and there can be no assurance as to:

•

the liquidity of any trading market that may develop;



•

the ability of holders to sell their exchange notes; or



•

the price at which the holders would be able to sell their exchange notes.

If a trading market were to develop, the exchange notes might trade at higher or lower prices than their principal amount or purchase price, depending on many factors, including prevailing interest rates, the market for similar debentures and our financial performance.

    We understand that the initial purchasers presently intend to make a market in the notes. However, they are not obligated to do so, and any market-making activity with respect to the notes may be discontinued at any time without notice. In addition, any market-making activity will be subject to the limits imposed by the Securities Act and the Exchange Act, and may be limited during the exchange offer or the pendency of an applicable shelf registration statement. There can be no assurance that an active trading market will exist for the notes or that any trading market that does develop will be liquid.

    In addition, any outstanding note holder who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes may be deemed to have received restricted securities, and if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. For a description of these requirements, see "Exchange Offer."

Your notes will not be accepted for exchange if you fail to follow the exchange offer procedures and, as a result, your notes will continue to be subject to existing transfer restrictions and you may not be able to sell your notes.

    We will not accept your notes for exchange if you do not follow the exchange offer procedures. We will issue exchange notes as part of this exchange offer only after a timely receipt of your outstanding notes, a properly completed and duly executed letter of transmittal and all other required documents. Therefore, if you want to tender your notes, please allow sufficient time to ensure timely delivery. If we do not receive your notes, letter of transmittal and other required documents by the expiration date of the exchange offer, we will not accept your notes for exchange. We are under no duty to give notification of defects or irregularities with respect to the tenders of outstanding notes for exchange. If there are defects or irregularities with respect to your tender of notes, we will not accept your notes for exchange.

If you do not exchange your notes, your notes will continue to be subject to the existing transfer restrictions and you may not be able to sell your notes.

    We did not register the outstanding notes, nor do we intend to do so following the exchange offer. Outstanding notes that are not tendered will therefore continue to be subject to the existing transfer restrictions and may be transferred only in limited circumstances under the securities laws. If you do not exchange your notes, you will lose your right to have such notes registered under the federal

11

securities laws. As a result, if you hold outstanding notes after the exchange offer, you may not be able to sell your outstanding notes.

Risks Relating to the Notes

Our substantial indebtedness could adversely affect our financial health and prevent the issuer from fulfilling its obligations under these notes.

    As a result of the acquisition and related financing transactions, we have a significant amount of indebtedness. The following table sets forth our total debt, stockholders' equity giving effect to the acquisition and the related financing transactions, including the offering of notes and application of the net proceeds as of April 1, 2001. The pro forma ratio of earnings to fixed charges assumes the acquisition and related financing transactions were completed on January 1, 2000:

	At April 1, 2001
	(dollars in thousands)
Total debt	$	602,276
Stockholders' equity	$	146,185

	Year Ended December 31, 2000	Three Months Ended March 31, 2001
Pro forma ratio of earnings to fixed charges	1.35x	1.26x

    Our substantial indebtedness could have important consequences to you. For example, it could:

•

make it more difficult for the issuer to satisfy its obligations with respect to these notes;



•

increase our vulnerability to general adverse economic and industry conditions;



•

require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes;



•

limit our flexibility in planning for, or reacting to, changes in our business and the markets in which we operate;



•

place us at a competitive disadvantage compared to our competitors that have less debt; and



•

limit, among other things, our ability to borrow additional funds.

    In addition, the issuer of the notes and its subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the indenture governing the notes and the senior credit facility allow the issuer and its subsidiaries to issue and incur additional debt upon satisfaction of certain conditions. If new debt is added to current debt levels, the related risks described above could intensify.

Your right to receive payments on these notes is junior to the issuer's existing senior indebtedness and possibly all of its future borrowings. Further, the guarantees of these notes are junior to all of the guarantors' existing senior indebtedness and possibly to all their future borrowings.

    These notes and the subsidiary guarantees rank behind all of the issuer's and the subsidiary guarantors' existing senior indebtedness (as defined) and all of the issuer's and the subsidiary guarantors' future senior indebtedness. The acquisition and the related financing transactions were completed on April 10, 2001. At April 1, 2001, the date the acquisition was consummated for financial reporting purposes, these notes were subordinated to approximately $394.0 million of senior debt of the issuer and the subsidiary guarantees were subordinated to approximately $402.0 million of senior debt of the subsidiary guarantors, $394.0 million of which represented guarantees of the issuer's senior debt. In addition, approximately $76.0 million was available for borrowing as additional senior debt under the

12

revolving credit facility. The issuer is permitted to incur substantial additional indebtedness, including senior debt, in the future.

    As a result of such subordination, upon any distribution to the issuer's creditors or the creditors of the guarantors in a bankruptcy, liquidation or reorganization or similar proceeding relating to the issuer or the guarantors or the issuer's or the guarantors' property, the holders of senior debt of the issuer and the guarantors will be entitled to be paid in full in cash before any payment may be made with respect to these notes or the subsidiary guarantees.

    Although your interest as a holder of the notes is generally senior to that of ordinary trade creditors, upon default in payment to certain of the issuer's and the subsidiary guarantors' commodity suppliers, federal and state laws, including the Perishable Agricultural Commodities Act and the Minnesota Wholesale Produce Distributors Act, may create for these suppliers a floating statutory trust, which in effect grants these unpaid suppliers a claim on all of the issuer's and the subsidiary guarantors' inventories and products before the holders of secured or unsecured debt, including the notes.

    In addition, all payments on the notes and the guarantees will be blocked in the event of a payment default on senior debt and may be blocked for up to 179 consecutive days in the event of certain non-payment defaults on designated senior debt.

    In the event of a bankruptcy, liquidation or reorganization or similar proceeding relating to the issuer or the guarantors, holders of the notes will participate with trade creditors and all other holders of subordinated indebtedness of the issuer and the guarantors in the assets remaining after the issuer and the subsidiary guarantors have paid all of the senior debt. However, because the indenture relating to the notes requires that amounts otherwise payable to holders of the notes in a bankruptcy or similar proceeding be paid to holders of senior debt instead, holders of the notes may receive less, ratably, than holders of trade payables in any such proceeding. In any of these cases, the issuer and the subsidiary guarantors may not have sufficient funds to pay all of their creditors and holders of notes may receive less, ratably, than the holders of senior debt.

Since the notes are unsecured, your right to enforce remedies is limited by the rights of holders of secured debt.

    In addition to being contractually subordinated to all existing and future senior indebtedness, the issuer's obligations under the notes will be unsecured while obligations under the senior credit facility will be secured by substantially all of its assets and those of its subsidiaries. If the issuer becomes insolvent or is liquidated, or if payment under the senior credit facility is accelerated, the lenders under the senior credit facility will be entitled to exercise the remedies available to a secured lender under applicable law. These lenders will have a claim on all assets securing the senior credit facility before the holders of unsecured debt, including the notes. See "Description of Senior Credit Facility."

The issuer will require a significant amount of cash to service its indebtedness. Its ability to generate cash depends on many factors beyond the issuer's control.

    The ability of the issuer to make payments on and to refinance its indebtedness, including these notes and amounts borrowed under the senior credit facility, and to fund planned capital expenditures and expansion efforts and any strategic acquisitions we may make in the future, if any, will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive and other factors that are beyond our control.

    Based on our current level of operations, we believe our cash flow from operations, together with available cash and available borrowings under the new senior credit facility, will be adequate to meet future liquidity needs for at least the next twelve months. However, we cannot assure you that our business will generate sufficient cash flow from operations in the future, that our currently anticipated growth in net sales and cash flow will be realized on schedule or that future borrowings will be

13

available to us under the senior credit facility in an amount sufficient to enable the issuer to repay indebtedness, including these notes, or to fund other liquidity needs. The issuer may need to refinance all or a portion of its indebtedness, including these notes, on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness, including the senior credit facility and these notes, on commercially reasonable terms or at all.

The indenture related to these notes and the senior credit facility contain various covenants which limit our management's discretion in the operations of our business.

    The new senior credit facility and the indenture related to these notes contain various provisions which limit our management's discretion by restricting the issuer's and its subsidiaries' ability to:

•

borrow money;



•

pay dividends on stock or purchase stock;



•

make investments and other restricted payments;



•

use assets as security in other transactions;



•

sell certain assets or merge with or into other companies;



•

enter into certain transactions with affiliates;



•

sell stock in certain of our subsidiaries; and



•

restrict dividends or other payments to our company.

    In addition, the senior credit facility requires us to meet certain financial ratios. Covenants in our senior credit facility also require us to use a portion of the proceeds we receive in specified debt or equity issuances to repay outstanding borrowings under our senior credit facility.

    Any failure to comply with the restrictions of the senior credit facility, the indenture related to the notes or any other subsequent financing agreements may result in an event of default. Such default may allow the creditors, if the agreements so provide, to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provisions applies. In addition, the lenders may be able to terminate any commitments they had made to supply us with further funds.

The issuer may not have the ability to raise the funds necessary to finance the change of control offer required by the indenture.

    Upon the occurrence of certain specific kinds of change of control events, the issuer will be required to offer to repurchase all outstanding notes. However, it is possible that the issuer will not have sufficient funds at the time of the change of control to make the required repurchase of notes or that restrictions in the senior credit facility will not allow such repurchases. In addition, certain important corporate events, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a "change of control" under the indenture related to the notes. The issuer's ability to repurchase these notes upon certain specific kinds of change of control events may be limited by the terms of its senior indebtedness and the subordination provisions of the indenture. For example, the senior credit facility prohibits the issuer from repurchasing these notes after certain specific kinds of change of control events until it first repays debt under the senior credit facility in full or obtains a waiver from the bank lenders. If the issuer fails to repurchase these notes in that circumstance, it will go into default under the indenture related to these notes and the senior credit facility. Any future debt which we incur may also contain restrictions on repayment which come into effect upon certain specific kinds of change of control events. If a change of control occurs, we cannot assure you that the issuer, as applicable, will have sufficient funds to repay other debt obligations which will be required to be repaid, in addition to these notes. See "Description of Notes—Repurchase at the Option of Holders—Change of Control" and "Description of Senior Credit Facility."

14

Federal and state statutes allow courts, under specific circumstances, to void guarantees and require noteholders to return payments received from guarantors.

    If a bankruptcy case or lawsuit is initiated by unpaid creditors of any guarantor, the debt represented by the guarantees entered into by the guarantors may be reviewed under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws. Under these laws, the guarantee could be voided, or claims in respect of the guarantee could be subordinated to certain obligations of a guarantor if, among other things, such guarantor, at the time it entered into the guarantee:

•

received less than reasonably equivalent value or fair consideration for entering into the guarantee; and



•

either:



•

was insolvent or rendered insolvent by reason of entering into a guarantee; or



•

was engaged in a business or transaction for which the guarantor's remaining assets constituted unreasonably small capital; or



•

intended to incur, or believed that it would incur, debts or contingent liabilities beyond its ability to pay such debts or contingent liabilities as they become due.

    In addition, any payment by a guarantor could be voided and required to be returned to such guarantor, or to a fund for the benefit of the creditors of such guarantor under such circumstances.

    If a guarantee of a subsidiary were voided as a fraudulent conveyance or held unenforceable for any other reason, holders of these notes would be solely creditors of our company and creditors of our other subsidiaries that have validly guaranteed these notes. These notes then would be effectively subordinated to all obligations of the subsidiary whose guarantee was voided.

    The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if:

•

the sum of its debts, including contingent liabilities, were greater than the fair saleable value of all of its assets; or



•

if the present fair saleable value of its assets were less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or



•

it could not pay its debts or contingent liabilities as they become due.

    To the extent that the claims of the holders of these notes against any subsidiary were subordinated in favor of other creditors of such subsidiary, such other creditors would be entitled to be paid in full before any payment could be made on these notes. If one or more of the guarantees is voided or subordinated, we cannot assure you that after providing for all prior claims, there would be sufficient assets remaining to satisfy the claims of the holders of these notes.

    Based upon financial and other information, we believe that the guarantees are being incurred for proper purposes and in good faith and that each subsidiary that is a guarantor is solvent and will continue to be solvent after this offering is completed, will have sufficient capital for carrying on its business after such issuance and will be able to pay its debts as they mature. There can be no assurance, however, as to what standard a court would apply in making such determinations or that a court would agree with our conclusions in this regard.

15

Risks Relating to Our Company, Our Industry and the Industries We Serve

Our operating profit is significantly affected by egg market prices and the prices of other raw materials, such as grain, which can fluctuate widely.

    Our operating profit or loss is significantly affected by egg market prices and the prices of corn and soybean meal, which are the primary feedstock used in our internal production of eggs. For the year ended December 31, 2000, our costs for eggs purchased from outside suppliers and corn and soybean meal fed to our internal flocks were approximately $236.7 million, which represented 37% and 45% of total net sales and of total cost of sales of the egg products division, respectively. Of this amount, a substantial majority was for the purchase of eggs from third-party suppliers.

    Eggs, corn and soybean meal are each commodities that are subject to significant price fluctuations due to market conditions. For illustrative purposes, the yearly average market cost of eggs, corn and soybean meal for the past ten years is set forth below:

	1991	1992	1993	1994	1995	1996	1997	1998	1999	2000
	(dollars)
Liquid whole eggs (per pound)	0.37	0.32	0.38	0.35	0.36	0.50	0.43	0.38	0.31	0.30
Corn (per bushel)	2.46	2.36	2.40	2.47	2.85	3.70	2.75	2.32	2.08	2.09
Soybean meal (per ton)	176	179	196	179	182	240	250	155	137	172

    Although we can take steps to mitigate the effects of changes to our raw material costs, fluctuations in egg, corn and soybean meal prices are outside of our control. In general, the pricing of eggs is affected by an inelasticity of supply and demand, in connection with which small increases in production or decreases in demand can have a large effect on prices. Our operating profit has historically been adversely affected when egg and grain prices rise. In addition, our operating profit has historically been negatively impacted during extended periods of low egg prices. For example, during 2000 the operating profits for our lower value-added egg products sold mostly to industrial ingredient customers declined by approximately $14.0 million due, in part, to a decline in egg prices to a fifteen year low in mid-year 2000. This resulted in a decline in operating profit for the egg products division as a whole, as the growth in sales and earnings of our higher value-added products was insufficient to fully offset this decline. We cannot assure you that changes in the price of eggs, corn or soybean meal will not have a material adverse affect on our business, prospects, results of operations or financial condition. For a description of our risk management strategy designed to reduce the impacts of changes in these commodity prices, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—General—Commodity Risk Management" and "Business—Egg Products Division—Risk Management Strategy."

We produce and distribute food products that are susceptible to microbial contamination.

    Many of our food products, particularly egg and dairy products, are vulnerable to contamination by disease producing organisms, or pathogens, contained in food, such as Listeria monocytogenes and Salmonella enteritidis. These pathogens are generally found in the environment and as a result, there is a risk that they will be present in our processed food products. The risk may be controlled, but may not be eliminated, by adherence to good manufacturing practices and finished product testing. Also, products purchased from others for repacking or distribution may contain contaminants that may be inadvertently redistributed by us. Once contaminated products have been shipped for distribution, illness and death may result if the pathogens are not eliminated by processing at the foodservice or consumer level. For example, in February 1999, we evaluated a soured milk complaint from one of our customers and discovered a pathogen presence in nine cartons of milk. As a result, we initiated a recall of approximately five million cartons of milk and related products. In addition, our White Bear Lake, Minnesota plant was shut down and was subsequently reopened subject to oversight by the Minnesota Department of Agriculture and the FDA. Although there were no illnesses reported in connection with

16

this contamination, our dairy products division lost significant sales and experienced a decrease in operating profit as a result of the product recall. Also, in November 2000, our refrigerated distribution division recalled certain cheese products manufactured for us by a third party due to a possible listeria contamination. Even an inadvertent shipment of adulterated products is a violation of law and may lead to an increased risk of exposure to product liability claims, as discussed below, product recalls and increased scrutiny by federal and state regulatory agencies and may have a material adverse effect on our reputation, business, prospects, results of operations and financial condition. See "Business—Food Safety."

As a result of selling food products, we face the risk of exposure to product liability claims.

    We face the risk of exposure to product liability claims and adverse public relations in the event that our quality control procedures fail and the consumption of our products cause injury or illness. If a product liability claim is successful, our insurance may not be adequate to cover all liabilities we may incur, and we may not be able to continue to maintain such insurance, or obtain comparable insurance at a reasonable cost, if at all. We generally seek contractual indemnification and insurance coverage from parties supplying us products, but this indemnification or insurance coverage is limited by the creditworthiness of the indemnifying party, and their insurance carriers, if any, as well as the insured limits of any insurance provided by suppliers. If we do not have adequate insurance or contractual indemnification available, product liability claims relating to defective products could have a material adverse effect on our business reputation and earnings. In addition, even if a product liability claim is not successful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or injury could have a material adverse effect on our reputation with existing and potential customers and on our business, prospects, results of operations and financial condition.

A decline in egg consumption or in the consumption of processed food products would have a material adverse effect on our net sales and results of operations.

    For the year ended December 31, 2000, we derived approximately 59% of our total net sales and 73% of our total operating profit from our egg products division. Per capita consumption of eggs declined from the early 1980s through the early 1990s due in part to public health and safety concerns regarding blood cholesterol levels and bacterial contamination from eggs. Despite a recent upward trend, there can be no assurance that the consumption of eggs will not decline again. Adverse publicity relating to health concerns or the nutritional value of eggs and egg products could adversely affect demand for our processed egg products, which would have a material adverse effect on our business, prospects, results of operations and financial condition. In addition, as almost all of our operations consist of the production and distribution of processed food products, a change in consumer preferences relating to processed food products or in consumer perceptions regarding the nutritional value of processed food products could adversely affect demand, which would have a material adverse effect on our business, prospects, results of operations and financial condition.

The segments of the food industry in which we operate are highly competitive, and our inability to compete successfully could adversely affect our business, prospects, results of operations and financial condition.

    Competition in each of the segments of the food industry in which we operate is intense. In particular, we compete with major companies such as Cargill Inc., Kraft Foods, Inc. and ConAgra Foods, Inc. Each of these companies has substantially greater financial resources, name recognition, research and development, marketing and human resources than we have. In addition, our competitors may succeed in developing new or enhanced products which are better than our products. These companies may also prove to be more successful than we are in marketing and selling these products. We cannot assure you that we will be able to compete successfully with any of these companies. Increased competition as to any of our products could result in price reduction, reduced margins and

17

loss of market share, which could negatively affect our business, prospects, results of operations and financial condition.

Our largest customers have historically accounted for a significant portion of our net sales volume. Accordingly, our business may be adversely affected by the loss of, or reduced purchases by, one or more of our large customers.

    For the year ended December 31, 2000, egg products division sales to Sysco, Alliant and MBM Corp. accounted for approximately 14%, 8% and 5% of the egg products division's net sales volume, respectively, and sales to the egg products division's top ten customers in the aggregate accounted for approximately 45% of the egg products division's total sales volume. For the year ended December 31, 2000, potato products division sales to Sysco, US Foodservice and Alliant accounted for approximately 22%, 10% and 8%, respectively, of the potato products division's net sales volume, and sales to the top ten customers in the aggregate accounted for approximately 55% of the potato products division's total sales volume. For the year ended December 31, 2000, dairy products division sales to US Foodservice, MBM and Maines Paper accounted for approximately 23%, 9% and 7%, respectively, of the dairy products division's total sales volume, and sales to its top ten customers in the aggregate accounted for approximately 72% of the dairy products division's total sales volume. For the year ended December 31, 2000, refrigerated distribution division sales to SUPERVALU and its affiliates accounted for approximately 42% of the refrigerated distribution division's net sales volume. If, for any reason, one of our key customers were to purchase significantly less of our products in the future or were to terminate its purchases from us, and we are not able to sell our products to new customers at comparable or greater levels, it could have a material adverse effect on our business, prospects, financial condition and results of operations. For more information, see the "Customers" section for each of our divisions in "Business."

Our business relies on several patents and trademarks. The loss or expiration of a patent, whether licensed or owned, or the loss of any trademark could negatively impact our ability to produce and sell the products associated with such patent or trademark, which could have a material adverse effect on our sales volume and net income.

    We rely on patents, trademarks, trade secrets and other intellectual property in our business. Our egg products division possesses an exclusive license to use patents for the ultra-pasteurization of eggs and other sublicenses to use other patented processes relating to, among other things, electro-heating of eggs. These patents are used in the production of extended shelf-life liquid egg products. We believe that some of our competitors infringe upon some of these patents, and we have been engaged in extensive proceedings, along with the holder of the patents, in connection with these infringements. The patents that we license for our egg products division expire between 2005 and 2009. Although we believe that some of our competitors are already using these patented processes, additional parties may begin to produce and market processed egg products that are similar to ours when these patents expire.

    We also own several registered and unregistered trademarks that are used in the marketing and sale of our products. We have invested a substantial amount of money in promoting our trademarked brands. However, the degree of protection that these trademarks afford us is unknown. We may not have the resources necessary to engage in actions to prevent infringement of our trademarks or the patents that we license. We cannot be certain that steps we have taken to protect our intellectual property rights will be adequate or that third parties will not infringe or misappropriate our proprietary rights. Any such infringement or misappropriation or the termination or expiration of existing licensed patents, our trademarks or other intellectual property could have a material adverse effect on our business, prospects, results of operation and financial condition. For more information, see "Business—Proprietary Technologies and Trademarks."

18

Government regulation could increase our costs of production and increase our legal and regulatory expenses.

    The manufacture, processing, packaging, storage, distribution and labeling of food products are subject to extensive federal, state and local regulation. We are regulated by the FDA, the USDA and various local and state health and agricultural agencies. In addition, some of our facilities are subject to continuous on-site inspections. Applicable statutes and regulations governing food products include "standards of identity" for the content of specific types of foods, nutritional labeling and serving size requirements and "good manufacturing practices" with respect to production processes. In addition, our production and distribution facilities are subject to various federal, state and local environmental and workplace regulations. Failure to comply with all applicable laws and regulations could subject us to civil remedies, including fines, injunctions, recalls or seizures, and criminal sanctions, which could have a material adverse effect on our business, financial condition and results of operations. However, compliance with current or future laws or regulations could require us to make material expenditures or otherwise adversely affect the way we operate our business and our prospects, results of operations and financial condition.

We may incur unexpected costs associated with compliance with environmental regulations.

    We are subject to federal, state, and local environmental requirements, including those governing discharges to air and water, the management of hazardous substances, the disposal of solid and hazardous wastes, and the remediation of contamination. If we do not fully comply with environmental regulations, or if a release of hazardous substances occurs at or from one of our facilities, we may be subject to penalties and/or held liable for the cost of remedying the condition. For example, we were recently required to upgrade the wastewater treatment systems at two of our facilities and we may be required to upgrade the systems at other facilities in the future. The operational and financial effects associated with compliance with the variety of environmental regulations we are subject to could require us to make material expenditures or otherwise adversely affect the way we operate our business and our prospects, results of operations and financial condition. See "Business—Environmental Regulation."

Extreme weather conditions, disease and pests could harm our business.

    All of our business activities are subject to a variety of agricultural risks. Unusual weather conditions, disease and pests can materially and adversely affect the quality and quantity of the food products we produce and distribute. There can be no assurance that these factors will not affect a substantial portion of our production facilities in any year and have a material adverse effect on our business, prospects, results of operations or financial condition.

The segments of the food industry in which we compete are labor intensive, and if we cannot attract and retain qualified employees, we may not be able to implement our operating strategies.

    The segments of the food industry in which we compete are labor intensive. Some of our operations have experienced a high rate of employee turnover and could continue to experience high turnover in the future. Labor shortages, the inability to hire or retain qualified employees or increased labor costs could have a material adverse effect on our ability to control expenses and efficiently conduct our operations. The low unemployment rate in the United States has made it more difficult for us to find qualified personnel at a low cost in some areas where we operate. We cannot assure you that we will be able to continue to hire and retain the sufficiently skilled labor force necessary to operate efficiently and to support our operating strategies, that we will continue to experience favorable labor relations or that our labor expenses will not increase as a result of a continuing shortage in the supply of personnel.

19

Strikes, work stoppages and slowdowns could negatively affect our results of operations.

    We currently participate in union contracts established through December 2002 covering employees in our potato and dairy products divisions, which represent approximately 6% of our approximately 4,100 employees. We cannot assure you that our relations with the unionized portion of our workforce will remain positive or that it will not initiate a strike, work stoppage or slowdown in the future. In the event of such an action, our business, prospects, results of operations and financial condition could be negatively affected and we cannot assure you that we would be able to adequately meet the needs of our customers utilizing our remaining workforce. In addition, we cannot assure you that we would not have similar actions with our nonunionized workforce.

Our industry and the sales of our products are subject to seasonal variations and, as a result, our quarterly operating results may fluctuate.

    Our quarterly operating results are affected by the seasonal fluctuations of our sales and operating profits. The prices that we generally pay for eggs fluctuate in response to seasonal factors and the typical increase in egg production during the spring and early summer. Egg prices tend to increase with the start of the school year in September and are generally highest prior to holiday periods, particularly in November and early December. Consequently, we generally experience higher sales from our egg products division in our fourth quarter. Operating profits from refrigerated potato products are less seasonal, but tend to be higher in the second half of the year, which coincides with the potato harvest. Sales and operating profits from dairy operations are, typically, significantly higher in the second and third quarters due to increased consumption of ice cream products during the summer months and our refrigerated distribution division experiences higher sales and operating profits in the fourth quarter as a result of increasing consumer demand during the holiday season. As a result of these seasonal and quarterly fluctuations, we believe that comparisons of our sales and operating results between different quarters within a single fiscal year are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future performance.

Our business operations could be significantly disrupted if we lost members of our management team.

    Our success depends to a significant degree upon the continued contributions of our executive officers and key employees, both individually and as a group. Our future performance will be substantially dependent on our ability to retain and motivate them. The loss of the services of any of our executive officers or key employees, particularly our president and chief executive officer, Gregg A. Ostrander, and our executive vice president and chief financial officer, John D. Reedy, could prevent us from executing our business strategy. See "Management—Directors, Executive Officers and Key Employees."

Under a provision of the State of Nebraska's constitution, we may be required to divest real property we hold in that state, which could subject us to prolonged litigation and have a material adverse effect on our business, prospects, financial condition and results of operations.

    Approximately 20% of our total shell egg requirements are met by the Nebraska operations of our egg products division. A provision of the constitution of the State of Nebraska generally prohibits corporations from engaging in farming or ranching in Nebraska. Although the constitutional provision contains an exemption for agricultural land operated by a corporation for the purpose of raising poultry, the Attorney General of Nebraska has, in written opinions, taken the position that facilities devoted primarily to the production of eggs do not fall within such exemption and therefore remain subject to the restrictions contained in the constitutional provision. The constitution empowers the Attorney General of Nebraska, or if the Attorney General fails to act, any citizen of Nebraska, to obtain a court order to, among other things, force a divestiture of land held in violation of this constitutional provision. If land subject to such a court order is not divested within a two-year period, the constitutional provision directs the court to declare the land escheated, or forfeited, to the State of

20

Nebraska. As our facilities in Nebraska are all owned through a corporation and are almost entirely devoted to the production of eggs, our operations in Nebraska would be subject to the constitutional provision. Although we are not currently aware of any proceedings under this constitutional provision pending or threatened against us, we cannot assure you that this will continue to be the case. In the event we are forced to divest our egg production operations in Nebraska or become involved in prolonged litigation or other proceedings relating to a possible divestiture, our business, prospects, results of operations and financial condition could be materially adversely affected. For more information, see "Business—Government Regulation."

The interests of our controlling stockholder could conflict with those of the holders of the notes offered hereby.

    We are a wholly owned subsidiary of M-Foods Holdings, Inc. M-Foods Holdings is a corporation formed by M-Foods Investors, LLC, whose members include affiliates of Vestar Capital Partners and Goldner Hawn Johnson & Morrison, certain members of our senior management and affiliates of the Michael family. After giving effect to the exercise of all options we expect to be reserved for issuance in connection with M-Foods Holdings' stock option plan, M-Foods Investors owns approximately 95% of M-Foods Holdings' common stock. As a result, M-Foods Investors has the ability to elect all of the members of our board of directors, appoint new management and approve any action requiring the approval of our stockholders. The directors will have the authority to make decisions affecting our capital structure, including the issuance of additional indebtedness and the declaration of dividends. In addition, transactions may be pursued that could enhance their equity investment while involving risks to your interests. There can be no assurance that the interests of M-Foods Investors and its members will not conflict with the holders of the notes.

21

THE ACQUISITION

    On December 21, 2000, Michael Foods, Inc. entered into the merger agreement with M-Foods Holdings, Inc. and its wholly owned subsidiary, Michael Foods Acquisition Corp., a transitory corporation organized by the equity investors to effect the merger. In the merger agreement, we agreed to merge with Michael Foods Acquisition Corp. and, at the closing of the merger, we became a wholly owned subsidiary of M-Foods Holdings. M-Foods Holdings is a corporation owned by M-Foods Investors, LLC, whose members include affiliates of Vestar Capital Partners and Goldner Hawn Johnson & Morrison, certain members of our senior management and affiliates of the Michael family. Under the merger agreement, each public shareholder, other than certain members of our management team and affiliates of the Michael family, was entitled to receive $30.10 in cash for each share of our common stock that they own. The merger agreement contained customary provisions including representations and warranties, covenants with respect to the conduct of the business and various closing conditions, including the continued accuracy of representations and warranties.

    The shareholders of Michael Foods approved the acquisition on April 9, 2001, and the acquisition and related financing transactions were consummated on April 10, 2001.

    Our shareholders and option holders immediately prior to the acquisition received aggregate cash consideration of approximately $524.5 million. After giving effect to the exercise of options we expect to be reserved for issuance in connection with the stock option plan, M-Foods Investors will own approximately 95% of M-Foods Holdings' common stock on a fully diluted basis.

    The acquisition was financed through:

•

the sale of the $200.0 million in aggregate principal amount of notes;

•

borrowings of approximately $370.0 million under the $470.0 million senior credit facility;

•

the assumption of approximately $8.3 million of existing indebtedness;

•

the investment by the equity investors of approximately $175.0 million; and

•

the rollover equity investment totaling approximately $48.4 million by certain members of our senior management and affiliates of the Michael family.

    In connection with the acquisition we transferred the assets and liabilities that comprise our dairy products division to two limited liability companies to provide for future flexibility with respect to strategic alternatives involving such business. The outstanding ownership interests of these companies consist of voting preferred units and voting and non-voting common units. Certain of the issuer's indirect wholly owned subsidiaries own all of the outstanding voting preferred units, which accrue dividends at a rate of ten percent per annum and have a liquidation preference equal to the fair market value of the transferred assets. Those subsidiaries also own all of the voting common units, which represent 5% of the outstanding common units. The remaining 95% of the common units, which are non-voting, are owned by the members of M-Foods Investors through a holding company.

    For accounting purposes, the limited liability companies are treated as majority-owned subsidiaries of the issuer and, accordingly, the accounts of the subsidiaries will be included in the consolidated financial statements of the issuer. The issuer reflects the 95% common equity ownership interest in the limited liability companies to be owned by the members of M-Foods Investors through a holding company as a minority interest in its consolidated financial statements. The minority interest in the statement of operations will be equal to the net income applicable to the common units not owned by the issuer and its subsidiaries after the accrual of the preferred unit dividends for that period. The limited liability companies are restricted subsidiaries and guarantors under the indenture relating to the notes. In addition, the indenture provides that any proceeds received by the members of M-Foods Investors upon a sale or other disposition of the limited liability companies will be treated as asset sale proceeds under the indenture.

    For more information on the various agreements that we entered into in connection with the acquisition, see "Certain Relationships and Related Transactions—Certain Agreements Relating to the Acquisition."

22

EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

    The issuer, the guarantors and the initial purchasers entered into a registration rights agreement in connection with the original issuance of the notes. The registration rights agreement provides that we will take the following actions, at our expense, for the benefit of the holders of the notes:

•

Within 90 days after the date on which the outstanding notes were issued, we will file the exchange offer registration statement, of which this prospectus is a part, relating to the exchange offer. The exchange notes will have terms substantially identical in all material respects to the outstanding notes except that the exchange notes will not contain transfer restrictions.

•

We will cause the exchange offer registration statement to be declared effective under the Securities Act within 180 days after the date on which the outstanding notes were issued.

•

We will keep the exchange offer open for at least 30 business days, or longer if required by applicable law, after the date notice of the exchange offer is mailed to the holders.

    For each of the outstanding notes surrendered in the exchange offer, the holder who surrendered the note will receive an exchange note having a principal amount equal to that of the surrendered note. Interest on each exchange note will accrue from the later of (1) the last interest payment date on which interest was paid on the outstanding note surrendered and (2) if no interest has been paid on the outstanding note, from the date on which the outstanding notes were issued. If the note is surrendered for exchange on a date in a period that includes the record date for an interest payment date to occur on or after the date of the exchange will accrue from that interest payment date.

    We will be required to file a shelf registration statement covering resales of the outstanding notes if:

•

because of any change in law or in currently prevailing interpretations of the staff of the SEC, we are not permitted to effect an exchange offer,

•

in some circumstances, the holders of unregistered exchange notes so request, or

•

in the case of any holder that participates in the exchange offer, the holder does not receive exchange notes on the date of the exchange that may be sold without restriction under state and federal securities laws.

    Following the consummation of the exchange offer, holders of the outstanding notes who were eligible to participate in the exchange offer, but who did not tender their outstanding notes, will not have any further registration rights and the outstanding notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for the outstanding notes could be adversely affected.

Terms of the Exchange Offer

    Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all outstanding notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. We will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding notes accepted in the exchange offer. Any holder may tender some or all of its outstanding notes pursuant to the exchange offer. However, outstanding notes may be tendered only in integral multiples of $1,000.

    The form and terms of the exchange notes are the same as the form and terms of the outstanding notes except that:

(1)

the exchange notes bear a Series B designation and a different CUSIP Number from the outstanding notes;

(2)

the exchange notes have been registered under the Securities Act and hence will not bear legends restricting the transfer thereof; and

23

(3)

the holders of the exchange notes will not be entitled to certain rights under the registration rights agreement, including the provisions providing for an increase in the interest rate on the outstanding notes in certain circumstances relating to the timing of the exchange offer, all of which rights will terminate when the exchange offer is terminated.

The exchange notes will evidence the same debt as the outstanding notes and will be entitled to the benefits of the indenture.

    As of the date of this prospectus, $200,000,000 aggregate principal amount of the outstanding notes were outstanding. We have fixed the close of business on      , 2001 as the record date for the exchange offer for purposes of determining the persons to whom this prospectus and the letter of transmittal will be mailed initially.

    Holders of outstanding notes do not have any appraisal or dissenters' rights under the Minnesota Business Corporation Act, or the indenture relating to the notes in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC thereunder.

    We will be deemed to have accepted validly tendered outstanding notes when, as and if we have given oral or written notice thereof to the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the exchange notes from us.

    If any tendered outstanding notes are not accepted for exchange because of an invalid tender, the occurrence of specified other events set forth in this prospectus or otherwise, the certificates for any unaccepted outstanding notes will be returned, without expense, to the tendering holder thereof as promptly as practicable after the expiration date of the exchange offer.

    Holders who tender outstanding notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes pursuant to the exchange offer. We will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the exchange offer. See "—Fees and Expenses."

Expiration Date; Extensions; Amendments

    The term "expiration date" will mean 5:00 p.m., New York City time, on            , 2001, unless we, in our sole discretion, extend the exchange offer, in which case the term "expiration date" will mean the latest date and time to which the exchange offer is extended.

    In order to extend the exchange offer, we will notify the exchange agent of any extension by oral or written notice and will mail to the registered holders an announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

    We reserve the right, in our sole discretion, (1) to delay accepting any outstanding notes, to extend the exchange offer or to terminate the exchange offer if any of the conditions set forth below under "—Conditions" have not been satisfied, by giving oral or written notice of any delay, extension or termination to the exchange agent or (2) to amend the terms of the exchange offer in any manner. Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders.

Interest on the Exchange Notes

    The exchange notes will bear interest from their date of issuance. Holders of outstanding notes that are accepted for exchange will receive, in cash, accrued interest thereon to, but not including, the date of issuance of the exchange notes. Such interest will be paid with the first interest payment on the exchange notes on October 1, 2001. Interest on the outstanding notes accepted for exchange will cease to accrue upon issuance of the exchange notes.

    Interest on the exchange notes is payable semi-annually on each April 1 and October 1, commencing on October 1, 2001.

24

Procedures for Tendering

    Only a holder of outstanding notes may tender outstanding notes in the exchange offer. To tender in the exchange offer, a holder must complete, sign and date the letter of transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the letter of transmittal or transmit an agent's message in connection with a book-entry transfer, and mail or otherwise deliver the letter of transmittal or the facsimile, together with the outstanding notes and any other required documents, to the exchange agent prior to 5:00 p.m., New York City time, on the expiration date. To be tendered effectively, the outstanding notes, letter of transmittal or an agent's message and other required documents must be completed and received by the exchange agent at the address set forth below under "Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration date. Delivery of the outstanding notes may be made by book-entry transfer in accordance with the procedures described below. Confirmation of the book-entry transfer must be received by the exchange agent prior to the expiration date.

    The term "agent's message" means a message, transmitted by a book-entry transfer facility to, and received by, the exchange agent forming a part of a confirmation of a book-entry, which states that the book-entry transfer facility has received an express acknowledgment from the participant in the book-entry transfer facility tendering the outstanding notes that the participant has received and agrees: (1) to participate in ATOP; (2) to be bound by the terms of the letter of transmittal; and (3) that we may enforce the agreement against the participant.

    To participate in the exchange offer, each holder will be required to make the following representations to us:

•

Any exchange notes to be received by the holder will be acquired in the ordinary course of its business.

•

At the time of the commencement of the exchange offer, the holder has no arrangement or understanding with any person to participate in the distribution, within the meaning of Securities Act, of the exchange notes in violation of the Securities Act.

•

The holder is not our affiliate as defined in Rule 405 promulgated under the Securities Act.

•

If the holder is not a broker-dealer, it is not engaged in, and does not intend to engage in, the distribution of exchange notes.

•

If the holder is a broker-dealer that will receive exchange notes for its own account in exchange for outstanding notes that were acquired as a result of market-making or other trading activities, the holder will deliver a prospectus in connection with any resale of the exchange notes. We refer to these broker-dealers as participating broker-dealers.

•

The holder is not acting on behalf of any person or entity that could not truthfully make these representations.

    The tender by a holder and our acceptance thereof will constitute agreement between the holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal or agent's message.

The method of delivery of outstanding notes and the letter of transmittal or agent's message and all other required documents to the exchange agent is at the election and sole risk of the holder. As an alternative to delivery by mail, holders may wish to consider overnight or hand delivery service. In all cases, sufficient time should be allowed to assure delivery to the exchange agent before the expiration date. No letter of transmittal or outstanding notes should be sent to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or nominees to effect the above transactions for them.

    Any beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct the registered holder to tender on the beneficial owner's behalf.

25

See "Instructions to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner" included with the letter of transmittal.

    Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member of the Medallion System unless the outstanding notes tendered pursuant to the letter of transmittal are tendered (1) by a registered holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the letter of transmittal or (2) for the account of a member firm of the Medallion System. In the event that signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, the guarantee must be by a member firm of the Medallion System.

    If the letter of transmittal is signed by a person other than the registered holder of any outstanding notes listed in this prospectus, the outstanding notes must be endorsed or accompanied by a properly completed bond power, signed by the registered holder as the registered holder's name appears on the outstanding notes with the signature thereon guaranteed by a member firm of the Medallion System.

    If the letter of transmittal or any outstanding notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, the person signing should so indicate when signing, and evidence satisfactory to us of its authority to so act must be submitted with the letter of transmittal.

    We understand that the exchange agent will make a request promptly after the date of this prospectus to establish accounts with respect to the outstanding notes at DTC for the purpose of facilitating the exchange offer, and subject to the establishment thereof, any financial institution that is a participant in DTC's system may make book-entry delivery of outstanding notes by causing DTC to transfer the outstanding notes into the exchange agent's account with respect to the outstanding notes in accordance with DTC's procedures for the transfer. Although delivery of the outstanding notes may be effected through book-entry transfer into the exchange agent's account at DTC, unless an agent's message is received by the exchange agent in compliance with ATOP, an appropriate letter of transmittal properly completed and duly executed with any required signature guarantee and all other required documents must in each case be transmitted to and received or confirmed by the exchange agent at its address set forth below on or prior to the expiration date, or, if the guaranteed delivery procedures described below are complied with, within the time period provided under the procedures. Delivery of documents to DTC does not constitute delivery to the exchange agent.

    All questions as to the validity, form, eligibility, including time of receipt, acceptance of tendered outstanding notes and withdrawal of tendered outstanding notes will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all outstanding notes not properly tendered or any outstanding notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right in our sole discretion to waive any defects, irregularities or conditions of tender as to particular outstanding notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured within the time we determine. Although we intend to notify holders of defects or irregularities with respect to tenders of outstanding notes, neither we, the exchange agent nor any other person will incur any liability for failure to give the notification. Tenders of outstanding notes will not be deemed to have been made until the defects or irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent to the tendering holders, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

26

Guaranteed Delivery Procedures

    Holders who wish to tender their outstanding notes and (1) whose outstanding notes are not immediately available, (2) who cannot deliver their outstanding notes, the letter of transmittal or any other required documents to the exchange agent or (3) who cannot complete the procedures for book-entry transfer, prior to the expiration date, may effect a tender if:

(A)

the tender is made through a member firm of the Medallion System;

(B)

prior to the expiration date, the exchange agent receives from a member firm of the Medallion System a properly completed and duly executed Notice of Guaranteed Delivery by facsimile transmission, mail or hand delivery setting forth the name and address of the holder, the certificate number(s) of the outstanding notes and the principal amount of outstanding notes tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal or facsimile thereof together with the certificate(s) representing the outstanding notes or a confirmation of book-entry transfer of the outstanding notes into the exchange agent's account at DTC, and any other documents required by the letter of transmittal will be deposited by the member firm of the Medallion System with the exchange agent; and

(C)

the properly completed and executed letter of transmittal or facsimile thereof, as well as the certificate(s) representing all tendered outstanding notes in proper form for transfer or a confirmation of book-entry transfer of the outstanding notes into the exchange agent's account at DTC, and all other documents required by the letter of transmittal are received by the exchange agent within five New York Stock Exchange trading days after the expiration date.

    Upon request to the exchange agent, a Notice of Guaranteed Delivery will be sent to holders who wish to tender their outstanding notes according to the guaranteed delivery procedures set forth above.

Withdrawal of Tenders

    Except as otherwise provided in this prospectus, tenders of outstanding notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date.

    To withdraw a tender of outstanding notes in the exchange offer, a telegram, telex, letter or facsimile transmission notice of withdrawal must be received by the exchange agent at its address set forth in this prospectus prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. Any notice of withdrawal must:

(1)

specify the name of the person having deposited the outstanding notes to be withdrawn;

(2)

identify the outstanding notes to be withdrawn, including the certificate number(s) and principal amount of the outstanding notes, or, in the case of outstanding notes transferred by book-entry transfer, the name and number of the account at DTC to be credited;

(3)

be signed by the holder in the same manner as the original signature on the letter of transmittal by which the outstanding notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee with respect to the outstanding notes register the transfer of the outstanding notes into the name of the person withdrawing the tender; and

(4)

specify the name in which any outstanding notes are to be registered, if different from that of the person depositing the outstanding notes to be withdrawn.

All questions as to the validity, form and eligibility, including time of receipt, of the notices will be determined by us. Our determination will be final and binding on all parties. Any outstanding notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer and no exchange notes will be issued with respect thereto unless the outstanding notes so withdrawn are validly retendered. Any outstanding notes which have been tendered but which are not accepted for exchange will be returned to the holder thereof without cost to the holder as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn outstanding

27

notes may be retendered by following one of the procedures described above under "—Procedures for Tendering" at any time prior to the expiration date.

Conditions

    Notwithstanding any other term of the exchange offer, we will not be required to accept for exchange, or exchange notes for, any outstanding notes, and may terminate or amend the exchange offer as provided in this prospectus before the acceptance of the outstanding notes, if:

(1)

any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer which, in our sole judgment, might materially impair our ability to proceed with the exchange offer or any material adverse development has occurred in any existing action or proceeding with respect to us or any of our subsidiaries; or

(2)

any law, statute, rule, regulation or interpretation by the staff of the SEC is proposed, adopted or enacted, which, in our sole judgment, might materially impair our ability to proceed with the exchange offer or materially impair the contemplated benefits of the exchange offer to us; or

(3)

any governmental approval has not been obtained, which approval we will, in our sole discretion, deem necessary for the consummation of the exchange offer as contemplated by this prospectus.

    If we determine in our sole discretion that any of the conditions are not satisfied, we may (1) refuse to accept any outstanding notes and return all tendered outstanding notes to the tendering holders, (2) extend the exchange offer and retain all outstanding notes tendered prior to the expiration of the exchange offer, subject, however, to the rights of holders to withdraw the outstanding notes (see "—Withdrawal of Tenders") or (3) waive the unsatisfied conditions with respect to the exchange offer and accept all properly tendered outstanding notes which have not been withdrawn.

Exchange Agent

    BNY Midwest Trust Company has been appointed as exchange agent for the exchange offer. Questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for Notice of Guaranteed Delivery should be directed to the exchange agent addressed as follows:

By Overnight Courier or Registered/Certified Mail:	By Hand Prior to 4:30 p.m., New York City time:
The Bank of New York 101 Barclay Street New York, NY 10286 Attn: Reorganization Unit-7E	The Bank of New York 101 Barclay Street New York, NY 10286 Ground Level Corporate Trust Services Window Attn: Reorganization Unit-7E
Facsimile Transmission: (212) 815-6339 For Information Telephone (212) 815-3750

Delivery to an address other than set forth above will not constitute a valid delivery.

Fees and Expenses

    We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telecopy, telephone or in person by our and our affiliates' officers and regular employees.

28

    We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses incurred in connection with these services.

    We will pay the cash expenses to be incurred in connection with the exchange offer. Such expenses include fees and expenses of the exchange agent and trustee, accounting and legal fees and printing costs, among others.

Accounting Treatment

    The exchange notes will be recorded at the same carrying value as the outstanding notes, which is face value, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes as a result of the exchange offer. The expenses of the exchange offer will be deferred and charged to expense over the term of the exchange notes.

Consequences of Failure to Exchange

    The outstanding notes that are not exchanged for exchange notes pursuant to the exchange offer will remain restricted securities. Accordingly, the outstanding notes may be resold only:

(1)

to us upon redemption thereof or otherwise;

(2)

so long as the outstanding notes are eligible for resale pursuant to Rule 144A, to a person inside the United States whom the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act in a transaction meeting the requirements of Rule 144A, in accordance with Rule 144 under the Securities Act, or pursuant to another exemption from the registration requirements of the Securities Act, which other exemption is based upon an opinion of counsel reasonably acceptable to us;

(3)

outside the United States to a foreign person in a transaction meeting the requirements of Rule 904 under the Securities Act; or

(4)

pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States.

Resale of the Exchange Notes

    With respect to resales of exchange notes, based on interpretations by the staff of the SEC set forth in no-action letters issued to third parties, we believe that a holder or other person who receives exchange notes, whether or not the person is the holder, other than a person that is our affiliate within the meaning of Rule 405 under the Securities Act, in exchange for outstanding notes in the ordinary course of business and who is not participating, does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of the exchange notes, will be allowed to resell the exchange notes to the public without further registration under the Securities Act and without delivering to the purchasers of the exchange notes a prospectus that satisfies the requirements of Section 10 of the Securities Act. However, if any holder acquires exchange notes in the exchange offer for the purpose of distributing or participating in a distribution of the exchange notes, the holder cannot rely on the position of the staff of the SEC expressed in the no-action letters or any similar interpretive letters, and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction, unless an exemption from registration is otherwise available. Further, each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where the outstanding notes were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes.

29

USE OF PROCEEDS

    This exchange offer is intended to satisfy certain of our obligations under the registration rights agreement. We will not receive any cash proceeds from the issuance of the exchange notes. In consideration for issuing the exchange notes contemplated in this prospectus, we will receive outstanding notes in like principal amount, the form and terms of which are the same as the form and terms of the exchange notes, except as otherwise described in this prospectus.

    We used the proceeds from the issuance of the notes of approximately $194.0 million, net of discount, together with the other financing transactions described in this prospectus, to consummate the acquisition and pay related fees and expenses.

CAPITALIZATION

    The following table sets forth our cash and cash equivalents and our consolidated capitalization as of April 1, 2001 on an actual basis giving effect to the acquisition and related financing transactions. This table should be read in conjunction with "Selected Historical Financial Data," "Unaudited Pro Forma Condensed Consolidated Statements of Earnings," our consolidated financial statements and related notes and other financial information appearing elsewhere in this prospectus.

			As of April 1, 2001
			(in thousands)
Cash and equivalents			$	4,270
Debt:
	Current maturities of long-term debt		$	13,850
	Revolving credit facility(1)			24,075
	Term loans, excluding current maturities			358,975
	Other debt, excluding current maturities(2)			5,376
	113/4% senior subordinated notes due 2011			200,000
		Total debt		602,276
Total stockholders' equity				146,185
		Total capitalization	$	748,461

(1)

After completion of the acquisition on April 10, 2001, and reflecting it for financial reporting purposes as having occurred on April 1, 2001, we had approximately $76.0 million of unused borrowing capacity under the revolving credit facility.

(2)

Includes the long-term debt portion of approximately $7.2 million to be paid in connection with the 1999 acquisition of a dairy facility in Connecticut and approximately $1.1 million in deferred compensation.

30

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

    The acquisition has been reflected in our audited consolidated balance sheet as of April 1, 2001 appearing elsewhere in this prospectus. The following unaudited pro forma condensed consolidated statements of earnings have been derived by the application of pro forma adjustments to our accounting predecessor's historical consolidated statements of earnings appearing elsewhere in this prospectus. The unaudited pro forma condensed consolidated statement of earnings data gives effect to the acquisition and related financing transactions, including the offering of notes and the application of the proceeds, as if it all had occurred on January 1, 2000. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with these unaudited pro forma condensed consolidated statements of earnings.

    The pro forma adjustments are based on the actual amounts of debt borrowed, equity invested to complete the acquisition and on a preliminary valuation by a third party appraisal firm. The values assigned by the appraisal firm to property, plant and equipment and intangible assets, including goodwill, could change when their final report is issued. Revisions to such preliminary valuations could impact the pro forma adjustments reflected herein.

    The unaudited pro forma condensed consolidated statements of earnings should not be considered indicative of actual results that would have been achieved had the acquisition and related financing transactions been consummated for the periods indicated and do not purport to show results of operations for any future period.

    The unaudited pro forma condensed consolidated statements of earnings should be read in conjunction with the information contained in "Selected Historical Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements of Michael Foods, Inc. and the notes thereto appearing elsewhere in this prospectus.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2000
(in thousands)

			Historical		Adjustments			Pro Forma
Net sales			$	1,080,601	$	—		$	1,080,601
Cost of sales				889,138		—			889,138
	Gross profit			191,463		—			191,463
						1,000	(A)
						4,328	(B)
Selling, general and administrative expenses				104,657		5,420	(C)		115,405
	Operating profit			86,806		(10,748	)		76,058
						3,440	(D)
Interest expense, net				13,206		39,694	(E)		56,340
	Earnings before income taxes			73,600		(53,882	)		19,718
Income tax expense				28,890		(21,149	)(F)		7,741
		Net earnings	$	44,710	$	(32,733	)	$	11,977

    At the time of the acquisition our shares ceased to be publicly traded. Accordingly, pro forma earnings per share data is not presented.

31

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 2001
(in thousands)

			Historical			Adjustments			Pro Forma
Net sales			$	275,627		$	—		$	275,627
Cost of sales				227,707			—			227,707
	Gross profit			47,920			—			47,920
							250	(A)
							1,082	(B)
Selling, general and administrative expenses				27,376			1,356	(C)		30,064
Transaction expenses				11,050			(11,050	)(G)		—
	Operating profit			9,494			8,362			17,856
							860	(D)
Interest expense, net				3,293			10,039	(E)		14,192
	Earnings before income taxes and extraordinary item			6,201			(2,537	)		3,664
Income tax expense				2,430			(996	)(F)		1,434
	Earnings before extraordinary item			3,771			(1,541	)		2,230
Extraordinary item—early extinguishment of debt, net of tax				(9,424	)		9,424	(G)		—
		Net earnings (loss)	$	(5,653	)	$	7,883		$	2,230

    At the time of the acquisition our shares ceased to be publicly traded. Accordingly, pro forma earnings per share data is not presented.

32

NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands)

December 31, 2000 and March 31, 2001

A.

To reflect the annual management fee to be paid to the equity investors under their management agreement with us.

B.

To reflect additional depreciation related to the increased basis of property, plant and equipment.

C.

To reflect amortization of acquired goodwill and other intangibles to operations over an estimated life of forty years, net of $3,443 and $860 of goodwill amortization included in the historical columns.

D.

To reflect the amortization of deferred financing costs associated with senior credit facility and the notes, using the interest method.

E.

To adjust interest expense associated with senior credit facility and the notes for the actual effective rates at the date of the acquisition and to eliminate interest expense on the refinanced debt:

		Three Months Ended March 31, 2001			Year Ended December 31, 2000
Interest on term loan A (effective rate 7.5%)		$	1,900		$	7,200
Interest on term loan B (effective rate 7.5%)			5,100			20,200
Interest on 11.75% senior subordinated notes due 2011			5,875			23,500
Interest on revolving credit facility (effective rate 7.5%)			400			1,600
Commitment fee on revolving credit facility (.5% of unused facility)			100			400
Elimination of interest expense related to refinanced debt			(3,336	)		(13,206	)
	Net adjustment to interest expense	$	10,039		$	39,694

The actual interest rates will vary from those used to compute the above adjustment of interest expense due to floating rates applicable to our revolving credit facility and the term loans. The effect on pre-tax income of a ¹/8 percent variance in these rates would be approximately $480.

F.

To reflect the income tax effect of the pro forma adjustments.

G.

To eliminate transaction expenses and an extraordinary item which are directly attributable to the transaction and will not be reflected in our continuing operations.

33

SELECTED HISTORICAL FINANCIAL DATA

    The following table sets forth selected historical financial and other data of our accounting predecessor as of and for the five years ended December 31, 2000 and the three months ended March 31, 2000 and 2001. The selected historical financial and other data as of and for the years ended December 31, 1998, 1999 and 2000 have been derived from our audited consolidated financial statements and the related notes, which are included elsewhere in this prospectus. The selected historical financial and other data as of and for the years ended December 31, 1996 and 1997 have been derived from our audited consolidated financial statements for the years ended December 31, 1996 and 1997, which are not included in this prospectus. The data for each of the five fiscal years ended December 31, 2000 have been audited by Grant Thornton LLP, whose report relating to the three years in the period ended December 31, 2000 appears elsewhere in this prospectus. The selected historical financial and other data for the three month periods ended March 31, 2000 and 2001 have been derived from unaudited consolidated financial statements of our accounting predecessor. Operating results for the three months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2001.

    The selected historical financial data of our accounting predecessor set forth below is not necessarily indicative of the results of future operations and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and related notes and other financial information appearing elsewhere in this prospectus.

		Predecessor
		Year Ended December 31,											Three Months Ended March 31,
		1996			1997(1)		1998		1999		2000		2000		2001
		(dollars in thousands)											(unaudited)
Statement of Earnings Data:
Net sales		$	616,395		$	956,223	$	1,020,484	$	1,053,272	$	1,080,601	$	251,926	$	275,627
Costs of sales			545,055			813,771		847,383		860,256		889,138		205,071		227,707
Product line inventory markdown			12,225			—		—		—		—		—		—
Gross profit			59,115			142,452		173,101		193,016		191,463		46,855		47,920
Selling, general and administrative expenses			44,822			76,173		93,548		106,686		104,657		27,956		27,376
Product line asset impairment			10,472			—		—		—		—		—		—
Transaction expenses			—			—		—		—		—		—		3,298
Operating profit			3,821			66,279		79,553		86,330		86,806		18,899		17,246
Interest expense, net			7,264			10,830		10,136		11,664		13,206		2,950		3,293
Earnings before income taxes and extraordinary item			(3,443	)		55,449		69,417		74,666		73,600		15,949		13,953
Income taxes expense (benefit)			(370	)		23,010		29,160		30,610		28,890		6,460		5,480
	Net earnings (loss) before extraordinary item	$	(3,073	)	$	32,439	$	40,257	$	44,056	$	44,710	$	9,489	$	8,473

34

Balance Sheet:
Cash and equivalents		$	2,585		$	4,038		$	2,047		$	4,961		$	4,421		$	4,526		$	4,270
Working capital			56,677			54,788			61,297			51,764			78,628			57,343			73,459
Total assets			364,659			503,655			551,516			597,917			612,904			599,499			619,721
Total debt			112,901			146,028			166,107			178,534			198,809			184,597			192,200
Stockholders' equity			174,072			229,246			244,149			264,599			258,733			259,949			257,151
Other Financial Data:
EBITDA(2)		$	30,497		$	99,602		$	115,357		$	128,894		$	134,789		$	31,152		$	31,744
Cash provided by (used in):
	Operating activities		21,810			87,001			68,910			107,653			69,085			16,424			14,016
	Investing activities		(29,120	)		(80,152	)		(63,983	)		(93,530	)		(38,500	)		(8,117	)		(6,949	)
	Financing activities		7,974			(5,396	)		(6,918	)		(11,209	)		(31,125	)		(8,742	)		(7,218	)
Depreciation and amortization			26,676			33,323			35,804			42,564			47,983			11,951			12,535
Capital expenditures			29,334			41,062			64,777			74,125			37,373			8,131			10,837
Ratio of earnings to fixed charges(3)			0.61	x		5.06	x		6.16	x		6.11	x		5.83	x					2.75	x

footnotes to table on following page

35

footnotes to table on prior page

(1)

Amounts include 53 weeks of operations and the results of Papetti's operations only from February 26, 1997, the date of acquisition.

(2)

EBITDA represents earnings before interest, income taxes, depreciation and amortization. We believe EBITDA is a widely accepted financial indicator used to analyze and compare companies on the basis of operating performance. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles and is not indicative of operating profit or cash flow from operations as determined under generally accepted accounting principles.

(3)

For purposes of determining the ratio of earnings to fixed charges, earnings are defined as earnings before income taxes and extraordinary items, plus fixed charges. Fixed charges consist of interest expense, including amortization of debt issuance costs and a portion of operating lease rental expense deemed to be representative of the interest factor.

36

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and the notes to those statements and other financial information appearing elsewhere in this prospectus. This prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those indicated in forward-looking statements. See "Cautionary Note Regarding Forward-Looking Statements."

The following discussion and analysis of the financial condition and results of operations relates to the accounting predecessor and covers periods prior to the consummation of the acquisition and related financing transactions. As part of the acquisition, we entered into the various financing arrangements described herein and, as a result, we now have a different capital structure. Accordingly, the results of operations for periods subsequent to the consummation of the acquisition and related financing transactions will not necessarily be comparable to prior periods.

General

    Overview.  Michael Foods is a diversified producer and distributor of specialty egg, potato and dairy products to the foodservice, retail and industrial ingredient markets. We also distribute refrigerated grocery items, primarily cheese and other dairy products, to the retail grocery market in the central United States. We focus our growth efforts on the specialty segments within our food categories and strive to be a market leader in product innovation and low-cost production. Our strategic focus on value-added processing of food products is designed to capitalize on key food industry trends, such as the desire for improved safety and convenience, reduced labor and waste, as well as growth of food consumption away from home. We believe our operational scale, product selection and market reach make us an important strategic partner for our customers, which include foodservice distributors, large food companies and large-scale restaurant chains. In recent years, our net sales and operating profit have each increased as a result of our focus on value-added products combined with favorable food industry trends.

    Capital Expenditures.  Over the last four years, we have invested approximately $217 million in capital expenditures. Of this amount, approximately $115 million was used for growth investments to expand our manufacturing capacity for value-added egg products, upgrade our dairy and potato products operations, improve and expand our distribution centers and install a new company-wide management information system. These expenditures included the installation of pre-cooked egg production equipment, a new dried egg facility, automated packing machines, non-refrigerated dairy creamer production lines and quality control systems. We expect these investments to improve manufacturing efficiencies, customer service and product quality.

    Acquisitions/Joint Ventures.  We have grown both organically and through acquisitions. Since 1988, we have completed 16 acquisitions and three joint ventures, including the $106 million acquisition of Papetti's in 1997. The acquisition of Papetti's significantly increased our egg products division's market share, scale, geographic scope and product offerings. With the exception of Papetti's, we have focused in recent years on making small acquisitions that either expand our current product offerings or geographic scope. For example, in the past two years, we: (i) acquired a dairy products operation in Connecticut for $15.3 million ($5.7 million cash was paid on closing), which increased the geographic coverage of our dairy products division; (ii) acquired Ingredient Supply LLC for approximately $2 million, which expanded our egg products division's hardcooked eggs product line; and (iii) we invested approximately $10 million in foreign egg products joint ventures to expand the geographic coverage of our egg products division and pursue new technologies.

    Commodity Risk Management.  The primary raw materials used in the production of eggs are corn and soybean meal. We purchase these materials for our hens, which produce approximately 35% of our

37

egg requirements. We purchase shell eggs and liquid eggs from third-party suppliers and in the spot market for the remainder of our egg needs. Eggs, corn and soybean meal are each commodities that are subject to significant price fluctuations due to market conditions which, in certain circumstances, can adversely affect our results of operations.

    In order to reduce the impacts of changes in commodity prices on our operating results, we have developed a risk management strategy that includes the following elements:

•

We hedge a significant percentage of our grain requirements for both our internal egg production and our third-party egg procurement contracts that are priced based on grain indices, which collectively account for approximately 52% of our egg requirements. This activity can provide us with protection from unexpected increases in grain prices, as well as predictability with respect to a portion of our future raw materials costs. These hedging activities, however, can diminish our opportunity to benefit from the improved margins that would result from an unanticipated decline in grain prices. As a result, we adjust our hedged position from time to time based on our expectation of the commodity pricing environment. Based on our expectation of rising commodity prices over the next twelve months, we have recently increased our hedging activities.



•

We seek to align our procurement and sales volumes by matching the percentage of variable pricing contracts with our customers and the percentage of raw materials procured on a variable basis. This matching of our variable priced procurement contracts with that of our sales contracts provides us with a natural hedge during times of grain and egg market volatility. As part of this effort, we are also transitioning our customers to variable pricing contracts that are priced off the same index that we use to purchase shell and liquid eggs. Historically, we have priced many of our industrial ingredient customers' contracts off of different indices. A mismatch in these indices contributed to a decline in our lower value-added egg products operating profit in 2000, as described in more detail below.



•

We negotiate agreements with certain of our fixed price customers which allow us to raise prices by giving 30 to 60 days notice in response to increased commodity prices. The majority of these contracts are with our major broad-line foodservice distributor customers who are generally less sensitive to price increases because their customers purchase food products from them on a cost-plus basis.



•

We are continuing to transition customers from lower value-added egg products to higher margin, higher value-added specialty products. We believe these products are less sensitive to fluctuations in underlying commodity prices because the raw material component is a smaller percentage of their total costs and we generally have the ability to pass through certain cost increases related to our higher value-added egg products to our customers. This transition to higher value-added specialty products has taken place gradually over the last four years, as these products represented approximately 60% of our egg products sales in 2000, up from approximately 52% in 1997.

    Currently, the majority of our lower value-added egg products are sold at prices derived from egg market indices. This pricing strategy has historically served as an effective hedge against changes in our underlying egg costs. During 2000, however, egg market indices declined to 15 year lows and, for a variety of reasons (most notably supply and demand imbalances), exhibited abnormal relationships between the egg market indices used to procure our egg requirements and the indices used to price our products to customers. As a result, the operating profit for our lower value-added products declined by approximately $14 million in 2000, resulting in a decline in operating profit for the egg products division as a whole, as growth in sales and earnings of our higher value-added products was insufficient to fully offset this decline.

38

    Product Recall.  In early 1999, we evaluated a soured milk complaint from one of our customers and discovered a pathogen presence in nine cartons of milk. As a result, we initiated a recall of approximately five million cartons of milk and related products. In response to the recall, we instituted new operating policies to improve our quality controls and sampling/testing programs to protect against future incidents. We also installed new divisional management and invested significant capital to upgrade our manufacturing capabilities in the dairy products division. Our operating results for the dairy products division for 1999 and 2000 were adversely impacted as a result of volume declines and operating inefficiencies associated with the recall. We settled the only major claim with respect to the product recall for $1.7 million, the majority of which was covered by our insurance policies. We expect the dairy products division to regain some of the lost volume in 2001. For more information, see "Business—Food Safety."

    Purchase Accounting Effects.  The acquisition has been accounted for as a purchase in accordance with Accounting Principles Board Opinion 16, Business Combinations and EITF 88-16, Basis in Leveraged Buyout Transactions. Accordingly, the acquired assets and liabilities are recorded at fair value for the interests acquired by new investors and at the carryover basis for continuing investors. The carryover basis is reflected as a deemed dividend to the continuing investors. As a result, the assets and liabilities are assigned new values, which are part predecessor cost and part fair value in the same proportions as the carryover basis of the residual interests retained by the continuing management investors and continuing affliate investors of the Michael family and the new interests acquired by the new investors. The amount of the carryover basis is reflected as a deemed dividend and was approximately $66.6 million. The allocation of the purchase price of the assets acquired in the acquisition will result in a significant increase in our annual depreciation and amortization expense. In addition, due to the effects of the increased borrowings to finance the acquisition, our interest expense will increase significantly in the periods following the acquisition.

Results of Operations

    The following table summarizes the historical results of our divisional operations and such data as a percentage of total net sales for the periods indicated. The historical financial data for the years ended 1998, 1999 and 2000 and the three months ended March 31, 2001 were derived from our audited consolidated financial statements included elsewhere in this prospectus. The historical financial data for the three month periods ended March 31, 2000 were derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The information contained in this table should be

39

read in conjunction with "Selected Historical Financial Data" and the consolidated financial statements and related notes included elsewhere in this prospectus.

			Predecessor
			Years Ended December 31,												Three Months Ended March 31,
			1998				1999				2000				2000				2001
			$		%		$		%		$		%		$		%		$		%
			(dollars in thousands)
Statement of Earnings Data:
Net sales:
	Egg products division		607,688		59.6		620,719		58.9		637,355		59.0		153,553		61.0		163,529		59.3
	Potato products division		52,345		5.1		57,353		5.5		60,731		5.6		14,096		5.6		15,585		5.7
	Dairy products division		138,865		13.6		144,865		13.7		141,401		13.1		28,029		11.1		35,328		12.8
	Refrigerated distribution division		221,586		21.7		230,335		21.9		241,114		22.3		56,248		22.3		61,185		22.2
		Total net sales	1,020,484		100.0		1,053,272		100.0		1,080,601		100.0		251,926		100.0		275,627		100.0
Cost of sales			847,383		83.0		860,256		81.7		889,138		82.3		205,071		81.4		227,707		82.6
Gross profit			173,101		17.0		193,016		18.3		191,463		17.7		46,855		18.6		47,920		17.4
Selling, general and administrative expenses			93,548		9.2		106,686		10.1		104,657		9.7		27,956		11.1		27,376		9.9
Transaction expenses			—		—		—		—		—		—		—		—		11,050		4.0
Operating profit:
	Egg products division		69,295		6.8		73,531		7.0		67,658		6.2		15,121		6.0		12,915		4.7
	Potato products division		3,890		0.4		6,751		0.6		7,650		0.7		1,301		0.5		1,688		0.6
	Dairy products division		6,748		0.7		3,750		0.4		1,322		0.1		(186	)	(0.1	)	3,958		1.4
	Refrigerated distribution division		7,288		0.7		10,656		1.0		16,001		1.5		4,305		1.7		3,639		1.3
	Corporate		(7,668	)	(0.8	)	(8,358	)	(0.8	)	(5,825	)	(0.5	)	(1,642	)	(0.6	)	(12,706	)	(4.6	)
		Total operating profit	79,553		7.8		86,330		8.2		86,806		8.0		18,899		7.5		9,494		3.4
Interest expense, net			10,136		1.0		11,664		1.1		13,206		1.2		2,950		1.2		3,293		1.2

Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000

    Net Sales.  Net sales for the three months ended March 31, 2001 increased $23.7 million, or 9.4%, to $275.6 million from $251.9 million for the three months ended March 31, 2000. This increase was attributable to an increase in net sales from all of our operating divisions, including a $10.0 million increase in our egg products division and a $7.3 million increase in our dairy products division.

    Egg Products Division Sales.  Egg products division sales for the three months ended March 31, 2001 increased $10.0 million, or 6.5%, to $163.5 million from $153.6 million for the three months ended March 31, 2000. The increase was primarily attributable to unit sales increases, particularly for value-added egg products, and modestly higher selling prices. Unit sales were particularly strong for hardcooked eggs, which was attributable to a late 2000 acquisition, and egg substitutes.

    Potato Products Division Sales.  Potato products division sales for the three months ended March 31, 2001 increased $1.5 million, or 10.6%, to $15.6 million from $14.1 million for the three months ended March 31, 2000. The increase was primarily attributable to unit sales increases in all product categories. Sales were particularly strong for retail items. New account activity, same-account sales growth and higher marketing spending levels all contributed to the sales gain.

40

    Dairy Products Division Sales.  Dairy products division sales for the three months ended March 31, 2001 increased $7.3 million, or 26.0%, to $35.3 million from $28.0 million for the three months ended March 31, 2000. The increase was primarily attributable to higher unit sales due to strong creamer and specialty cartoned products sales. Sales of the division's main product line, UHT dairy mixes, were flat on a unit basis. Inflationary impacts from a year-over-year rise in the national butterfat market also added to dollar sales growth.

    Refrigerated Distribution Division Sales.  Refrigerated distribution division sales for the three months ended March 31, 2001 increased $4.9 million, or 8.8%, to $61.2 million from $56.2 million for the three months ended March 31, 2000. This increase was primarily attributable to unit sales increases for several product lines, with cheese, margarine, ethnic items and potato products showing particular strength. Unit sales growth resulted primarily from new customers gained over the past year, as the Crystal Farms brand continues to expand beyond its traditional customer base.

    Gross Profit.  Gross profit for the three months ended March 31, 2001 increased $1.1 million, or 2.3%, to $47.9 million from $46.9 million for the three months ended March 31, 2000. Our gross profit margin was 17.4% of net sales for the three months ended March 31, 2001, as compared to 18.6% of net sales for the three months ended March 31, 2000. The decrease in our gross profit margin for the three months ended March 31, 2001, as compared to the results of the 2000 period, was largely attributable to increased raw material costs within the egg products and refrigerated distribution divisions. It is our strategy to increase value-added product sales as a percent of total sales over time, while decreasing commodity-sensitive products' contribution to consolidated sales. These efforts historically have been beneficial to gross profit margins in most periods.

    Selling, General and Administrative Expenses.  Selling, general and administrative expenses decreased as a percent of sales for the three months ended March 31, 2001, as compared to the results of the 2000 period. While these expenses reflect costs associated with terminating our investment in a joint venture, The Lipid Company, S.A., these costs were offset by the final insurance settlement related to a dairy products division product recall in 1999. Separate from selling, general and administrative expenses for the three months ended March 31, 2001, we recorded non-recurring expenses related to our April 2001 acquisition for financial, legal, advisory and regulatory filing fees. These expenses of $3,298,000 are reflected as transaction expenses in our condensed consolidated statements of earnings located elsewhere in this prospectus.

    Operating Profit.  Operating profit for the three months ended March 31, 2001 decreased $1.7 million, or 8.8%, to $17.2 million from $18.9 million for the three months ended March 31, 2000. This decrease was primarily attributable to costs incurred in connection with the acquisition and related financing transactions, and losses relating to the decision to terminate a European joint venture.

    Egg Products Division Operating Profit.  Egg products division operating profit for the three months ended March 31, 2001 decreased $2.2 million, or 14.6%, to $12.9 million from $15.1 million for the three months ended March 31, 2000. This decrease was attributable to higher egg costs, for both internally and externally procured eggs, in the 2001 period, which were met with only modest egg products pricing increases, creating margin pressure for certain egg products, and reducing divisional operating profit. Operating profit for the egg products division was also negatively affected by our decision to terminate a European joint venture, The Lipid Company, S.A., which resulted in a realized pretax loss of approximately $1.7 million.

    Potato Products Division Operating Profit.  Potato products division operating profit for the three months ended March 31, 2001 increased $0.4 million, or 29.8%, to $1.7 million from $1.3 million for the three months ended March 31, 2000. The increase was attributable to volume growth, an improved sales mix and efficient plant operations at the main potato processing facility. During the 2001 period, the potato products division's western U.S. plant was relocated from

41

California to Nevada. Initial start-up costs from this relocation somewhat constrained profitability, but were within planned levels.

    Dairy Products Division Operating Profit.  Dairy products division operating profit for the three months ended March 31, 2001 increased $4.1 million from $(0.2) million for the three months ended March 31, 2000. The increase was attributable to strong volume growth, an improved sales mix, and more efficient plant operations. Additionally, an insurance settlement of approximately $3.2 million was also recorded related to a payment received for the final claim submitted from a 1999 dairy products recall.

    Refrigerated Distribution Division Operating Profit.  Refrigerated distribution division operating profit for the three months ended March 31, 2001 decreased $0.7 million, or 15.5%, to $3.6 million from $4.3 million for the three months ended March 31, 2000. The decrease was primarily attributable to declining margins in the key cheese category and for butter items, in both cases as a result of product costs rising more rapidly than the division's selling prices. These impacts decreased divisional operating profit as compared to strong first quarter 2000 levels.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

    Net Sales.  Net sales for the year ended December 31, 2000 increased $27.3 million, or 2.6%, to $1,080.6 million from $1,053.3 million for the year ended December 31, 1999. This increase was primarily attributable to an increase in net sales from our egg products division of $16.7 million and an increase in net sales from our refrigerated distribution division of $10.8 million, partially offset by reduced net sales of $3.5 million from our dairy products division.

    Egg Products Division Sales.  Egg products division sales for the year ended December 31, 2000 increased $16.7 million, or 2.7%, to $637.4 million from $620.7 million for the year ended December 31, 1999. The increase was primarily attributable to a 6.5% unit sales growth for all higher value-added products, such as extended shelf-life liquid, pre-cooked, hardcooked and low/no cholesterol liquid eggs. This sales growth more than offset price declines on certain products, including frozen and dried eggs, and managed volume declines in two industrial ingredient products, short shelf-life liquid and frozen eggs, due to our voluntary rationalization of unprofitable volume as a result of the adverse pricing environment. Sales of higher value-added egg products represented approximately 60% of the egg product division's sales in 2000, up from 58% in 1999.

    Potato Products Division Sales.  Potato products division sales for the year ended December 31, 2000 increased $3.3 million, or 5.9%, to $60.7 million from $57.4 million for the year ended December 31, 1999. This increase was primarily attributable to a strong unit sales growth for retail refrigerated potato products, which increased 12% from 1999. Sales to new customers, growth in sales to existing customers and new product introductions also contributed to the increase in sales.

    Dairy Products Division Sales.  Dairy products division sales for the year ended December 31, 2000 decreased by $3.5 million, or (2.4)%, to $141.4 million from $144.9 million for the year ended December 31, 1999. This decrease was primarily attributable to lower unit sales volumes for certain packaged mixes and the loss of its industrial ingredient customer in late 1999 as a result of problems related to the product recall, which accounted for approximately $15 million of our sales in 1999. These declines were offset by increased volumes as a result of our acquisition of a Connecticut dairy facility in May 1999, continued growth in non-refrigerated dairy creamers as a result of product line extensions, customer additions and a recovery in cartoned specialty products one year after our recall in 1999.

42

    Refrigerated Distribution Division Sales.  Refrigerated distribution division sales for the year ended December 31, 2000 increased $10.8 million, or 4.7%, to $241.1 million from $230.3 million for the year ended December 31, 1999. This increase was primarily attributable to strong unit sales growth in cheese, which increased 10.9% from 1999, and butter, which increased 15.1% from 1999. Strong volume growth resulted from sales to new customers, particularly in new territories, promotional activity and increased consumer advertising.

    Gross Profit.  Gross profit for the year ended December 31, 2000 decreased $1.5 million, or approximately (0.8)%, to $191.5 million from $193.0 million for the year ended December 31, 1999. Our gross profit margin was 17.7% of net sales for 2000, as compared to 18.3% of net sales for 1999. The decrease in gross profit was mainly attributable to a $14.9 million decrease in gross profit from lower value-added egg products resulting from a decrease in margins described above and $0.8 million from the loss of the dairy product division's major industrial dairy mix customer in late 1999, partially offset by increased gross profit from our higher value-added egg products, refrigerated case items and specialty potato products.

    Selling, General and Administrative Expenses.  Selling, general and administrative expenses for the year ended December 31, 2000 decreased $2.0 million, or (1.9)%, to $104.7 million from $106.7 million for the year ended December 31, 1999. Selling, general and administrative expenses declined as a percent of sales in 2000, as compared to the results in 1999. Expenses decreased due to reductions in costs associated with our information systems upgrade project, the majority of which was completed in the third quarter of 2000, as compared to peak expense levels on this project in 1999 and reduced payments under our executive incentive plan from 1999 levels. We also benefited from effective expense controls in other areas of our business and the favorable impact of reduced egg products royalty payments arising from a renegotiation of these payments in exchange for the assumption by us of certain administrative expenses, including any expenses related to litigation or other disputes in connection with some of the patents that we license. These benefits more than offset increases in bad debt expenses resulting from a foodservice distributor's bankruptcy filing and additional marketing efforts.

    Operating Profit.  Operating profit for the year ended December 31, 2000 increased $0.5 million, or approximately 0.6%, to $86.8 million from $86.3 million for the year ended December 31, 1999. This increase is primarily attributable to increased operating profits in our potato products and refrigerated distribution divisions, which were partially offset by a decline in operating profits of our egg products and dairy products divisions.

    Egg Products Division Operating Profit.  Egg products division operating profit for the year ended December 31, 2000 decreased $5.8 million, or (8.0)%, to $67.7 million from $73.5 million for the year ended December 31, 1999. Operating profit for our higher value-added egg products increased by $6.2 million, or 10.4%, from 1999, while operating profit from our other egg products declined by 98% to approximately break-even levels. As discussed above, operating profits for our industrial ingredient egg products declined by $14.0 million in 2000 as a result of a decrease in margins. The operating profit for the entire egg products division was impacted by a $4.6 million increase in depreciation as a result of substantial capital expenditures made throughout the division in 1999.

    Potato Products Division Operating Profit.  Potato products division operating profit for the year ended December 31, 2000 increased $0.9 million, or 13.3%, to $7.7 million from $6.8 million for the year ended December 31, 1999. This increase reflects benefits from volume growth and continuing improvements in plant operations, which were partially offset by increased marketing spending.

43

    Dairy Products Division Operating Profit.  Dairy products division operating profit for the year ended December 31, 2000 decreased $2.5 million, or (64.7)%, to $1.3 million from $3.8 million for the year ended December 31, 1999. Divisional operating profit declined in 2000 as a result of the loss of its major industrial customer, increased bad debt expenses resulting from a foodservice distributor's bankruptcy filing, higher overhead expenses, continued above average operating expenses as a result of the product recall in 1999 and increased amortization related to the acquisition of a dairy facility in Connecticut.

    Refrigerated Distribution Division Operating Profit.  Refrigerated distribution division operating profit for the year ended December 31, 2000 increased $5.3 million, or 50.1%, to $16.0 million from $10.7 million for the year ended December 31, 1999. Strong unit sales growth, along with a reduction in cheese supply costs without a commensurate reduction in selling prices, resulted in increases in margins during 2000.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

    Net Sales.  Net sales for the year ended December 31, 1999 increased $32.8 million, or 3.2%, to $1,053.3 million from $1,020.5 million for the year ended December 31, 1998. The increase was attributable to sales growth across our four operating divisions.

    Egg Products Division Sales.  Egg products division sales for the year ended December 31, 1999 increased $13.0 million, or 2.1%, to $620.7 million from $607.7 million for the year ended December 31, 1998. The increase was primarily attributable to sales in higher value-added product lines, such as pre-cooked patties and omelets, which increased 5.1% from 1998, and sales of our other egg products, such as dried eggs, which increased 1.5% from 1998. Sales of higher value-added egg products represented approximately 58% of the egg product division's sales in 1999, compared to approximately 57% in 1998.

    Potato Products Division Sales.  Potato products division sales for the year ended December 31, 1999 increased $5.0 million, or 9.6%, to $57.4 million from $52.4 million for the year ended December 31, 1998. This increase was primarily attributable to higher unit sales in 1999 compared to 1998. Foodservice unit sales were particularly strong in 1999, up 7.5% from 1998, with mashed potatoes, which showed significant sales increases, and new foodservice products contributing to the sales increase. Sales volume for retail items also increased in 1999, up 10.2% from 1998.

    Dairy Products Division Sales.  Dairy products division sales for the year ended December 31, 1999 increased by $6.0 million, or 4.3%, to $144.9 million from $138.9 million for the year ended December 31, 1998. This increase was primarily attributable to the acquisition of a Connecticut dairy facility in May 1999 and sales growth in non-refrigerated dairy creamers, partially offset by the loss of its major industrial customer at the beginning of the fourth quarter of 1999 and lower milk product sales as a result of the product recall in early 1999.

    Refrigerated Distribution Division Sales.  Refrigerated distribution division sales for the year ended December 31, 1999 increased $8.7 million, or 3.9%, to $230.3 million from $221.6 million for the year ended December 31, 1998. This increase was primarily attributable to strong unit sales growth in cheese products, which increased 12.0% from 1998, and butter, which increased 9.0% from 1998. Strong volume growth resulted from new customers, promotional activity and increased consumer advertising.

    Gross Profit.  Gross profit for the year ended December 31, 1999 increased $19.9 million, or 11.5%, to $193.0 million from $173.1 million for the year ended December 31, 1998. Our gross profit margin was 18.3% of net sales in 1999, as compared to 17.0% of net sales in 1998. The increase in gross profit margin in 1999 was attributable to a greater proportion of value-added product sales as

44

discussed above, which have higher margins relative to our total net sales, reduced feed and egg costs due to declines in the market prices of these raw materials and a decrease in potato products processing costs.

    Selling, General and Administrative Expenses.  Selling, general and administrative expenses for the year ended December 31, 1999 increased $13.2 million, or 14.0%, to $106.7 million from $93.5 million for the year ended December 31, 1998. Selling, general and administrative expenses were 10.1% of net sales in 1999, as compared to 9.2% of net sales in 1998. The increase was attributable to, among other factors, increased marketing costs, expenses related to company-wide information systems upgrades and increased incentive compensation accruals due, in part, to broadened employee participation in our incentive plans.

    Operating Profit.  Operating profit for the year ended December 31, 1999 increased $6.7 million, or 8.5%, to $86.3 million from $79.6 million for the year ended December 31, 1998. This increase is primarily attributable to increased operating profits in our egg products, potato products and refrigerated distribution divisions, which were partially offset by a decline in operating profit from our dairy products division.

    Egg Products Division Operating Profit.  Egg products division operating profit for the year ended December 31, 1999 increased $4.2 million, or 6.1%, to $73.5 million from $69.3 million for the year ended December 31, 1998. Increased sales of value-added egg products and higher margins for our other egg products accounted for most of this operating profit increase.

    Potato Products Division Operating Profit.  Potato products division operating profit for the year ended December 31, 1999 increased $2.9 million, or 73.5%, to $6.8 million from $3.9 million for the year ended December 31, 1998. Significant sales growth, improved plant operations resulting in lower processing costs, and a reduction in retail returns contributed to earnings growth in this division.

    Dairy Products Division Operating Profit.  Dairy products division operating profit for the year ended December 31, 1999 decreased $2.9 million, or (44.4)%, to $3.8 million from $6.7 million for the year ended December 31, 1998. Operating profit margins were lower in 1999 than 1998 as a result of costs and reduced sales related to a product recall early in the year, the loss of its major industrial customer late in the year, and inefficiencies in plant operations, partially offset by the acquisition of a Connecticut dairy facility in May 1999.

    Refrigerated Distribution Division Operating Profit.  Refrigerated distribution division operating profit for the year ended December 31, 1999 increased $3.4 million, or 46.2%, to $10.7 million from $7.3 million for the year ended December 31, 1998. The combination of volume growth, more effective expense controls and a reduction in product costs, as compared to 1998 levels, resulted in increases in profit margin in 1999.

Seasonality

    Consolidated quarterly operating results are affected by the seasonality of our net sales and operating profits. Specifically, shell egg prices typically rise seasonally in the first and fourth quarters of the year due to increased demand during holiday periods. Consequently, net sales in our egg products division increase in the fourth quarter. Generally, our refrigerated distribution division has higher net sales and operating profits in the fourth quarter, coinciding with incremental consumer demand during the holiday season. Net sales and operating profits from our dairy products division typically are significantly higher in the second and our third quarters due to increased consumption of ice cream products during the summer months. Operating profits from our potato products division are less seasonal, but tend to be higher in the second half of the year coinciding with the potato harvest.

45

Liquidity and Capital Resources

    Cash flow provided by operating activities was $69.1 million, $107.7 million and $68.9 million for the years ended December 31, 2000, 1999 and 1998, respectively. The decrease in cash flow provided by operating activities from 1999 to 2000 was due principally to an increase in working capital. The increase in cash flow provided by operating activities from 1998 to 1999 was due to increases in net earnings and depreciation, plus a decrease in working capital.

    We invested approximately $37 million in capital expenditures during the year ended December 31, 2000. We invested approximately $74 million in capital expenditures in 1999 and approximately $65 million in 1998. Capital expenditures during 2000 were mainly related to expanding capacity for our value-added products, especially dairy products. We also devoted significant capital to further implement an enterprise resource planning software system. In 2000, we purchased substantially all of the assets of Ingredient Supply LLC, a hardcooked egg products processor for approximately $2 million and agreed to lease the building it occupied. In 1999, we acquired a dairy products facility in Connecticut through a combination of a long-term lease commitment, a non-compete agreement and the purchase of certain assets for approximately $5.7 million in cash at the closing, with an ongoing obligation to pay $2.4 million per year until May 2003. In addition, we invested approximately $10 million in three foreign egg products joint ventures in 1999. We did not complete any acquisitions in 1998. Capital expenditures in 2000, 1999 and 1998 were funded from cash flow from operations and borrowings under our existing credit facility. We plan to spend approximately $48 million in total capital expenditures for 2001, which will be used to maintain our existing production facilities and to expand production capacity for value-added products, such as non-refrigerated dairy creamers, extended shelf-life liquid eggs and hardcooked eggs. We expect to fund such spending from operating cash flow and bank borrowings.

    Acquisitions and capital expenditures have been, and will likely continue to be, a significant capital requirement. In recent years we have undertaken a higher than normal number of capital projects to increase our productivity, as described above. Historically, we have financed our cash needs principally from internally generated funds, bank borrowings, issuance of senior debt and the sale of our common stock. We believe that these financing alternatives will continue to meet our anticipated needs, although the sale of common stock is not expected to be a financing tool over the next several years.

    We had two unsecured lines of credit for $80.0 million and $20.0 million with our principal banks, which were repaid in full at the closing of the acquisition. As of December 31, 2000, $65.5 million was outstanding under these lines of credit.

    In July 1998, our board of directors authorized the purchase of up to 2,000,000 shares of our common stock on the open market or in privately negotiated transactions. In February 2000, the board authorized the purchase of up to an additional 2,000,000 shares of common stock on the open market or in privately negotiated transactions. In May 2000, the board authorized the purchase of up to an additional 500,000 shares. In 1998, we repurchased 982,700 shares of our common stock for an aggregate purchase price of $24.1 million. In 1999, we repurchased 920,100 shares of our common stock for an aggregate purchase price of $18.9 million. In 2000, we repurchased 2,109,400 shares of our common stock for an aggregate purchase price of $46.1 million.

    The senior credit facility we entered into in connection with the acquisition currently consists of a $100.0 million term loan, a $270.0 million term loan and a $100.0 million revolving credit facility. For more information, see "Description of Senior Credit Facility." We used the net proceeds from the term loans to consummate the acquisition. We expect to use the revolving credit facility primarily to fund our future working capital needs. At April 1, 2001, the date the acquisition was consummated for financial reporting purposes, approximately $24.0 million was outstanding under the revolving credit facility.

46

    The senior credit facility contains various restrictive covenants. It prohibits us from prepaying other indebtedness, including the notes, and it requires us to maintain specified financial ratios, such as a minimum ratio of EBITDA to interest expense, a minimum fixed charge coverage ratio and a maximum ratio of total debt to EBITDA, and satisfy financial condition tests. In addition, the senior credit facility prohibits us from declaring or paying any dividends and prohibits us from making any payments with respect to the notes if we fail to perform our obligations under, or fail to meet the conditions of, the senior credit facility or if payment creates a default under the senior credit facility. For more information, see "Description of Senior Credit Facility," "Description of Notes" and "Risk Factors."

    The indenture governing the notes, among other things, (a) restricts the ability of the issuer and its subsidiaries, including the guarantors of the notes, to incur additional indebtedness, issue shares of preferred stock, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates, (b) prohibits certain restrictions on the ability of certain of the issuer's subsidiaries, including the guarantors of the notes, to pay dividends or make certain payments to the issuer and (c) places restrictions on the ability of the issuer and its subsidiaries, including the guarantors of the notes, to merge or consolidate with any other person or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the assets of the issuer. The indenture related to these notes and the senior credit facility also contain various covenants which limit our discretion in the operation of our businesses.

    Our principal sources of funds are anticipated to be cash flows from operating activities and borrowings under our senior credit facility. We believe that these funds will provide us with sufficient liquidity and capital resources for us to meet our current and future financial obligations, as well as to provide funds for our working capital, capital expenditures and other needs for at least the next 12 months. No assurance can be given, however, that this will be the case. We may require additional equity or debt financing to meet our working capital requirements or to fund our acquisition activities, if any. There can be no assurance that additional financing will be available when required or, if available, will be on terms satisfactory to us.

Market Risk

Commodity Hedging

    We are exposed to cash flow and earnings market risk from certain changes in grain prices, primarily corn and soybean meal, relative to the cost to feed our approximately 14 million hens and prices under our grain-based egg procurement contracts. To reduce this risk, we utilize derivative commodity instruments, principally futures contracts. The following table is a sensitivity analysis that estimates our exposure to market risk associated with these futures contracts. The notional value of our monthly commodity position represents the notional value of the corn and soybean meal futures contracts for the year ended December 31, 2000. Market risk is estimated as the potential loss in fair value resulting from a hypothetical 10% adverse change in commodity prices (amounts in thousands).

		Notional Value		Market Risk
Corn futures contracts:
	Highest position	$	25,679	$	2,568
	Lowest position		9,784		978
	Average position		16,387		1,639
Soybean meal futures contracts:
	Highest position	$	18,099	$	1,810
	Lowest position		1,566		157
	Average position		6,275		628

47

Interest Rates

    We are exposed to changes in interest rates. The senior credit facility we entered into in connection with the acquisition will be variable rate debt. Interest rate changes therefore generally do not affect the market value of such debt but do impact the amount of our interest payments and, therefore, our future earnings and cash flows, assuming other factors are held constant. Conversely, for fixed rate debt, interest rate changes do not impact future cash flows and earnings, but do impact the fair market value of such debt, assuming other factors are held constant. At April 1, 2001, the date the acquisition was consummated for financial reporting purposes, we had variable rate debt of approximately $394.0 million outstanding. Holding other variables constant, including levels of indebtedness, a one percentage point increase in interest rates would have had an estimated impact on pre-tax earnings and cash flows for a twelve month period of approximately $3.9 million.

Inflation

    Inflation is not expected to have a significant impact on our business, financial condition or results of operations. We generally have been able to offset the impact of inflation through a combination of productivity improvements and price increases.

48

BUSINESS

Overview

    Michael Foods, Inc. is a diversified producer and distributor of specialty egg, potato and dairy products to the foodservice, retail and industrial ingredient markets. We also distribute refrigerated grocery items, primarily cheese and other dairy products, to the retail grocery market in the central United States. Our largest operating division, egg products, is the largest producer of processed egg products in the United States, and we believe it is three times larger than its next largest competitor. We estimate that we have a 60% share of the higher value-added segment of the United States processed egg market, which includes extended shelf-life liquid eggs, pre-cooked egg patties and omelets, low/no cholesterol liquid eggs and hardcooked eggs. Since 1997, we have grown volumes of higher value-added egg products at more than twice the industry growth rate for egg consumption. We process over one billion pounds of egg products annually through our fully-integrated national operations and believe we are the lowest cost producer of processed egg products in the United States.

    As the market leader for processed eggs, we have benefited from the consistent growth in the demand for eggs over the last decade. We have further benefited from our ability to capitalize on favorable consumer and food industry trends by introducing new, higher value-added egg products, which have helped us to improve our egg products operating profit margin from 3.3% in 1992 to 10.4% in 2000, while also growing our sales both organically and through acquisitions. For the three months ended March 31, 2001, we generated net sales and EBITDA of $275.6 million and $31.7 million, respectively, and for the year ended December 31, 2000, we generated net sales and EBITDA of $1,080.6 million and $134.8 million, respectively.

    We offer our customers a wide range of products within our food categories. Our strategy within those categories is to focus on higher-margin specialty segments that are growing at a higher rate than their respective food category, such as extended shelf-life liquid eggs, pre-cooked egg products, refrigerated potato products and non-refrigerated dairy creamers. We also seek to develop and market products that address key food industry concerns including food safety, convenience, product quality and consistency, and labor and waste reduction. Our products are primarily sold through long-standing preferred supplier relationships with major foodservice distributors and national restaurant chains.     The following charts set forth the net sales and operating profit of our four divisions for the year ended December 31, 2000.

49

    Egg Products:  We believe the egg products division is the largest producer and supplier of processed egg products in the United States. Our higher-margin specialty products include extended shelf-life liquid eggs, pre-cooked egg patties and omelets, low/no cholesterol liquid egg products and hardcooked eggs. Within this higher value-added segment of the processed egg market, we have an estimated 60% market share in the United States. We are also the leader in producing frozen, dried and short shelf-life liquid egg products. Our foodservice brands include Table Ready and Easy Eggs, and our retail brands include Better 'n Eggs and All Whites. The egg products division's major customers include leading foodservice distributors, such as Sysco Corporation and Alliant Foodservice, Inc., national restaurant chains, such as Burger King Corporation and IHOP Corp. (International House of Pancakes), and major industrial ingredient customers, such as The Pillsbury Company and Unilever Bestfoods. For the year ended December 31, 2000, the egg products division represented approximately 59.0% of our net sales and 73.0% of our operating profit.

    Potato Products:  We believe the potato products division is the largest processor and distributor in the United States of a wide variety of refrigerated potato products sold to the retail grocery and foodservice markets. Our potato products principally consist of hash browns and mashed potatoes, and also include sliced, wedged and diced potatoes. Refrigerated potato products can be distinguished from the more commodity-like frozen potato products by their freshness, taste and convenience. As a result, the products are generally able to command higher prices and superior margins. We believe we were the first to introduce nationally branded refrigerated potato products in the late 1980s, and we have grown our sales volume in this market at a compounded annual growth rate of 10% since 1992. We are the national market leader in refrigerated potato products with an estimated 55% market share in the foodservice segment, principally under the Northern Star and Farm Fresh brands, and an estimated 57% market share in the retail grocery segment, under the Simply Potatoes and Diner's Choice brands. The potato products division's largest customers include major foodservice distributors, such as Sysco and U.S. Foodservice, Inc., and major retail grocery store chains, such as Publix and Food Lion. For the year ended December 31, 2000, the potato products division represented approximately 5.6% of our net sales and 8.3% of our operating profit.

    Dairy Products:  The dairy products division is a leading producer and marketer of dairy mixes, including soft serve ice cream and milkshake mix, and specialty processed dairy products to quick service restaurant chains and foodservice distributors. Our dairy products division is increasingly focusing on higher-margin products, including extended shelf-life non-refrigerated creamers and specialty cartoned dairy products, such as soy milk and whipping cream. Our dairy products are sold under the 70 year-old Kohler brand name and under our customers' private label brands to quick service restaurant customers, including McDonald's Corporation, Burger King and Sonic Corporation, and foodservice distributors, including Sysco and Alliant Foodservice. For the year ended December 31, 2000, the dairy products division represented approximately 13.1% of our net sales and 1.4% of our operating profit.

    Refrigerated Distribution:  The refrigerated distribution division is a distributor of over 400 branded and private label refrigerator case items to retailers and wholesale warehouses in 30 states. The refrigerated distribution division's principal product is its Crystal Farms branded cheese, which has a strong presence in the upper midwest region of the United States and the largest market share for branded cheese in Minnesota. Crystal Farms branded cheese generated approximately $122.0 million of net sales in 2000. This division also distributes shell eggs, bagels, butter, margarine, and refrigerated potato and other products. The refrigerated distribution division's largest customers include major grocery retailers, such as SUPERVALU Inc. and Cub Foods. For the year ended December 31, 2000, the refrigerated distribution division represented approximately 22.3% of our net sales and 17.3% of our operating profit.

50

Industry Trends

    We believe that our egg, potato and dairy products divisions are well positioned to capitalize on the continued growth of the foodservice industry, which is being driven by an increase in food consumption away from the home. We also believe that the egg products division will benefit from several additional trends, including continued increases in processed egg consumption. Our business is influenced by the following industry trends:

    Growth in Foodservice.  According to the USDA, purchases of food prepared away from home in the United States have grown from 26% of total food purchases in 1960 to 47.5% of purchases in 2000 and are expected to rise to approximately 50% by 2005. Foodservice sales have increased due to various demographic changes, including the increases in personal disposable income, single parent households and dual income families. This growth in foodservice sales is expected to continue to lead to increased demand for processed food products. Additionally, we believe that the focus of the foodservice industry on increasing product safety, reducing preparation costs and outsourcing more of the food preparation process complements our product portfolio and new product development efforts.

    Consolidation in Foodservice Channel.  Leading foodservice distributors continue to consolidate the foodservice industry in an effort to improve and broaden their product offerings, competitiveness and profitability. For example, according to ID Magazine, a foodservice industry publication, the top 20 foodservice distributors have increased their share of total industry sales from 22.5% in 1991 to 34.6% in 1999. As foodservice distributors consolidate, we believe they will increasingly migrate to national suppliers that have broad product lines and extensive service capabilities to meet both the scale and the scope of their operational requirements.

    Growth in Per Capita Egg Consumption.  Per capita egg consumption has been generally increasing for the last ten years due to a shift in consumer perceptions regarding the health attributes of eggs as well as new applications for eggs. According to the USDA, per capita egg consumption has increased from 234 eggs per person in 1991 to an estimated 259 eggs per person in 2000. The USDA also projects that per capita egg consumption will grow to 264 eggs per person by 2005 and to 269 eggs per person by 2010.

    Growth in Higher Value-Added Processed Egg Products.  The growth in food consumption away from home and the development of new egg products has resulted in an increase in the production and consumption of processed egg products. According to the USDA, approximately 30.4% of all eggs consumed in the United States in 2000 were processed, up from approximately 21.5% in 1990. Requirements of the foodservice industry for food safety and concerns regarding product quality, consistency and convenience have further increased the consumption of such higher value-added egg products such as extended shelf-life liquid eggs and pre-cooked eggs.

51

Competitive Strengths

    We believe we are able to compete favorably in our markets due to the following competitive strengths:

Extensive Portfolio of Specialty and Branded Products with Leading Regional and National Market Positions. We specialize in the development, production and distribution of specialty food products that address many of the needs of the foodservice industry. Our success in developing new and innovative products has resulted in a broad portfolio of strong market positions and leading brands, as shown in the table below.

Division	Specialty Products	Estimated Market Position(1)	Key Brands
Egg Products	Extended shelf-life liquid eggs Pre-cooked eggs Low/no cholesterol liquid eggs Hardcooked eggs	•#1 U.S. market share of processed egg products •#1 U.S. market share for extended shelf-life liquid egg products •#1 U.S. market share of pre-cooked eggs •#2 U.S. market share in low/no cholesterol liquid eggs •#1 U.S. market share of hardcooked eggs	Easy Eggs, Table Ready, MGW, Papetti's, Better 'n Eggs, All Whites
Potato Products	Refrigerated potato products	•#1 U.S. market share in foodservice •#1 U.S. market share in retail	Northern Star, Farm Fresh, Simply Potatoes, Diner's Choice
Dairy Products	Extended shelf-life and non-  refrigerated creamers Ultra-high temperature dairy mixes	•Strong niche position in non-refrigerated dairy creamers •Leading regional position in dairy mixes to McDonald's, Burger King and Sonic	Kohler
Refrigerated Distribution	Processed and wrapped cheeses	•Strong regional market share •#1 market share in Minnesota	Crystal Farms

(1)

Market share data is derived primarily from our own estimates, which are based on information obtained from customers, distributors and suppliers.

    Long-Standing Customer Relationships.  Our quality products, production capability, focus on service and delivery, and customer driven product development have helped us to build and retain a strong and diverse customer base. We have long-standing preferred supplier relationships with every major broad-line foodservice distributor, serving as their leading supplier of egg products. In addition, we have long-standing relationships with most national restaurant chains that serve breakfast, major industrial ingredient companies and major retail grocery store chains. Our average length of relationship with our top ten egg products, potato products and dairy products customers is 17 years, 15 years and nine years, respectively. In addition, we have experienced very little turnover among our top foodservice customers in each of our divisions. We believe this low turnover is the result, in part, of being one of the only producers capable of supplying sufficient quantities of egg products to serve as the preferred supplier for more than one of the major national foodservice distributors. Further, we are also able to meet their demand for refrigerated potato and dairy products. We have received numerous supplier awards, including the UniPro Vendor of the Year in 2000, the Gordons Foodservice Supplier of the Year in 2000 and, for each of the last six years, the Sysco Corporation Top 100.

    Large Scale Operator with Efficient Manufacturing Operations.  We process over one billion pounds of eggs annually. We believe our significant annual volume combined with our diversified egg procurement and highly automated manufacturing facilities provides us with a cost advantage in the marketplace. Over the last four years, we have invested approximately $217 million in capital expenditures. Of this amount, approximately $115 million was used for growth investments to expand

52

our manufacturing capacity for value-added egg products, as well as to upgrade our dairy and potato operations, improve and expand our distribution centers and install a new company-wide management information system. These investments include the installation of new pre-cooked egg production lines, a new dried egg facility, automatic packaging equipment and quality control systems. Additionally, our diverse geographic presence, with core manufacturing facilities in the midwest and eastern United States, allows us to serve customers cost effectively throughout the United States. We believe that our operational scale, product breadth and geographic scope make us an important strategic partner for foodservice distributors, major restaurant chains and industrial ingredient companies.

    Industry Leading Product Development Capability.  We believe that innovation and product development continue to distinguish us from our competitors, and help us earn attractive margins for our specialty products. Our research and development staffs work closely with current and prospective customers to create and commercialize customized specialty food products. Over the last two years we have introduced both independently and in conjunction with our customers several new products and line extensions. Products currently being test marketed include pre-cooked puffed egg patties, in-shell pasteurized eggs, breakfast twists, slush drink mixes and refrigerated french fries with several more products currently under development and in test markets.

    Strong, Proven Management Team With Significant Equity Interest.  We have an experienced and successful senior management team that has an average of over 20 years of food industry experience. The management team is headed by Gregg Ostrander, who has been our president and chief executive officer since 1994 and has 26 years of food industry experience, including management positions with Beatrice Foods Company and Armour Swift-Eckrich, a division of ConAgra Foods Inc. Our management team has a strong track record of product innovation and successful acquisitions, most notably the acquisition of Papetti's Hygrade Egg Products in 1997. Furthermore, our management's commitment to the business is evidenced by their rollover equity investment in our company of approximately $10.0 million, representing over 70% of their available proceeds from the acquisition.

Business Strategy

    Our strategy has enabled us to capitalize upon key industry trends, specifically the increases in both food prepared away from the home and the consumption of further-processed eggs. The primary components of our business strategy include the following:

    Move Customers Up the "Value Chain."  While we offer a variety of food products with different levels of processing, we seek to continually transition our customers from lower value-added products to higher value-added, higher-margin products that offer improved food safety, reduced labor and waste, and improved product quality and consistency. For example, in 1989 we worked with Burger King to help them transition from shell eggs to extended shelf-life liquid eggs and then, in 1998, to higher value-added pre-cooked egg patties. We believe this transition has reduced Burger King's waste and labor costs and has improved product consistency nationwide. We believe there are significant benefits to our customers from transitioning them to higher value-added products, and we expect this trend to continue. In addition, we are actively encouraging and assisting current and prospective customers who may wish to enter into, or expand their presence in, the profitable foodservice breakfast segment. For example, Dunkin' Donuts and Sonic are using our pre-cooked egg products as part of their evolving breakfast strategies.

    Capitalize On Growth Opportunities in Potato Products, Dairy Products and Refrigerated Distribution Divisions.  We believe that significant growth opportunities exist in our potato products, dairy products and refrigerated distribution divisions. Our branded retail refrigerated potato products have grown at an average rate of 10% during the last eight years without significant consumer marketing. In late 2000, we invested approximately $1.0 million in consumer advertising in the Tampa Bay and Cincinnati metropolitan areas. These marketing initiatives have resulted in significant sales volume increases in

53

these markets. Based on the success of these marketing efforts, we are increasing our consumer spending by another $1.0 million in 2001 for additional test markets. We expect that higher levels of marketing activity will increase revenues and expand profitability as consumer awareness of our retail refrigerated potato products grows.

    After investing significant time and capital improving our dairy operations, including adding a new management team, modernizing manufacturing operations and upgrading our quality control procedures, our dairy products division is resuming an aggressive sales and marketing program. The focus of our efforts will be to continue the growth of our non-refrigerated dairy creamer business, as well as expand our sales of specialty cartoned products, such as soy-based milk and whipping cream.

    Finally, we intend to expand our geographic reach and increase existing market penetration for our Crystal Farms branded cheese, while introducing new products and line extensions under the Crystal Farms label. Based on our success in the central United States, we believe there are significant opportunities to grow the sales of our refrigerated distribution division.

    Integrate Our Egg Operations.  Due to contractual arrangements and strategic and personnel considerations, we have only recently begun to fully integrate our two egg products operations, M.G. Waldbaum Company and Papetti's Hygrade Egg Products. The first step of this process was completed in early 2000 by combining the management teams of the two operations under Bill Goucher, the president of our egg products division. Mr. Goucher has over 25 years of experience in the food business. We believe that considerable opportunities remain to both increase sales and decrease costs as a result of the further integration of these businesses. These opportunities primarily include the integration and optimization of distribution systems, which until recently have functioned under two separate entities, and the consolidation of the sales forces in order to maintain consistent pricing and relationships with major customers.

    Reduce Commodity Risks.  We have developed a risk management strategy in order to reduce the impact of changes in the prices of our commodity inputs on our operating results. This strategy includes: (i) significantly hedging the grain requirements for our internal egg production and our third-party egg procurement contracts that are based on grain prices; (ii) matching variable priced egg procurement contracts with variable priced selling contracts; (iii) negotiating the ability to raise prices with certain fixed price customers by giving 30 to 60 days notice; and (iv) increasing the percentage of our sales from higher value-added products, as profitability of these higher-margin products is less affected by changes in underlying commodity prices. As a result of our risk management strategy and strong market position, we believe that, subject to a lag period in some cases, we generally have the ability to pass-through a significant portion of our raw material cost increases to our customers. For example, during the fourth quarter of 2000, as wholesale egg prices increased significantly from 15 year lows, we were successful in passing through price increases to many of our egg products customers for whom we had the ability to adjust prices.

    Pursue Attractive Acquisition and Joint Venture Opportunities.  We will continue to evaluate and selectively pursue acquisitions that broaden our technological expertise and expand our product offerings and/or geographic reach to complement our existing businesses. Since 1988, we have completed 16 acquisitions and three joint ventures, including the $106 million acquisition of Papetti's in 1997. The acquisition of Papetti's significantly increased our market share, scale, geographic scope and offerings for our egg products division. With the exception of Papetti's, we have focused in recent years on making small strategic acquisitions. For example, in the past two years, we: (i) acquired a dairy products operation in Connecticut, which increased the geographic coverage of our dairy products division; (ii) acquired Ingredient Supply LLC, which expanded our egg products division's hardcooked eggs product line; and (iii) we invested in foreign egg products joint ventures to expand the geographic coverage of our egg products division and pursue new technologies.

54

Company Background

    Michael Foods, Inc. was formed in 1987 as a Delaware corporation by the holding company North Star Universal, Inc., a Minnesota corporation, for the purpose of consolidating and focusing North Star Universal's food products operations and facilitating the offer and sale of a portion of the new company's equity to the public. In May 1987, Michael Foods Delaware sold shares of its common stock in an initial public offering.

    North Star Universal, which was founded in 1928, was engaged in various graphics, manufacturing and services businesses in addition to its food processing and distribution business. Its involvement in food processing and distribution originated with the 1977 acquisition of Kohler, which was founded in 1929. In 1984, North Star Universal expanded its food-related activities with the acquisition of Crystal Foods Incorporated. In 1985, North Star Universal acquired Northern Star Co., a processor and distributor of frozen potato products.

    After its formation, Michael Foods Delaware expanded significantly through a series of acquisitions, which included: M.G. Waldbaum Company, a large producer, processor and distributor of shell eggs and egg products; Morning Glory Eggs, Inc., a producer of egg products for the foodservice market; Wisco, a distributor of refrigerator case products; Drallos Potato Co., Inc., a producer of refrigerated potato products; Farm Fresh Foods, Inc., another producer of refrigerated potato products; four small hardcooked egg processors, which expanded Michael Foods' market share of this processed eggs segment; and the institutional refrigerated potato products line of Interstate Food Processing Corp.

    North Star Universal acquired all publicly held shares of Michael Foods Delaware in February 1997 through a reverse merger that involved an exchange by North Star Universal of shares of its common stock for shares of common stock held by the public shareholders of Michael Foods Delaware. Concurrently, North Star Universal contributed all of its non-food processing and distribution assets to a newly formed subsidiary and distributed shares of this newly formed subsidiary to its shareholders. After this distribution, North Star Universal renamed itself Michael Foods, Inc., and Michael Foods Delaware, a wholly owned subsidiary of Michael Foods, Inc., was renamed Michael Foods of Delaware, Inc.

    In February 1997, we completed the acquisition of Papetti's Hygrade Egg Products, a New Jersey-based processed egg products business, which is our most significant acquisition to date. The Papetti's acquisition more than doubled the market share of our egg products division.

    In January 1999, we purchased 25% of Belovo S.A., a Bastogne, Belgium-based egg products producer. A joint venture we formed with Belovo concurrent with the purchase, the Lipid Company S.A., was effectively dissolved in early 2001. As a result of monetary and technology transfers upon terminating the joint venture, our ownership of Belovo has increased to approximately 33%.

    In May 1999, we acquired an ultra-high temperature pasteurization dairy facility in Connecticut. In July 1999, we formed Trilogy Egg Products, Inc., an egg products joint venture in Canada with two partners, Canadian Inovatech, Inc. and the Egg Producers Co-Op Ltd. Trilogy sells specialty egg products in the Canadian foodservice market. In November 2000, we acquired Ingredient Supply, LLC, a hardcooked eggs processor and distributor.

    On April 10, 2001, pursuant to a merger agreement by and among Michael Foods, Inc., M-Foods Holdings, Inc. and its wholly owned subsidiary, Michael Foods Acquisition Corp., we entered into a series of transactions that resulted in Michael Foods becoming a wholly owned subsidiary of M-Foods Holdings, Inc. M-Foods Holdings is a corporation formed by M-Foods Investors, LLC, which is owned by affiliates of Vestar Capital Partners and Goldner Hawn Johnson & Morrison, and certain members of our management and affiliates of the Michael family. For more information, see "The Acquisition."

55

Egg Products Division

    We believe the egg products division is the largest producer of egg products in the United States with an estimated 45% market share. The division is our largest, and currently consists of the M.G. Waldbaum Company and Papetti's Hygrade Egg Products—two well-recognized names in the industry. We believe our egg products division is the only United States egg products industry participant serving all market channels, the foodservice, retail and industrial ingredient markets, with a comprehensive product line. The egg products division processes over one billion pounds of eggs annually through its integrated facilities. The division focuses on producing higher value-added egg products that we believe are safe, easy to prepare and more consistent in quality.

    Demand for higher value-added egg products in both the retail and foodservice markets has been driven by the following factors:

Food Safety	Processed egg products are pasteurized and quality controlled, which reduces the likelihood of contamination. As a result, foodservice companies and major restaurant chains are choosing processed egg products as a lower-risk alternative to unprocessed eggs.
Labor Reduction/Ease of Use	Processed egg products require less preparation time, reducing labor costs for foodservice companies and increasing convenience for individual purchasers.
Product Quality and Consistency	Foodservice companies and national restaurant chains require consistency of products throughout their operations. Processed egg products, particularly pre-cooked eggs which are produced to distinct specifications, provide foodservice companies and national restaurant chains with a processed egg product that provides a more consistent taste, quality and serving size than shell eggs.
Efficiency/Waste Reduction	Processed eggs reduce the need for disposal of partially used product and have fewer packaging and space requirements.

    Products.  Our higher value-added processed egg products are detailed below:

Extended shelf-life liquid eggs:  We maintain an estimated 65% market share in the extended shelf-life liquid egg market in the United States. These products are packaged in cartons and bag-in-box packaging principally for use in foodservice markets. We use proprietary ultra-high temperature pasteurization processes to produce our extended shelf-life liquid eggs. These processes produce an egg product that is salmonella and listeria-negative, as defined by federal law, with a refrigerated shelf-life of up to three months. Our extended shelf-life liquid egg products are marketed under the Easy Eggs and Table Ready brand names.

Pre-cooked eggs:  We are the leader in pre-cooked omelets and egg patties with an approximate 60% market share in the United States. These products are fully-cooked and packaged at the manufacturing facility and then reheated at the point of consumption. Foodservice companies and

56

quick service restaurant chains find these products attractive because they can reduce labor costs and waste, improve consistency and require only a minimal infrastructure investment. We will continue to direct significant production and marketing resources to this product as usage increases.

Low/no cholesterol eggs:  We believe that we hold the number two market share position in the United States in the niche retail egg substitutes category. These egg products consist primarily of egg whites and are sold to retail grocery stores under the names of Better 'n Eggs and All Whites.

Hardcooked eggs:  We believe that we have approximately a 60% market share in the hardcooked egg market in the United States. These products are hard-boiled eggs, which are packaged in pails with brine solution or in modified atmosphere packs that are designed to increase both shelf-life and food safety. Hardcooked eggs are sold primarily to foodservice and industrial accounts for use in salads and other dishes.

    In addition, our other egg products include frozen eggs, short shelf-life liquid eggs and dried eggs that we supply in order to provide our customers with a broad range of egg products. We believe we are the leading processor of these types of products. Frozen eggs are used primarily by foodservice and industrial ingredient customers. Short shelf-life liquid eggs are liquid eggs packaged with standard pasteurization and are convenient for industrial ingredient customers, such as bakeries, who will use a large quantity of eggs within a short time period to produce other products. Dried eggs are used primarily by industrial ingredient customers in the production of mayonnaise, salad dressings and baking mixes.

    Customers.  The egg products division has long-standing preferred supplier relationships with a majority of its customers. Our customers include each of the major broad-line foodservice distributors and most national restaurant chains that serve breakfast. As the largest processed egg producer in the industry, we offer our customers a broad product selection, large-scale manufacturing capabilities and specialized service. The egg products division's major customers in each of its market channels include leading foodservice distributors, such as Sysco, Alliant Foodservice and U.S. Foodservice, national restaurant chains, such as Burger King and International House of Pancakes, and major industrial ingredient customers, such as Pillsbury and Unilever Bestfoods.

    The egg products division's supply agreements with its customers typically last one year. These contracts generally stipulate a number of conditions including the types of products to be supplied, volume targets, pricing levels (with weekly, monthly, quarterly or annual revision options), discount options, delivery and other logistical and administrative parameters. The contracts are not "take or pay" contracts and typically can be terminated early without penalty. The strength of the egg products division's customer base is demonstrated by low turnover and the long-standing nature of the relationships, exemplified by an average relationship length of 17 years for its top ten customers. As an example of this type of relationship, the egg products division has a six year preferred supplier contract with U.S. Foodservice in which we supply a substantial majority of its egg products needs. This relationship is over 20 years old. Our volume with U.S. Foodservice grew 13% during 2000 and 14% during 1999.

    Competition.  The egg processing industry is heavily concentrated, especially when compared to the shell egg industry. We believe we account for 45% of the total processed egg products industry, which we believe is three times larger than the market share of our nearest competitor. Sunny Fresh Foods, Inc., a subsidiary of Cargill, Inc., is our largest higher value-added products competitor. We also compete with other egg products processors including Sonstegard, Rose Acre Farms, Inc., Echo Lake Farm Produce, Cutler Egg Products Inc. and ConAgra Foods, Inc.

    Risk Management Strategy.  The primary raw materials used in the production of our egg products are corn, soybean meal, shell eggs and liquid eggs. We purchase corn and soybean meal for our hens, which produce approximately 35% of our egg requirements, and we purchase shell eggs and liquid eggs

57

from third-party suppliers for the remainder of our egg needs. Market conditions could subject corn, soybean meal, shell eggs and liquid eggs to price fluctuations. As these variable raw material costs represent a large percentage of the total costs of our egg products, significant price fluctuations could have an adverse affect on our results of operations.

    We have a risk management strategy, the underlying goal of which is to match as closely as possible our egg purchasing activities with those of our selling activities. This strategy includes:

•

directly hedging, through the purchase of futures contracts, a significant portion of the grain requirements for our internal egg production and our third-party egg procurement contracts that are based on grain prices;



•

matching the percentage of variable pricing contracts with our variable priced egg procurement contracts, which provides a natural hedge during times of grain and egg price volatility;



•

negotiating the ability to raise prices with certain fixed price customers by giving 30 to 60 days notice which allows us to respond to commodity price changes; and



•

increasing the percentage of our sales derived from higher margin value-added products, which we believe are less sensitive to changes in underlying commodity prices.

    As certain of our risk management strategies cannot be implemented immediately following changes in the prices of our commodity inputs, such price volatility can adversely affect our margins in the short-term. However, we believe, subject to a lag period in some cases, our market position and focus on value-added products generally provide us with the ability to pass through a significant portion of the raw material cost increases to our customers. For more information on our risk management strategy, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—General—Commodity Risk Management."

    Sales Dynamics.  We sell our egg products based on a mix of variable, semi-variable and fixed price contracts, of which variable contracts constitute a significant portion. Sales of egg products under variable priced sales contracts are tied to a pricing index, either an Urner-Barry egg market or grain index. Price changes under these sales contracts are based on a formula and generally allow for a pass-through of cost increases. Our semi-variable sales contracts generally allow us to change prices by giving 30 to 60 days notice. These contracts are with major broad-line foodservice distributors who are generally less sensitive to price increases because their customers purchase food products from them on a cost-plus basis. Our fixed price egg products sales contracts generally have durations of up to one year and maturity dates that are generally staggered throughout the year, effectively reducing our commitment to fixed priced contracts. We use fixed price contracts because our large national foodservice customers require fixed pricing in order to manage the prices at which they sell their products.

    Suppliers.  The egg products division produces approximately 35% of its shell egg requirements at multiple internal egg production facilities. A majority of the remainder of the division's egg requirements are purchased under contracts with numerous cooperatives and egg producers at prices primarily derived from grain-based and Urner-Barry market indices. No egg supplier provides more than 5% of the division's egg requirements.

Potato Products Division

    The potato products division produces and distributes refrigerated potato products to the retail, foodservice and industrial ingredient markets. This division's products principally include hash browns and mashed potatoes, but also include sliced and diced potatoes. The potato products division is the national market leader in refrigerated potato products with an estimated 55% market share in the foodservice segment, principally under the Northern Star and Farm Fresh brands, and an estimated 57% market share in the grocery segment under the Simply Potatoes and Diner's Choice brands. Our branded

58

retail refrigerated potato products have grown at a compounded annual growth rate of 10% since 1992. Due to their freshness and quality, refrigerated potatoes are sold at higher prices than frozen potatoes and, according to our consumer studies, have superior taste and texture characteristics. In addition, we use a production process that produces what we believe to be the longest shelf-life potato products in the retail category of 75 days. The shelf-life of our competitors' retail products, however, are advertised as being approximately 45 to 60 days.

    Products.  The potato products division sells refrigerated hash browns, mashed potatoes and diced, sliced and other specialty potato products. These products are marketed under the Northern Star, Farm Fresh and Quality Farms brand names to the foodservice market and the Simply Potatoes and Diner's Choice brand names to the retail market. Northern Star and Simply Potatoes are the division's leading brands in the foodservice and retail channels, respectively. Historically, the Simply Potatoes brand has achieved consistent growth despite minimal advertising expenditures. In late 2000, we invested approximately $1.0 million in consumer advertising in the Tampa Bay and Cincinnati metropolitan areas. These marketing initiatives have resulted in significant sales volume increases in these markets. Based on the success of these marketing efforts, we are increasing our consumer spending by an additional $1.0 million in 2001 for additional test markets.

    Recent growth in the potato products division is the result of several factors, including the growth in specialty potato products and increasing consumer awareness of the refrigerated potato category. For example, mashed potatoes continue to be a popular category in both the retail and foodservice markets, particularly special recipe mashed potatoes, including deluxe mashed (prepared with butter and sour cream), seasoned mashed, red skin garlic mashed and mashed with onion. The potato products division's ability to create such customized mashed potato products has attracted interest from chain restaurants in the foodservice market, such as International House of Pancakes, which use these blends as signature menu items. In addition, we have had success with other products such as special cuts, including thick-sliced russets and red skin wedges, and seasoned hash browns.

    In 1997, we exited the frozen french fry business due to our inability to compete profitably with the larger market participants. This move allowed us to shift our strategic focus to becoming a leading processor and distributor of refrigerated potato products. We have invested significant capital in our Minneapolis facility, including re-designing the plant layout and upgrading the equipment. Since 1997, production yields have continuously improved, labor costs have declined and gross profit per unit has grown at a compounded annual rate of 14%.

    Customers.  The potato products division leverages existing relationships with national foodservice distributor customers of our egg products division. The potato products division's top five customers are also long-standing customers of the egg products division. We provide foodservice distributors the convenience of sourcing many different types of potato and eggs products centrally. The potato products division's largest customers include major foodservice distributors, such as Sysco, U.S. Foodservice and Alliant Foodservice and major retail grocery store chains, such as Publix and Food Lion. These relationships provide a foundation for our refrigerated potato products division and provide potential growth opportunities.

    Competition.  We were the first to introduce nationally branded refrigerated potato products in the late 1980s to the United States' foodservice and retail markets. We are currently the largest processor and distributor by volume in the United States of a broad-line of refrigerated potato products. The potato products division's largest competitor is Reser's Fine Foods, a national producer of refrigerated products. Other competitors are smaller local and regional processors, including I&K Distributors, Inc. and Naturally Potatoes. In the broader potato products category, other large national producers, particularly those that produce frozen potato products, compete indirectly with our potato products division.

59

    Suppliers.  A high-quality, consistent-cost potato supply is important to the potato products division's profitability. Historically, potato prices have remained relatively stable. A substantial portion of our annual potato requirements are met through contracts with potato producers, with a high percentage of such production coming from irrigated land, allowing for relatively consistent raw material quality. In addition, the potato products division contracts with a geographically diverse supplier group to hedge weather and quality risk. The remaining portion of the potato products division's potato requirements are purchased on the spot market. Potatoes are mainly sourced from Minnesota, North Dakota and Wisconsin, with lesser quantities sourced from California, Idaho, Oregon and Nevada for our west coast processing plant.

Dairy Products Division

    The dairy products division is a leading producer and marketer of dairy mixes and specialty dairy products, principally soft serve ice cream and milkshake mix, pasteurized milk and creamers. Our products are sold under the 70 year-old Kohler brand name and under our customers' private label brands. Our dairy products division sells to domestic quick serve restaurant chains, major foodservice distributors, independent retailers and ice cream manufacturers throughout the United States. This division manufactures soft-serve ultra-high temperature pasteurized mixes that utilize an advanced pasteurization process to produce salmonella and listeria-negative dairy products while maintaining flavor. This extends product shelf-life to 90 to 120 days and, as a result, increases the geographic area to which we can distribute our dairy products. The dairy products division also produces non-refrigerated dairy creamers, the fastest growing and most profitable of our dairy products. We have invested over $15 million during the last two years to upgrade our dairy facilities and add capacity for the high-margin non-refrigerated dairy creamer and specialty cartoned products business. We are now able to produce all of our dairy mixes, cartoned products and dairy creamers in each of our three dairy facilities for customers throughout the United States.

    Products.  The dairy products division currently produces over 100 different product formulations for major quick service restaurants, foodservice and other customers. Such products include ultra-high temperature pasteurized mixes, non-refrigerated dairy creamers and specialty cartoned products, such as whipping cream and soy milk. A majority of our specialty cartoned products are produced under co-packaging arrangements with dairy and other foodservice companies through which we provide the product for a customer's retail brand.

    Customers.  The dairy products division has approximately 325 customers, with approximately 75% of its sales to a group of large regional and national restaurants through distributors, including Burger King, Sonic, McDonald's, Arby's and Dairy Queen. Our customers located throughout much of the central and eastern United States are serviced from facilities in Minnesota, Connecticut and Texas. Sales to major national accounts are typically provided on a cost-plus basis, significantly reducing the division's exposure to fluctuations in commodity milk and dairy ingredient prices.

    Competition.  The division has the leading market share position in soft serve mix sold in Minnesota and Wisconsin and a strong position in the foodservice channel for ultra-high temperature pasteurized soft serve mix and ultra-high temperature fluid milk throughout the central United States. We believe we are also a leading national producer of non-refrigerated dairy creamers. Competition is highly fragmented and most competitors are full-line dairy suppliers focused on a specific region.

    Key competitors include Suiza, Dean Foods, Prairie Farms, West Farm Foods, Milk Products of Alabama, Crowley Foods and Cumberland Dairy. Unlike Michael Foods, most of these competitors offer their own retail branded products in addition to co-packaging products for other customers. We believe that our dairy products division is an attractive partner for companies that may wish to enter into, or expand their presence in, the dairy products market but are reluctant to use established dairy companies that may offer competing brands. In addition, the dairy products division's focus on

60

foodservice mix customers allows it to successfully compete with the regional full service dairies who often lack the scale required to deal with large national accounts.

    Suppliers.  The dairy product division's primary input is milk. The majority of this division's milk needs are filled by local and regional dairy cooperatives. Since the majority of the dairy products division's products are sold on a cost-plus basis, its profitability is not significantly impacted over time by fluctuations in milk and dairy ingredient prices.

Refrigerated Distribution Division

    The refrigerated distribution division is a leading distributor of refrigerator case items to retailers and wholesale warehouses in 30 states, primarily in the central region of the United States. The refrigerated distribution division distributes its own Crystal Farms branded cheese with sales for the year ended December 31, 2000 of over $122.0 million. With a reputation for quality and a market position between national brands such as Kraft and private label brands, Crystal Farms cheese drives this division's sales and profitability.

    The refrigerated distribution division distributes a wide range of refrigerated grocery products primarily on a direct-store-delivery basis, offering customers a high level of service and quality alternatives to nationally branded products. The refrigerated distribution division has strong distribution capabilities with over 400 different refrigerated grocery products in addition to the Crystal Farms cheese products.

    Products.  The refrigerated distribution division offers a broad selection of refrigerated products, which consist principally of cheese, eggs, bagels, butter, margarine, muffins, potato products, juice and ethnic foods, such as corn and flour tortillas. Cheese products are the refrigerated distribution division's most significant entry point with new customers. While most of the division's products are supplied by vendors or our other divisions, the refrigerated distribution division operates a cheese packaging facility in Lake Mills, Wisconsin, which processes and packages various cheese products acquired in bulk from third-party suppliers for its Crystal Farms brand and its private label customers.

    The refrigerated distribution division has historically served as a wholesaler to independent grocery stores and small grocery store chains on a direct-to-store delivery basis and it has more recently experienced success dealing with larger chains and wholesalers through warehouse delivery of goods. The refrigerated distribution division is working with retailers and wholesalers to develop partnerships and to respond to the changing needs of the grocery industry.

    Customers.  The refrigerated distribution division has customer relationships with large grocery store chains that rely on us to deliver a variety of dairy case products in a timely and efficient manner. For the year ended December 31, 2000, the division served approximately 4,300 retail locations, inclusive of stores receiving products through warehouse delivery. SUPERVALU, the grocery industry's largest distributor, is the refrigerated distribution division's largest customer. For the year ended December 31, 2000, sales to warehouse operations of SUPERVALU and SUPERVALU-owned and franchised stores, including Cub Foods Stores, bigg's and Shop 'n Save, accounted for approximately 45% of the refrigerated distribution division's sales. Other principal customers include Fleming, Coborns, Nash Finch Co. and Wal-Mart.

    Competition.  While the division competes with the refrigerated products of larger suppliers such as Beatrice, Kraft, Land O' Lakes and Sargento, we believe that we have successfully positioned Crystal Farms as an alternative mid-priced brand, operating at price points below national brands and above retail store brands. The refrigerated distribution division's emphasis on a high level of service and lower-priced branded products has enabled it to compete effectively with much larger national brand companies. We believe that Crystal Farms branded cheese has an estimated 7% market share in the regions in which it competes and an estimated 50% market share in Minnesota.

61

    Suppliers.  This division obtains products from a number of different co-packers and, in the case of cheese, purchases the product in bulk and repackages it under the Crystal Farms brand.

Sales, Marketing and Customer Service

    Each of our four divisions has developed a marketing strategy, which emphasizes high product quality and superior customer service. Michael Foods Sales, an internal sales group, coordinates the sales of egg, potato and dairy products, primarily for national and regional accounts, and is supported by a centralized order entry and customer service staff. A group of foodservice brokers is used by Michael Foods Sales to supplement its internal sales efforts. In addition, the egg and potato products divisions use a separate nationwide system of brokers for the retail market. The egg products division also maintains a small sales group which handles certain industrial egg product sales. We employ a small marketing staff, which executes marketing plans in the foodservice market, with additional resources available from outside agencies and consultants as needed.

    The refrigerated distribution division's internal and external sales personnel obtain orders from retail stores which are usually placed no more than one day ahead of the requested delivery date. That division's marketing efforts are primarily focused on in-store and cooperative advertising programs, which are executed with grocers on a market-by-market basis. During 1999 and 2000, Crystal Farms increased its consumer marketing support efforts by using television and in-store programs, with favorable sales volume results. Also, the egg products division has a consumer support program to support various of its egg products which are sold in the retail market.

Proprietary Technologies and Trademarks

    We use a combination of patent, trademark and trade secrets laws to protect the intellectual property for our products. We own proprietary patents, and we have exclusive license agreements for several patents and technologies. In 1988, we entered into an exclusive license agreement to use patented processes developed and owned by North Carolina State University involving the ultra-pasteurization of liquid eggs. The five patents licensed to us under this agreement expire between 2006 and 2010. In addition, as a result of our acquisition of Papetti's, we also acquired an exclusive sublicense to use a patented process for the electro-heating of liquid eggs owned by Raztek Corporation. The patent licensed to us under this sublicense expires in 2005. Our license to use each of these patents will continue until the expiration of the patents. These patented processes produce liquid eggs that are salmonella and listeria-negative, as defined by federal law, and extend the shelf-life of liquid eggs from less than two weeks to over ten weeks.

    We also own an exclusive license to use a patented process, owned and developed by the University of Missouri, to eliminate salmonella from shell eggs. This patent is set to expire in 2016. Our license to use this patent will also continue until the expiration of the patent. We currently use this technology for processing in-shell pasteurized eggs sold through our refrigerated distribution division. We also have acquired licenses to other patents and technology from other third parties, including the University of Nebraska.

    We believe that certain of our other competitors infringe upon some of our patents and the patents licensed to us. Along with North Carolina State University, we have initiated litigation against several processors of competing liquid egg products claiming infringement of the original and subsequent related process patents licensed to us by North Carolina State University with respect to ultra-pasteurized liquid egg production. In 1992, a jury for the United States District Court for the Middle District of Florida found the original patent to be valid and that a processor, Bartow Food Co., willfully and deliberately infringed one of the patents. In another action, the United States District Court for the District of New Jersey found in 1992 and 1993 that Papetti's had infringed certain of the patents and that the licensed patents are valid and enforceable. In 1994, the Court of Appeals for the Federal Circuit upheld this judgment. In 1993, Nulaid Foods, Inc. sought a declaratory judgment that

62

the licensed patents are invalid. This action was subsequently settled, and Nulaid Foods entered into an agreement with us for the sublicense of the patents. In 1996, reissue and reexamination proceedings were initiated by us and our competitors with the U.S. Patent and Trademark Office, or PTO, seeking to determine the scope and validity of some of the patents that we license from North Carolina State University. We have recently received a notice of allowance from the PTO that the claims in the licensed patents are valid and in full force and effect. In 2000, Sunny Fresh Foods, Inc., a division of Cargill, Inc., filed an action seeking declaratory judgment that Sunny Fresh Foods does not infringe upon the licensed patents and that the licensed patents are invalid. For more information, see "—Legal Proceedings."

    Although we actively pursue patent infringement litigation, we do not believe that the expiration of these patents will have a material adverse affect on our business or market share within these product segments because of our strong market position combined with the fact that we believe our largest competitor is currently infringing on this patent.

    The egg products division maintains numerous trademarks and/or trade names for its products, including "Logan Valley," "Wakefield," "Sunny Side Up," "Michael Foods," "Deep Chill," "MGW," "Simply Eggs Brand," "Better `n Eggs," "All Whites," "Chef's Omelet Brand," "Express Eggs," "Quaker State Farms," and "Broke N' Ready." Ultra-pasteurized liquid eggs are marketed using the "Easy Eggs" and "Table Ready" trade names.

    Within the potato products division, Northern Star Co. markets its refrigerated potato products to foodservice customers under a variety of brands, including "Northern Star," "Farm Fresh" and "Quality Farms." The "Simply Potatoes" and "Diner's Choice" brands are used for retail refrigerated products.

    Within the dairy products division, "Kohler" and "Midwest Mix, Inc." are the two primary trade names.

    Refrigerated distribution division products are marketed principally under the "Crystal Farms" trade name.

Government Regulation

    All of our divisions are subject to federal, state and local government regulations relating to grading, quality control, product branding and labeling, waste disposal and other aspects of their operations. Our divisions are also subject to USDA and FDA regulation regarding grading, quality, labeling and sanitary control. The processing plants of our egg products division that break eggs, and some of our other egg processing operations, are subject to continuous on-site USDA inspection. All of our other processing plants are subject to periodic inspections by the USDA, FDA and state regulatory authorities.

Crystal Farms cheese and butter products and the dairy products division's mix products are affected by milk price supports established by the USDA. The support price serves as an artificial minimum price for these products, which may not be indicative of market conditions that would prevail if such supports were abolished.

    A substantial portion of the egg production operations of our egg products division are located in the State of Nebraska. With certain exceptions, a provision of the Nebraska constitution generally prohibits corporations from engaging in farming or ranching in Nebraska. Although the constitutional provision contains an exemption for agricultural land operated by a corporation for the purpose of raising poultry, the Nebraska Attorney General has, in written opinions, taken the position that facilities devoted primarily to the production of eggs do not fall within such exemption and therefore are subject to the restrictions contained in the constitutional provision. We believe that our egg production facilities in Nebraska are part of integrated facilities for the production, processing and distribution of egg products, and therefore, that any agricultural land presently owned by us in Nebraska is being used for non-farming and non-ranching purposes.

63

    The constitution empowers the Nebraska Attorney General, or if the Attorney General fails to act, a Nebraska citizen, to obtain a court order to, among other things, force a divestiture of land held in violation of this constitutional provision. If land subject to such a court order is not divested within a two-year period, the constitutional provision directs the court to declare the land escheated, or forfeited, to the State of Nebraska. We are not aware of any proceedings under this 70 year-old constitutional provision pending or threatened against us or any other companies engaging in farming or ranching activities in Nebraska. We believe that we have adequate contingency arrangements in place in the event a determination is made that we engage in farming and/or ranching activities proscribed by the Nebraska constitution. Until the scope of such provision has been clarified by further judicial, legislative, or executive action, there can be no assurance as to the effect, if any, that it may have on our egg products division.

Environmental Regulation

    We are subject to federal, state and local environmental regulations and requirements, including those governing discharges to air and water, the management of hazardous substances, the disposal of solid and hazardous wastes and the remediation of contamination.

    We have an ongoing relationship with an environmental consulting firm who helps us comply with environmental requirements. In addition, a review was conducted by independent environmental consultants in connection with the acquisition, and, as a result, we believe we are currently in material compliance with all environmental regulations and requirements. Nonetheless, as is the case with any business, if we do not fully comply with environmental regulations, or if a release of hazardous substances occurs at or from one of our facilities, we may be subject to penalties and/or held liable for the cost of remedying the condition.

    Many of our facilities discharge wastewater pursuant to wastewater discharge permits. We dispose of our waste from our internal egg production primarily by providing it to farmers for use as fertilizer. We dispose of our solid waste from potato processing by selling the waste to a processor who converts it to animal feed.

    We have made, and will continue to make, expenditures to comply with environmental requirements. We recently upgraded the wastewater treatment system at our Klingerstown, Pennsylvania facility and agreed to pay the city of Lenox, Iowa the cost to construct and operate a wastewater treatment plant used by our facility located there. Although our plants in Klingerstown and Lenox have exceeded their permitted wastewater discharge levels in the past, we believe that these expenditures will reduce the risk of future wastewater violations at these facilities. In addition, we are reviewing the adequacy of our wastewater treatment systems at the egg products division's facilities in Gaylord, Minnesota and Bloomfield, Nebraska and the dairy products division's facility in White Bear Lake, Minnesota. We may elect to upgrade the wastewater controls at these facilities or we may be required to upgrade such controls at these or other facilities in the future. However, we do not anticipate making any material capital expenditures for environmental controls for the foreseeable future.

Facilities

    Corporate.  We maintain leased space for our corporate headquarters, customer service office, sales office and information services group in suburban Minneapolis, Minnesota.

64

    Egg Products Division.  The following table summarizes information relating to the primary facilities of our egg products division:

Location	Principal Use	Size (square feet)	Owned/Leased
Elizabeth, New Jersey	Processing	75,000	Leased
Elizabeth, New Jersey	Processing	125,000	Leased
Bloomfield, Nebraska	Processing	80,000	Owned
LeSueur, Minnesota	Processing	29,000	Owned
Wakefield, Nebraska	Processing	380,000	Owned
Klingerstown, Pennsylvania	Processing and Distribution	139,000	Leased
Klingerstown, Pennsylvania	Processing and Distribution	19,000	Leased
Lenox, Iowa	Processing and Distribution	143,000	Owned
Gaylord, Minnesota	Processing and Distribution	190,000	Owned
Elizabeth, New Jersey	Sales and Distribution	80,000	Leased
Bloomfield, Nebraska	Egg Production	619,000	Owned
Wakefield, Nebraska	Egg Production	658,000	Owned
LeSueur, Minnesota	Egg Production	345,000	Owned
Gaylord, Minnesota	Egg Production	349,000	Owned
Gaylord, Minnesota	Pullet Houses	130,000	Owned
Wakefield, Nebraska	Pullet Houses	432,000	Owned
Plainview, Nebraska	Pullet Houses	112,000	Owned

The egg products division leases office space for its headquarters, financial and administrative services staff in suburban Minneapolis and owns or leases, primarily for egg production operations, approximately 1,600 acres of land in Nebraska and Minnesota.

    Potato Products Division.  The potato products division owns a processing plant and land located in Minneapolis, Minnesota, consisting of approximately 175,000 square feet of production area. This division leases one building in North Las Vegas, Nevada, consisting in the aggregate of approximately 31,000 square feet.

    Dairy Products Division.  The dairy products division's facilities in White Bear Lake, Minnesota, consist of three owned buildings, with the main plant measuring approximately 95,000 square feet. It also leases a dairy plant in Sulphur Springs, Texas, which is approximately 40,000 square feet, and a dairy plant in Newington, Connecticut, which is approximately 70,000 square feet.

    Refrigerated Distribution Division.  The refrigerated distribution division leases administrative and sales offices in suburban Minneapolis and several small warehouses across the United States. It owns a distribution center located near LeSueur, Minnesota, which is approximately 33,000 square feet. The refrigerated distribution division also owns and operates a 48,200 square foot refrigerated warehouse and a 19,000 square foot cheese packaging facility on a 19 acre site in Lake Mills, Wisconsin.

    The total annual base rent of the facilities described above is approximately $7.4 million. The leases for these facilities have varying length terms ranging from month-to-month to September 2024. We believe that our owned and leased facilities, together with budgeted capital projects in each of our four operating divisions, are adequate to meet anticipated requirements for our current lines of business for the foreseeable future. All of our owned property will be pledged to secure repayment of the new senior credit facility.

Employees

    At March 31, 2001, we had approximately 4,100 employees. Of this total, the egg products division employed approximately 2,750 full-time and 265 part-time employees, none of whom are represented by

65

a union. The potato products division employed approximately 290 persons, approximately 195 of which were represented by the Bakery, Laundry, Allied Sales Drivers and Warehousemen Union, which is affiliated with the Teamsters. The dairy products division employed approximately 220 people, approximately 65 of which were represented by the Milk Drivers and Dairy Employees Union. The refrigerated distribution division employed approximately 460 employees, none of whom are represented by a union. The Michael Foods corporate, sales, distribution and customer service and information systems groups collectively employed approximately 120 people at March 31, 2001.

Legal Proceedings

    Four patents for ultrapasteurizing liquid eggs licensed to us by North Carolina State University were involved in proceedings before the PTO. In 1996, an examiner rejected certain claims under these patents as a result of challenges from competitors. We and North Carolina State University appealed this rejection to the PTO's Board of Patent Appeals and Interferences, or the PTO Board. In September 1999, we and North Carolina State University received a favorable ruling whereby the PTO Board reversed the examiner's rejection of 57 process claims made under the patents. As a result of these proceedings, process claims of all four patents continue to be valid and in full force and effect. We have recently received a notice of allowance from the PTO with regard to new product claims under the fourth patent. The patents will be re-issued once standard allowance fees are paid. In connection with a renegotiation in 1999 of our arrangements with respect to the patents that we license from North Carolina State University, we reduced the license fees we pay in exchange for agreeing to assume 50% of the costs relating to the defense of these patents in proceedings before the PTO and all other civil proceedings.

    On September 13, 2000, Sunny Fresh Foods, Inc., a division of Cargill Inc., filed a declaratory judgment action in the United States District Court for the District of Minnesota requesting the adjudication of the unenforceability and invalidity of those patents exclusively licensed to us by North Carolina State University. We have filed a counter-claim against Sunny Fresh Foods, claiming willful infringement by Sunny Fresh Foods of these patents. This litigation is still in its preliminary stages.

    Macartney Farms, a Canadian company that formerly distributed our egg products to the Canadian market, has filed a complaint against us and our Canadian joint venture Trilogy Egg Products, Inc., seeking $23.7 million (Canadian), or approximately $15.5 million, in damages asserting wrongful termination of its alleged exclusive marketing and distribution rights of Easy Eggs, intentional interference with economic relations, breach of fiduciary duty and recoupment of monies invested for the benefit of Michael Foods. Macartney also seeks an injunction against both Michael Foods and Trilogy from soliciting Macartney's customers. The litigation, which is pending in the Ontario Superior Court in Ottawa, is still in its preliminary stages.

    In addition, we are from time to time party to litigation, administrative proceedings and union grievances that arise in the ordinary course of our business. We do not have pending any litigation that, separately or in the aggregate, would in the opinion of management have a material adverse effect on our results of operations or financial condition.

Food Safety

    We believe that we take extensive precautions to ensure the safety of our products. In addition to routine inspections by state and federal regulatory agencies, including continuous USDA inspection of many facilities, we have instituted quality systems plans in each of our divisions which address such topics as supplier control, ingredient, packaging and product specifications, preventive maintenance, pest control and sanitation. Each of our facilities also has in place a hazard analysis critical control points plan which identifies critical pathways through which contaminants may enter our facilities and mandates control measures that must be used to prevent, eliminate or reduce all relevant foodborne

66

hazards. For example, at facilities in our egg products division, sanitization and pasteurization steps are in place to eliminate the risk of microbial contamination, and workers entering certain facilities must take special hand and foot baths to reduce the risk of product contamination. Each division has also instituted a product recall plan, including lot identifiability and traceability measures, that allows us to act quickly to reduce the risk of consumption of any product of which we suspect a problem.

    Product Recalls.  In February 1999, we evaluated a soured milk complaint from a customer and discovered pathogen presence. Nine cartons tested positive for listeria. As a result, we initiated a recall of approximately five million cartons of milk and related products. Our White Bear Lake, Minnesota, plant was shut down and, in less than two weeks, reopened with oversight by the Minnesota Department of Agriculture and the FDA. In response to the recall, we instituted new operating policies to improve our quality controls and sampling and testing programs to protect against future incidents. We also installed new management in our dairy products division and invested significant capital to upgrade our manufacturing capabilities. Although we are not aware of any reported illnesses as a result of this contamination, our operating results for the dairy products division for 1999 and 2000 were adversely impacted as a result of volume declines and operating inefficiencies associated with the recall. We expect the dairy products division to continue to regain some of the lost volume in 2001.

    A substantial portion of our costs in this matter were covered by either product liability insurance or by our insurance policy covering accidental contamination of product. We settled the only major claim with respect to the product recall for $1.7 million, the majority of which was covered by our insurance policies. At this time, we are not aware of any pending claims related to the product recall. In March 2001, we settled our insurance claim related to this recall and reported a gain of approximately $3.2 million.

    In November 2000, the refrigerated distribution division initiated a recall of 60,000 pounds of two cheese products manufactured by a co-packer due to a possible contamination of listeria. No illnesses were reported with the recall, and the impact on the refrigerated distribution division's sales and earnings was minimal. Our co-packer has agreed to pay all costs associated with the recall. We were the first company to recall the cheese, which had been produced for numerous firms nationally, and through our direct store distribution network we were able to rapidly collect the recalled product.

    We currently maintain product liability insurance in the amount of $100 million and recall insurance in the amount of $30 million.

67

MANAGEMENT

Directors, Executive Officers and Key Employees

    Michael Foods, Inc. is a wholly owned subsidiary of M-Foods Holdings, Inc., a corporation owned by M-Foods Investors, LLC, whose members include affiliates of Vestar Capital Partners and Goldner Hawn Morrison & Johnson, members of our senior management and affiliates of the Michael family. Each member of the management committee of M-Foods Investors is also a director of Michael Foods. For more information, see "Certain Relationships and Related Transactions—Certain Agreements Relating to the Acquisition—Securityholders Agreement."

    The executive officers, directors and key employees of Michael Foods, and their ages and positions, are as follows:

Name	Age	Position
Gregg A. Ostrander	48	President, Chief Executive Officer and Director
John D. Reedy	55	Executive Vice President, Chief Financial Officer and Treasurer
Mark D. Witmer	43	Assistant Treasurer and Secretary
James D. Clarkson	48	President—Potato Products and Dairy Products Divisions
Bill L. Goucher	54	President—Egg Products Division
Norman A. Rodriguez	58	President—Refrigerated Distribution Division
Bradley L. Cook	45	Executive Vice President and Chief Financial Officer—Egg Products Division
Max R. Hoffmann	42	Chief Financial Officer—Potato Products and Dairy Products Divisions
James Mohr	49	Vice President—Supply Chain Logistics
Harold D. Sprinkle	54	Executive Vice President—Sales
J. Christopher Henderson	33	Director
James P. Kelley	46	Director
Leonard Lieberman	72	Director
Jeffrey J. Michael	44	Director
John L. Morrison	55	Director
Kevin A. Mundt	47	Director
Daniel S. O'Connell	47	Director

    Pursuant to a securityholders agreement described herein, the management committee of M-Foods Investors will consist of up to nine members. We anticipate that one additional member will be elected to the management committee of M-Foods Investors. This member will also serve on the board of directors of Michael Foods. For more information about the voting arrangements contained in the securityholders agreement and the composition of the management committee of M-Foods Investors, see "Certain Relationships and Related Transactions—Certain Agreements Relating to the Acquisition—Securityholders Agreement."

    Gregg A. Ostrander is our President and Chief Executive Officer and a director, and has held these positions since 1994. In 1993, Mr. Ostrander served as our Chief Operating Officer. Prior to joining Michael Foods, Mr. Ostrander was President of the Armour Swift-Eckrich Prepared Food Division, a

68

division of ConAgra Foods, Inc., from 1989 to 1993. From 1986 to 1989, Mr. Ostrander served as a Vice President of Marketing and Senior Vice President of Marketing for Armour Swift-Eckrich. Prior to that time, Mr. Ostrander was employed by Beatrice Foods Company for ten years serving most recently as its Director of Marketing. Mr. Ostrander is also a director of Arctic Cat Inc. and Hain Celestial Group, Inc.

    John D. Reedy is our Executive Vice President, Chief Financial Officer and Treasurer and has held these positions since 2000. From 1988 to 2000, Mr. Reedy was our Vice President—Finance and Chief Financial Officer, and he has been Treasurer since 1990. Prior to joining Michael Foods in 1988, Mr. Reedy was at Grant Thornton LLP for 18 years, most recently as an Audit Partner.

    Mark D. Witmer is our Assistant Treasurer and Secretary. He has been Assistant Treasurer since 1995 and Secretary since May 2001. Prior to joining Michael Foods as the Director of Corporate Communications in 1989, Mr. Witmer was a Partner and research analyst at Wessels, Arnold & Henderson, an institutional brokerage firm from 1986 to 1989, and was a Vice President and research analyst at Dain Bosworth, Inc., from 1981 to 1986.

    James D. Clarkson is President of our potato products and dairy products divisions. Mr. Clarkson joined Michael Foods in 1994 as Vice President and General Manager of our refrigerated distribution division. Prior to joining Michael Foods, Mr. Clarkson worked in the Lykes Pasco organization as an Industrial Engineer and Warehouse Manager for three years, at Pillsbury/Green Giant as Production Superintendent for four years, and in various assignments with Armour Swift-Eckrich, most recently as Vice President and General Manager of the Armour Business.

    Bill L. Goucher is the President of our egg products division, a position he has held since joining Michael Foods in 1993. Prior to joining Michael Foods, Mr. Goucher spent 20 years with Armour Swift-Eckrich, holding executive positions in operations and distribution, including as General Manager of manufacturing facilities, and most recently as Senior Vice President of Deli/Foodservice.

    Norman A. Rodriguez is President of our refrigerated distribution division, a position he has held since joining Michael Foods in 1989. Prior to joining Michael Foods, Mr. Rodriguez spent six years with Westinghouse as an Industrial Engineer and Senior Engineer—Production and Inventory Control, one year as a MIS Project Leader for Pittsburgh Plate Glass and 17 years in various executive management positions at United Foods, including most recently as its Executive Vice President.

    Bradley L. Cook is Executive Vice President and Chief Financial Officer of our egg products division. He has held this position, and the same position in the M. G. Waldbaum Company subsidiary, since 1992. Prior to joining M.G. Waldbaum, Mr. Cook was Senior Vice President and Chief Financial Officer of Park National Bank from 1983 to 1991. Prior to that time, he served as Senior Audit Supervisor at Grant Thornton LLP.

    Max R. Hoffmann is the Chief Financial Officer for our potato products and dairy products divisions. He has held the potato products position since 1995 and the dairy products position since 2000. He previously served as Controller of the refrigerated distribution division from 1993 to 1995. From 1986 to 1993, Mr. Hoffmann served as assistant controller of the refrigerated distribution division.

    James Mohr is our Vice President—Supply Chain Logistics, a position he has held since 1996. Prior to 1996, he was the Vice President of Distribution for Crystal Farms from 1994 to 1996. Prior to joining Michael Foods in 1994, Mr. Mohr was a Distribution Center Manager at Armour Swift-Eckrich, from 1987 to 1994.

    Harold D. (Dean) Sprinkle is our Executive Vice President—Sales, a position he has held since 1999. Mr. Sprinkle joined Michael Foods in 1989 and has held various positions, including Vice

69

President of Foodservice Sales, National Accounts and U.S. Business Development. Prior to joining Michael Foods, he served as President of Agri-Services, Inc. in Denver, Colorado from 1985 to 1989.

    J. Christopher Henderson is a director and a member of the management committee of M-Foods Investors. Mr. Henderson is a Managing Director of Vestar Capital Partners. Prior to joining Vestar Capital Partners in 1993, Mr. Henderson was a member of the Mergers and Acquisitions group at The First Boston Corporation. Mr. Henderson is also a director of St. John Knits International, Incorporated.

    James P. Kelley is a director and a member of the management committee of M-Foods Investors. Mr. Kelley is a Managing Director of Vestar Capital Partners and was a founding partner of Vestar Capital Partners at its inception in 1988. Mr. Kelley is a director of Consolidated Container Company LLC, St. John Knits International, Incorporated and Westinghouse Air Brake Technologies Corporation.

    Leonard Lieberman is a director and a member of the management committee of M-Foods Investors. Since 1988, Mr. Lieberman has served as a consultant to Vestar Capital Partners and its affiliates. Currently, Mr. Lieberman is a director of Advanced Organics, Inc., Russell-Stanley Corporation, Sonic Corporation, Consolidated Container Company LLC and Nice Pak Products, Inc. Mr. Lieberman was the Chief Executive Officer of Supermarkets General Corporation between 1983 and 1987 and of Outlet Communications Inc. in 1991.

    Jeffrey J. Michael is a director and a member of the management committee of M-Foods Investors. Mr. Michael has been a director of Michael Foods since 1987. Mr. Michael is President, Chief Executive Officer and director of Corstar Holdings, Inc., a holding company owning businesses engaged in voice and data connectivity and networking products and services and director of CorVel Corporation. Mr. Michael has held these positions since 1997.

    John L. Morrison is a director and a member of the management committee of M-Foods Investors. Mr. Morrison is a Managing Director of Goldner Hawn Johnson & Morrison, a position which he has held since 1989. Mr. Morrison was employed by The Pillsbury Company from 1975 to 1989, most recently as Executive Vice President and Chairman of the U.S. Consumer Foods Group. Mr. Morrison is a director of Claire-Sprayway, Inc., Woodcraft Industries, Inc., Havco Wood Products, Inc., American Engineered Components, Inc. and Andersen Windows Corporation.

    Kevin A. Mundt is a director and a member of the management committee of M-Foods Investors. Mr. Mundt is Vice President, a member of the Board of Directors and head of the Retail and Consumer and Financial Services practices of Mercer Management Consulting. Since 1982, Mr. Mundt has served as a consultant to multinational corporations, working first for Corporate Decisions, Inc., until its merger into Mercer Management Consulting. Mr. Mundt is or has been a member of the board of directors for Prestone Products, Remington Products Company, L.L.C., Russell-Stanley Holdings, Inc., Reid Plastics, Telephone and Data Systems and Advanced Organics, Inc.

    Daniel S. O'Connell is a director and a member of the management committee of M-Foods Investors. Mr. O'Connell is the Chief Executive Officer and founder of Vestar Capital Partners in 1988. Mr. O'Connell is a director of Advanced Organics, Inc., Aearo Corporation, Cluett American Corp., Remington Products Company L.L.C., Russell-Stanley Holdings, Inc., Siegelgale Holdings, Inc., St. John Knits International, Incorporated and Sunrise Medical, Inc.

    Except as described herein, there are no arrangements or understandings between any member of the management committee or executive officer and any other person pursuant to which that person was elected or appointed to his position.

70

Executive Compensation

    The following table sets forth information concerning the compensation of our chief executive officer and each of our four most highly compensated executive officers, which we refer to as the "named executive officers," during each of the last three fiscal years.

Summary Compensation Table

	Annual Compensation					Long-Term Compensation Awards Securities Underlying Options(2)
Name and Principal Position	Fiscal Year	Salary		Bonus(1)			All Other Compensation(3)
Gregg A. Ostrander President and Chief Executive Officer	2000 1999 1998	$	584,731 506,000 418,269	$	347,150 416,980 384,260	75,000 44,500 9,000	$	7,621 7,604 7,125
John D. Reedy Executive Vice President, Chief Financial Officer and Treasurer	2000 1999 1998		273,269 260,000 260,000		167,593 217,055 214,800	23,000 16,200 6,000		7,780 7,295 7,166
Bill L. Goucher President—Egg Products Division	2000 1999 1998		258,269 230,000 227,692		145,240 170,471 186,035	30,000 9,800 6,000		7,090 7,167 7,264
Jeffrey M. Shapiro Executive Vice President	2000 1999 1998		231,346 270,000 280,000		153,580 230,658 258,991	19,000 14,000 6,000		7,407 7,337 7,408
Norman A. Rodriguez President—Refrigerated Distribution Division	2000 1999 1998		211,979 203,000 210,423		174,475 187,875 79,213	12,000 7,700 6,000		7,654 7,461 7,737

(1)

Amounts for the year ended December 31, 2000 include common stock incentive awards paid under the 1994 Executive Incentive Plan, as amended, for 1999 performance, plus common stock incentive awards paid for 1999 and 1998 performance, as such awards vested based upon 2000 performance, as follows (total dollar value of awards/2000 shares/1999 shares/1998 shares): Mr. Ostrander $158,259/2,483/1,770/1,123; Mr. Reedy $79,306/1,160/909/625; Mr. Goucher $73,948/1,096/805/611; Mr. Shapiro $78,835/982/944/752; and Mr. Rodriguez $64,028/900/710/565. Awards for 2000 represent 50% of the amount conditionally earned for 2000 performance under the vesting schedule of the 1994 Executive Incentive Plan, as amended, plus 30% of the amount conditionally earned for 1999 performance and 20% of the amount conditionally earned for 1998 performance under the vesting schedule of the 1994 Executive Incentive Plan, as amended, as such awards vested based upon 2000 performance.

(2)

Pursuant to the 1994 Executive Incentive Plan, as amended, no stock option awards were made in 2001 based upon 2000 performance. Pursuant to the 1994 Executive Incentive Plan, as amended, stock option awards were made to certain executive officers in February 2000 based upon 1999 performance. The number of shares of common stock purchasable under such option awards made to named executive officers were: Mr. Ostrander—4,500 shares; Mr. Reedy—3,000 shares; Mr. Goucher—3,000 shares; Mr. Shapiro—3,000 shares; and Mr. Rodriguez—3,000 shares. Pursuant to the 1994 Executive Incentive Plan, as amended, stock option awards were made to certain executive officers in February 1999 based upon 1998 performance. The number of shares of common stock purchasable under such option awards made to named executive officers were: Mr. Ostrander—9,000 shares; Mr. Reedy—6,000 shares; Mr. Goucher—6,000 shares; Mr. Shapiro—6,000 shares; and Mr. Rodriguez—6,000 shares. Option grants are reflected in year earned, rather than year of grant. In addition, the following stock option grants were made under the discretionary authority of the compensation committee in the year indicated: Mr. Ostrander—75,000 in 2000 and 40,000 in 1999; Mr. Reedy—23,000 in 2000 and 13,200 in 1999; Mr. Goucher—30,000 in 2000 and 6,800 in 1999; Mr. Shapiro—19,000 in 2000 and 11,000 in 1999; and Mr. Rodriguez—12,000 in 2000 and 4,700 in 1999.

(3)

Reflects the value of contributions made by Michael Foods under the retirement savings plan and the value of life insurance premiums paid by us.

71

Option Grants in Last Year

    The following table sets forth the option grants during the year ended December 31, 2000 for the named executive officers. In connection with the consummation of the acquisition, members of our senior management exchanged all of their options and shares of Michael Foods common stock for cash, equity interests in M-Foods Investors and deferred compensation arrangements of M-Foods Holdings. For more information, see "—Management and Michael Family Equity Participation" and "—Benefit Plans, Severance Plans and Deferred Compensation Plans."

							Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term(4)
	Number of Securities Underlying Options Granted(1)	% of Total Options Granted to Employees in Last Year
Name				Exercise or Base Price Per Share ($/Sh)(2)
						Expiration Dates(3)	5%		10%
Gregg A. Ostrander	79,500	25.9	%	$	21.688 - 21.719	2/22 - 2/24/10	$	1,086,000	$	2,752,000
John D. Reedy	26,000	8.5			21.688 - 21.719	2/22 - 2/24/10		355,000		900,000
Bill L. Goucher	33,000	10.8			21.688 - 23.28	2/22 - 7/27/10		460,000		1,167,000
Jeffrey M. Shapiro	22,000	7.2			21.688 - 21.719	2/22 - 2/24/10		300,000		761,000
Norman A. Rodriguez	15,000	4.9			21.688 - 21.719	2/22 - 2/24/10		205,000		519,000

(1)

All options granted are exercisable in cumulative 20% installments commencing one year from date of grant, with full vesting occurring on the fifth anniversary date. Vesting may be accelerated in certain events relating to a change in control of Michael Foods.

(2)

The exercise price may be paid by delivery of already owned shares. The tax withholding obligations related to exercises may be paid by an offset of the underlying shares, subject to certain conditions.

(3)

All options have a ten year term, with vesting subject to discontinuation if employment is terminated in the first five years.

(4)

Potential gains are reported net of the option exercise price, but before taxes associated with an exercise. These amounts represent certain assumed rates of appreciation only. Actual gains, if any, on stock option exercises are dependent on the future performance of the common stock, overall stock market conditions, as well as the optionholder's continued employment through the vesting period. The amounts reflected in this table may not necessarily be realized.

Option Exercises in Last Year and Year-End Option Values

    There were no option exercises by the named executive officers in 2000. The following table provides information related to the number and value of shares of common stock represented by options held at December 31, 2000 by the named executive officers.

	Number of Unexercised Options at Year-End		Value of Unexercised In-The-Money Options at Year-End(1)
Name
	Exercisable	Unexercisable	Exercisable		Unexercisable
Gregg A. Ostrander	184,200	198,300	$	2,969,700	$	1,674,500
John D. Reedy	58,550	60,360		944,300		521,300
Bill L. Goucher	70,560	67,240		1,229,600		607,900
Jeffrey M. Shapiro	51,494	54,600		765,700		473,500
Norman A. Rodriguez	33,473	41,760		424,600		359,900

(1)

The closing price for the common stock on December 29, 2000 was $30.125 per share. The value is calculated on the basis of the difference between the option exercise prices and $30.125 multiplied by the number of shares of common stock underlying the options.

72

Compensation Committee Interlocks and Insider Participation

    The compensation arrangements for our chief executive officer and each of our executive officers was established pursuant to the terms of the respective employment agreements between us and each executive officer. The terms of the employment agreements were established pursuant to arms-length negotiations between representatives of the equity investors or senior executives and each executive officer.

Board of Directors Compensation

    All members of our board of directors will be reimbursed for their usual and customary expenses incurred in connection with attending all board and other committee meetings. Members of the board of directors who are also our employees or employees of Vestar Capital Partners, Goldner Hawn Johnson & Morrison or members of the Michael family will not receive remuneration for serving as members of the board. We expect that each other director will receive customary compensation for each year of service to the board of directors, each meeting of the board of directors attended in person or by teleconference and each committee meeting attended in person or by teleconference.

Management and Michael Family Equity Participation

    As described elsewhere in this prospectus, certain members of our senior management and affiliates of the Michael family made a rollover equity investment of their shares of our common stock into approximately $48.4 million in securities of M-Foods Investors and deferred compensation arrangements with M-Foods Holdings. When the acquisition was consummated, these members of our senior management and affiliates of the Michael family exchanged their common stock and option equity value of Michael Foods, in the amounts indicated in the chart below, for cash, equity interests of M-Foods Investors and, in the case of senior management, deferred compensation arrangements with M-Foods Holdings. For more information on these deferred compensation arrangements, see "—Benefit Plans, Severance Plans and Deferred Compensation Plans."

Name		Total Common Stock and Option Value		Common Stock and Option Value Rollover		Total Cash Proceeds
Michael family affiliates		$	91,744,890	$	38,377,500	$	53,367,390
Gregg A. Ostrander			5,821,502		4,200,000		1,621,502
John D. Reedy			2,414,820		1,500,000		914,820
Bill L. Goucher			2,337,054		1,500,000		837,054
James D. Clarkson			1,561,033		1,200,000		361,033
Bradley L. Cook			717,463		400,000		317,463
Max R. Hoffmann			850,722		400,000		450,722
Harold D. Sprinkle			487,017		400,000		87,017
James Mohr			661,962		400,000		261,962
	Total	$	106,596,463	$	48,377,500	$	58,218,963

Employment Agreements

    General Provisions.  The employment agreement with Gregg Ostrander provides for a term of two years, subject to certain termination rights, and automatic one year extensions beginning with the first anniversary of the closing of the acquisition. The Ostrander employment agreement provides that Mr. Ostrander will receive an annual base salary of at least $595,000 and that he will participate in certain bonus arrangements, long-term incentive plans and employee benefit plans of Michael Foods. Mr. Ostrander will be subject to a noncompetition covenant, with respect to the businesses of the production, distribution or sales of eggs or egg products, and a nonsolicitation provision during the

73

period starting with the close of the acquisition and ending on the second anniversary of Mr. Ostrander's termination.

    The employment agreement with John Reedy provides for a term of two years, subject to certain termination rights and automatic one year extensions beginning with the first anniversary of the closing of the acquisition. The Reedy employment agreement provides that Mr. Reedy will receive an annual base salary of at least $275,000 and that he will participate in certain bonus arrangements, long-term incentive plans and employee benefit plans of Michael Foods. Mr. Reedy will be subject to a noncompetition covenant with respect to the businesses of the production, distribution or sales of eggs or egg products, and a nonsolicitation provision during the period starting with the close of the acquisition and ending on the second anniversary of Mr. Reedy's termination.

    The employment agreement with Bill Goucher provides for a term beginning with the closing of the acquisition through the second anniversary of a change in control, as defined in the Goucher employment agreement, subject to certain termination rights. Mr. Goucher's annual base salary will be at least $275,000, and he will participate in certain bonus arrangements and employee benefit plans of Michael Foods. Mr. Goucher will be subject to a noncompetition covenant with respect to the businesses of the production, distribution or sales of eggs or egg products, and a nonsolicitation provision during the period starting with the close of the acquisition and ending on the second anniversary of Mr. Goucher's termination.

    The employment agreement with James Clarkson provides for a term beginning with the close of the acquisition through the second anniversary of a change in control, as defined in the Clarkson employment agreement, subject to certain termination rights. Mr. Clarkson's annual base salary will be at least $250,000, and he will participate in certain bonus arrangements and employee benefit plans of Michael Foods. Mr. Clarkson will be subject to a noncompetition covenant with respect to the businesses of the production, distribution or sales of refrigerated potato products or specialty dairy products and mixes, and a nonsolicitation provision during the period starting with the close of the acquisition and ending on the second anniversary of Mr. Clarkson's termination.

    Termination Provisions  The Ostrander employment agreement provides that if Mr. Ostrander's employment is terminated by his death or disability, Mr. Ostrander, or his estate or beneficiaries, will receive, within 30 days, a payment equal to any annual base salary through the date of termination not yet paid, plus the target bonus for the year prorated for months of employment in that year, plus any eligible unpaid other benefits, plus three times the total of Mr. Ostrander's current annual base salary and target bonus.

    If Mr. Ostrander's employment is terminated for cause or he terminates without good reason, as described below, Mr. Ostrander will receive his annual base salary through the date of termination and other benefits not yet paid under any plan, program, policy, contract or agreement with or practice of Michael Foods. "Good reason" includes, among other things, any diminution in position, authority, duties and responsibilities or any requirement to relocate or travel extensively. If Mr. Ostrander terminates his employment for good reason or if Michael Foods terminates his employment other than for cause, death or disability, Mr. Ostrander will receive a lump sum, within 30 days, in an amount equal to any annual base salary through the date of termination not yet paid, plus the target bonus for the year prorated for months of employment in that year, plus any eligible unpaid other benefits, plus three times the total of Mr. Ostrander's current annual base salary and target bonus. In addition, Mr. Ostrander will receive for three years following the termination date, or until such earlier time as Mr. Ostrander becomes eligible to receive comparable benefits, certain medical, dental and life insurance benefits for himself and his family.

    Solely as such may be applicable to any severance payments deemed made in the context of the change in ownership resulting from the acquisition, Mr. Ostrander may also be eligible to receive an additional payment of any excise tax imposed by Section 4999 of the Internal Revenue Code, as well as

74

a gross up payment such that he will retain an amount equal to the excise taxes, after all income taxes, interest and penalties associated with all such payments.

    The Reedy employment agreement provides that if Mr. Reedy's employment is terminated by his death or disability, Mr. Reedy, or his estate or beneficiaries, will receive within 30 days a payment equal to any annual base salary through the date of termination not yet paid, plus the target bonus for the year prorated for months of employment in that year, plus any eligible unpaid other benefits, plus two times the total of Mr. Reedy's current annual base salary and target bonus.

    If Mr. Reedy's employment is terminated for cause or he terminates without good reason, such term having a meaning substantially similar to the meaning given such term in the Ostrander employment agreement, Mr. Reedy will receive his annual base salary through the date of termination and other benefits not yet paid under any plan, program, policy, contract or agreement with or practice of Michael Foods. If Mr. Reedy terminates his employment for good reason or if Michael Foods terminates his employment other than for cause, death or disability, Mr. Reedy will receive a lump sum within 30 days in an amount equal to any annual base salary through the date of termination not yet paid, plus the target bonus for the year prorated for months of employment in that year, plus any eligible unpaid other benefits, plus two times the total of Mr. Reedy's current annual base salary and target bonus. In addition, Mr. Reedy will receive for two years following the termination date, or until such earlier time as Mr. Reedy becomes eligible to receive comparable benefits, certain medical, dental and life insurance benefits for himself and his family.

    Solely as such may be applicable to any severance payments deemed made in the context of the change in ownership resulting from the acquisition, Mr. Reedy may also be eligible to receive an additional payment of any excise tax imposed by Section 4999 of the Internal Revenue Code, as well as a gross up payment such that he will retain an amount equal to the excise taxes, after all income taxes, interest and penalties associated with all such payments.

    The Goucher employment agreement provides that if Mr. Goucher is terminated by his death or disability, Mr. Goucher, or his estate or beneficiaries, will receive, within 30 days, a payment equal to any annual base salary through the date of termination not yet paid, plus the target bonus for the year prorated for months of employment in that year, plus any eligible unpaid other benefits, plus an amount equal to Mr. Goucher's current annual base salary.

    If Mr. Goucher is terminated for cause or without good reason, as defined in the Goucher employment agreement, Mr. Goucher will receive his annual base salary through the date of termination and other benefits not yet paid under any plan, program, policy, contract or agreement with or practice of Michael Foods. If Mr. Goucher's employment is terminated prior to a change in control, as described below, by Michael Foods other than for cause, death or disability, Mr. Goucher will receive a lump sum within 30 days equal to any annual base salary through the date of termination not yet paid, plus any eligible unpaid other benefits, plus an amount equal to Mr. Goucher's current annual base salary.

    If Mr. Goucher is terminated by Michael Foods other than for cause, or if Mr. Goucher terminates his employment for good reason, in anticipation of or within two years following a change in control, Mr. Goucher will receive within 30 days a payment equal to any annual base salary through the date of termination not yet paid, plus the target bonus for the year prorated for months of employment in that year, plus any eligible unpaid other benefits, plus two times Mr. Goucher's current annual base salary. A change in control refers a transaction where another party acquires voting control of Michael Foods, another party acquires substantially all of the assets of Michael Foods, or, prior to an initial public offering of Michael Foods, Vestar and its affiliates cease to have the ability to elect a majority of the board of directors of Michael Foods.

75

    The Clarkson employment agreement contains severance provisions substantially identical to the severance provisions contained in the Goucher employment agreement.

Benefit Plans, Severance Plans and Deferred Compensation Plans

    The merger agreement requires Michael Foods to maintain, until the first anniversary of the closing of the acquisition, employee benefit plans and arrangements with overall employee benefits which are substantially comparable in the aggregate to the benefits provided by Michael Foods' various plans as of December 21, 2000, without taking into account the value of any benefits under equity-based benefit plans.

    Michael Foods has maintained its severance plan subsequent to the acquisition and each of Messrs. Cook, Sprinkle, Mohr and Hoffmann has rights under the severance plan pursuant to his respective severance and deferred compensation agreement. Participants in Michael Foods' severance plan are eligible for certain severance arrangements should they be terminated without cause within twenty-four months following a change in control. Generally, the severance plan defines a change in control as occurring when a person acquires the power to elect, appoint or cause the election or appointment of at least a majority of the board of directors or purchases all or substantially all of the properties and assets of Michael Foods. A change in control, however, does not include certain acquisitions pursuant to a merger, consolidation or sale of properties and assets as defined in the severance plan. Under the plan, certain key employees would be entitled to receive a lump sum payment equal to one times their total annual compensation, with several key employees being entitled to a payment of two times total annual compensation. Annual compensation is defined as the employee's highest annual rate of salary, excluding bonuses, benefits, allowances, etc., within the three calendar year periods prior to the date of termination of employment. However, if an employee has been employed by Michael Foods or a predecessor for less than three years, total annual compensation will equal the highest annualized salary during the period of employment.

    The merger agreement provided that each outstanding option to purchase shares of Michael Foods common stock, whether or not then exercisable, including those granted to directors and executive officers of Michael Foods, would become vested and exercisable with respect to all shares of common stock subject thereto. Each option was cancelled at the closing of the acquisition, pursuant to option cancellation agreements entered into with all the holders of options, and such holders were paid in consideration of the cancellation of their options an amount in cash and/or other consideration equal to the difference between $30.10 and the exercise price of the option. The non-cash consideration included certain rights to deferred compensation described below.

    In addition, certain members of management received rights in an unfunded, unsecured, nonqualified deferred compensation arrangement, which was assumed by M-Foods Holdings, in exchange for the cancellation of certain of his options in an amount equal to the spread value of such canceled options. This amount is deemed to be invested in M-Foods Investors' Class A Units and in the Class A Units of the holding company which holds the non-voting common units of the limited liability companies (in the same proportion as the executive contributed to M-Foods Investors and such holding company). M-Foods Holdings will credit each executive's deferred compensation account as if the deferred compensation amount were actually invested in M-Foods Investors' Class A Units and M-Foods Dairy Holdings Class A Units with respect to distributions, whether cash or non-cash, relating only to the return of invested capital and an 8% preferred return on the invested capital, but not with respect to any other distributions. Actual distributions of each executive's deferred compensation arrangements, if any, will be made upon the earliest of a change in control, the tenth anniversary of the closing of the acquisition or the purchase by M-Foods Investors or M-Foods Dairy Holdings of that executive's Class B Units in accordance with the terms of his severance arrangement.

76

    The following chart indicates those executives, along with the number of options each currently holds, that received deferred compensation arrangements from M-Foods Holdings, the respective amounts of such deferred compensation, and the amount of the cash payment received in exchange for cancellation of all of the executive's options:

Name	Number of Options	Cash Payment Amount		Deferred Compensation Amount
Gregg A. Ostrander	382,500	$	602,659	$	4,032,000
John D. Reedy	118,910		22,576		1,440,000
Bill L. Goucher	137,800		394,053		1,440,000
James D. Clarkson	113,000		64,449		1,152,000
Bradley L. Cook	33,000		103,920		384,000
Max R. Hoffmann	21,000		—		293,661
Harold D. Sprinkle	44,000		15,758		384,000
James Mohr	40,000		129,990		384,000

    In addition, upon the closing of the acquisition, all shares of Michael Foods common stock awarded under its executive incentive plan in prior years that were not vested became vested in accordance with the terms of such plan. Because Michael Foods achieved the 15% average annual earnings per share growth over the three year period ended December 31, 2000, the executives listed below received the number of shares of Michael Foods common stock indicated below. The executive incentive plan was terminated in connection with the acquisition.

Name		Number of Shares
Gregg A. Ostrander		3,662
John D. Reedy		1,766
Bill L. Goucher		1,633
James D. Clarkson		1,433
Bradley L. Cook		837
Max R. Hoffmann		509
Harold D. Sprinkle		877
James Mohr		757
	Total of Listed Executives	11,474

    In addition to the deferred compensation arrangements described above, certain members of our management entered into stock purchase and unit subscription agreements pursuant to which each:

•

sold to M-Foods Investors a portion of such executive's shares of Michael Foods common stock; and



•

contributed the remainder of his Michael Foods common stock to M-Foods Investors in exchange for a number of Class B Units and Class C Units of M-Foods Investors based on a $2.00 per unit price.

For more information on these arrangements, see "Certain Relationships and Related Transactions—Certain Agreements Relating to the Acquisition—Management Stock Purchase and Unit Subscription Agreements" and "Security Ownership of Certain Beneficial Owners and Management."

M-Foods Holdings Stock Option Plan

    In order to provide additional financial incentives to our management, certain members of our management are eligible to participate in a stock option program pursuant to which the compensation

77

committee of the board of directors of M-Foods Holdings will be authorized to issue options to purchase up to five percent of the common stock of M-Foods Holdings. The exercise price of options granted in the future will reflect the fair market value of the underlying shares, as determined by the compensation committee in its best judgment. The compensation committee of M-Foods Holdings will determine the actual number of options granted.

    We expect that fifty percent of the options reserved for issuance under this stock option plan will be issued to Messrs. Ostrander, Reedy, Goucher, Clarkson, Cook, Hoffmann, Sprinkle and Mohr in July 2001. The exercise price is payable (1) in cash, (2) after an initial public offering of Michael Foods' common stock, through simultaneous sales of underlying shares by brokers or (3) through the exchange of M-Foods Holdings securities held by the optionee for longer than six months.

    Unless otherwise provided in the award agreement, options will vest ratably over a five-year period. On termination of employment for any reason, all unvested options of the terminated employee are cancelled. Vested options not exercised within 90 days after termination are cancelled, unless such employee is terminated for cause or leaves without good reason, in which case such vested options shall be cancelled upon termination. If employment is terminated for any reason other than for cause or a termination without good reason, M-Foods Holdings will provide a notice setting forth the fair market value of the common stock within 90 days after such termination. In the event of a change of control of M-Foods Holdings or M-Foods Investors, all options which have not become vested shall automatically become vested. The options will be subject to other customary restrictions and repurchase rights.

78

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    Michael Foods, Inc. is a wholly owned subsidiary of M-Foods Holdings, Inc., a corporation owned, in part, by M-Foods Investors, LLC, whose members include affiliates of Vestar Capital Partners and Goldner Hawn Morrison & Johnson, certain members of our management and affiliates of the Michael family. After giving effect to the exercise of all options reserved for issuance in connection with M-Foods Holdings' stock option plan, M-Foods Investors owns approximately 95% of M-Foods Holdings' common stock.

    The following table sets forth certain information regarding beneficial ownership of M-Foods Investors by: (i) each person or entity known to us to own more than 5% of any class of M-Foods Investors' outstanding securities and (ii) each member of M-Foods Investors' management committee, which is identical to the Michael Foods board of directors, each of our named executive officers and all members of the management committee and executive officers as a group. M-Foods Investors' outstanding securities consist of approximately 2,134,697 Class A Units, 99,078 Class B Units and 100,000 Class C Units. The Class A Units, Class B Units and Class C Units generally have identical rights and preferences, except the Class C Units are nonvoting and as to certain distributions described in "Certain Relationships and Related Transactions—Certain Agreements Relating to the Acquisition—Limited Liability Company Agreement." To our knowledge, each of such securityholders has sole voting and investment power as to the units shown unless otherwise noted. Beneficial ownership of the securities listed in the table has been determined in accordance with the applicable rules and regulations promulgated under the Exchange Act.

		Securities Beneficially Owned
Name and Address		Number of Class A Units	Number of Class B Units	Percentage of Class A and B Units	Number of Class C Units	Percentage of Class C Units
Principal Securityholders:
Vestar Capital Partners IV, L.P.(1)		1,400,000	—	62.7	—	—
Marathon Fund Limited Partnership IV(2)		350,000	—	15.7	—	—
4J2R1C Limited Partnership(3)		195,650	—	8.7	—	—
3J2R Limited Partnership(3)		188,125	—	8.4	—	—
Management Committee Members and Executive Officers:
Gregg A. Ostrander(4)		—	42,000	1.9	42,000	42.0
John D. Reedy(4)		—	15,000	*	15,000	15.0
Bill L. Goucher(4)		—	15,000	*	15,000	15.0
Norman A. Rodriguez(4)		—	—	—	—	—
J. Christopher Henderson(5)		—	—	—	—	—
James P. Kelley(5)		—	—	—	—	—
Leonard Lieberman(5)		—	—	—	—	—
Jeffrey J. Michael(3)		383,775	—	17.2	—	—
John L. Morrison(6)		—	—	—	—	—
Kevin A. Mundt		—	—	—	—	—
Daniel S. O'Connell(5)		—	—	—	—	—
	All management committee members and named executive officers as a group (11 persons)	383,775	72,000	20.4	72,000	72.0

*

Less than 1%.

footnotes to table on following page

79

footnotes to table on prior page

(1)

The address for Vestar Capital Partners IV, L.P. is c/o Vestar Capital Partners, 1225 Seventeenth Street, Suite 1660, Denver, Colorado 80202.

(2)

The address for Marathon Fund Limited Partnership IV is c/o Goldner Hawn Johnson & Morrison, 5250 Wells Fargo Center, Minneapolis, Minnesota 55402.

(3)

Each of 4J2R1C and 3J2R are Minnesota limited partnerships. The general partners of 4J2R1C are James H. Michael, Jeffrey J. Michael and 2JM Enterprises, Inc., a Minnesota corporation. The directors of 2JM Enterprises are James H. Michael and Jeffrey J. Michael, and the officers of 2JM Enterprises are Jeffrey J. Michael, President and Treasurer, and James H. Michael, Vice President and Secretary. The general partners of 3J2R are Jeffrey J. Michael, as managing general partner, and 2JM Enterprises. As a general partner of 4J2R1C and 3J2R, Mr. Michael may be deemed to beneficially own the securities held by such partnerships. Mr. Michael disclaims beneficial ownership except to the extent of his pecuniary interest as a partner in the limited partnerships' assets. The address for each of 4J2R1C Limited Partnership, 3J2R Limited Partnership and Jeffrey J. Michael is 10851 Louisiana Avenue South, Bloomington, Minnesota 55438.

(4)

The address for each of the named executive officers is c/o Michael Foods, Inc., Suite 324, Signal Bank Building, 5353 Wayzata Boulevard, Minneapolis, Minnesota 55416.

(5)

Vestar Capital Partners IV, L.P. is a Delaware general partnership whose general partner is Vestar Associates IV, L.P., a Delaware limited partnership. The general partner of Vestar Associates IV, L.P. is Vestar Associates Corporation IV, a Delaware corporation. The board of directors of Vestar Associates Corporation IV consists solely of Daniel S. O'Connell, who also serves as its President and Chief Executive Officer. In addition, each of James P. Kelley and J. Christopher Henderson are Managing Directors of Vestar Associates Corporation IV. Leonard Lieberman is a consultant to Vestar Capital Partners and its affiliates and owns a limited partnership interest in Vestar Executives IV, L.P. Mr. O'Connell, as an executive officer and member of the board of directors of Vestar Associates Corporation IV, Mr. Kelley, as an executive officer of Vestar Associates Corporation IV, Mr. Henderson, as an executive officer of Vestar Associates Corporation IV, and Mr. Lieberman, as a limited partner of Vestar Capital Partners IV, L.P., may be deemed to share beneficial ownership of Vestar Capital Partners IV, L.P.'s member units of M-Foods Investors, LLC. Each of these individuals disclaims this beneficial ownership.

(6)

Marathon Fund Limited Partnership IV is a Delaware limited partnership whose sole general partner is Militades LLC, a Delaware limited liability company, of which John L. Morrison is an authorized member. Mr. Morrison, as an authorized member of Militades LLC and a Managing Director of Goldner Hawn Johnson & Morrison, an affiliate of Marathon Fund Limited Partnership IV, may be deemed to beneficially own the member units of M-Foods Investors held by Marathon Fund Limited Partnership IV. Mr. Morrison disclaims this beneficial ownership.

80

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    In connection with the Papetti's acquisition in February 1997, we entered into six separate leases for the principal properties used by Papetti's in its operations. The properties are owned by six separate partnerships, of which four are wholly owned by Papetti family members and two are 50% owned by Papetti family members. Five of the leases expire in 2007 and are renewable for two successive five-year terms. One of the leases expires in 2010. The aggregate annual net rent paid by us under the leases was $2,138,148 in 2000, $2,300,148, including a lease termination payment, in 1999 and $2,162,148 in 1998. In addition, we pay all real estate taxes, utilities, insurance and other operating expenses associated with the properties, and we are required to maintain the properties.

    In addition, our egg products division purchases eggs under an egg supplier agreement with a partnership in which certain members of the Papetti family are general partners. Such purchases totaled approximately $9,800,000 in 2000, $10,100,000 in 1999 and $11,900,000 in 1998. Papetti Farms, Inc. is a 50% general partner in the partnership, Sunbest-Papetti Farms, and is owned as follows: Arthur J. Papetti, 50%; Alfred Papetti, 25%; Stephen T. Papetti, 25%. The Papetti's no longer own equity interests in Michael Foods or any of its affiliates, including M-Foods Investors.

Certain Agreements Relating to the Acquisition

Limited Liability Company Agreement

    The amended and restated limited liability company agreement of M-Foods Investors authorizes it to issue Class A Units, Class B Units and Class C Units. The Class A Units, Class B Units and Class C Units generally have identical rights and preferences, except that the Class C Units are nonvoting and as to certain distributions described below. M-Foods Investors also has the authority to create and issue preferred units, with the terms and provisions more fully described in the management stock purchase and unit subscription agreements, in connection with certain repurchases by M-Foods Investors of Class B Units and Class C Units held by former executives of Michael Foods and its subsidiaries.

    Distributions of property of M-Foods Investors shall be made in the following order:

•

First, holders of Class A Units, Class B Units and Class C Units will receive a return of their invested capital.



•

Second, the holders of the Class A Units will receive an 8% cumulative preferred return on their invested capital.



•

Thereafter, holders of the Class A Units and Class B Units, on the one hand, and the holders of the Class C Units on the other, will receive certain percentages of all remaining distributions, based on satisfaction of certain minimum internal rate of return or multiple of investment hurdles.

    A management committee has the exclusive authority to manage and control the business and affairs of M-Foods Investors. The management committee's composition was determined in accordance with the provisions of the securityholders agreement described below.

Securityholders Agreement

    Pursuant to the securityholders agreement entered into in connection with the acquisition, units of M-Foods Investors (or common stock following a change in corporate form) beneficially owned by the Michael Foods executives and any other employees of M-Foods Investors and its subsidiaries, which we collectively refer to as the management investors, Marathon Fund Limited Partnership IV, a limited partnership associated with Goldner Hawn Johnson & Morrison, and 4J2R1C Limited Partnership and 3J2R Limited Partnership, each of which are associated with the Michael family, are subject to certain restrictions on transfer, other than certain exempt transfers as defined in the securityholders agreement,

81

as well as the other provisions described below. When reference is made to "units" of M-Foods Investors in the discussion that follows, such reference shall be deemed to include common stock of M-Foods Investors following a change in corporate form, whether in preparation for an initial public offering or otherwise.

    The securityholders agreement provides that Vestar Capital Partners IV, L.P., Marathon Fund Limited Partnership IV, 4J2R1C Limited Partnership, 3J2R Limited Partnership, the management investors and all other parties to the agreement will vote all of their units to elect and continue in office management committees or boards of directors of M-Foods Investors and each of its subsidiaries, other than subsidiaries of Michael Foods, consisting of up to nine members or directors composed of:

•

five (5) persons designated by Vestar Capital Partners IV, L.P.;



•

one (1) person designated by Marathon Fund Limited Partnership IV;



•

one (1) person designated by 4J2R1C Limited Partnership and 3J2R Limited Partnership, which are associated with the Michael family;



•

the chief executive officer of Michael Foods; and



•

one (1) independent person designated by the chief executive officer of Michael Foods.

    The securityholders agreement also provides:

•

Marathon Fund Limited Partnership IV, 4J2R1C Limited Partnership, 3J2R Limited Partnership and the management investors with customary "tag-along" rights with respect to transfers of M-Foods Investors units beneficially owned by Vestar Capital Partners IV, L.P., its partners or their transferees; and



•

Vestar Capital Partners IV, L.P. with "drag-along" rights with respect to M-Foods Investors units owned by Marathon Fund Limited Partnership IV, 4J2R1C Limited Partnership, 3J2R Limited Partnership and the management investors in a sale of M-Foods Investors. In addition, Vestar Capital Partners IV, L.P., and, after M-Foods Investors' first public offering, Marathon Fund Limited Partnership IV and 4J2R1C Limited Partnership and 3J2R Limited Partnership, have certain rights to require M-Foods Investors to register units held by them under the Securities Act, up to four, two and two times, respectively.

    In addition, Vestar Capital Partners IV, L.P., Marathon Fund Limited Partnership IV, 4J2R1C Limited Partnership, 3J2R Limited Partnership and the management investors have certain rights to participate in publicly registered offerings of common equity of M-Foods Investors initiated by it or other third parties. For example, each of Vestar Capital Partners IV, L.P., Marathon Fund Limited Partnership IV, 4J2R1C Limited Partnership, 3J2R Limited Partnership and the management investors may elect to participate in a demand registration initiated by another party to the securityholders agreement. If M-Foods Investors issues or sells any new units to Vestar Capital Partners IV, L.P., subject to certain exceptions, each management investor and each of Marathon Fund Limited Partnership IV, 4J2R1C Limited Partnership and 3J2R Limited Partnership shall have the right to subscribe for a sufficient number of new M-Foods Investors units to maintain its respective ownership percentage in M-Foods Investors.

Management Stock Purchase and Unit Subscription Agreements

    Under the management stock purchase and unit subscription agreements, each of the executives listed in the table below sold to M-Foods Investors that number of shares of Michael Foods common stock indicated below in exchange for $30.10 per share. In addition, each such executive contributed the remainder of his Michael Foods common stock to M-Foods Investors in exchange for a number of Class B Units and Class C Units of M-Foods Investors based on a $2.00 per unit price, with the

82

exception of Max R. Hoffmann who, in addition, purchased Class A Units. All units held by each executive vest 20% each year beginning on the first anniversary of the closing of the acquisition. The executives listed in the table below hold approximately 4.5% of the outstanding Class A and Class B units combined, and 100% of the outstanding Class C units. In addition, a small portion of the proceeds from the sale of Michael Foods common stock to M-Foods Investors was used to purchase indirect interests in the two dairy limited liability companies described elsewhere in this prospectus. For more information, see "The Acquisition."

Name	Number of Shares Sold to M- Foods Investors	Gross Proceeds from Sale		Number of Shares Contributed to M-Foods Investors	Value of Shares Contributed		Number of Class A Units received in Exchange for Contribution	Number of Class B Units received in Exchange for Contribution		Number of Class C Units received in Exchange for Contribution
Gregg A. Ostrander	29,199	$	878,890	5,569	$	167,627	0	42,000		42,000
John D. Reedy	17,881		538,220	1,989		59,867	0	15,000		15,000
Bill L. Goucher	13,089		393,981	1,989		59,867	0	15,000		15,000
James D. Clarkson	7,647		230,170	1,591		47,894	0	12,000		12,000
Bradley L. Cook	6,259		188,384	530		15,965	0	4,000		4,000
Max R. Hoffmann	14,473		435,637	3,525		106,103	921.83	3,078	.17	4,000
Harold D. Sprinkle	1,492		44,897	530		15,965	0	4,000		4,000
James Mohr	3,629		109,221	530		15,965	0	4,000		4,000

    M-Foods Investors may be required to purchase all of an executive's units in the event of such executive's termination of employment due to death, disability or retirement. In addition, in certain circumstances M-Foods Investors will have the right to purchase all or a portion of an executive's units, if an executive's employment is terminated or such executive is deemed to be engaging in certain competitive activities. However, if M-Foods Investors elects or is required to purchase any units pursuant to the call and put options described in the preceding sentences, and such payment would result in a violation of law applicable to M-Foods Investors or a default under certain of its financing arrangements, M-Foods Investors may make the portion of the cash payment so affected by the delivery of preferred units of M-Foods Investors with a liquidation preference equal to the amount of the cash payment affected.

    In addition, each management stock purchase and unit subscription agreement contains customary representations, warranties and covenants.

Stock Purchase and Unit Subscription Agreement

    The stock purchase and unit subscription agreement required each of 4J2R1C Limited Partnership and 3J2R Limited Partnership to sell, immediately prior to the acquisition, to M-Foods Investors the number of shares of Michael Foods common stock indicated below at a price per share of $30.10, and to contribute to M-Foods Investors the number of shares of Michael Foods common stock indicated below in exchange for the number of Class A units indicated below. Each Class A unit is valued at $100.00. In addition, a small portion of the proceeds from the sale of Michael Foods common stock to M-Foods Investors was used to purchase indirect interests in the two dairy limited liability companies described elsewhere in this prospectus. For more information, see "The Acquisition."

Name	Number of Shares Sold to Investors	Gross Proceeds from Sale		Number of Shares Contributed to Investors	Value of Share Contributed		Number of Class A Units received in Exchange for Contribution
4J2R1C Limited Partnership	939,933	$	28,291,973	648,556	$	19,521,546	195,650
3J2R Limited Partnership	835,902		25,160,654	623,612		18,770,717	188,125

    In addition, the stock purchase and unit subscription agreements contain customary representations, warranties and covenants. There are no put rights or call options in the stock purchase and unit subscription agreements.

83

Management Agreement

    Pursuant to the management agreement entered into in connection with the acquisition, Vestar Capital Partners and Goldner Hawn Johnson & Morrison Incorporated will render to each of M-Foods Investors, M-Foods Holdings and Michael Foods, and each of their subsidiaries, certain advisory and consulting services. In consideration of those services, M-Foods Investors, M-Foods Holdings and Michael Foods jointly and severally will pay to Vestar Capital Partners and Goldner Hawn Johnson & Morrison Incorporated, semi-annually in advance, an aggregate per annum management fee equal to the greater of:

•

$1,000,000 and



•

an amount equal to 0.75% of the consolidated earnings before interest, taxes, depreciation and amortization of M-Foods Investors and its subsidiaries for such fiscal year, but before deduction of any such fee, determined as set forth in documents related to the proposed senior credit facility.

    M-Foods Investors, M-Foods Holdings and Michael Foods also jointly and severally agreed to pay Vestar Capital Partners and Goldner Hawn Johnson & Morrison Incorporated at the closing of the acquisition an aggregate transaction fee equal to 1.25% of total transaction value plus all out-of-pocket expenses incurred by Vestar Capital Partners and Goldner Hawn Johnson & Morrison Incorporated prior to the closing of the acquisition for services rendered by them in connection with the acquisition.

    M-Foods Investors, M-Foods Holdings and Michael Foods also jointly and severally agreed to indemnify Vestar Capital Partners and Goldner Hawn Johnson & Morrison Incorporated and their respective affiliates from and against all losses, claims, damages and liabilities arising out of the performance by Vestar Capital Partners and Goldner Hawn Johnson & Morrison Incorporated of their services pursuant to the management agreement. The management agreement will terminate at such time as Vestar Capital Partners IV, L.P. and Marathon Fund Limited Partnership IV and their respective partners and the respective affiliates thereof hold, directly or indirectly in the aggregate, less than 20% of the voting power of Michael Foods' outstanding voting stock.

84

DESCRIPTION OF SENIOR CREDIT FACILITY

    In connection with the transactions described herein, we entered into a senior credit facility with Bank of America, N.A., as Administrative Agent, Bear, Stearns & Co. Inc., as Syndication Agent, and various other lenders. Set forth below is a summary of the material terms of the senior credit facility.

    The senior credit facility provides for aggregate borrowings by us of up to $470.0 million. The senior credit facility provides for:

•

a revolving credit facility of up to $100.0 million in revolving credit loans and letters of credit,



•

a term loan A facility of $100.0 million in term loans and



•

a term loan B facility of $270.0 million in term loans.

    We borrowed amounts under the senior credit facility to provide a portion of the proceeds required to consummate the acquisition and to provide for working capital and general corporate needs, including other permitted acquisitions. All revolving loans incurred under the senior credit facility and the term loan A facility mature six years from the date of closing. The term loan B facility matures seven years from the date of closing. At April 1, 2001, the date the acquisition was consummated for financial reporting purposes, there was approximately $370.0 million of outstanding indebtedness under the senior credit facility and approximately $76.0 million of unused borrowing capacity under the revolving credit facility for working capital and other corporate purposes, including permitted acquisitions. The following is a summary of the material terms of the senior credit facility:

    The senior credit facility is secured by, among other things:

•

a first priority security interest in all of our receivables, contracts, contract rights, equipment, intellectual property, inventory and all other tangible and intangible assets and each of our direct and indirect domestic subsidiaries, subject to certain customary exceptions and



•

a pledge of (i) all of our capital stock and that of any of our direct and indirect domestic subsidiaries and (ii) 65% of the capital stock of first-tier foreign subsidiaries.

    Our borrowings under the senior credit facility bear interest at a floating rate which can be either a base rate (the higher of (x) the Bank of America prime rate and (y) the federal funds effective rate, plus one half percent (.50%) per annum) or, at our option (subject to availability), a LIBOR rate, plus an applicable margin. The initial applicable margin for the base rate loans and LIBOR loans is 2.00% and 3.00%, respectively, for borrowings under the senior credit facility. Commencing six months after the closing date of the acquisition, the applicable margin will be subject to adjustment based on the leverage ratio. The interest rate payable under the senior credit facility will increase by 2.00% per annum during the continuance of an event of default.

    Under the senior credit facility we are also be required to pay a commitment fee on the difference between committed amounts and amounts actually borrowed under the revolving credit facility, which is calculated at a rate per annum based upon the leverage ratio. Until October 10, 2001, the initial commitment fee will be 0.50%.

    Prior to the maturity date, funds borrowed under the revolving credit facility may be borrowed, repaid and reborrowed, without premium or penalty. The term loan A and term loan B facilities are subject to quarterly installments of principal on March 31, June 30, September 30 and December 31 of

85

each year, beginning on June 30, 2001. Each of the term loan A and term loan B facility are subject to quarterly installments of principal as set forth in the table below.

Year	Term Loan A		Term Loan B
1	$	12 million	$	2.7 million
2	$	12 million	$	2.7 million
3	$	16 million	$	2.7 million
4	$	16 million	$	2.7 million
5	$	20 million	$	2.7 million
6	$	24 million	$	2.7 million
7		N/A	$	253.8 million

    Voluntary prepayments of principal amounts outstanding under the senior credit facility are permitted at any time, upon the giving of proper notice. However, if a prepayment of principal is made with respect to a LIBOR loan on a date other than the last day of the applicable interest period, we will be required to compensate the lenders for losses and expenses incurred as a result of the prepayment.

    In addition, we are required to prepay amounts outstanding under the senior credit facility in an amount equal to:

•

100% of the net cash proceeds from certain asset dispositions by us, M-Foods Holdings or our subsidiaries, subject to certain baskets and reinvestment provisions;



•

75% (if our leverage ratio is equal to or greater than 3.5:1.0) or 50% (if our leverage ratio is less than 3.5:1.0) of excess cash flow, as defined in the senior credit facility;



•

100% of the net cash proceeds from the issuance of any funded debt for borrowed money by us, M-Foods Holdings, or our subsidiaries (excluding certain permitted debt); and



•

50% of the net cash proceeds from the issuance of equity, excluding equity provided by certain of our other sponsors and other customary exceptions.

    The senior credit facility requires us to meet certain financial tests, including without limitation, a minimum fixed charge coverage ratio, a maximum leverage ratio and a minimum interest coverage ratio. In addition, the senior credit facility contains certain covenants which, among other things, limit the incurrence of additional indebtedness, investments, dividends, transactions with affiliates, asset sales, acquisitions, capital expenditures, mergers and consolidations, prepayments of other indebtedness, liens and encumbrances and other matters customarily restricted in such agreements.

    The senior credit facility contains customary events of default, including without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain other material agreements or indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency, judgment defaults in excess of specified amounts, failure of any guaranty or security document supporting the senior credit facility to be in full force and effect, M-Foods Holdings engaging in any business or activity other than holding 100% of our capital stock and a change of control of Michael Foods or M-Foods Holdings.

86

DESCRIPTION OF NOTES

    You can find the definitions of certain terms used in this description under the subheading "Certain Definitions" appearing on page 120. In this description, the word "issuer" refers only to Michael Foods, Inc. ("Michael Foods") and not to any of the subsidiaries of Michael Foods.

    The outstanding Notes were issued under an Indenture (the "Indenture") between the issuer and BNY Midwest Trust Company, as trustee (the "Trustee"), in a private transaction that was not subject to the registration requirements of the Securities Act. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). On the Merger Date, the Guarantors became parties to the Indenture.

    Any Notes that remain outstanding after completion of the exchange offer, together with the Exchange Notes issued in the exchange offer, will be treated as a single class of securities under the Indenture.

    The following description is a summary of the material provisions of the Indenture, the Pledge Agreement and the Registration Rights Agreement. It does not restate those agreements in their entirety. We urge you to read the Indenture, the Pledge Agreement and the Registration Rights Agreement because they, and not this description, define your rights as holders of the Notes. Unless otherwise required by the context, references in this description to the Notes include the Notes issued to the initial purchasers in a private transaction that was not subject to the registration requirements of the Securities Act and the Exchange Notes, which have been registered under the Securities Act. Certain defined terms used in this description but not defined below under "—Certain Definitions" have the meanings assigned to them in the Indenture.

Brief Description of the Notes and the Guarantees

The Notes

    The Notes:

•

are general unsecured obligations of the issuer;



•

are subordinated in right of payment to all existing and future Senior Debt of the issuer;



•

are pari passu in right of payment with any future senior subordinated Indebtedness of the issuer; and



•

are guaranteed by the Guarantors as of the Merger Date.

The Guarantees

    The Notes are guaranteed as of the Merger Date by all of the Domestic Subsidiaries of Michael Foods. As of the Merger Date, all of our subsidiaries, other than MFI Food Canada, Inc. and MIKLFS Corp., are "Domestic Subsidiaries." In the future, we may have additional subsidiaries which are not "Domestic Subsidiaries."

    Each Guarantee of the Notes:

•

is a general unsecured obligation of the Guarantor;



•

is subordinated in right of payment to all existing and future Senior Debt of the Guarantor; and



•

is pari passu in right of payment with any future senior subordinated Indebtedness of the Guarantor.

87

    The Merger and the related financing transactions were completed on April 10, 2001. At April 1, 2001, the date the Merger was consummated for financial reporting puposes, the issuer had total Senior Debt of approximately $376.0 million and the Guarantors had total Senior Debt of approximately $402.0 million. As indicated above and as discussed in detail below under the subheading "—Subordination," payments on the Notes and under the Guarantees of the Notes are subordinated to the prior payment in full in cash or Cash Equivalents of all Senior Debt. The Indenture permits the issuer and the Guarantors to incur additional Senior Debt.

    As of the Merger Date, all of our subsidiaries are "Restricted Subsidiaries." However, under the circumstances described below under the subheading "—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries," we will be permitted to designate certain of our subsidiaries as "Unrestricted Subsidiaries." Our Unrestricted Subsidiaries are not subject to many of the restrictive covenants in the Indenture. Our Unrestricted Subsidiaries do not guarantee the Notes.

Principal, Maturity and Interest

    The Indenture provides for the issuance by the issuer of Notes with a maximum aggregate principal amount of $300 million, of which $200 million will be issued in this offering. The issuer may issue additional notes (the "Additional Notes") from time to time after this offering. Any offering of Additional Notes is subject to the covenant described below under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock." The Notes and any Additional Notes subsequently issued under the Indenture would be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. The issuer will issue Notes in denominations of $1,000 and integral multiples of $1,000. The Notes will mature on April 1, 2011.

    Interest on the Notes will accrue at the rate of 11³/4% per annum and will be payable semi-annually in arrears on April 1 and October 1, commencing on October 1, 2001. The issuer will make each interest payment to the Holders of record on the immediately preceding March 15 and September 15.

    Interest on the Notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Methods of Receiving Payments on the Notes

    If a Holder has given wire transfer instructions to the issuer, the issuer will pay all principal, interest and premium and Liquidated Damages, if any, on that Holder's Notes in accordance with those instructions. All other payments on Notes will be made at the office or agency of the Paying Agent and Registrar within the City and State of New York unless the issuer elects to make interest payments by check mailed to the Holders at their addresses set forth in the register of Holders.

Paying Agent and Registrar for the Notes

    The Trustee will initially act as Paying Agent and Registrar. The issuer may change the Paying Agent or Registrar without prior notice to the Holders, and the issuer or any of its Subsidiaries may act as Paying Agent or Registrar.

Transfer and Exchange

    A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The issuer is not required to transfer or exchange any Note selected for redemption.

88

Also, the issuer is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.

    The registered Holder of a Note will be treated as the owner of it for all purposes.

Note Guarantees

    On and after the Merger Date, the Guarantors will jointly and severally guarantee the issuer's obligations under the Notes. Each Note Guarantee will be subordinated to the prior payment in full of all Senior Debt of that Guarantor. The obligations of each Guarantor under its Note Guarantee will be limited as necessary to prevent that Note Guarantee from constituting a fraudulent conveyance under applicable law. See "Risk Factors—Federal and state statutes allow courts, under specific circumstances, to void guarantees and require noteholders to return payments received from guarantors."

    The Indenture will provide that a Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than the issuer or another Guarantor, unless:

(1)

immediately after giving effect to that transaction, no Default or Event of Default exists; and



(2)

either:



(a)

the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger is a corporation, partnership or limited liability company, organized or existing under (i) the laws of the United States, any state thereof or the District of Columbia or (ii) the laws of the same jurisdiction as that Guarantor and, in each case, assumes all the obligations of that Guarantor under the Indenture, its Note Guarantee and the Registration Rights Agreement pursuant to a supplemental indenture satisfactory to the Trustee; or



(b)

such sale or other disposition complies with the "Asset Sale" provisions of the Indenture, including the application of the Net Proceeds therefrom.

    The Note Guarantee of a Guarantor will be released:

(1)

in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the issuer, if the sale or other disposition of all or substantially all of the assets of that Guarantor complies with the "Asset Sale" provisions of the Indenture, including the application of the Net Proceeds therefrom;



(2)

in connection with any sale of all of the Capital Stock of a Guarantor to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the issuer, if the sale of all such Capital Stock of that Guarantor complies with the "Asset Sale" provisions of the Indenture, including the application of the Net Proceeds therefrom;



(3)

if the issuer properly designates any Restricted Subsidiary that is a Guarantor (other than the Egg Products Division) as an Unrestricted Subsidiary; or



(4)

in connection with any sale of Capital Stock of a Guarantor (other than the Egg Products Division) to a Person that results in the Guarantor no longer being a Subsidiary of the issuer, if the sale of such Capital Stock of that Guarantor complies with the "Asset Sale" provisions of the Indenture, including the application of the Net Proceeds therefrom.

Subordination

    The payment of principal, interest and premium and Liquidated Damages, if any, on the Notes will be subordinated to the prior payment in full in cash or Cash Equivalents of all Senior Debt of the issuer, including Senior Debt of the issuer incurred after the date of the Indenture.

89

    The holders of Senior Debt of the issuer will be entitled to receive payment in full in cash or Cash Equivalents of all Obligations due in respect of Senior Debt of the issuer (including interest after the commencement of any bankruptcy proceeding at the rate specified in the documentation for the applicable Senior Debt of the issuer) before the Holders of Notes will be entitled to receive any payment with respect to the Notes (except that Holders of Notes may receive and retain Permitted Junior Securities and payments made from the trust described under "—Legal Defeasance and Covenant Defeasance"), in the event of any distribution to creditors of the issuer:

(1)

in a liquidation or dissolution of the issuer;



(2)

in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the issuer or its property;



(3)

in an assignment for the benefit of creditors; or



(4)

in any marshaling of the issuer's assets and liabilities.

    The issuer also may not make any payment in respect of the Notes (except in Permitted Junior Securities or from the trust described under "—Legal Defeasance and Covenant Defeasance") if:

(1)

a payment default on Designated Senior Debt of the issuer occurs and is continuing beyond any applicable grace period; or



(2)

any other default occurs and is continuing on any series of Designated Senior Debt of the issuer that permits holders of that series of Designated Senior Debt of the issuer to accelerate its maturity and the Trustee receives a notice of such default (a "Payment Blockage Notice") from a representative of the holders of any Designated Senior Debt of the issuer.

    Payments on the Notes may and shall be resumed:

(1)

in the case of a payment default on Designated Senior Debt of the issuer, upon the date on which such default is cured or waived; and



(2)

in case of any default referred to in clause (2) of the immediately preceding paragraph on Designated Senior Debt of the issuer, the earlier of (x) the date on which such default is cured or waived, (y) 179 days after the date on which the applicable Payment Blockage Notice is received or (z) the date the Trustee receives notice from the representative for such Designated Senior Debt rescinding the Payment Blockage Notice, unless the maturity of such Designated Senior Debt of the issuer has been accelerated.

    No new Payment Blockage Notice may be delivered unless and until:

(1)

360 days have elapsed since the delivery of the immediately prior Payment Blockage Notice; and



(2)

all scheduled payments of principal, interest and premium and Liquidated Damages, if any, on the Notes that have come due have been paid in full in cash.

    No default referred to in clause (2) of the third immediately preceding paragraph that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default has been cured or waived for a period of not less than 90 days.

    If the Trustee or any Holder of the Notes receives a payment in respect of the Notes (except in Permitted Junior Securities or from the trust described under "—Legal Defeasance and Covenant Defeasance") when:

(1)

the payment is prohibited by these subordination provisions; and

90

(2)

the Trustee or the Holder has actual knowledge that the payment is prohibited;

the Trustee or the Holder, as the case may be, shall hold the payment in trust for the benefit of the holders of Senior Debt of the issuer. Upon the proper written request of the holders of Senior Debt of the issuer, the Trustee or the Holder, as the case may be, shall deliver the amounts in trust to the holders of Senior Debt of the issuer or their proper representative.

    The issuer and the Trustee must promptly notify holders of its Senior Debt if payment of the Notes is accelerated because of an Event of Default.

    As a result of the subordination provisions described above, in the event of a bankruptcy, liquidation or reorganization of the issuer, Holders of Notes may recover less ratably than creditors of the issuer who are holders of Senior Debt of the issuer.

    Payments under the Note Guarantee of each Guarantor will be subordinated to the prior payment in full of all Senior Debt of such Guarantor, including Senior Debt of such Guarantor incurred after the date of the Indenture, on the same basis as provided above with respect to the subordination of payments on the Notes by the issuer to the prior payment in full of Senior Debt of the issuer. See "Risk Factors—Your right to receive payments on these Notes is junior to the issuer's existing senior indebtedness and possibly all its future borrowings."

    "Designated Senior Debt" means:

(1)

any Indebtedness outstanding under the Credit Agreement; and



(2)

any other Senior Debt permitted under the Indenture the principal amount of which is $25.0 million or more and that has been designated by the issuer as "Designated Senior Debt."

    "Permitted Junior Securities" means:

(1)

Equity Interests in the issuer or any Guarantor; or



(2)

debt securities that are subordinated to all Senior Debt and any debt securities issued in exchange for Senior Debt at least to the same extent as, or to a greater extent than, the Notes and the Note Guarantees are subordinated to Senior Debt under the Indenture.

    "Senior Debt" means:

(1)

all Indebtedness of the issuer or any Guarantor outstanding under the Credit Agreement and all Hedging Obligations with respect thereto, whether outstanding on the Merger Date or incurred thereafter;



(2)

any other Indebtedness of the issuer or any Guarantor permitted to be incurred under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes or any Note Guarantee; and



(3)

all Obligations with respect to the items listed in the preceding clauses (1) and (2) (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law).

    Notwithstanding anything to the contrary in the preceding, Senior Debt will not include:

(1)

any liability for federal, state, local or other taxes owed or owing by the issuer;



(2)

any Indebtedness of the issuer to any of its Subsidiaries or other Affiliates;



(3)

any trade payables;

91

(4)

the portion of any Indebtedness that is incurred in violation of the Indenture; or



(5)

Non-Recourse Debt.

Optional Redemption

    At any time prior to April 1, 2004, the issuer may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture at a redemption price of 111.75% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the redemption date, with the net cash proceeds of one or more Equity Offerings of the issuer (or of the Parent to the extent such proceeds are contributed to the common equity of the issuer); provided that:

(1)

at least 65% of the aggregate principal amount of Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the issuer and its Subsidiaries); and



(2)

the redemption must occur within 60 days of the date of the closing of such Equity Offering.

    Except pursuant to the preceding paragraph, the Notes will not be redeemable at the issuer's option prior to April 1, 2006. The issuer is not prohibited, however, from acquiring the Notes by means other than a redemption, whether pursuant to an issuer tender offer or otherwise, assuming such acquisition does not otherwise violate the terms of the Indenture.

    After April 1, 2006, the issuer may redeem all or a part of the Notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on April 1 of the years indicated below:

Year	Percentage
2006	105.875	%
2007	103.917	%
2008	101.958	%
2009 and thereafter	100.000	%

Repurchase at the Option of Holders

Change of Control

    If a Change of Control occurs, each Holder of Notes will have the right to require the issuer to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of that Holder's Notes pursuant to a Change of Control Offer on the terms set forth in the Indenture. In the Change of Control Offer, the issuer will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the date of purchase. Within 30 days following any Change of Control, the issuer will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the Change of Control Payment Date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the Indenture and described in such notice. The issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the

92

Indenture, the issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the Indenture by virtue of such conflict.

    On the Change of Control Payment Date, the issuer will, to the extent lawful:

(1)

accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;



(2)

deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and



(3)

deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the issuer.

    The Paying Agent will promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof.

    Prior to complying with any of the provisions of this "Change of Control" covenant, but in any event within 90 days following a Change of Control, the issuer will either repay all outstanding Senior Debt or obtain the requisite consents, if any, under all agreements governing outstanding Senior Debt to permit the repurchase of Notes required by this covenant. The issuer will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

    The agreements governing the outstanding Senior Debt of Michael Foods and the Credit Agreement will prohibit the issuer from purchasing any Notes, and also provide that certain change of control events with respect to Michael Foods would constitute a default under these agreements. Any future credit agreements or other agreements relating to Senior Debt to which the issuer becomes a party may contain similar restrictions and provisions. In the event a Change of Control occurs at a time when the issuer is prohibited from purchasing Notes, the issuer could seek the consent of its senior lenders to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the issuer does not obtain such a consent or repay such borrowings, the issuer will remain prohibited from purchasing Notes. In such case, the issuer's failure to purchase tendered Notes would constitute an Event of Default under the Indenture which would, in turn, constitute a default under such Senior Debt. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the Holders of Notes.

    The provisions described above that require the issuer to make a Change of Control Offer following a Change of Control will be applicable regardless of whether any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders of the Notes to require that the issuer repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.

    The issuer will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

    The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the properties or assets of the

93

issuer and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a Holder of Notes to require the issuer to repurchase such Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the issuer and its Subsidiaries taken as a whole to another Person or group may be uncertain.

Asset Sales

    The issuer will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1)

the issuer (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;



(2)

such fair market value is determined by the issuer's Board of Directors and evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee; and



(3)

at least 75% of the consideration therefor received by the issuer or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following shall be deemed to be cash:



(a)

any liabilities (as shown on the issuer's or such Restricted Subsidiary's most recent balance sheet) of the issuer or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets and where the issuer and all Restricted Subsidiaries are released from any further liability in connection therewith;



(b)

any securities, notes or other obligations received by the issuer or any such Restricted Subsidiary from such transferee that are converted by the issuer or such Restricted Subsidiary into cash within 180 days thereafter (to the extent of the cash received in that conversion);



(c)

any Designated Noncash Consideration received by the issuer or any of its Restricted Subsidiaries in such Asset Sale having a fair market value, taken together with all other Designated Noncash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed 15% of Total Net Tangible Assets at the time of the receipt of such Designated Noncash Consideration, with the fair market value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value; and



(d)

any combination thereof.

    For purposes of paragraph (3) above, any liabilities of the issuer or any Restricted Subsidiary that are not assumed by the transferee of such assets in respect of which the issuer and all Restricted Subsidiaries are not released from any future liabilities in connection therewith shall not be considered consideration.

    Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the issuer may apply such Net Proceeds at its option:

(1)

to repay Senior Debt and, if the Senior Debt repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto;



(2)

to acquire all or substantially all of the assets of, or a majority of the Voting Stock of, another Permitted Business;

94

(3)

to acquire other assets, including investments in property or capital expenditures, that are used or useful in a Permitted Business; or



(4)

any combination of the foregoing.

Pending the final application of any such Net Proceeds, the issuer may temporarily reduce revolving credit borrowings or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture.

    Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million, the issuer will make an Asset Sale Offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the issuer may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

    The issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sales provisions of the Indenture, the issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such conflict.

    The agreements governing the outstanding Senior Debt of Michael Foods and the Credit Agreement will prohibit the issuer from purchasing any Notes, and also provide that certain asset sale events with respect to the issuer would constitute a default under these agreements. Any future credit agreements or other agreements relating to Senior Debt to which the issuer becomes a party may contain similar restrictions and provisions. In the event an Asset Sale occurs at a time when the issuer is prohibited from purchasing Notes, the issuer could seek the consent of its senior lenders to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the issuer does not obtain such a consent or repay such borrowings, the issuer will remain prohibited from purchasing Notes. In such case, the issuer's failure to purchase tendered Notes would constitute an Event of Default under the Indenture which would, in turn, constitute a default under such Senior Debt. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the Holders of Notes.

Selection and Notice

    If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows:

(1)

if the Notes are listed, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or



(2)

if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

95

    No Notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Notices of redemption may not be conditional.

    If any Note is to be redeemed in part only, the notice of redemption that relates to that Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption.

Certain Covenants

Restricted Payments

    The issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1)

declare or pay any dividend or make any other payment or distribution on account of the issuer's or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the issuer or any of its Restricted Subsidiaries) or to the direct or indirect holders of the issuer's or any of its Restricted Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the issuer or to the issuer or a Restricted Subsidiary of the issuer);

(2)

purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the issuer) any Equity Interests of the issuer, the Parent or any Subsidiary of the issuer (other than a Wholly Owned Restricted Subsidiary);

(3)

make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Note Guarantees, except a payment of interest or principal at the Stated Maturity thereof; or

(4)

make any Restricted Investment (all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as "Restricted Payments"),

unless, at the time of and after giving effect to such Restricted Payment:

(1)

no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and

(2)

the issuer would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock;" and

(3)

such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the issuer and its Restricted Subsidiaries after the date of the Indenture (excluding Restricted Payments permitted by clauses (2), (3), (6), (7), (8), and (10) of the next succeeding paragraph), is less than the sum, without duplication, of:

(a)

50% of the Consolidated Net Income of the issuer for the period (taken as one accounting period) beginning on the Merger Date and ending on the date of the issuer's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus

96

(b)

100% of the aggregate net cash proceeds received by the issuer subsequent to the Merger Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of the issuer (other than Excluded Contributions or net cash proceeds from the issue and sale of Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the issuer that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the issuer); plus

(c)

an amount equal to the net reduction in Investments by the issuer and its Restricted Subsidiaries, subsequent to the Merger Date, resulting from payments of interest on Indebtedness, dividends, repayments of loans or advances or other transfers of assets, in each case to the issuer or any such Restricted Subsidiary from any such Investment, or from the net cash proceeds from the sale of any such Investment, or from a redesignation of an Unrestricted Subsidiary to a Restricted Subsidiary, but only if and to the extent such amounts are not included in the calculation of Consolidated Net Income and not to exceed in the case of any Investment the amount of the Investment previously made by the issuer or any Restricted Subsidiary in such Person or Unrestricted Subsidiary; provided, that any amounts in excess of the amount of the Investment previously made may be added to the amounts otherwise available under this clause (c) to make Restricted Investments pursuant to this clause (3).

    So long as no Default has occurred and is continuing or would be caused thereby, the preceding provisions will not prohibit:

(1)

the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture;

(2)

the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the issuer or any Restricted Subsidiary or of any Equity Interests of the issuer in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of the issuer) of, Equity Interests of the issuer other than Disqualified Stock; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of the preceding paragraph;

(3)

the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness of the issuer or any Restricted Subsidiary with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;

(4)

the payment of any dividend by a Restricted Subsidiary of the issuer to the holders of any series or class of its common Equity Interests on a pro rata basis;

(5)

the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the issuer and any distribution, loan or advance to the Parent for the repurchase, redemption or other acquisition or retirement for value of any Equity Interests, of the Parent, in each case held by any former or current employees, officers, directors or consultants of the issuer or any of its Restricted Subsidiaries or their respective estates, spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons, in an amount not to exceed $2.0 million in any calendar year; provided that the issuer may carry over and make in a subsequent calendar year, in addition to the amounts permitted for such calendar year, the amount of such purchases, redemptions or other acquisitions or retirements for value permitted to have been made but not made in any preceding calendar year up to a maximum of $6.0 million in any calendar year; and provided further that such amount in any calendar year may be increased by an amount not

97

to exceed (i) the net cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the issuer (or the Parent to the extent such net cash proceeds are contributed to the common equity of the issuer) to employees, officers, directors or consultants of the issuer and its Restricted Subsidiaries that occurs after the Merger Date (to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments pursuant to clause (2) above or previously applied to the payment of Restricted Payments pursuant to this clause (5)) plus (ii) the cash proceeds of key man life insurance policies received by the issuer and its Restricted Subsidiaries after the Merger Date less any amounts previously applied to the payment of Restricted Payments pursuant to this clause (5); provided further that cancellation of Indebtedness owing to the issuer from employees, officers, directors and consultants of the issuer or any of its Restricted Subsidiaries in connection with a repurchase of Equity Interests of the issuer from such Persons will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provisions of the Indenture; provided further that the net cash proceeds from such sales of Equity Interests described in clause (i) of this clause (5) shall be excluded from clause 3(b) of the preceding paragraph to the extent such proceeds have been or are applied to the payment of Restricted Payments pursuant to this clause (5);

(6)

the payment of dividends or other distributions or the making of loans or advances to the Parent in amounts required for the Parent to pay franchise taxes and other fees required to maintain its existence and provide for all other operating costs of the Parent to the extent attributable to the ownership or operation of the issuer and its Restricted Subsidiaries, including, without limitation, in respect of director fees and expenses, administrative, legal and accounting services provided by third parties and other costs and expenses including all costs and expenses with respect to filings with the SEC, of up to an aggregate under this clause (6) of $500,000 per fiscal year plus any indemnification claims made by directors or officers of the Parent attributable to the ownership or operation of the issuer and its Restricted Subsidiaries;

(7)

the payment of dividends or other distributions by the issuer to the Parent in amounts required to pay the tax obligations of the Parent attributable to the issuer and its Subsidiaries determined as if the issuer and its Subsidiaries had filed a separate consolidated, combined or unitary return for the relevant taxing jurisdiction; provided that (x) the amount of dividends paid pursuant to this clause (7) to enable the Parent to pay Federal and state income taxes (and franchise taxes based on income) at any time shall not exceed the amount of such Federal and state income taxes (and franchise taxes based on income) actually owing by the Parent at such time to the respective tax authorities for the respective period and (y) any refunds received by the Parent attributable to the issuer or any of its Subsidiaries shall promptly be returned by the Parent to the issuer through a contribution or purchase of common stock (other than Disqualified Stock) of the issuer from the issuer;

(8)

repurchases of Capital Stock deemed to occur upon the cashless exercise of stock options and warrants;

(9)

other Restricted Payments not otherwise permitted pursuant to this covenant in an aggregate amount not to exceed $25.0 million;

(10)

Restricted Payments to holders of equity interests of Michael Foods contemplated by the Merger Agreement;

(11)

the declaration and payment of dividends and distributions to holders of any class or series of Disqualified Stock of the issuer or any of its Restricted Subsidiaries issued or incurred in accordance with the covenant described below under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; and

(12)

Investments that are made with Excluded Contributions.

98

    The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued to or by the issuer or such Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant shall be determined by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee. The Board of Directors' determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the fair market value exceeds $5.0 million. Not later than the date of making any Restricted Payment, the issuer shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this "Restricted Payments" covenant were computed, together with a copy of any fairness opinion or appraisal required by the Indenture.

Incurrence of Indebtedness and Issuance of Preferred Stock

    The issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and the issuer will not issue any Disqualified Stock and the issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stock; provided, however, that the issuer and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the issuer's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.00 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.

    So long as no Default shall have occurred and be continuing or would be caused thereby, the first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

(1)

(a) the incurrence by the issuer or any Guarantor of Indebtedness under the Credit Agreement (and the incurrence by the Guarantors of guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the issuer and the Guarantors thereunder) not to exceed $470 million and (b) the incurrence by the issuer or any Guarantor of additional Indebtedness under Credit Facilities (and the incurrence by the Guarantors of guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the issuer and the Guarantors thereunder) not to exceed the amount, if any, by which (x) the amount of the Borrowing Base as of the date of such incurrence exceeds (y) the aggregate amount of Indebtedness permitted to be incurred pursuant to the immediately preceding clause (a) as of the date of such incurrence, less, in the case of each of clause (a) and (b) the aggregate amount of all Net Proceeds of Asset Sales applied by the issuer or any Guarantor to repay any Indebtedness under the Credit Agreement or the Credit Facilities (and, in the case of any revolving credit Indebtedness under the Credit Agreement or a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to the covenant described above under the caption "—Repurchase at the Option of Holders—Asset Sales";

(2)

the incurrence by the issuer or any Guarantor of the Existing Indebtedness;

(3)

the incurrence by the issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of the Indenture and the related Note Guarantees and

99

the Exchange Notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;

(4)

the incurrence by the issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the issuer or any of its Restricted Subsidiaries in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed $15 million at any time outstanding;

(5)

the incurrence by the issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be incurred under the first paragraph of this covenant or clauses (2), (3), (4), (5) or (15) of this paragraph;

(6)

the incurrence by the issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the issuer and any of its Restricted Subsidiaries; provided, however, that:

(a)

if the issuer or any Guarantor is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the issuer, or the Note Guarantee, in the case of a Guarantor; and

(b)

(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);

(7)

the incurrence by the issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred:

(a)

for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;

(b)

for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or

(c)

for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases;

(8)

the guarantee by the issuer or any Guarantor of Indebtedness of the issuer or a Restricted Subsidiary of the issuer that was permitted to be incurred by another provision of this covenant;

(9)

the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant; provided, in each such case, that the amount thereof is included in Fixed Charges of the issuer as accrued;

(10)

the incurrence by the issuer's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted

100

Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the issuer that was not permitted by this clause (10);

(11)

the incurrence by the issuer or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims or self-insurance; provided, however, that, upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(12)

the incurrence by the issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the issuer or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Capital Stock of a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that:

(a)

that Indebtedness is not reflected on the balance sheet of the issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and

(b)

the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of those noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the issuer and/or that Restricted Subsidiary in connection with that disposition;

(13)

the issuance of preferred stock by any of the issuer's Restricted Subsidiaries issued to the issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Equity Securities or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the issuer or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock;

(14)

the incurrence by the issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion guarantees provided by the issuer or such Restricted Subsidiary in the ordinary course of business;

(15)

the incurrence by the issuer or any Guarantor of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $30 million;

(16)

the incurrence by the Foreign Restricted Subsidiaries of the issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries under any credit facility entered into in connection therewith) not to exceed the greater of (x) $20 million or (y) the amount of the Foreign Borrowing Base as of the date of such incurrence; and

(17)

the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the issuer or any other Restricted Subsidiary of the issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction.

101

    For purposes of determining compliance with this "Incurrence of Indebtedness and Issuance of Preferred Stock" covenant, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the issuer will be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this covenant. Indebtedness under the Credit Agreement immediately following the Merger shall be deemed to have been incurred on the Merger Date in reliance on the exception provided by clause (1) of the definition of Permitted Debt.

Limitation on Senior Subordinated Debt

    The issuer will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt of the issuer and senior in any respect in right of payment to the Notes. No Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to the Senior Debt of such Guarantor and senior in any respect in right of payment to such Guarantor's Note Guarantee.

Liens

    The issuer will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind securing Indebtedness, Attributable Debt or trade payables (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired, unless all payments due under the Indenture and the Notes are secured on an equal and ratable basis with the obligations so secured until such time as such obligations are no longer secured by a Lien.

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

    The issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

(1)

pay dividends or make any other distributions on its Capital Stock to the issuer or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to the issuer or any of its Restricted Subsidiaries;

(2)

make loans or advances to the issuer or any of its Restricted Subsidiaries; or

(3)

transfer any of its properties or assets to the issuer or any of its Restricted Subsidiaries.

    However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1)

Existing Indebtedness as in effect on the date of the Indenture and the Credit Agreement as in effect on the Merger Date and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive, taken as a whole, with respect to such encumbrances than those contained in such Existing Indebtedness, as in effect on the date of the Indenture;

(2)

the Indenture, the Notes and the Note Guarantees;

(3)

applicable law or regulation;

102

(4)

any agreements or instrument governing Indebtedness or Capital Stock of a Person acquired by the issuer or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;

(5)

customary non-assignment provisions in leases entered into in the ordinary course of business;

(6)

purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (3) of the preceding paragraph;

(7)

an agreement entered into for the sale or disposition of Capital Stock or assets of a Restricted Subsidiary or an agreement entered into for the sale of specified assets (in either case, so long as such encumbrance or restriction, by its terms, terminates on the earlier of the termination of such agreement or the consummation of such agreement and so long as such restriction applies only to the Capital Stock or assets to be sold);

(8)

Permitted Refinancing Indebtedness, provided that the encumbrances and restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

(9)

Permitted Liens securing Indebtedness that limit the right of the debtor to dispose of the assets subject to such Lien;

(10)

customary limitations on the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business; and

(11)

any Purchase Money Note, or other Indebtedness or contractual requirements of a Receivables Subsidiary in connection with a Qualified Securitization Transaction; provided that such restrictions only apply to such Receivables Subsidiary.

Merger, Consolidation or Sale of Assets

    The issuer will not, directly or indirectly, consolidate or merge with or into another Person (whether or not the issuer is the surviving corporation), and the issuer will not, and will not cause or permit any Restricted Subsidiary to, sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the issuer and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person (including by way of consolidation or merger), unless:

(1)

either: (a) the issuer or such Restricted Subsidiary, as the case may be, is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than the issuer or such Restricted Subsidiary) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof or the District of Columbia; provided, that in the case such Person is a limited liability company or a partnership, a co-obligor of the Notes is a corporation;

(2)

the Person formed by or surviving any such consolidation or merger (if other than the issuer or such Restricted Subsidiary) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of the issuer or such Restricted Subsidiary (if such Restricted Subsidiary is a Guarantor), as the case may

103

be, under the Notes, the Indenture and the Registration Rights Agreement pursuant to agreements reasonably satisfactory to the Trustee;

(3)

immediately after such transaction no Default or Event of Default exists; and

(4)

the issuer or the Person formed by or surviving any such consolidation or merger (if other than the issuer), or to which such sale, assignment, transfer, conveyance or other disposition shall have been made, will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock."

    In addition, neither the issuer nor any Restricted Subsidiary may, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. This "Merger, Consolidation or Sale of Assets" covenant will not apply to (i) a sale, assignment, transfer, conveyance or other disposition of assets between or among the issuer and any of its Restricted Subsidiaries or (ii) the Merger on the terms set forth in the Merger Agreement and as described in the Prospectus.

Transactions with Affiliates

    The issuer will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:

(1)

such Affiliate Transaction is on terms that are no less favorable to the issuer or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the issuer or such Restricted Subsidiary with an unrelated Person; and

(2)

the issuer delivers to the Trustee:

(a)

with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $1.0 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and

(b)

with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, an opinion as to the fairness to the issuer or such Restricted Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

    The following items shall not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(1)

any consulting or employment agreement entered into by the issuer or any of its Restricted Subsidiaries consistent with the past practice of the issuer or such Restricted Subsidiary;

(2)

transactions between or among the issuer and/or its Restricted Subsidiaries;

(3)

payment of reasonable directors fees to directors of the issuer and the Parent and the provision of customary indemnification to directors and officers of the issuer and the Parent;

(4)

sales of Equity Interests (other than Disqualified Stock) to Affiliates of the issuer;

104

(5)

any tax sharing agreement or arrangement and payments pursuant thereto among the issuer and its Subsidiaries and any other Person with which the issuer or its Subsidiaries is required or permitted to file a consolidated tax return or with which the issuer or any of its Restricted Subsidiaries is or could be part of a consolidated group for tax purposes in amounts not otherwise prohibited by the Indenture;



(6)

Restricted Payments that are permitted by the provisions of the Indenture described above under the caption "—Restricted Payments";



(7)

the payment (directly or through the Parent) of annual management, consulting, monitoring and advising fees and related expenses to the Equity Sponsors and their respective Affiliates pursuant to management agreements entered into in connection with the Merger pursuant to the Merger Agreement and as described herein under "Certain Relationships and Related Transactions—Management Agreement";



(8)

payments by the issuer or any of its Restricted Subsidiaries to the Equity Sponsors and their respective Affiliates for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are approved by the majority of the Board of Directors of the issuer in good faith and are in an amount not to exceed the greater of (i) $1.0 million or (ii) 1.25% of the aggregate transaction value (including enterprise value in connection with acquisitions or divestitures) (or portion thereof) in respect of which such services are rendered;



(9)

loans to employees that are approved in good faith by a majority of the Board of Directors of the issuer in an amount not to exceed $3.0 million outstanding at any time;



(10)

agreements (and payments relating thereto) entered into in connection with the Merger Agreement and as otherwise described herein, as the same may be amended, modified or replaced from time to time, so long as any amendment, modification or replacement is no less favorable to the issuer and its Restricted Subsidiaries than the agreement described herein and in effect on the Merger Date;



(11)

transactions with a joint venture engaged in a Permitted Business; provided that all the outstanding ownership interests of such joint venture are owned only by the issuer, its Restricted Subsidiaries and Persons who are not Affiliates of the issuer; and



(12)

transactions between a Receivables Subsidiary and any Person in which the Receivables Subsidiary has an Investment.

Additional Note Guarantees

    If the issuer or any of its Restricted Subsidiaries acquires or creates another Domestic Subsidiary (other than a Receivables Subsidiary) on or after the Merger Date, then that newly acquired or created Domestic Subsidiary (other than an Immaterial Subsidiary) must become a Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel to the Trustee within 20 Business Days of the date on which it was acquired or created.

Designation of Restricted and Unrestricted Subsidiaries

    The Board of Directors of the issuer may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default; provided that in no event shall (i) there be any Unrestricted Subsidiaries on or immediately following the Merger Date and (ii) the business currently operated by the Egg Products Division be transferred to or held by an Unrestricted Subsidiary. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate fair

105

market value of all outstanding Investments owned by the issuer and its Restricted Subsidiaries in the Subsidiary so designated (after giving effect to any sale of Equity Interests of such Subsidiary in connection with such designation) will be deemed to be a Restricted Investment made as of the time of such designation and will either reduce the amount available for Restricted Payments under the first paragraph of the covenant described above under the caption "—Restricted Payments" or reduce the amount available for future Investments under one or more clauses of the definition of "Permitted Investments". That designation will only be permitted if such Investment would be permitted at that time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors of the issuer may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the issuer of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if (1) such Indebtedness is permitted under the covenant described under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock," calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation.

Sale and Leaseback Transactions

    The issuer will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that the issuer or any Restricted Subsidiary may enter into a sale and leaseback transaction if:

(1)

the issuer or that Restricted Subsidiary, as applicable, could have incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction under the Fixed Charge Coverage Ratio test in the first paragraph of the covenant described above under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock";



(2)

the gross cash proceeds of that sale and leaseback transaction are at least equal to the fair market value, as determined in good faith by the Board of Directors and set forth in an Officers' Certificate delivered to the Trustee, of the property that is the subject of that sale and leaseback transaction; and



(3)

the transfer of assets in that sale and leaseback transaction is permitted by, and the issuer applies the proceeds of such transaction in compliance with, the covenant described above under the caption "—Repurchase at the Option of Holders—Asset Sales."

Limitations on Issuances of Guarantees of Indebtedness

    The issuer will not permit any of its Restricted Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to secure the payment of any other Indebtedness of the issuer unless either (1) such Restricted Subsidiary is a Guarantor or (2) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee of the payment of the Notes by such Restricted Subsidiary, which Guarantee shall be senior to or pari passu with such Subsidiary's Guarantee of or pledge to secure such other Indebtedness, unless such other Indebtedness is Senior Debt, in which case the Guarantee of the Notes may be subordinated to the Guarantee of such Senior Debt to the same extent as the Notes are subordinated to such Senior Debt.

    Notwithstanding the preceding paragraph, any Note Guarantee will provide by its terms that it will be automatically and unconditionally released and discharged under the circumstances described above under the caption "—Note Guarantees." The form of the Note Guarantee will be attached as an exhibit to the Indenture.

106

Business Activities

    The issuer will not, and will not permit any Restricted Subsidiary to, engage in any business other than Permitted Businesses.

Payments for Consent

    The issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Reports

    Whether or not required by the Commission, so long as any Notes are outstanding, the issuer will furnish to the Holders of Notes, within the time periods specified in the Commission's rules and regulations:

(1)

all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the issuer were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by the issuer's certified independent accountants; and



(2)

all current reports that would be required to be filed with the Commission on Form 8-K if the issuer were required to file such reports.

    In addition, following the date by which the issuer is required to consummate the exchange offer contemplated by the Registration Rights Agreement, whether or not required by the Commission, the issuer will file a copy of all of the information and reports referred to in clauses (1) and (2) above with the Commission for public availability within the time periods specified in the Commission's rules and regulations (unless the Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. In addition, the issuer and the Guarantors have agreed that, for so long as any Notes (but not the Exchange Notes) remain outstanding, they will furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

    If the issuer has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in "Management's Discussion and Analysis of Financial Condition and Results of Operations," of the financial condition and results of operations of the issuer and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the issuer.

Events of Default and Remedies

    Each of the following is an Event of Default:

(1)

default for 30 days in the payment when due of interest on, or Liquidated Damages with respect to, the Notes whether or not prohibited by the subordination provisions of the Indenture;



(2)

default in payment when due of the principal of, or premium, if any, on the Notes, whether or not prohibited by the subordination provisions of the Indenture;

107

(3)

failure by the issuer or any of its Restricted Subsidiaries to comply with the provisions described under the captions "—Repurchase at the Option of Holders—Change of Control," "—Repurchase at the Option of Holders—Asset Sales," "—Mandatory Redemption—Special Redemption" or "—Certain Covenants—Merger, Consolidation or Sale of Assets";



(4)

failure by the issuer or any of its Restricted Subsidiaries for 45 days after notice by the Trustee or by Holders of at least 25% in principal amount of the then outstanding Notes to comply with any of the other agreements in the Indenture;



(5)

default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the issuer or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the issuer or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, if that default:



(a)

is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default"); or



(b)

results in the acceleration of such Indebtedness prior to its express maturity,

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more (other than the 7.58% Notes to be repaid in connection with the Merger so long as such 7.58% Notes are repaid within 35 days of the Merger Date);

(6)

failure by the issuer or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $15.0 million, which judgments are not paid, discharged or stayed for a period of 60 days after such judgments have become final and non-appealable and, in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree that is not promptly stayed;



(7)

except as permitted by the Indenture, any Note Guarantee of a Guarantor (other than an Immaterial Guarantor) shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor (other than an Immaterial Guarantor), or any Person acting on behalf of any Guarantor (other than an Immaterial Guarantor), shall deny or disaffirm its obligations under its Note Guarantee;



(8)

the Pledge Agreement shall cease to be in full force and effect or enforceable in accordance with its terms (other than in accordance with its terms) or the issuer denies or disaffirms its obligations under the Pledge Agreement or the obligations under the Pledge Agreement cease to be secured by a perfected first priority security interest in any portion of the collateral purported to be pledged under the Pledge Agreement (other than in accordance with its terms); and



(9)

certain events of bankruptcy or insolvency with respect to the issuer or any of its Significant Subsidiaries or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary.

    In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the issuer or any Restricted Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately by notice in writing to the issuer specifying the respective Event of Default; provided, however, that so long as any Indebtedness permitted to be

108

incurred pursuant to the Credit Agreement shall be outstanding, that acceleration shall not be effective until the earlier of (1) an acceleration of Indebtedness under the Credit Agreement; or (2) five business days after receipt by the issuer and the Agent under Credit Agreement of written notice of the acceleration of the Notes.

    Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest or Liquidated Damages) if it determines that withholding notice is in their interest.

    The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or Liquidated Damages on, or the principal of, the Notes.

    In the case of any Event of Default occurring by reason of any willful action or inaction taken or not taken by or on behalf of the issuer with the intention of avoiding payment of the premium that the issuer would have had to pay if the issuer then had elected to redeem the Notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs during any time that the Notes are outstanding, by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the issuer with the intention of avoiding the prohibition on redemption of the Notes, then the premium specified in the Indenture shall also become immediately due and payable to the extent permitted by law upon the acceleration of the Notes.

    The issuer is required to deliver to the Trustee annually a statement regarding compliance with the Indenture. Upon becoming aware of any Default or Event of Default, the issuer is required to deliver to the Trustee a statement specifying such Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

    No director, officer, employee, incorporator or stockholder of the issuer or any Guarantor, as such, shall have any liability for any obligations of the issuer or the Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Legal Defeasance and Covenant Defeasance

    The issuer may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding Notes and all obligations of the Guarantors discharged with respect to their Note Guarantees ("Legal Defeasance") except for:

(1)

the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium and Liquidated Damages, if any, on such Notes when such payments are due from the trust referred to below;



(2)

the issuer's obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

109

(3)

the rights, powers, trusts, duties and immunities of the Trustee, and the issuer's and the Guarantor's obligations in connection therewith; and



(4)

the Legal Defeasance provisions of the Indenture.

    In addition, the issuer may, at its option and at any time, elect to have the obligations of the issuer and the Guarantors released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants shall not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the Notes.

    In order to exercise either Legal Defeasance or Covenant Defeasance:

(1)

the issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, or interest and premium and Liquidated Damages, if any, on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be, and the issuer must specify whether the Notes are being defeased to maturity or to a particular redemption date;



(2)

in the case of Legal Defeasance, the issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that (a) the issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;



(3)

in the case of Covenant Defeasance, the issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;



(4)

no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);



(5)

such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the issuer or any of its Subsidiaries is a party or by which the issuer or any of its Subsidiaries is bound, including the Credit Agreement;



(6)

the issuer must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the issuer with the intent of preferring the Holders of Notes over the other creditors of the issuer with the intent of defeating, hindering, delaying or defrauding creditors of the issuer or others; and

110

(7)

the issuer must deliver to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Amendment, Supplement and Waiver

    Except as provided in the next two succeeding paragraphs, the Indenture, the Notes or the Pledge Agreement contemplated by "—Mandatory Redemption—Special Redemption" above may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).

    Without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder):

(1)

reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;



(2)

reduce the principal of or change the fixed maturity of any Note or alter the provisions, or waive any payment, with respect to the redemption of the Notes (other than payment provisions relating to the covenant described under the caption "—Repurchase at Option of Holders");



(3)

reduce the rate of or change the time for payment of interest on any Note;



(4)

waive a Default or Event of Default in the payment of principal of, or interest or premium, or Liquidated Damages, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);



(5)

make any Note payable in money other than U.S. dollars;



(6)

make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or interest or premium or Liquidated Damages, if any, on the Notes;



(7)

release any Guarantor from any of its obligations under its Note Guarantee or the Indenture or release any collateral under the Pledge Agreement, except in accordance with the terms of the Indenture or the Pledge Agreement, respectively; or



(8)

make any change in the preceding amendment and waiver provisions.

    In addition, any amendment to, or waiver of, the provisions of the Indenture relating to subordination that adversely affects the rights of the Holders of the Notes will require the consent of the Holders of at least 75% in aggregate principal amount of Notes then outstanding. Any amendment to, or waiver of, the provisions of the Indenture relating to subordination or legal or covenant defeasance will require the consent of the Agent under the Credit Agreement.

    Notwithstanding the preceding, without the consent of any Holder of Notes, the issuer, the Guarantors and the Trustee may amend or supplement the Indenture or the Notes:

(1)

to cure any ambiguity, defect or inconsistency;



(2)

to provide for uncertificated Notes in addition to or in place of certificated Notes;

111

(3)

to provide for the assumption of the issuer's or any Guarantor's obligations to Holders of Notes in the case of a merger or consolidation or sale of all or substantially all of the issuer's or such Guarantor's assets;



(4)

to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights under the Indenture of any such Holder; or



(5)

to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.

Satisfaction and Discharge

    The Indenture will be discharged and will cease to be of further effect as to all Notes issued thereunder, when the issuer or any Guarantor have paid or caused to be paid all sums payable by it under the Indenture and:

    either:

(1)

all Notes that have been authenticated (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the issuer) have been delivered to the Trustee for cancellation; or



(2)

(a) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise or will become due and payable within one year and the issuer or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and Liquidated Damages, if any, and accrued interest to the date of maturity or redemption; (b) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the issuer or any Guarantor is a party or by which the issuer or any Guarantor is bound; and (c) the issuer has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward the payment of the Notes at maturity or on the redemption date, as the case may be.

    In addition, the issuer must deliver an Officers' Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Concerning the Trustee

    If the Trustee becomes a creditor of the issuer or any Guarantor, the Indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest, it must eliminate such conflict within 90 days or apply to the Commission for permission to continue or resign.

    The Holders of a majority in principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur and be continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be

112

under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Additional Information

    Anyone who receives this Prospectus may obtain a copy of the Indenture and Registration Rights Agreement without charge by writing to Michael Foods, Inc., Suite 324, Signal Bank Building, 5353 Wayzata Boulevard, Minneapolis, Minnesota 55416, Attention: John D. Reedy, Executive Vice President and Chief Financial Officer.

Book-Entry, Delivery and Form

    The exchange notes will be represented by one or more notes in registered, global form without interest coupons (collectively, the "Global Notes"). The Global Notes will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company ("DTC"), in New York, New York, and registered in the name of DTC or its nominee, for credit to an account of a direct or indirect participant in DTC, including the Euroclear System ("Euroclear") and Clearstream Banking, S.A. ("Clearstream").

    Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for Notes in certificated form except in the limited circumstances described below. See "—Exchange of Global Notes for Certificated Notes." Except in the limited circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of Notes in certificated form.

    Transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time.

Depository Procedures

    The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. The issuer takes no responsibility for these operations and procedures and urges investors to contact the system or its participants directly to discuss these matters.

    DTC has advised the issuer that DTC is a limited-purpose trust issuer created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the Initial Purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.

113

    DTC has also advised the issuer that, pursuant to procedures established by it:

(1)

upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the Initial Purchasers with portions of the principal amount of the Global Notes; and



(2)

ownership of these interests in the Global Notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes).

    Investors in the Global Notes who are Participants in DTC's system may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) which are Participants in such system. All interests in a Global Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.

Except as described below, owners of interest in the Global Notes will not have Notes registered in their names, will not receive physical delivery of Notes in certificated form and will not be considered the registered owners or "Holders" thereof under the Indenture for any purpose.

    Payments in respect of the principal of, and interest and premium and Liquidated Damages, if any, on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered Holder under the Indenture. Under the terms of the Indenture, the issuer and the Trustee will treat the Persons in whose names the Notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving payments and for all other purposes. Consequently, neither the issuer, the Trustee nor any agent of the issuer or the Trustee has or will have any responsibility or liability for:

(1)

any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Notes; or



(2)

any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.

    DTC has advised the issuer that its current practice, upon receipt of any payment in respect of securities such as the Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of Notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Trustee or the issuer. Neither the issuer nor the Trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the Notes, and the issuer and the Trustee may

114

conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

    Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds, and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.

    Cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.

    DTC has advised the issuer that it will take any action permitted to be taken by a Holder of Notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the Notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange the Global Notes for legended Notes in certificated form, and to distribute such Notes to its Participants.

    Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. Neither the issuer nor the Trustee nor any of their respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Exchange of Global Notes for Certificated Notes

    A Global Note is exchangeable for definitive Notes in registered certificated form ("Certificated Notes") if:

(1)

DTC (a) notifies the issuer that it is unwilling or unable to continue as depositary for the Global Notes and the issuer fails to appoint a successor depositary or (b) has ceased to be a clearing agency registered under the Exchange Act;



(2)

the issuer, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Certificated Notes; or



(3)

there shall have occurred and be continuing a Default or Event of Default with respect to the Notes.

    In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the Trustee by or on behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).

115

Exchange of Certificated Notes for Global Notes

    Certificated Notes may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such Notes.

Same Day Settlement and Payment

    The issuer will make payments in respect of the Notes represented by the Global Notes (including principal, premium, if any, interest and Liquidated Damages, if any) by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. The issuer will make all payments of principal, interest and premium and Liquidated Damages, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address. The Notes represented by the Global Notes are expected to be eligible to trade in the PORTAL market and to trade in DTC's Same-Day Funds Settlement System, and any permitted secondary market trading activity in such Notes will, therefore, be required by DTC to be settled in immediately available funds. The issuer expects that secondary trading in any Certificated Notes will also be settled in immediately available funds.

    Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised the issuer that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC's settlement date.

Governing Law

    The Indenture and the Notes will be governed by, and construed in accordance with, the laws of the State of New York.

Certain Definitions

    Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

    "Acquired Debt" means, with respect to any specified Person:

(1)

Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and



(2)

Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

    "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person,

116

whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" shall have correlative meanings.

    "Asset Acquisition" means (a) an Investment by the issuer or any of its Restricted Subsidiaries in any other Person if, as a result of such Investment, such Person shall become a Restricted Subsidiary of the issuer, or shall be merged with or into the issuer or any Restricted Subsidiary of the issuer, or (b) the acquisition by the issuer or any Restricted Subsidiary of the issuer of all or substantially all of the assets of any other Person or any division or line of business of any other Person.

    "Asset Sale" means:

(1)

the sale, lease, conveyance or other disposition of any assets or rights; provided that the sale, conveyance or other disposition of all or substantially all of the assets of the issuer and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption "—Repurchase at the Option of Holders—Change of Control" and/or the provisions described above under the caption "—Certain Covenants—Merger, Consolidation or Sale of Assets" and not by the provisions of the Asset Sale covenant;



(2)

the issuance or sale of Equity Interests by any of the issuer's Restricted Subsidiaries or the sale of Equity Interests in any of its Subsidiaries; and



(3)

the sale or other disposition for cash of the common units of the limited liability company formed to hold the dairy products business of the issuer and its Restricted Subsidiaries (the "Dairy LLC") that are owned indirectly by the members of M-Foods Investors LLC.

Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales:

(1)

any single transaction or series of related transactions that involves assets having a fair market value of less than $5.0 million;



(2)

a transfer of assets between or among the issuer and its Restricted Subsidiaries;



(3)

an issuance of Equity Interests by a Restricted Subsidiary to the issuer or to another Restricted Subsidiary;



(4)

the sale or lease of equipment, inventory or other assets in the ordinary course of business, including leases with a duration of no greater than 24 months with respect to facilities which are temporarily not in use or pending their disposition;



(5)

the sale or other disposition of cash or Cash Equivalents;



(6)

a Restricted Payment or Permitted Investment that is permitted by the covenant described above under the caption "—Certain Covenants—Restricted Payments";



(7)

the licensing of intellectual property to third Persons on customary terms as determined by the Board of Directors in good faith;



(8)

any sale of accounts receivable, or participations therein, in connection with any Qualified Receivables Transaction; and



(9)

the sale of non voting common equity interests of the Dairy LLC to a limited liability company whose members are the members of M-Foods Investors LLC.

    "Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present

117

value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

    "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.

    "Board of Directors" means:

(1)

with respect to a corporation, the board of directors of the corporation;



(2)

with respect to a partnership, the Board of Directors of the general partner of the partnership; and



(3)

with respect to any other Person, the board or committee of such Person serving a similar function.

    "Borrowing Base" means, as of any date, an amount equal to:

(1)

80% of the face amount of all accounts receivable owned by the issuer and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date that were not more than 90 days past due; plus

(2)

50% of the book value of all inventory owned by the issuer and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date; all calculated on a consolidated basis and in accordance with GAAP.

    "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

    "Capital Stock" means:

(1)

in the case of a corporation, corporate stock;



(2)

in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;



(3)

in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and



(4)

any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

    "Cash Equivalents" means:

(1)

United States dollars;



(2)

securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than six months from the date of acquisition;



(3)

certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and

118

overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of "B" or better;

(4)

repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;



(5)

commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Rating Services and in each case maturing within six months after the date of acquisition; and



(6)

money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition.

    "Change of Control" means the occurrence of any of the following:

(1)

the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Parent and its Restricted Subsidiaries or the issuer and its Restricted Subsidiaries, in each case, taken as a whole, to any "person" (as that term is used in Section 13(d)(3) of the Exchange Act) other than the Principals or Related Parties of the Principals;



(2)

the adoption of a plan relating to the liquidation or dissolution of the Parent or the issuer;



(3)

the consummation of any transaction (including, without limitation, any merger or consolidation) (a) prior to a Public Equity Offering by the issuer or the Parent, the result of which is that the Principals and their Related Parties become the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) of less than 50% of the Voting Stock of the issuer or the Parent (measured by voting power rather than the number of shares) or (b) after a Public Equity Offering of the issuer or the Parent, any "person" or "groups" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Principals and their Related Parties, becomes the beneficial owner (as defined above), directly or indirectly, of 35% or more of the Voting Stock of the issuer or the Parent, as the case may be, and such person is or becomes, directly or indirectly, the beneficial owner of a greater percentage of the voting power of the Voting Stock of the issuer or the Parent, as the case may be, calculated on a fully diluted basis, than the percentage beneficially owned by the Principals and their Related Parties;



(4)

the first day on which a majority of the members of the Board of Directors of the Parent or the issuer are not Continuing Directors; or

119

(5)

the Parent or the issuer consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, the Parent or the issuer, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of the Parent, the issuer or such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where (A) the Voting Stock of the Parent or the issuer outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such issuance) and (B) immediately after such transaction, (a) prior to a Public Equity Offering of the Parent or the issuer, the Principals and their Related Parties become the "beneficial owner" (as defined above) of not less than 50% of the Voting Stock of the surviving or transferee Person or (b) after a Public Equity Offering of the Parent or the issuer, no "person" or "group" (as such terms are used in Section 13(d) and 14(d) of the Exchange Act), other than the Principals and their Related Parties, becomes, directly or indirectly, the beneficial owner of 35% or more of the Voting Stock of the Parent or the issuer, as the case may be, and such person is or becomes, directly or indirectly, the beneficial owner of a greater percentage of the voting power of the Voting Stock of the Parent or the issuer, as the case may be, calculated on a fully diluted basis, than the percentage beneficially owned by the Principals and their Related Parties.

    "Consolidated Cash Flow" means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus:

(1)

provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus

(2)

consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether or not paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income; plus

(3)

depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; plus

(4)

one time nonrecurring costs and expenses of the issuer and its Subsidiaries incurred in connection with the Merger Agreement (including fees paid to the Equity Sponsors in connection with the Merger); minus

(5)

non-cash items increasing such Consolidated Net Income for such period, excluding any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period.

120

    Notwithstanding the preceding, the provision for taxes based on the income or profits of, and the depreciation and amortization and other non-cash expenses of, a Restricted Subsidiary of the issuer shall be added to Consolidated Net Income to compute Consolidated Cash Flow of the issuer only to the extent that a corresponding amount would be permitted at the date of determination to be dividended to the issuer by such Restricted Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders.

    "Consolidated Net Income" means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

(1)

the Net Income of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the specified Person or a Wholly Owned Restricted Subsidiary thereof;



(2)

the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;



(3)

the Net Income (or loss) of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded;



(4)

the cumulative effect of a change in accounting principles shall be excluded;



(5)

the Net Income (or loss) of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the specified Person or one of its Subsidiaries;



(6)

any increase in cost of sales as a result of the step-up in inventory valuation arising from applying the purchase method of accounting in accordance with GAAP in connection with any acquisition consummated after the Merger Date, net of taxes, shall be excluded; and



(7)

non-cash charges relating to employee benefit or other management compensation plans of the issuer or any of its Restricted Subsidiaries or any non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards of the issuer or any of its Restricted Subsidiaries, (excluding in each case any non-cash charge to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense incurred in a prior period) in each case, to the extent that such non-cash charges are deducted in computing such Consolidated Net Income shall be excluded.

    "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the issuer or the Parent, as the case may be, who:

(1)

was a member of such Board of Directors on the date of the Indenture or the Date of the Merger; or



(2)

was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election.

    "Credit Agreement" means that certain Credit Agreement, to be dated as of the Merger Date, by and among the issuer, Holdings, the guarantor subsidiaries named therein, Bank of America, N.A., as

121

Agent and the other Lenders named therein providing for up to $370 million in term loan borrowings and $100 million of revolving credit borrowings, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder or adding Subsidiaries of the issuer as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders.

    "Credit Facilities" means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities, in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.

    "Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

    "Designated Noncash Consideration" means the fair market value of noncash consideration (as determined in good faith by the principal financial officer of the issuer) received by the issuer or any of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an Officers' Certificate, setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Noncash Consideration.

    "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature; provided that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the issuer or any of its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the issuer or such Subsidiary in order to satisfy applicable statutory or regulatory obligations; and provided, further, that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the issuer to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the issuer may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption "—Certain Covenants—Restricted Payments."

    "Domestic Subsidiary" means any Restricted Subsidiary that was formed under the laws of the United States or any state thereof or the District of Columbia or that guarantees or otherwise provides direct credit support for any Indebtedness of the issuer.

    "Egg Products Division" means those operations and Subsidiaries of the issuer and its Restricted Subsidiaries engaged in the egg products business.

    "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

122

    "Equity Offering" means an offering of the Equity Interests (other than Disqualified Stock) of the issuer or the Parent, other than public offerings with respect to the Equity Interests registered on Form S-8.

    "Equity Sponsors" means Vestar and GHJ&M.

    "Excluded Contributions" means the net cash proceeds received by the issuer after the date of the Indenture from (a) contributions to its common equity capital and (b) the sale (other than to a Subsidiary or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the issuer or any of its Subsidiaries) of Capital Stock (other than Disqualified Stock) of the issuer, in each case designated within 60 days of the receipt of such net cash proceeds as Excluded Contributions pursuant to an Officers' Certificate, the cash proceeds of which are excluded from the calculation set forth in the second clause (3) of the first paragraph of the covenant described above under the "—Certain Covenants—Restricted Payments."

    "Existing Indebtedness" means (a) Indebtedness of Michael Foods and its Subsidiaries (other than Indebtedness under the Credit Agreement) to be assumed in connection with the Merger in an aggregate amount not to exceed $8.3 million, until such amounts are repaid and (b) the 7.58% Notes; provided that such 7.58% Notes are repaid within 35 days of the Merger Date.

    "Fixed Charges" means, with respect to any specified Person for any period, the sum, without duplication, of:

(1)

the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations; plus

(2)

the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period; plus

(3)

any interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus

(4)

the product of (a) all dividends and distributions, whether paid or accrued and whether or not in cash, on any series of preferred stock or Disqualified Stock of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of the issuer (other than Disqualified Stock) or to the issuer or a Restricted Subsidiary of the issuer, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP.

    "Fixed Charge Coverage Ratio" means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage

123

Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the use of the proceeds therefrom as if the same had occurred at the beginning of the applicable four-quarter reference period.

    In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

(1)

the Recapitalization, Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (as determined in accordance with GAAP) that have been made by the issuer or any Restricted Subsidiary of the issuer during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis including Pro Forma Cost Savings assuming that the Recapitalization and all such Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person (that subsequently became a Restricted Subsidiary of the issuer or was merged with or into the issuer or any Restricted Subsidiary of the issuer since the beginning of such period) shall have made any Investment, acquisition, disposition, merger, consolidation or discontinued operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period; and



(2)

in calculating Fixed Charges attributable to interest on any Indebtedness computed on a pro forma basis, (a) interest on outstanding Indebtedness determined on a fluctuating basis as of the Calculation Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Calculation Date; (b) if interest on any Indebtedness actually incurred on the Calculation Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Calculation Date will be deemed to have been in effect during the four-quarter period; and (c) notwithstanding clause (a) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to interest rate swaps, caps or collars, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreement.

    "Foreign Borrowing Base" means, as of any date, an amount equal to:

(1)

80% of the face amount of all accounts receivable owned by the Foreign Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date that were not more than 90 days past due; plus

(2)

50% of the book value of all inventory owned by the Foreign Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date; all calculated on a consolidated basis and in accordance with GAAP.

    "Foreign Restricted Subsidiary" means any Restricted Subsidiary of the issuer incorporated in any jurisdiction outside the United States.

    "GHJ&M" means Golden Hawn Johnson & Morrison.

    "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in

124

such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of the Indenture.

    "Guarantee" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.

    "Guarantors" means:

(1)

each direct or indirect Domestic Subsidiary of the issuer; and



(2)

any other subsidiary that executes a Note Guarantee in accordance with the provisions of the Indenture;

and their respective successors and assigns.

    "Hedging Obligations" means, with respect to any specified Person, the obligations of such Person under:

(1)

interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and



(2)

other agreements or arrangements designed to protect such Person against fluctuations in interest rates.

    "Holdings" means M-Foods Holdings, Inc., a Delaware corporation and the immediate parent of the issuer.

    "Immaterial Guarantor" means any Guarantor that is an Immaterial Subsidiary.

    "Immaterial Subsidiary" means any Subsidiary of the issuer that has less than $100,000 in total assets.

    "Indebtedness" means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent, in respect of:

(1)

borrowed money;



(2)

evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);



(3)

banker's acceptances;



(4)

representing Capital Lease Obligations;



(5)

the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or



(6)

representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any indebtedness of any other Person.

125

    The amount of any Indebtedness outstanding as of any date shall be:

(1)

the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and



(2)

the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

    "Investments" means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made consistent with past practices), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the issuer or any Restricted Subsidiary of the issuer sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the issuer such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the issuer, the issuer shall be deemed to have made a Restricted Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption "—Certain Covenants—Restricted Payments." The acquisition by the issuer or any Restricted Subsidiary of the issuer of a Person that holds an Investment in a third Person shall be deemed to be an Investment by the issuer or such Restricted Subsidiary in such third Person in an amount equal to the fair market value of the Investment held by the acquired Person in such third Person in an amount determined as provided in the final paragraph of the covenant described above under the caption "—Certain Covenants—Restricted Payments."

    "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

    "Merger" means the merger of Michael Foods Acquisition Corp. with and into Michael Foods in accordance with the terms of the Merger Agreement.

    "Merger Agreement" means the Agreement and Plan of Merger, dated as of December 21, 2000 by and among Holdings, Protein Acquisition Corp. and the issuer.

    "Merger Date" means the date of the consummation of the Merger pursuant to the terms of the Merger Agreement.

    "Net Income" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:

(1)

any gain (or loss), together with any related provision for taxes on such gain (or loss), realized in connection with: (a) any Asset Sale (without reference to the $5.0 million limitation); or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and



(2)

any extraordinary gain (or loss), together with any related provision for taxes on such extraordinary gain (or loss).

126

    "Net Proceeds" means the aggregate cash proceeds received by the issuer or any of its Restricted Subsidiaries or the holders of the common equity units of Dairy LLC in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any Designated Noncash Consideration or other non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale or disposition of such Designated Noncash Consideration or other non-cash consideration, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (including the amount of taxes payable by any Person resulting from an Asset Sale of units in Dairy LLC, which amount of taxes shall be deemed to be for each such Person the amount of tax calculated by applying the highest federal, New York State and City individual income tax rates applicable to the type of income realized from such Asset Sale), in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts required to be applied to the repayment of Indebtedness (other than revolving credit Indebtedness, unless there is a required reduction in commitments), secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect of (1) the sale price of such asset or assets established in accordance with GAAP and (2) any liabilities associated with such asset or assets and retained by the issuer after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

    "Non-Recourse Debt" means Indebtedness:

(1)

as to which neither the issuer nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;



(2)

no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Notes) of the issuer or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and



(3)

as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the issuer or any of its Restricted Subsidiaries.

    "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages, costs, expenses and other liabilities payable under the documentation governing any Indebtedness.

    "Parent" means any direct or indirect parent company of the issuer.

    "Permitted Business" means any business conducted or proposed to be conducted (as described in the Prospectus) by the issuer and its Restricted Subsidiaries on the date of the Indenture and other businesses reasonably related or ancillary thereto.

    "Permitted Investments" means:

(1)

any Investment in the issuer or in a Restricted Subsidiary of the issuer;



(2)

any Investment in Cash Equivalents;



(3)

any Investment by the issuer or any Restricted Subsidiary of the issuer in a Person, if as a result of such Investment:



(a)

such Person becomes a Restricted Subsidiary of the issuer; or

127

(b)

such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the issuer or a Restricted Subsidiary of the issuer;

(4)

any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption "—Repurchase at the Option of Holders—Asset Sales";



(5)

any Investment the payment for which consists of Equity Interests (other than Disqualified Stock) of the issuer;



(6)

Hedging Obligations;



(7)

other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (7) since the date of the Indenture, not to exceed $15.0 million;



(8)

any Investment of the issuer or any of its Restricted Subsidiaries or of Michael Foods and any of its Restricted Subsidiaries existing on the date of the Indenture;



(9)

loans to employees that are approved in good faith by a majority of the Board of Directors of the issuer in an amount not to exceed $3.0 million outstanding at any time;



(10)

any Investment acquired by the issuer or any of its Restricted Subsidiaries:



(a)

in exchange for any other Investment or accounts receivable held by the issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer, or



(b)

as a result of a foreclosure by the issuer or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(11)

Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;



(12)

Investments in joint ventures engaged in a Permitted Business not in excess of $20.0 million in the aggregate outstanding at any one time; and



(13)

Investments by the issuer or a Restricted Subsidiary of the issuer in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person, in each case, in connection with a Qualified Receivables Transaction.

    "Permitted Liens" means:

(1)

Liens on the assets of the issuer and any Guarantor securing Senior Debt that was permitted by the terms of the Indenture to be incurred;



(2)

Liens in favor of the issuer or any Restricted Subsidiary of the Company;



(3)

Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the issuer or any Restricted Subsidiary of the issuer; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the issuer or the Restricted Subsidiary;



(4)

Liens on property existing at the time of acquisition thereof by the issuer or any Restricted Subsidiary of the issuer; provided that such Liens were in existence prior to the contemplation

128

of such acquisition and do not extend to any property other than the property so acquired by the issuer or the Restricted Subsidiary;

(5)

Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant entitled "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" covering only the assets acquired with such Indebtedness;



(6)

Liens of the issuer and its Restricted Subsidiaries and of Michael Foods and its Restricted Subsidiaries existing on the date of the Indenture;



(7)

Liens incurred in the ordinary course of business of the issuer or any Restricted Subsidiary of the issuer with respect to obligations that do not exceed $5.0 million at any one time outstanding;



(8)

Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other similar obligations (exclusive of obligations for the payment of borrowed money) incurred in the ordinary course of business;



(9)

Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;



(10)

Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;



(11)

Liens imposed by law, such as carriers', warehousemen's, mechanics', materialmen's and other like Liens;



(12)

Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, including any Lien securing letters of credit issued in the ordinary course of business consistent with past practice in connection therewith;



(13)

Liens to secure Indebtedness of any Foreign Restricted Subsidiary permitted by clause (16) of the second paragraph of the covenant entitled "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" covering only the assets of such Foreign Restricted Subsidiary; and



(14)

Liens on assets of a Receivables Subsidiary arising in connection with a Qualified Receivables Transaction.

    "Permitted Refinancing Indebtedness" means any Indebtedness of the issuer or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the issuer or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

(1)

the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest thereon and the amount of any reasonably determined premium necessary to accomplish such refinancing and such reasonable expenses incurred in connection therewith);

129

(2)

such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;



(3)

if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and



(4)

such Indebtedness is incurred either by the issuer or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

    "Person" means any individual, corporation, partnership, joint venture, association, joint-stock issuer, trust, unincorporated organization, limited liability issuer or government or other entity.

    "Principals" means the Equity Sponsors and their respective Affiliates.

    "Pro Forma Cost Savings" means, with respect to any period, the reduction in costs and related adjustments that occurred during the four-quarter period or after the end of the four-quarter period and on or prior to the Calculation Date that (i) were directly attributable to an Asset Acquisition and calculated on a basis that is consistent with Regulation S-X under the Securities Act as in effect and applied as of the date of the Indenture or (ii) were actually implemented by the business that was the subject of any such Asset Acquisition within six months of the date of the Asset Acquisition and prior to the Calculation Date that are supportable and quantifiable by the underlying accounting records of such business and are described, as provided below, in an officer's certificate, as if in the case of each of clause (i) and (ii), all such reductions in costs had been effected as of the beginning of such period. Pro Forma Cost Savings described in clause (ii) above shall be set forth in reasonable specificity in a certificate delivered to the Trustee from the issuer's Chief Financial Officer and, in the case of Pro Forma Cost Savings in excess of $5.0 million per four-quarter period, such certificate shall be accompanied by a supporting opinion from an accounting firm of national standing.

    "Public Equity Offering" means an offer and sale of common stock (other than Disqualified Stock) of the issuer or the Parent pursuant to a registration statement that has been declared effective by the Commission pursuant to the Securities Act (other than a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee benefit plan of the issuer).

    "Purchase Money Note" means a promissory note evidencing a line of credit, or evidencing other Indebtedness owed to the issuer or any Restricted Subsidiary of the issuer in connection with a Qualified Receivables Transaction, which note shall be repaid from cash available to the maker of such note, other than amounts required to be established as reserves pursuant to agreement, amounts paid to investors in respect of interest, principal and other amounts owning to such investors and amounts paid in connection with the purchase of newly generated receivables.

    "Qualified Receivables Transaction" means any transaction or series of transactions that may be entered into by the issuer or by any Restricted Subsidiary of the issuer pursuant to which the issuer or any Restricted Subsidiary of the issuer may sell, convey or otherwise transfer to a Receivables Subsidiary, any accounts receivable (whether now existing or arising in the future) of the issuer or any Restricted Subsidiary of the issuer and any asset related thereto, including, without limitation, all collateral securing such accounts receivable, and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets that are customarily

130

transferred, or in respect of which security interests are customarily granted, in connection with an asset securitization transaction involving accounts receivable.

    "Recapitalization" means the Merger and all related transactions as described in the Prospectus.

    "Receivables Subsidiary" means a Subsidiary of the issuer (other than a Guarantor) that engages in no activities other than in connection with the financing of accounts receivables and that is designated by the Board of Directors of the issuer (as provided below) as a Receivables Subsidiary (a) no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which (i) is guaranteed by the issuer or any other Restricted Subsidiary of the issuer (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the issuer or any other Restricted Subsidiary of the issuer in any way other than pursuant to Standard Securitization Undertakings or (iii) subjects any property or asset of the issuer or any other Restricted Subsidiary of the issuer, directly or indirectly, contingently or otherwise to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings, (b) with which neither the issuer nor any other Restricted Subsidiary of the issuer has any material contract, agreement, arrangement or understanding (except in connection with a Purchase Money Note or Qualified Receivables Transaction) other than on terms no less favorable to the issuer or such other Restricted Subsidiary of the issuer than those that might be obtained at the time from Persons that are not Affiliates of the issuer, other than fees payable in the ordinary course of business in connection with servicing accounts receivable, and (c) to which neither the issuer nor any other Restricted Subsidiary of the issuer has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve a certain level of operating results. Any such designation by the Board of Directors of the issuer shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the issuer giving effect to such designation and an officers' certificate certifying, to the best of such officer's knowledge and belief after consulting with counsel, that such designation complied with the foregoing conditions.

    "Related Party" means:

(1)

any controlling stockholder, partner, member, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of any Principal; or



(2)

any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Principals and/or such other Persons referred to in the immediately preceding clause.

    "Restricted Investment" means an Investment other than a Permitted Investment.

    "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

"7.58% Notes" means the 7.58% Senior Promissory Notes due 2009 of Michael Foods.

    "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of the Indenture.

    "Standard Securitization Undertaking" means representations, warrantees, covenants and indemnities entered into by the issuer or any Restricted Subsidiary of the issuer that are reasonably customary in an accounts receivable transaction.

    "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations

131

to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

    "Subsidiary" means, with respect to any specified Person:

(1)

any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and



(2)

any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof).

    "Total Net Tangible Assets" means the total consolidated net assets, less good will and intangibles, of the issuer and its Restricted Subsidiaries, as shown on the most recent balance sheet of the issuer.

    "Unrestricted Subsidiary" means any Subsidiary (other than any Subsidiary in the Egg Products Division) of the issuer that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent that such Subsidiary:

(1)

has no Indebtedness other than Non-Recourse Debt;



(2)

is not party to any agreement, contract, arrangement or understanding with the issuer or any Restricted Subsidiary of the issuer unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the issuer;



(3)

is a Person with respect to which neither the issuer nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results;



(4)

is a guarantor or otherwise directly or indirectly provides credit support for any Indebtedness of the issuer or any of its Restricted Subsidiaries at the time of such designation unless such guarantee or credit support is released upon such designation; and



(5)

has at least one director on its Board of Directors that is not a director or executive officer of the issuer or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of the issuer or any of its Restricted Subsidiaries.

    Any designation of a Restricted Subsidiary of the issuer as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption "—Certain Covenants—Restricted Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the issuer as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock," the issuer shall be in default of such covenant.

    "Vestar" means Vestar Capital Partners, a New York general partnership.

132

    "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

    "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1)

the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by



(2)

the then outstanding principal amount of such Indebtedness.

    "Wholly Owned Restricted Subsidiary" of any specified Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries of such Person.

133

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

    The following is a summary of the material U.S. federal income tax consequences of participating in the exchange offer. This discussion is a general summary only and does not address all tax aspects of ownership of the notes that may be relevant to a prospective investor's particular circumstances. This discussion deals only with notes held as capital assets and does not deal with the consequences to special classes of holders of the notes, such as dealers in securities or currencies, life insurance companies, tax exempt entities, financial institutions, persons with a functional currency other than the U.S. dollar, or investors in pass-through entities such as partnerships. It does not deal with the effects of any arrangement entered into by a holder of notes that partially or completely hedges such notes, or otherwise holds notes as part of a synthetic security, "straddle," or other integrated investment. This summary also does not address any tax consequences arising under any state, municipal, foreign or other taxing jurisdiction. In general, this discussion assumes that a holder acquires notes at original issue and for their original "issue price." The discussion is based upon the Internal Revenue Code of 1986, as amended, and the regulations, rulings and judicial decisions thereunder as of the date of this prospectus, any of which may be repealed or modified in a manner resulting in U.S. federal income tax consequences that differ from those described below.

    The exchange of notes for registered notes (with substantially identical terms) in the exchange offer should not be a taxable event for U.S. federal income tax purposes, and a holder of notes should have the same tax basis and holding period in such registered notes that the such holder had in the notes. The U.S. federal income tax consequences of holding and disposing of such registered notes should be the same as those described in this prospectus for the notes.

134

PLAN OF DISTRIBUTION

    Each participating broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a participating broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired as a result of market-making activities or other trading activities. We have agreed that for a period of 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any participating broker-dealer for use in connection with any such resale.

    We will not receive any proceeds from any sales of the exchange notes by participating broker-dealers. Exchange notes received by participating broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such participating broker-dealer and/or the purchasers of any such exchange notes. Any participating broker-dealer that resells the exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a participating broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

    For a period of 180 days after the expiration date we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any participating broker-dealer that requests such documents in the letter of transmittal.

    Prior to the exchange offer, there has not been any public market for the outstanding notes. The outstanding notes have not been registered under the Securities Act and will be subject to restrictions on transferability to the extent that they are not exchanged for exchange notes by holders who are entitled to participate in this exchange offer. The holders of outstanding notes, other than any holder that is our affiliate within the meaning of Rule 405 under the Securities Act, who are not eligible to participate in the exchange offer are entitled to certain registration rights, and we are required to file a shelf registration statement with respect to their outstanding notes. The exchange notes will constitute a new issue of securities with no established trading market. We do not intend to list the exchange notes on any national securities exchange or to seek the admission thereof to trading in the National Association of Securities Dealers Automated Quotation System. In addition, such market-making activity will be subject to the limits imposed by the Securities Act and the Exchange Act and may be limited during the exchange offer and the pendency of the shelf registration statements. Accordingly, no assurance can be given that an active public or other market will develop for the exchange notes or as to the liquidity of the trading market for the exchange notes. If a trading market does not develop or is not maintained, holders of the exchange notes may experience difficulty in reselling the exchange notes or may be unable to sell them at all. If a market for the exchange notes develops, any such market may be discontinued at any time.

135

LEGAL MATTERS

    The validity of the exchange notes and the guarantees and other legal matters, including the tax-free nature of the exchange, will be passed upon on our behalf by Kirkland & Ellis, a partnership that includes professional corporations, Chicago, Illinois. Certain partners of Kirkland & Ellis are members of a limited liability company that is an investor in Vestar Capital Partners IV, L.P. In addition, certain partners of Kirkland & Ellis are partners in Randolph Street Partners, which acquired less than 1.0% of the Class A Units of M-Foods Investors, LLC in connection with the acquisition. Kirkland & Ellis has from time to time represented, and may continue to represent, Vestar Capital Partners and certain of its affiliates in connection with certain legal matters.

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

    The consolidated financial statements of Michael Foods, Inc. included in this prospectus for the fiscal years ended December 31, 1998, 1999 and 2000 and the three months ended March 31, 2001 have been audited by Grant Thornton LLP, independent certified public accountants, as indicated in their report with respect thereto.

    The financial statements of M-Foods Dairy, LLC included in this prospectus for the fiscal years ended December 31, 1998, 1999 and 2000 and the three months ended March 31, 2001 have been audited by Grant Thornton, LLP, independent certified public accountants, as indicated in their report thereto.

    The financial statements of M-Foods Dairy TXCT, LLC included in this prospectus for the fiscal years ended December 31, 1998, 1999 and 2000 and the three months ended March 31, 2001 have been audited by Grant Thornton, LLP, independent certified public accountants, as indicated in their report thereto.

AVAILABLE INFORMATION

    We are not currently subject to the periodic reporting and other informational requirements of the Exchange Act. We have agreed that, whether or not we are required to do so by the rules and regulations of the SEC, for so long as any of the notes remain outstanding, we will furnish to the holders of the notes and file with the SEC, unless the SEC will not accept the filing, following the consummation of the exchange offer: (1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if we were required to file those forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report by our certified independent accountants and (2) all current reports that would be required to be filed with the SEC on Form 8-K if we were required to file such reports. You may read and copy any reports we file with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. All reports filed with the SEC will be available on the SEC's web site at http://www.sec.gov. In addition, for so long as any of the notes remain outstanding, we have agreed to make available to any prospective purchaser of the notes or beneficial owner of the notes in connection with any sale of the notes, the information required by Rule 144A(d)(4) under the Securities Act.

136

INDEX TO FINANCIAL STATEMENTS

	Page
MICHAEL FOODS, INC.
Report of Independent Certified Public Accountants	F-1-1
Consolidated Balance Sheets	F-1-3
Consolidated Statements of Earnings	F-1-4
Consolidated Statements of Shareholders' Equity	F-1-5
Consolidated Statements of Cash Flows	F-1-6
Notes to Consolidated Financial Statements	F-1-7
Quarterly Financial Data (Unaudited)	F-1-38
M-FOODS DAIRY, LLC
Report of Independent Certified Public Accountants	F-2-1
Balance Sheets	F-2-3
Statements of Operating Unit Income	F-2-4
Statements of Unit Holder and Operating Unit Equity	F-2-5
Statements of Operating Unit Cash Flows	F-2-6
Notes to Financial Statements	F-2-7
M-FOODS DAIRY, TXCT, LLC
Report of Independent Certified Public Accountants	F-3-1
Balance Sheets	F-3-3
Statements of Operating Unit Operations	F-3-4
Statements of Unit Holder and Operating Unit Equity	F-3-5
Statements of Operating Unit Cash Flows	F-3-6
Notes to Financial Statements	F-3-7

F–1

Report of Independent Certified Public Accountants

BOARD OF DIRECTORS
MICHAEL FOODS, INC.

    We have audited the accompanying consolidated balance sheet of Michael Foods, Inc. and subsidiaries (a wholly-owned subsidiary of M-Foods Holdings, Inc.) as of April 1, 2001. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit.

    We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation. We believe our audit provides a reasonable basis for our opinion.

    In our opinion, the consolidated balance sheet referred to above presents fairly, in all material respects, the financial position of Michael Foods, Inc. and subsidiaries (a wholly-owned subsidiary of M-Foods Holdings, Inc.) as of April 1, 2001, in conformity with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

May 15, 2001

F–1–1

Report of Independent Certified Public Accountants

     BOARD OF DIRECTORS
MICHAEL FOODS, INC.

    We have audited the accompanying consolidated balance sheets of Michael Foods, Inc. and subsidiaries (the "Predecessor") as of December 31, 2000 and 1999 and March 31, 2001 and the related consolidated statements of earnings, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2000 and the three months ended March 31, 2001. These financial statements are the responsibility of the Predecessor's management. Our responsibility is to express an opinion on these financial statements based on our audits.

    We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion.

    In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Michael Foods, Inc. and subsidiaries as of December 31, 2000 and 1999 and March 31, 2001 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000 and the three months ended March 31, 2001, in conformity with accounting principles generally accepted in the United States of America.

    We have also audited Schedule II for each of the three years in the period ended December 31, 2000. In our opinion, this schedule, when considered in relation to the basic financial statement taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

May 15, 2001

F–1–2

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

CONSOLIDATED BALANCE SHEETS

				Company			Predecessor
										December 31,
				April 1, 2001 (Inception)			March 31, 2001
										2000			1999
ASSETS
CURRENT ASSETS
	Cash and equivalents			$	4,270,000		$	4,270,000		$	4,421,000		$	4,961,000
	Accounts receivable, less allowances				120,886,000			120,670,000			112,767,000			92,493,000
	Inventories				82,341,000			80,678,000			75,734,000			71,197,000
	Prepaid expenses and other				7,586,000			4,510,000			4,803,000			4,604,000
			Total current assets		215,083,000			210,128,000			197,725,000			173,255,000
PROPERTY, PLANT AND EQUIPMENT — AT COST
	Land				4,691,000			4,106,000			4,106,000			4,104,000
	Buildings and improvements				87,040,000			143,071,000			143,160,000			133,778,000
	Machinery and equipment				218,685,000			387,284,000			377,911,000			357,724,000
					310,416,000			534,461,000			525,177,000			495,606,000
	Less accumulated depreciation				—			252,921,000			243,360,000			208,807,000
					310,416,000			281,540,000			281,817,000			286,799,000
OTHER ASSETS
	Goodwill, net				354,533,000			113,370,000			114,255,000			116,729,000
	Deferred financing costs				20,835,000			—			—			—
	Joint ventures and other assets				9,434,000			14,683,000			19,107,000			21,134,000
					384,802,000			128,053,000			133,362,000			137,863,000
				$	910,301,000		$	619,721,000		$	612,904,000		$	597,917,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
	Current maturities of long-term debt			$	13,850,000		$	2,824,000		$	2,865,000		$	3,130,000
	Accounts payable				59,655,000			59,655,000			54,212,000			47,009,000
	Accrued liabilities
		Compensation			9,594,000			9,594,000			11,795,000			13,143,000
		Insurance			7,986,000			7,986,000			7,422,000			7,229,000
		Customer programs			18,889,000			18,889,000			19,307,000			20,999,000
		Income taxes			3,419,000			3,419,000			10,622,000			11,805,000
		Transaction costs			3,535,000			24,831,000			—			—
		Other			9,492,000			9,471,000			12,874,000			18,176,000
			Total current liabilities		126,420,000			136,669,000			119,097,000			121,491,000
LONG-TERM DEBT, less current maturities					588,426,000			189,376,000			195,944,000			175,404,000
DEFERRED INCOME TAXES					48,795,000			36,525,000			39,130,000			36,423,000
COMMITMENTS AND CONTINGENCIES					—			—			—			—
MINORITY INTEREST					475,000			—			—			—
SHAREHOLDERS' EQUITY
	Common stock				—			184,000			183,000			203,000
	Additional paid-in capital				146,762,000			64,585,000			58,506,000			102,777,000
	Retained earnings				—			194,243,000			201,361,000			162,577,000
	Accumulated other comprehensive income				(577,000	)		(1,861,000	)		(1,317,000	)		(958,000	)
					146,185,000			257,151,000			258,733,000			264,599,000
				$	910,301,000		$	619,721,000		$	612,904,000		$	597,917,000

The accompanying notes are an integral part of these statements.

F–1–3

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

CONSOLIDATED STATEMENTS OF EARNINGS
(000's, except per share amounts)

			Predecessor
			Three months ended March 31,					Years ended December 31,
			2001			2000		2000		1999		1998
			(Unaudited)
Net sales			$	275,627		$	251,926	$	1,080,601	$	1,053,272	$	1,020,484
Cost of sales				227,707			205,071		889,138		860,256		847,383
		Gross profit		47,920			46,855		191,463		193,016		173,101
Selling, general and administrative expenses				27,376			27,956		104,657		106,686		93,548
Transaction expenses				11,050			—		—		—		—
	Operating profit			9,494			18,899		86,806		86,330		79,553
Interest expense, net				3,293			2,950		13,206		11,664		10,136
	Earnings before income taxes and extraordinary item			6,201			15,949		73,600		74,666		69,417
Income tax expense				2,430			6,460		28,890		30,610		29,160
	Earnings before extraordinary item			3,771			9,489		44,710		44,056		40,257
Extraordinary item — early extinguishment of debt, net of taxes				(9,424	)		—		—		—		—
		NET EARNINGS (LOSS)	$	(5,653	)	$	9,489	$	44,710	$	44,056	$	40,257
NET EARNINGS (LOSS) PER SHARE:
	Basic:
		Earnings before extraordinary item	$	0.20		$	0.47	$	2.36	$	2.15	$	1.86
		Extraordinary item		(0.51	)		—		—		—		—
		Net earnings (loss)	$	(0.31	)	$	0.47	$	2.36	$	2.15	$	1.86
	Diluted:
		Earnings before extraordinary item	$	0.20		$	0.47	$	2.33	$	2.12	$	1.83
		Extraordinary item		(0.50	)		—		—		—		—
		Net earnings (loss)	$	(0.30	)	$	0.47	$	2.33	$	2.12	$	1.83
Weighted average shares outstanding
		Basic		18,333			20,158		18,950		20,500		21,642
		Diluted		18,719			20,371		19,192		20,750		21,980

The accompanying notes are an integral part of these statements.

F–1–4

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

		COMMON STOCK
													ACCUMULATED OTHER COMPREHENSIVE INCOME
		SHARES ISSUED		AMOUNT			ADDITIONAL PAID-IN CAPITAL			RETAINED EARNINGS						TOTAL SHAREHOLDERS' EQUITY
Predecessor
Balance at January 1, 1998		21,816,098		$	218,000		$	140,188,000		$	88,840,000		$	—		$	229,246,000
Repurchase of common stock		(982,700	)		(10,000	)		(24,058,000	)		—			—			(24,068,000	)
Incentive plan stock compensation		24,532			1,000			613,000			—			—			614,000
Stock options exercised, net of shares surrendered for exercise price and income taxes		237,137			2,000			2,099,000			—			—			2,101,000
Tax benefit from stock options exercised		—			—			1,029,000			—			—			1,029,000
Net earnings		—			—			—			40,257,000			—			40,257,000
Dividends ($.23 per share)		—			—			—			(5,030,000	)		—			(5,030,000	)
Balance at December 31, 1998		21,095,067			211,000			119,871,000			124,067,000			—			244,149,000
Repurchase of common stock		(920,100	)		(10,000	)		(18,918,000	)		—			—			(18,928,000	)
Incentive plan stock compensation		32,989			1,000			617,000			—			—			618,000
Stock options exercised, net of shares surrendered for exercise price and income taxes		93,668			1,000			837,000			—			—			838,000
Tax benefit from stock options exercised		—			—			370,000			—			—			370,000
Net earnings		—			—			—			44,056,000			—			44,056,000
Foreign currency translation adjustment loss		—			—			—			—			(958,000	)		(958,000	)
	Comprehensive income	—			—			—			—			—			43,098,000
Dividends ($.27 per share)		—			—			—			(5,546,000	)		—			(5,546,000	)
Balance at December 31, 1999		20,301,624			203,000			102,777,000			162,577,000			(958,000	)		264,599,000
Repurchase of common stock		(2,109,400	)		(21,000	)		(46,104,000	)		—			—			(46,125,000	)
Incentive plan stock compensation		40,890			—			876,000			—			—			876,000
Stock options exercised, net of shares surrendered for exercise price and income taxes		56,370			1,000			650,000			—			—			651,000
Tax benefit from stock options exercised		—			—			307,000			—			—			307,000
Net earnings		—			—			—			44,710,000			—			44,710,000
Foreign currency translation adjustment loss		—			—			—			—			(359,000	)		(359,000	)
	Comprehensive income	—			—			—			—			—			44,351,000
Dividends ($.31 per share)		—			—			—			(5,926,000	)		—			(5,926,000	)
Balance at December 31, 2000		18,289,484			183,000			58,506,000			201,361,000			(1,317,000	)		258,733,000
Incentive plan stock compensation		39,703			—			1,169,000			—			—			1,169,000
Stock options exercised, net of shares surrendered for exercise price and income taxes		36,543			1,000			545,000			—			—			546,000
Tax benefit from stock options exercised		—			—			4,055,000			—			—			4,055,000
Stock options extended		—			—			310,000			—			—			310,000
Net loss		—			—			—			(5,653,000	)		—			(5,653,000	)
Foreign currency translation adjustment income		—			—			—			—			1,088,000			1,088,000
Futures loss		—			—			—			—			(1,632,000	)		(1,632,000	)
Comprehensive income (loss)		—			—			—			—			—			(6,197,000	)
Dividends ($.08 per share)		—			—			—			(1,465,000	)		—			(1,465,000	)
Balance at March 31, 2001		18,365,730		$	184,000		$	64,585,000		$	194,243,000		$	(1,861,000	)	$	257,151,000
Company
Balance at March 31, 2001		18,365,730		$	184,000		$	64,585,000		$	194,243,000		$	(1,861,000	)	$	257,151,000
Merger with M-Foods Holdings, Inc.		(18,365,730	)		(184,000	)		(64,585,000	)		(194,243,000	)		1,861,000			(257,151,000	)
Proceeds from issuance of common stock		1,000			—			213,393,000			—			—			213,393,000
Deemed dividend to continuing shareholders		—			—			(66,631,000	)		—			—			(66,631,000	)
Allocation of deemed dividend to Accumulated Other Comprehensive Income		—			—			—			—			(577,000	)		(577,000	)
Balance at April 1, 2001		1,000		$	—		$	146,762,000		$	—		$	(577,000	)	$	146,185,000

The accompanying notes are an integral part of these statements.

F–1–5

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

				Predecessor
				Three months ended March 31,						Years ended December 31,
				2001			2000			2000			1999			1998
							(Unaudited)
Cash flows from operating activities:
	Net earnings (loss)			$	(5,653,000	)	$	9,489,000		$	44,710,000		$	44,056,000		$	40,257,000
Adjustments to reconcile net earnings to net cash provided by operating activities:
		Depreciation			11,114,000			10,486,000			42,355,000			37,537,000			32,105,000
		Amortization			1,421,000			1,408,000			5,628,000			5,027,000			3,699,000
		Deferred income taxes			(1,547,000	)		505,000			2,707,000			1,023,000			1,860,000
		Tax benefit of stock options exercised			4,055,000			39,000			307,000			370,000			1,029,000
		Changes in operating assets and liabilities:
			Accounts receivable		(7,903,000	)		926,000			(20,274,000	)		5,146,000			(14,144,000	)
			Inventories		(4,944,000	)		(7,201,000	)		(4,537,000	)		3,053,000			(5,321,000	)
			Prepaid expenses and other		293,000			481,000			(199,000	)		(720,000	)		(2,208,000	)
			Accounts payable		5,443,000			3,355,000			7,203,000			2,633,000			(2,534,000	)
			Accrued liabilities		11,737,000			(3,064,000	)		(8,815,000	)		9,528,000			14,167,000
Net cash provided by operating activities					14,016,000			16,424,000			69,085,000			107,653,000			68,910,000
Cash flows from investing activities:
	Capital expenditures				(10,837,000	)		(8,131,000	)		(37,373,000	)		(74,125,000	)		(64,777,000	)
	Joint ventures and other assets				3,888,000			14,000			(1,127,000	)		(19,405,000	)		794,000
Net cash used in investing activities					(6,949,000	)		(8,117,000	)		(38,500,000	)		(93,530,000	)		(63,983,000	)
Cash flows from financing activities:
	Payments on long-term debt				(52,109,000	)		(37,537,000	)		(171,509,000	)		(188,075,000	)		(58,221,000	)
	Proceeds from long-term debt				45,500,000			43,600,000			191,784,000			200,502,000			78,300,000
	Repurchase of common stock				—			(13,470,000	)		(46,125,000	)		(18,928,000	)		(24,068,000	)
	Extension of stock options				310,000			—			—			—			—
	Proceeds from issuance of common stock				546,000			86,000			651,000			838,000			2,101,000
	Dividends				(1,465,000	)		(1,421,000	)		(5,926,000	)		(5,546,000	)		(5,030,000	)
Net cash used in financing activities					(7,218,000	)		(8,742,000	)		(31,125,000	)		(11,209,000	)		(6,918,000	)
Net increase (decrease) in cash and equivalents					(151,000	)		(435,000	)		(540,000	)		2,914,000			(1,991,000	)
Cash and equivalents at beginning of period					4,421,000			4,961,000			4,961,000			2,047,000			4,038,000
Cash and equivalents at end of period				$	4,270,000		$	4,526,000		$	4,421,000		$	4,961,000		$	2,047,000
Supplemental disclosures of cash flow information:
Cash paid during the periods for:
	Interest			$	5,945,000		$	5,254,000		$	13,484,000		$	12,895,000		$	11,414,000
	Income taxes				1,025,000			1,653,000			27,225,000			23,663,000			20,415,000

The accompanying notes are an integral part of these statements.

F–1–6

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A—MERGER AGREEMENT

    On December 21, 2000, Michael Foods, Inc. (the "Company", "we", "our") entered into a definitive agreement providing for the acquisition of Michael Foods, Inc. and its subsidiaries ("the Predecessor") by an investor group comprised of a management group led by our Chairman, President and Chief Executive Officer, Gregg A. Ostrander, affiliates of Jeffrey Michael, a member of the Michael Foods, Inc. Board of Directors, and affiliates of two private equity investment firms, Vestar Capital Partners and Goldner Hawn Johnson & Morrison Incorporated, collectively, M-Foods Investors, LLC. M-Foods Investors, LLC formed M-Foods Holdings, Inc. to complete the acquisition. Following the acquisition transaction (the "Merger"), the Company is a wholly owned subsidiary of M-Foods Holdings, Inc., which is a non-operating holding company and wholly owned by M-Foods Investors, LLC. This Merger was completed on April 10, 2001. Under the terms of the Merger agreement, all outstanding shares of the Predecessor's common stock were converted into the right to receive $30.10 per share in cash or value equal thereto, and all outstanding stock options were converted into the right to receive, in cash, $30.10 per share reduced by the exercise price per share for all shares subject to such stock options. The purchase of the outstanding shares was financed through new equity financing of approximately $175,000,000, a senior secured credit facility of up to $470,000,000 at market-based variable interest rates (effective rate of 7.5% at April 10, 2001), and $200,000,000 of senior subordinated notes at an 11.75% annual interest rate.

    Simultaneous with the close of the Merger, the Company contributed the assets of its Dairy division into two limited liability corporations, M-Foods Dairy, LLC and M-Foods Dairy TXCT, LLC (collectively, the "Dairy LLCs") and in exchange received voting preferred and voting common units from these entities equal to the fair value of the net assets contributed, which collectively were approximately $40,000,000. The preferred units issued to the Company have an annual 10% preferred return guarantee and represent 100% of the preferred units issued and outstanding. In addition, the Company received 5% of the common units issued by each of the entities with the common units held by the Company representing 100% of the voting common units issued and outstanding. These common units have a stated value of $25,000. The remaining 95% of the common units, which are non-voting, are owned by M-Foods Dairy Holdings, LLC, which is owned by the same owners or affiliates of such owners, in the same proportion, as the unit holders of M-Foods Investors, LLC. The common unit interests owned by M-Foods Dairy Holdings, LLC were issued in exchange for $475,000 and is reflected as minority interest in the accompanying consolidated balance sheet as of April 1, 2001.

    Following the Merger, Michael Foods, Inc. became an indirect wholly owned subsidiary of M-Foods Investors, LLC.

    The Merger has been accounted for as a purchase in accordance with Accounting Principles Board Opinion 16, Business Combinations and EITF 88-16, Basis in Leveraged Buyout Transactions. Accordingly, the acquired assets and liabilities have been recorded at fair value for the interests acquired by new investors and at the carryover basis for continuing investors. As a result, the assets and liabilities are assigned new values, which are part Predecessor cost and part fair value in the same proportions as the carryover basis of the residual interests retained by the continuing management investors and continuing affiliate investors of the Michael family and the new interests acquired by the new investors. The amount of carryover basis is reflected as a deemed dividend and was $66,631,000.

    For ease of presentation, the Merger has been reflected in the accompanying balance sheet as if it had occurred on April 1, 2001. Management determined that no material transactions occurred during

F–1–7

the period from April 1 through April 9, 2001. The Company's consolidated balance sheet has been presented on a comparative basis with the Predecessor's historical consolidated balance sheets prior to the date of Merger. Different bases of accounting have been used to prepare the Company and Predecessor consolidated financial statements. In the future, the primary differences will relate to additional interest expense for new debt and depreciation and amortization of fixed assets and other intangible assets recorded at fair value at the date of Merger.

    For accounting purposes the Merger is considered a leveraged buyout. The total purchase price of approximately $562,881,000 was allocated to the acquired assets and assumed liabilities based on their fair values at April 1, 2001, net of the deemed dividend. The allocation of the purchase price is as follows:

Working capital	$	88,663,000
Property, plant & equipment		310,416,000
Other assets		30,269,000
Goodwill		354,533,000
Long-term debt		588,426,000
Other liabilities		49,270,000

    These allocations were based primarily on a preliminary valuation by a third party appraisal firm. Accordingly, the allocations related to property, plant and equipment and intangible assets, including goodwill, could change when the final valuation report is received. However, final allocations are not expected to vary significantly from the allocations indicated above.

    In connection with the Merger, the Predecessor incurred transaction expenses of approximately $26,600,000 associated with the Merger and change-in-control provisions of various compensation, debt and other agreements, which have been reflected in the Predecessor financial statements. These transaction expenses include the extraordinary item related to the early extinguishment of debt resulting from the change-in-control, which is described in Note C. In addition, the Company incurred other merger related and debt issuance costs of approximately $40,000,000, which have been capitalized as direct costs of the Merger and deferred financing costs in the Company's consolidated balance sheet.

    The following unaudited pro forma revenue and net earnings for the year ended December 31, 2000 and for the three months ended March 31, 2001 are derived from the application of pro forma adjustments to the Predecessor historical statements of earnings, and assumes the Merger had occurred on January 1, 2000:

	Three months ended March 31, 2001		Year ended December 31, 2000
Revenue	$	275,627,000	$	1,080,601,000
Net earnings before extraordinary item		2,230,000		11,977,000

F–1–8

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company

    The Company is a diversified producer and distributor of food products in four areas—egg products, refrigerated distribution, dairy products, and potato products. The Company is the largest producer of processed egg products in the United States, and is a leading producer and distributor of specialty potato and dairy products to the foodservice, retail and industrial markets. The Company also distributes refrigerated grocery items, primarily cheese and other dairy items, to the retail grocery market in the central United States.

    The accounting policies of the Predecessor have been adopted by the Company.

Principles of Consolidation and Fiscal Year

    The consolidated financial statements include the accounts of Michael Foods, Inc. and all majority owned subsidiaries in which it has control. All significant inter-company accounts and transactions have been eliminated. The Company's investments in non-controlled entities in which it has the ability to exercise significant influence over operating and financial policies are accounted for by the equity method. The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Saturday nearest to December 31, but for clarity of presentation, describes all periods as if the year end is December 31. The Predecessor's years ended December 31, 2000, 1999 and 1998 each consisted of fifty-two weeks. The Predecessor's three month periods ended March 31, 2001 and 2000 each consisted of 13 weeks.

Basis of Presentation

    The accompanying consolidated financial statements as of December 31, 2000 and 1999 and for each of the three years ended and the consolidated financial statements as of and for the three months ended March 31, 2001 have been taken from the historical books and records of the Predecessor. The accompanying unaudited consolidated financial statements and footnote information for the three-months ended March 31, 2000 have been prepared in accordance with Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") using the historical cost basis of assets and liabilities of the Predecessor. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the results of operations and cash flows for the three months ended March 31, 2000. The historical results of the Predecessor for the three months ended March 31, 2001 are not necessarily indicative of the results of the Company for a full year period.

Use of Estimates

    Preparation of the Company's consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related revenues and expenses and disclosure about contingent assets and liabilities at the date of the financial statements. Actual results could differ from the estimates used by management.

F–1–9

Cash and Equivalents

    The Company considers all highly liquid temporary investments with original maturities of three months or less to be cash equivalents.

Inventories

    Inventories, other than flocks, are stated at the lower of cost (determined on a first-in, first-out basis) or market. Flock inventory represents the cost of purchasing and raising flocks to laying maturity, at which time their cost is amortized to operations over their expected useful lives of generally one to two years. Finished goods inventory at April 1, 2001 is recorded at estimated selling prices, less cost of disposal and a selling profit allowance. Inventory values at April 1, 2001 for flock and raw material inventories are valued at Predecessor cost which approximates replacement costs. Work-in-process inventories at April 1, 2001 were not material and have been recorded at Predecessor cost.

    Inventories consist of the following:

	Company		Predecessor
					December 31,
	April 1, 2001		March 31, 2001
					2000		1999
			(000's)
Raw materials and supplies	$	15,913	$	15,913	$	15,107	$	15,720
Work in process and finished goods		45,794		44,131		41,366		35,447
Flocks		20,634		20,634		19,261		20,030
	$	82,341	$	80,678	$	75,734	$	71,197

    The Company purchases exchange traded futures contracts to manage its exposure to changes in grain prices, primarily corn and soybean meal, which are the main components of chicken feed. Such contracts are cash flow hedges of the Company's firm purchase commitments and anticipated production requirements, as they reduce the Company's exposure to changes in the cash price of grain. These contracts generally extend for less than one year. Prior to January 1, 2001, gains and losses on futures contracts were deferred and recognized as an adjustment to the cost of the related inventory item, with the ultimate recognition in cost of sales when the finished egg products are sold. The cost or benefit of contracts closed prior to the execution of the underlying purchase is deferred until the anticipated grain purchase occurs. Effective January 1, 2001, the Predecessor adopted Financial Accounting Standard ("FAS") No. 133 and related pronouncements. See Newly Adopted Accounting Standards.

Property, Plant and Equipment

    Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally on the straight-line basis. Estimated service lives range from 10-40 years for buildings and improvements and 3-10 years for machinery and equipment. Accelerated and straight-line methods are used for income tax purposes. The Predecessor capitalized $224,000, $1,054,000 and $1,048,000 of interest costs during the years ended December 31, 2000, 1999 and 1998 and $49,000 during the three months ended March 31, 2000 relating to the construction and

F–1–10

installation of property, plant and equipment. No interest was capitalized during the three months ending March 31, 2001.

Goodwill

    The Predecessor's acquisitions have been accounted for as purchases and the excess of the total acquisition costs over the fair value of the net assets acquired were recorded as goodwill. Goodwill is amortized on a straight-line basis over 40 years. Predecessor accumulated amortization was $23,549,000 and $20,106,000 at December 31, 2000 and 1999 and $24,443,000 at March 31, 2001. At April 1, 2001, goodwill was recorded for the excess of the purchase price of the Merger over the fair value of net assets acquired. The Company expects to amortize its goodwill over a 40 year period. Goodwill has been assigned to each of the operating subsidiaries down to the reporting level. The Company evaluates its goodwill annually to determine potential impairment by comparing its carrying value to the undiscounted future cash flows of the related assets.

    In June 2001, the FASB announced they intend to issue two statements in late June 2001: Business Combinations and Goodwill and Intangible Assets. These pronouncements are expected to, among other things, eliminate the pooling-of-interest method of accounting for business combinations and eliminate the amortization of goodwill for financial reporting purposes. However, goodwill will then be tested for impairment annually or whenever an impairment indicator arises. The elimination of goodwill amortization is expected to be effective for the Company beginning in January 2002. The terms and conditions of these statements could change significantly before they are issued, including implementation guidelines and effective dates.

Deferred Financing Costs

    Deferred financing costs are amortized using the interest method over the lives of the respective debt agreements. These costs arose at the time of the Merger.

Foreign Joint Ventures and Currency Translation

    The Company has investments in foreign joint ventures in Europe and Canada related to its Egg Products Division. These investments are accounted for using the equity method of accounting. The financial statements for these entities are measured in their local currency and then translated into U.S. dollars. Their balance sheet accounts are translated at the balance sheet date using the current exchange rate on that date and their operating results are translated using the average rates prevailing throughout the reporting period. Accumulated translation gains or losses are recorded in the shareholders' equity section of the balance sheet and are included as a component of comprehensive income in the statement of shareholders' equity.

Revenue Recognition

    Sales are recognized when goods are shipped to customers and are recorded net of estimated customer programs.

F–1–11

Stock-Based Compensation

    The Company utilizes the intrinsic value method of accounting for its stock-based employee compensation plans. Pro forma information related to the fair value method of accounting is provided in Note H.

Net Earnings Per Share

    The Predecessor basic net earnings per share was computed by dividing net earnings by the weighted average number of outstanding common shares. Diluted net earnings per share was computed by dividing net earnings by the weighted average number of outstanding common shares and common share equivalents relating to stock options, when dilutive. Options to purchase 661,411, 717,588 and 12,060 shares of common stock with weighted average exercise prices of $24.90, $24.90 and $29.39 were outstanding during the years ended December 31, 2000, 1999 and 1998 and 834,070 shares of common stock with a weighted average exercise price of $24.70 were outstanding during the three months ended March 31, 2000, but were excluded from the computation of common share equivalents because they were anti-dilutive. There were no anti-dilutive options to purchase shares of common stock outstanding during the three month period ended March 31, 2001. Earnings per share information for the Company is not presented because its shares are not publicly traded.

Newly Adopted Accounting Standards

    Effective January 1, 2001, the Predecessor adopted Statement of Financial Accounting Standard No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended. This standard establishes accounting and reporting standards for derivative financial instruments and hedge activities. Certain of our segments, most notably our Egg Products division, hold derivative instruments, such as exchange traded corn and soybean meal grain futures that we believe provide an economic hedge of future transactions and are designated as cash flow hedges. As the commodities being hedged are grain ingredients fed to the Company's flocks, the changes in the market value of such contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in price movements of these feed components. The amount of hedge ineffectiveness was immaterial for the three months ended March 31, 2001.

    The Company actively monitors its exposure to commodity price risks and uses derivative commodity instruments to manage the impact of certain of these risks. The Company uses derivatives only for the purpose of managing risks associated with underlying exposures, primarily exchange-traded futures contracts to manage its exposure to changes in corn and soybean meal prices. The Company's commodity contracts are cash flow hedges of firm purchase commitments and anticipated production requirements, as they reduce the Company's exposure to changes in the cash price of grain and generally extend for less than one year. The Company does not trade or use instruments with the objective of earning financial gains on the commodity price, nor does it use instruments where there are not underlying exposures.

    Gains and losses on futures contracts are deferred as a component of Accumulated Other Comprehensive Income (Loss) ("AOCI") in the Company's equity section of the balance sheet and recognized as an adjustment to the cost of the related inventory item, and subsequently recognized in cost of sales when the associated products are sold. The cost or benefit of contracts closed prior to the

F–1–12

execution of the underlying purchase is deferred until the anticipated grain purchase occurs. As a result of the volatility of the grain markets, deferred gains and losses in AOCI may fluctuate until the related contract is closed.

    The cumulative effect of adopting the new derivative accounting standard at January 1, 2001 was not significant and has been included in futures losses as a component of AOCI for the three months ended March 31, 2001. Initially, upon adoption of the new derivative accounting standard, and prospectively as required by the standard on the date new derivatives are entered into, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking the hedge. This process includes specific identification of the hedging instrument and the hedge transaction, the nature of the risk being hedged and how the hedging instrument's effectiveness will be assessed. Both at the inception of the hedge and on an ongoing basis, the Company assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. If it is determined that a derivative ceases to be a highly effective hedge or the forecast transaction being hedged will no longer occur, the Company will discontinue hedge accounting, and any gains or losses on the derivative instrument would be recognized in earnings during the period it no longer qualifies as a hedge. No such instances occurred in the three months ended March 31, 2001. As of the date of the Merger, all hedge positions were recorded at their fair values and accumulated gains or losses were eliminated except for the portion related to the carryover basis of continuing investors.

Advertising

    Advertising costs are expensed as incurred. Advertising expense was $9,132,000, $8,616,000 and $6,277,000 during the years ended December 31, 2000, 1999 and 1998 and $3,011,000 and $3,009,000 during the three months ended March 31, 2001 and 2000.

Reclassifications

    Certain 2000, 1999 and 1998 amounts have been reclassified to conform to the March 31, 2001 presentation.

F–1–13

NOTE C—LONG-TERM DEBT

    Long-term debt of the Predecessor consisted of the following:

			December 31,
	March 31, 2001
			2000		1999
Revolving lines of credit (a)	$	59,000,000	$	65,500,000	$	42,300,000
7.58% senior promissory notes		125,000,000		125,000,000		125,000,000
Other		8,200,000		8,309,000		11,234,000
		192,200,000		198,809,000		178,534,000
Less current maturities		2,824,000		2,865,000		3,130,000
	$	189,376,000	$	195,944,000	$	175,404,000

(a)

At December 31, 2000 and March 31, 2001, the Predecessor had unsecured revolving lines of credit with its principal banks for $100,000,000. These lines were due February 2002 with interest at the principal bank's reference rate, or at Eurodollar rates at the Predecessor's option (effective rates of 7.46% and 5.63% at December 31, 2000 and March 31, 2001).

    In connection with the Merger and change in control of the Predecessor, the senior promissory notes were retired, which resulted in the Predecessor incurring a mandatory early retirement premium. The early retirement premium payment was approximately $15,513,000 and is shown, net of the related tax benefit of $6,089,000, in the Predecessor's consolidated statement of earnings as an extraordinary item in the three months ended March 31, 2001.

    Concurrent with the Merger, the Company repaid the Predecessor's outstanding revolving line of credit and senior promissory notes and entered into a new senior credit facility, which consists of a $100,000,000 revolving credit facility ($24,076,000 outstanding at April 1, 2001), a $100,000,000 senior term loan A, both of which are due April 2007, and a $270,000,000 senior term loan B due April 2008. The Company's senior credit facility will bear interest at a floating base rate plus an applicable margin. The base rate is based on the higher of Bank of America prime rate and the federal funds effective rate plus .50%, or, at the Company's option, the LIBOR rate. The initial applicable interest rates is 2.00% over the prime rate or federal funds base rate or 3.00% over the LIBOR base rate. The Company's effective interest rate on these senior secured credit facilities at the date of the merger was approximately 7.5% based upon the LIBOR rate in effect at that time. In addition, the Company also issued $200,000,000 of 11.75% senior subordinated notes due March 2011, which are subordinated to the senior credit facility.

    The revolving credit and senior term loans are secured by substantially all of the assets of the Company. The revolving credit loan, the A and B term loans and senior subordinated notes contain restrictive covenants, including restrictions on dividends and distributions to shareholders and unit holders, a minimum fixed charge coverage ratio, a maximum leverage ratio, and a minimum interest coverage ratio, in addition to limitations on additional indebtedness and liens. Covenants related to operating performance are primarily based on earnings before income tax, interest expense and depreciation and amortization expense. In addition, the revolving credit, A and B term loans and senior subordinated note agreements also include guarantees by substantially all of the Company's domestic

F–1–14

subsidiaries. The fair value of the Company's long-term debt at April 1, 2001 approximates the carrying value.

    Aggregate maturities of the Company's long-term debt are as follows:

Years Ending December 31,
2001	$	13,850,000
2002		17,394,000
2003		20,215,000
2004		18,733,000
2005		21,718,000
Thereafter		510,366,000
	$	602,276,000

NOTE D—INCOME TAXES

Predecessor

    Income tax expense consists of the following:

		Three Months Ended March 31,					Years Ended December 31,
		2001			2000		2000		1999		1998
		(000's)
Current
	Federal	$	3,100		$	5,230	$	23,447	$	24,843	$	22,757
	State		877			725		2,736		4,744		4,543
			3,977			5,955		26,183		29,587		27,300
Deferred
	Federal		(1,406	)		459		2,461		979		1,691
	State		(141	)		46		246		44		169
			(1,547	)		505		2,707		1,023		1,860
		$	2,430		$	6,460	$	28,890	$	30,610	$	29,160

F–1–15

    Tax effects of the cumulative temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes are as follows:

				December 31,
	March 31, 2001
				2000			1999
Depreciation	$	32,780,000		$	33,190,000		$	32,290,000
Flock inventories		5,600,000			6,080,000			4,750,000
Goodwill		2,860,000			2,770,000			2,390,000
Other		(4,715,000	)		(2,910,000	)		(3,007,000	)
	$	36,525,000		$	39,130,000		$	36,423,000

    The following is a reconciliation of the Federal statutory income tax rate to the consolidated effective tax rate:

	Three Months Ended March 31,				Years Ended December 31,
	2001		2000		2000		1999		1998
Federal statutory rate	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%
State taxes	1.9		3.2		2.6		4.2		4.2
Goodwill	3.4		1.3		1.2		1.1		1.4
Other	(1.0	)	1.0		0.5		0.7		1.4
	39.3	%	40.5	%	39.3	%	41.0	%	42.0	%

F–1–16

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE D—INCOME TAXES (Continued)

Company

    The Merger was accomplished through a cash-for-stock transaction. As a result, the basis of the Company's assets and liabilities did not change for income tax reporting purposes. As of April 1, 2001, the tax effects of the cumulative temporary differences between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes are as follows:

	April 1, 2001
Depreciation	$	45,390,000
Flock inventories		5,600,000
Goodwill		2,860,000
Other		(5,055,000	)
	$	48,795,000

    Goodwill arising through the Merger will not be deductible and is considered a permanent difference. A portion of Predecessor goodwill, which was deductible for tax purposes prior to the Merger, will continue to be deductible.

    The Internal Revenue Service is currently examining the Predecessor's Federal tax returns for the years 1996, 1997 and 1998. Adjustments, if any, resulting from these examinations will adjust goodwill recorded at the time of the Merger. The Company does not expect any material adjustments to result from these examinations.

    The taxable income or loss of the Dairy LLCs will primarily be distributed to the Company until it has received payment for its preferred units and 10% cumulative return on the preferred units; and all senior secured and subordinated debt has been retired.

NOTE E—EMPLOYEE RETIREMENT PLAN

    Full-time employees who meet certain service requirements are eligible to participate in a defined contribution retirement plan. The Company matches up to 4% of each participant's eligible compensation. Predecessor contributions totaled $2,692,000, $2,491,000 and $1,786,000 in the years ended December 31, 2000, 1999 and 1998 and $1,194,000 and $858,000 for the three months ended March 31, 2001 and 2000.

NOTE F—RELATED PARTY TRANSACTIONS

    In February 1997, the Predecessor acquired Papetti's Hygrade Egg Products, Inc. and affiliated companies (collectively, "Papetti's"). In connection with this acquisition, the Predecessor entered into various operating leases with the previous owners of Papetti's for the majority of Papetti's operating facilities. The future minimum rental commitments under these leases are approximately $2,100,000 per year through February 2007. In addition, the Predecessor purchased eggs under an annual egg supply agreement with a partnership in which various Papetti family members own a 50% interest. The purchases from this partnership totaled approximately $9,800,000, $10,100,000 and $11,900,000 in 2000, 1999 and 1998. See Note H "Repurchases of Common Stock" for additional related party disclosure.

F–1–16

    Following the Merger, the previous owners of Papetti's are no longer considered to be related parties, as these individuals no longer own any stock of the Company. The Company continues to be obligated under the operating lease obligations and egg supply contracts described above.

    Pursuant to a management agreement with Vestar Capital Partners and Goldner Hawn Johnson & Morrison Incorporated, who are affiliates of the principal unit holders of M-Food Investors, LLC, the Company will pay them a combined annual fee of $1,000,000 or .75% of consolidated earnings before interest, taxes, depreciation and amortization, whichever is greater. In addition, these affiliates were paid approximately $10,500,000 by the Company for services rendered in connection with the Merger.

NOTE G—COMMITMENTS AND CONTINGENCIES

Patent Litigation

    The Company has an exclusive license agreement for a patented process for the production and sale of extended shelf-life liquid egg products. Under the license agreement, the Company has the right to defend and prosecute infringement of the patents. The Company may apply 50% of its costs of defending the patents to future royalty payments.

    The U.S. Federal Court of Appeals has upheld the validity of the patents, which are the subject of the license agreement. Subsequently, a patent examiner at the U.S. Patent and Trademark Office rejected the patents. The Predecessor and the patent holder appealed the decision of the examiner and the validity of the patents was upheld. In September 2000 the U.S. Patent and Trademark Office allowed product claims beyond the process claims previously allowed for the extended shelf-life egg product. The patents remain valid and in full force and effect. These patents are scheduled to expire beginning in 2006.

    In 2000, the Predecessor settled litigation with one party related to the infringement of these patents and issued a sub-license to the infringing party granting them the right to manufacture and distribute extended shelf-life liquid whole egg product subject to a royalty payable to the Company and the patent holder on all future product sold. In connection with this settlement the patent holder received a lump sum payment for the past production and sale of the product and other matters related to the infringement. The Company is continuing to pursue litigation related to other parties who are infringing the product and process patents.

Other Litigation

    The Company is engaged in routine litigation incidental to its business. Management believes the ultimate outcome of this litigation will not have a material effect on the Company's consolidated financial position, liquidity or results of operations.

NOTE H—SHAREHOLDERS' EQUITY

Predecessor

Capital Stock

    The Predecessor had authorized capital stock of 50,000,000 shares consisting of 40,000,000 shares of $.01 par value common stock and 10,000,000 shares of undesignated stock. The Board of Directors

F–1–17

had the authority to determine voting, conversion and other rights of the undesignated stock. There were no shares of undesignated stock issued or outstanding at December 31, 2000 or 1999 or March 31, 2001 (See also Note A—Merger Agreement).

Repurchases of Common Stock

    During 1998, the Predecessor's Board of Directors authorized the repurchase of up to 2,000,000 shares of common stock. During 1999 and 1998, the Predecessor repurchased and retired 1,902,800 shares for $42,996,000. In February and May of 2000, the Board of Directors authorized the repurchase of an additional 2,500,000 shares under the repurchase program. During the year ended December 31, 2000, the Predecessor repurchased 2,109,400 shares for $46,125,000, including 1,500,000 shares from a related party for $21.77 per share. During the three months ended March 31, 2000, the Predecessor repurchased 596,400 shares for $13,470,000. No shares were repurchased during the three months ended March 31, 2001.

Incentive Plan

    The Predecessor had an incentive compensation plan for certain key employees. The Predecessor utilized unissued common stock for a portion of the incentive compensation in this plan. The Predecessor accrued for all incentive compensation as earned. In connection with the Merger, this Plan was terminated. All shares of common stock previously awarded under the Plan were retired through the Merger.

Stock Option Plans

    The Predecessor maintained non-qualified stock option plans. The officer and key employee plans had 922,500 and 911,400 shares of common stock available for issue at March 31, 2001 and December 31, 2000 and the non-employee director plan had 42,800 shares available for issue at March 31, 2001 and December 31, 2000. The stock options granted under these plans generally had a ten year term, vested ratably over five years, and had an exercise price equal to the fair market value of the stock on the date of grant. Stock options totaling 957,740, 766,434 and 631,098 shares with weighted average exercise prices of $16.39, $14.86 and $12.18 were exercisable at December 31, 2000, 1999 and 1998. In connection with the Merger, all options for common stock previously awarded became fully vested in accordance with the terms of the respective plans and the option holders, except for certain options held by senior members of management, were paid the difference between the $30.10 per share consideration and the exercise price of their respective options (See Note A).

F–1–18

    Option transactions under these plans for each of the past three years and three months are summarized as follows:

		NUMBER OF SHARES		WEIGHTED AVERAGE EXERCISE PRICE
Outstanding at January 1, 1998		1,224,828		$	12.33
	Granted	683,000			24.95
	Exercised	(269,960	)		11.23
Outstanding at December 31, 1998		1,637,868			17.79
	Granted	200,900			21.82
	Exercised	(113,887	)		11.41
	Canceled	(86,340	)		21.57
Outstanding at December 31, 1999		1,638,541			18.53
	Granted	306,500			21.51
	Exercised	(65,070	)		13.09
	Canceled	(60,056	)		22.01
Outstanding at December 31, 2000		1,819,915			19.11
	Exercised	(36,581	)		14.94
	Canceled	(2,889	)		23.69
Outstanding at March 31, 2001		1,780,445		$	19.20

F–1–19

    The following tables summarize information concerning outstanding and exercisable stock options at March 31, 2001:

OPTIONS OUTSTANDING
EXERCISE PRICES
RANGE	WEIGHTED AVERAGE		NUMBER OF SHARES	WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE
$ 7.63 – $11.13	$	10.04	368,800	3.9 years
11.50 – 15.13		12.53	233,019	3.8 years
17.83 – 24.56		21.90	605,526	7.9 years
24.69 – 29.75		25.04	573,100	7.2 years
			1,780,445

OPTIONS EXERCISABLE
EXERCISE PRICES
RANGE	WEIGHTED AVERAGE		NUMBER OF SHARES
$ 7.63 – $11.13	$	10.00	350,100
11.50 – 15.13		12.53	229,019
17.83 – 24.56		21.86	238,606
24.69 – 29.75		25.19	310,000
			1,127,725

    Pro forma net earnings and diluted net earnings per share would have been $43,037,000, $42,630,000 and $39,273,000, or $2.28, $2.09 and $1.81 per share had the fair value method been used for valuing options granted in the years ending 2000, 1999 and 1998. The pro forma effect on net earnings for 1999 and 1998 is not representative of the pro forma effect on net earnings of future years because it does not take into consideration pro forma compensation expense related to grants made prior to 1995.

    The weighted average fair value of options granted in the years ending 2000, 1999 and 1998 were $9.49, $9.53 and $11.95 per share, computed by applying the following weighted average assumptions to the Black Scholes options pricing model: dividend yield of 1% in 2000, 1999 and 1998; risk-free rate of return of 5.1% in 2000, 6.5% in 1999 and 5.9% in 1998; volatility of 40% in 2000, 1999 and 1998, and an average term of 7 years. There were no options granted during the three months ending March 31, 2001.

Company

Common Stock

    The Company has authorized, issued and outstanding common stock of 1,000 shares with a $.01 par value. All 1,000 common shares were issued to M-Foods Holdings, Inc., a wholly owned subsidiary of M-Foods Investors, LLC in connection with the Merger.

F–1–20

NOTE I—BUSINESS SEGMENTS

    The Company operates in four reportable segments:

    Egg Products processes and distributes numerous egg products and shell eggs primarily through its facilities in the Midwest and Eastern United States. Sales of egg products are made through an internal sales force and independent brokers to the foodservice and retail markets primarily throughout the United States.

    Refrigerated Distribution distributes a wide range of refrigerated grocery products, including various cheese products packaged at its Wisconsin cheese packaging facility. Sales of refrigerated grocery products are made through an internal sales force to retail and wholesale markets primarily throughout the central United States.

    Dairy Products processes and distributes soft serve ice cream mix, frozen yogurt mix, milk and specialty dairy products, many of which are ultra-high temperature pasteurized, from its facilities in Connecticut, Minnesota and Texas. Sales of dairy products are made through an internal sales force to domestic quick service restaurants, other foodservice outlets and independent retailers throughout the United States.

    Potato Products processes and distributes refrigerated potato products from its manufacturing facilities in Minnesota and Nevada. Sales of potato products are made through an internal sales force to foodservice and retail markets throughout the United States.

    The Company identifies its segments based on its organizational structure, which is primarily by principal products. Operating profit represents earnings before interest expense, interest income, income taxes, and allocations of corporate costs to the respective divisions. Intersegment sales are made at market prices. The Company's corporate office maintains a majority of the Company's cash under its cash management policy.

    Sales to one customer, primarily by the Egg Products segment, accounted for 15% and 12% of consolidated net sales for the years ending December 31, 2000 and 1999 and 12% of consolidated net sales for the three months ended March 31, 2001.

F–1–21

    Certain financial information for the Company's operating segments is as follows (in thousands):

		EGG PRODUCTS		REFRIGERATED DISTRIBUTION		DAIRY PRODUCTS			POTATO PRODUCTS		CORPORATE			TOTAL
Predecessor
Year ended December 31, 2000
	External net sales	$	637,355	$	241,114	$	141,401		$	60,731	$	—		$	1,080,601
	Intersegment sales		13,357		80		516			2,477		—			16,430
	Operating profit (loss)		67,658		16,001		1,322			7,650		(5,825	)		86,806
	Total assets		461,298		45,716		53,505			44,122		8,263			612,904
	Depreciation and amortization		36,435		1,316		4,724			5,372		136			47,983
	Capital expenditures		25,376		1,042		9,565			1,390		—			37,373
Year ended December 31, 1999
	External net sales	$	620,719	$	230,335	$	144,865		$	57,353	$	—		$	1,053,272
	Intersegment sales		15,854		101		1,384			2,360		—			19,699
	Operating profit (loss)		73,531		10,656		3,750			6,751		(8,358	)		86,330
	Total assets		455,943		36,901		48,686			47,792		8,595			597,917
	Depreciation and amortization		31,824		1,316		3,671			5,626		127			42,564
	Capital expenditures		65,467		762		6,115			1,781		—			74,125
Year ended December 31, 1998
	External net sales	$	607,688	$	221,586	$	138,865		$	52,345	$	—		$	1,020,484
	Intersegment sales		21,224		127		1,846			2,048		—			25,245
	Operating profit (loss)		69,295		7,288		6,748			3,890		(7,668	)		79,553
	Total assets		425,568		39,886		28,097			50,385		7,580			551,516
	Depreciation and amortization		26,712		1,518		1,755			5,710		109			35,804
	Capital expenditures		54,443		1,132		4,477			4,671		54			64,777
Three months ended March 31, 2001:
	External net sales	$	163,529	$	61,185	$	35,328		$	15,585	$	—		$	275,627
	Intersegment sales		4,246		—		—			1,003		—			5,249
	Operating profit (loss)		12,915		3,639		3,958			1,688		(12,706	)		9,494
	Depreciation and amortization		9,636		316		1,271			1,278		34			12,535
Three months ended March 31, 2000:
	External net sales	$	153,553	$	56,248	$	28,029		$	14,096	$	—		$	251,926
	Intersegment sales		2,885		18		485			555		—			3,943
	Operating profit (loss)		15,121		4,305		(186	)		1,301		(1,642	)		18,899
	Depreciation and amortization		8,999		344		1,165			1,355		31			11,894

F–1–22

NOTE J—SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

   The Company's revolving credit facility, A and B term loans and senior subordinated notes have been guaranteed, on a joint and several basis, by the Company and its domestic subsidiaries. The revolving credit facility and A and B term loans are also guaranteed by the Company's parent, M-Foods Holdings, Inc.

    The following condensed consolidating financial information presents the consolidated balance sheet of the Company as of April 1, 2001; and the Predecessor's consolidated balance sheets as of March 31, 2001, December 31, 2000 and 1999 and the consolidated statements of earnings and cash flows for the three months ended March 31, 2001 and 2000 and for the years ended December 31, 2000, 1999, and 1998. These financial statements reflect Michael Foods, Inc. (the parent), the wholly owned guarantor subsidiaries (on a combined basis), the non-wholly owned guarantor subsidiaries, and elimination entries necessary to combine such entities on a consolidated basis. Included elsewhere in the Registration Statement are the audited Financial Statements of the non-wholly owned guarantor subsidiaries.

F–1–23

Company
Condensed Consolidating Balance Sheets
April 1, 2001
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
			Parent		Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC		M-Foods Dairy TXCT, LLC			Eliminations			Consolidated
Assets
Current Assets:
	Cash and equivalents		$	4,327	$	(64	)	$	7	$	—		$	—		$	4,270
	Accounts receivable, less allowances			630		102,898			12,972		5,928			(1,542	)		120,886
	Inventories			—		76,015			2,815		3,511			—			82,341
	Prepaid expenses and other			3,313		4,147			72		54			—			7,586
		Total current assets		8,270		182,996			15,866		9,493			(1,542	)		215,083
Property, Plant and Equipment — net				95		282,797			15,136		12,388			—			310,416
Other assets:
	Goodwill, net			—		350,574			3,959		—			—			354,533
	Deferred financing costs			20,835		—			—		—			—			20,835
	Joint ventures and other assets			501		6,977			3		1,953			—			9,434
	Investment in subsidiaries			726,331		—			—		—			(726,331	)		—
				747,667		357,551			3,962		1,953			(726,331	)		384,802
			$	756,032	$	823,344		$	34,964	$	23,834		$	(727,873	)	$	910,301
Liabilities and Shareholders' Equity
Current Liabilities:
	Current maturities of long-term debt		$	11,026	$	424		$	—	$	2,400		$	—		$	13,850
	Accounts payable			2,319		51,675			3,065		4,138			(1,542	)		59,655
	Accrued liabilities			12,205		38,185			1,638		887			—			52,915
		Total current liabilities		25,550		90,284			4,703		7,425			(1,542	)		126,420
Long-term debt, less current maturities				583,050		576			—		4,800			—			588,426
Deferred income taxes				196		49,975			737		(2,113	)		—			48,795
		Total liabilities		608,796		140,835			5,440		10,112			(1,542	)		763,641
Minority Interest				475		—			—		—			—			475
Shareholders' Equity				146,761		682,509			29,524		13,722			(726,331	)		146,185
			$	756,032	$	823,344		$	34,964	$	23,834		$	(727,873	)	$	910,301

F–1–24

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Balance Sheets
March 31, 2001
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
			Parent		Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC		M-Foods Dairy TXCT, LLC		Eliminations			Consolidated
Assets
Current Assets:
	Cash and equivalents		$	4,327	$	(64	)	$	7	$	—	$	—		$	4,270
	Accounts receivable, less allowances			414		102,898			12,972		5,928		(1,542	)		120,670
	Inventories			—		74,400			2,793		3,485		—			80,678
	Prepaid expenses and other			237		4,147			72		54		—			4,510
		Total current assets		4,978		181,381			15,844		9,467		(1,542	)		210,128
Property, Plant and Equipment — net				95		250,047			15,136		16,262		—			281,540
Other assets:
	Goodwill, net			—		111,606			1,764		—		—			113,370
	Joint ventures and other assets			501		6,012			4		8,166		—			14,683
	Investment in subsidiaries			471,571		—			—		—		(471,571	)		—
				472,072		117,618			1,768		8,166		(471,571	)		128,053
			$	477,145	$	549,046		$	32,748	$	33,895	$	(473,113	)	$	619,721
Liabilities and Shareholders' Equity
Current Liabilities:
	Current maturities of long-term debt		$	—	$	424		$	—	$	2,400	$	—		$	2,824
	Accounts payable			2,319		51,675			3,065		4,138		(1,542	)		59,655
	Accrued liabilities			33,479		38,186			1,638		887		—			74,190
		Total current liabilities		35,798		90,285			4,703		7,425		(1,542	)		136,669
Long-term debt, less current maturities				184,000		576			—		4,800		—			189,376
Deferred income taxes				196		35,554			728		47		—			36,525
		Total liabilities		219,994		126,415			5,431		12,272		(1,542	)		362,570
Shareholders' Equity				257,151		422,631			27,317		21,623		(471,571	)		257,151
			$	477,145	$	549,046		$	32,748	$	33,895	$	(473,113	)	$	619,721

F–1–25

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Earnings Statements
Three months ended March 31, 2001
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
		Parent			Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC			M-Foods Dairy TXCT, LLC			Eliminations			Consolidated
Net sales		$	—		$	245,548		$	17,684		$	17,644		$	(5,249	)	$	275,627
Cost of sales			—			200,854			14,994			17,108			(5,249	)		227,707
	Gross profit		—			44,694			2,690			536			—			47,920
Selling, general and administrative expenses			1,656			27,720			1,027			1,712			(1,522	)		30,593
Recall insurance settlement			—			—			(3,217	)		—			—			(3,217	)
Transaction costs			11,050			—			—			—			—			11,050
	Operating profit (loss)		(12,706	)		16,974			4,880			(1,176	)		1,522			9,494
Interest expense, net			3,308			(14	)		(1	)		—			—			3,293
Other income			1,522			—			—			—			(1,522	)		—
	Earnings (loss) before income taxes		(14,492	)		16,988			4,881			(1,176	)		—			6,201
Income tax expense (benefit)			(5,690	)		6,649			1,918			(447	)		—			2,430
	Earnings (loss) before extraordinary item		(8,802	)		10,339			2,963			(729	)		—			3,771
Extraordinary item — early extinguishment of debt, net of taxes			(9,424	)		—			—			—			—			(9,424	)
	NET EARNINGS (LOSS)		(18,226	)		10,339			2,963			(729	)		—			(5,653	)
Foreign currency translation adjustment loss			—			(543	)		—			—			—			(543	)
Comprehensive income (loss)		$	(18,226	)	$	9,796		$	2,963		$	(729	)	$	—		$	(6,196	)

F–1–26

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Statements of Cash Flows
Three months ended March 31, 2001
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
		Parent			Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC			M-Foods Dairy TXCT, LLC			Eliminations		Consolidated
Net cash provided by (used in) operating activities		$	12,000		$	4,487		$	(2,440	)	$	(31	)	$	—	$	14,016
Cash flows from investing activities:
	Capital expenditures		—			(4,923	)		(3,664	)		(2,250	)		—		(10,837	)
	Investments in joint ventures and other assets		434			3,454			—			—			—		3,888
Net cash provided by (used in) investing activities			434			(1,469	)		(3,664	)		(2,250	)		—		(6,949	)
Cash flows from financing activities:
	Payments on long-term debt		(52,000	)		(109	)		—			—			—		(52,109	)
	Proceeds from long-term debt		45,500			—			—			—			—		45,500
	Proceeds from issuance of stock		546			—			—			—			—		546
	Extension of stock options		310			—			—			—			—		310
	Dividends		(1,465	)		—			—			—			—		(1,465	)
	Investment in subsidiaries		(9,785	)		1,393			6,111			2,281			—		—
Net cash provided by (used in) financing activities			(16,894	)		1,284			6,111			2,281			—		(7,218	)
Net increase(decrease) in cash and equivalents			(4,460	)		4,302			7			—			—		(151	)
Cash and equivalents at beginning of period			8,787			(4,366	)		—			—			—		4,421
Cash and equivalents at end of period		$	4,327		$	(64	)	$	7		$	—		$	—	$	4,270

F–1–27

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Unaudited Condensed Consolidating Earnings Statements
Three months ended March 31, 2000
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
		Parent			Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC		M-Foods Dairy TXCT, LLC			Eliminations			Consolidated
Net sales		$	—		$	227,355		$	14,908	$	13,606		$	(3,943	)	$	251,926
Cost of sales			—			182,865			13,443		12,706			(3,943	)		205,071
	Gross profit		—			44,490			1,465		900			—			46,855
Selling, general and administrative expenses			1,642			25,042			931		1,875			(1,534	)		27,956
	Operating profit (loss)		(1,642	)		19,448			534		(975	)		1,534			18,899
Interest expense, net			2,967			(18	)		1		—			—			2,950
Other income			1,534			—			—		—			(1,534	)		—
	Earnings (loss) before income taxes		(3,075	)		19,466			533		(975	)		—			15,949
Income tax expense (benefit)			(1,245	)		7,866			210		(371	)		—			6,460
	NET EARNINGS (LOSS)		(1,830	)		11,600			323		(604	)		—			9,489
Foreign currency translation adjustment loss			—			(249	)		—		—			—			(249	)
Comprehensive income (loss)		$	(1,830	)	$	11,351		$	323	$	(604	)	$	—		$	9,240

F–1–28

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Unaudited Condensed Consolidating Statements of Cash Flows
Three months ended March 31, 2000
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
		Parent			Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC			M-Foods Dairy TXCT, LLC			Eliminations		Consolidated
Net cash provided by operating activities		$	11,287		$	3,354		$	1,528		$	255		$	—	$	16,424
Cash flows from investing activities:
	Capital expenditures		—			(7,175	)		(298	)		(658	)		—		(8,131	)
	Investments in joint ventures and other assets		330			(316	)		—			—			—		14
Net cash provided by (used in) investing activities			330			(7,491	)		(298	)		(658	)		—		(8,117	)
Cash flows from financing activities:
	Payments on long-term debt		(37,400	)		(137	)		—			—			—		(37,537	)
	Proceeds from long-term debt		43,600			—			—			—			—		43,600
	Proceeds from issuance of stock		86			—			—			—			—		86
	Repurchase of common stock		(13,470	)		—			—			—			—		(13,470	)
	Dividends		(1,421	)		—			—			—			—		(1,421	)
	Investment in subsidiaries		(2,827	)		3,654			(1,230	)		403			—		—
	Net cash provided by (used in) financing activities		(11,432	)		3,517			(1,230	)		403			—		(8,742	)
Net increase (decrease) in cash and equivalents			185			(620	)		—			—			—		(435	)
Cash and equivalents at beginning of period			6,677			(1,716	)		—			—			—		4,961
Cash and equivalents at end of period		$	6,862		$	(2,336	)	$	—		$	—		$	—	$	4,526

F–1–29

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Balance Sheets
December 31, 2000
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
			Parent		Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC		M-Foods Dairy TXCT, LLC		Eliminations			Consolidated
Assets
Current Assets:
	Cash and equivalents		$	8,787	$	(4,366	)	$	—	$	—	$	—		$	4,421
	Accounts receivable, less allowances			420		102,968			6,326		5,684		(2,631	)		112,767
	Inventories			—		71,077			2,262		2,395		—			75,734
	Prepaid expenses and other			238		4,414			94		57		—			4,803
		Total current assets		9,445		174,093			8,682		8,136		(2,631	)		197,725
Property, Plant and Equipment — net				103		255,485			11,800		14,429		—			281,817
Other assets:
	Goodwill, net			—		112,468			1,787		—		—			114,255
	Joint ventures and other assets			1,343		9,090			7		8,667		—			19,107
	Investment in subsidiaries			459,773		—			—		—		(459,773	)		—
				461,116		121,558			1,794		8,667		(459,773	)		133,362
			$	470,664	$	551,136		$	22,276	$	31,232	$	(462,404	)	$	612,904
Liabilities and Shareholders' Equity
Current Liabilities:
	Current maturities of long-term debt		$	—	$	465		$	—	$	2,400	$	—		$	2,865
	Accounts payable			111		51,636			1,962		3,134		(2,631	)		54,212
	Accrued liabilities			21,077		38,799			1,381		763		—			62,020
		Total current liabilities		21,188		90,900			3,343		6,297		(2,631	)		119,097
Long-term debt, less current maturities				190,500		644			—		4,800		—			195,944
Deferred income taxes				243		38,133			690		64		—			39,130
		Total liabilities		211,931		129,677			4,033		11,161		(2,631	)		354,171
Shareholders' Equity				258,733		421,459			18,243		20,071		(459,773	)		258,733
			$	470,664	$	551,136		$	22,276	$	31,232	$	(462,404	)	$	612,904

F–1–30

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Earnings Statements
Year ended December 31, 2000
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
		Parent			Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC			M-Foods Dairy TXCT, LLC			Eliminations			Consolidated
Net sales		$	—		$	955,115		$	68,102		$	73,814		$	(16,430	)	$	1,080,601
Cost of sales			—			775,173			59,948			70,447			(16,430	)		889,138
	Gross profit		—			179,942			8,154			3,367			—			191,463
Selling, general and administrative expenses			5,825			93,294			3,668			7,412			(5,542	)		104,657
	Operating profit (loss)		(5,825	)		86,648			4,486			(4,045	)		5,542			86,806
Interest expense, net			13,276			(64	)		(6	)		—			—			13,206
Other income			5,542			—			—			—			(5,542	)		—
	Earnings (loss) before income taxes		(13,559	)		86,712			4,492			(4,045	)		—			73,600
Income tax expense (benefit)			(4,990	)		33,651			1,766			(1,537	)		—			28,890
	NET EARNINGS (LOSS)		(8,569	)		53,061			2,726			(2,508	)		—			44,710
Foreign currency translation adjustment loss			—			(359	)		—			—			—			(359	)
Comprehensive income (loss)		$	(8,569	)	$	52,702		$	2,726		$	(2,508	)	$	—		$	44,351

F–1–31

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Statements of Cash Flows
Year ended December 31, 2000
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
		Parent			Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC			M-Foods Dairy TXCT, LLC			Eliminations		Consolidated
Net cash provided by (used in) operating activities		$	47,044		$	18,514		$	3,900		$	(373	)	$	—	$	69,085
Cash flows from investing activities:
	Capital expenditures		—			(27,808	)		(3,181	)		(6,384	)		—		(37,373	)
	Investments in joint ventures and other assets		(112	)		(1,015	)		—			—			—		(1,127	)
Net cash used in investing activities			(112	)		(28,823	)		(3,181	)		(6,384	)		—		(38,500	)
Cash flows from financing activities:
	Payments on long-term debt		(168,400	)		(709	)		—			(2,400	)		—		(171,509	)
	Proceeds from long-term debt		191,600			184			—			—			—		191,784
	Proceeds from issuance of stock		651			—			—			—			—		651
	Repurchase of common stock		(46,125	)		—			—			—			—		(46,125	)
	Dividends		(5,926	)		—			—			—			—		(5,926	)
	Investment in subsidiaries		(16,621	)		8,183			(719	)		9,157			—		—
Net cash provided by (used in) financing activities			(44,821	)		7,658			(719	)		6,757			—		(31,125	)
Net increase (decrease) in cash and equivalents			2,111			(2,651	)		—			—			—		(540	)
Cash and equivalents at beginning of year			6,677			(1,716	)		—			—			—		4,961
Cash and equivalents at end of year		$	8,788		$	(4,367	)	$	—		$	—		$	—	$	4,421

F–1–32

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Balance Sheets
December 31, 1999
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
			Parent		Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC		M-Foods Dairy TXCT, LLC		Eliminations			Consolidated
Assets
Current Assets:
	Cash and equivalents		$	6,677	$	(1,716	)	$	—	$	—	$	—		$	4,961
	Accounts receivable, less allowances			268		83,038			6,915		4,465		(2,193	)		92,493
	Inventories			—		66,038			2,738		2,421		—			71,197
	Prepaid expenses and other			181		3,933			436		54		—			4,604
		Total current assets		7,126		151,293			10,089		6,940		(2,193	)		173,255
Property, Plant and Equipment — net				137		267,378			9,956		9,328		—			286,799
Other assets:
	Goodwill, net			—		114,853			1,876		—		—			116,729
	Joint ventures and other assets			1,332		9,113			22		10,667		—			21,134
	Investment in subsidiaries			445,373		—			—		—		(445,373	)		—
				446,705		123,966			1,898		10,667		(445,373	)		137,863
			$	453,968	$	542,637		$	21,943	$	26,935	$	(447,566	)	$	597,917
Liabilities and Shareholders' Equity
Current Liabilities:
	Current maturities of long-term debt		$	—	$	730		$	—	$	2,400	$	—		$	3,130
	Accounts payable			24		43,633			2,343		3,202		(2,193	)		47,009
	Accrued liabilities			21,842		46,107			2,825		578		—			71,352
		Total current liabilities		21,866		90,470			5,168		6,180		(2,193	)		121,491
Long-term debt, less current maturities				167,300		904			—		7,200		—			175,404
Deferred income taxes				203		35,548			540		132		—			36,423
		Total liabilities		189,369		126,922			5,708		13,512		(2,193	)		333,318
Shareholders' Equity				264,599		415,715			16,235		13,423		(445,373	)		264,599
			$	453,968	$	542,637		$	21,943	$	26,935	$	(447,566	)	$	597,917

F–1–33

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Earnings Statements
Year Ended December 31, 1999
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
		Parent			Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC		M-Foods Dairy TXCT, LLC			Eliminations			Consolidated
Net sales		$	—		$	926,723		$	86,494	$	59,754		$	(19,699	)	$	1,053,272
Cost of sales			—			745,863			78,451		55,641			(19,699	)		860,256
	Gross profit		—			180,860			8,043		4,113			—			193,016
Selling, general and administrative expenses			8,358			89,922			2,781		5,625			—			106,686
	Operating profit (loss)		(8,358	)		90,938			5,262		(1,512	)		—			86,330
Interest expense, net			11,670			(12	)		6		—			—			11,664
	Earnings (loss) before income taxes		(20,028	)		90,950			5,256		(1,512	)		—			74,666
Income tax expense (benefit)			(8,830	)		37,949			2,066		(575	)		—			30,610
	NET EARNINGS (LOSS)		(11,198	)		53,001			3,190		(937	)		—			44,056
Foreign currency translation adjustment loss			—			(958	)		—		—			—			(958	)
Comprehensive income (loss)		$	(11,198	)	$	52,043		$	3,190	$	(937	)	$	—		$	43,098

F–1–34

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Statements of Cash Flows
Year ended December 31, 1999
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
		Parent			Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC			M-Foods Dairy TXCT, LLC			Eliminations		Consolidated
Net cash provided by operating activities		$	48,949		$	57,357		$	484		$	863		$	—	$	107,653
Cash flows from investing activities:
	Capital expenditures		—			(68,011	)		(1,356	)		(4,758	)		—		(74,125	)
	Investments in joint ventures and other assets		(181	)		(19,224	)		—			—			—		(19,405	)
Net cash used in investing activities			(181	)		(87,235	)		(1,356	)		(4,758	)		—		(93,530	)
Cash flows from financing activities:
	Payments on long-term debt		(185,000	)		(675	)		—			(2,400	)		—		(188,075	)
	Proceeds from long-term debt		188,500			12,002			—			—			—		200,502
	Proceeds from issuance of stock		838			—			—			—			—		838
	Repurchase of common stock		(18,928	)		—			—			—			—		(18,928	)
	Dividends		(5,546	)		—			—			—			—		(5,546	)
	Investment in subsidiaries		(29,503	)		22,337			872			6,294			—		—
Net cash provided by (used in) financing activities			(49,639	)		33,664			872			3,894			—		(11,209	)
Net increase (decrease) in cash and equivalents			(871	)		3,786			—			(1	)		—		2,914
Cash and equivalents at beginning of year			7,548			(5,502	)		—			1			—		2,047
Cash and equivalents at end of year		$	6,677		$	(1,716	)	$	—		$	—		$	—	$	4,961

F–1–35

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Earnings Statements
Year ended December 31, 1998
(in thousands)

							Non-wholly owned Guarantor Subsidiaries
		Parent			Wholly owned Guarantor Subsidiaries		M-Foods Dairy, LLC		M-Foods Dairy TXCT, LLC			Eliminations			Consolidated
Net sales		$	—		$	905,018	$	103,020	$	37,691		$	(25,245	)	$	1,020,484
Cost of sales			—			744,316		92,713		35,599			(25,245	)		847,383
	Gross profit		—			160,702		10,307		2,092			—			173,101
Selling, general and administrative expenses			7,668			80,229		2,472		3,179			—			93,548
	Operating profit (loss)		(7,668	)		80,473		7,835		(1,087	)		—			79,553
Interest expense, net			10,087			40		9		—			—			10,136
	Earnings (loss) before income taxes		(17,755	)		80,433		7,826		(1,087	)		—			69,417
Income tax expense (benefit)			(8,245	)		34,667		3,153		(415	)		—			29,160
	NET EARNINGS (LOSS)	$	(9,510	)	$	45,766	$	4,673	$	(672	)	$	—		$	40,257

F–1–36

MICHAEL FOODS, INC.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Predecessor
Condensed Consolidating Statements of Cash Flows
Year ended December 31, 1998
(in thousands)

								Non-wholly owned Guarantor Subsidiaries
		Parent			Wholly owned Guarantor Subsidiaries			M-Foods Dairy, LLC			M-Foods Dairy TXCT, LLC			Eliminations		Consolidated
Net cash provided by (used in) operating activities		$	56,068		$	7,789		$	7,834		$	(2,781	)	$	—	$	68,910
Cash flows from investing activities:
	Capital expenditures		(54	)		(60,246	)		(1,773	)		(2,704	)		—		(64,777	)
	Investments in joint ventures and other assets		549			245			—			—			—		794
Net cash provided by (used in) investing activities			495			(60,001	)		(1,773	)		(2,704	)		—		(63,983	)
Cash flows from financing activities:
	Payments on long-term debt		(57,500	)		(721	)		—			—			—		(58,221	)
	Proceeds from long-term debt		78,300			—			—			—			—		78,300
	Proceeds from issuance of stock		2,101			—			—			—			—		2,101
	Repurchase of common stock		(24,068	)		—			—			—			—		(24,068	)
	Dividends		(5,030	)		—			—			—			—		(5,030	)
	Investment in subsidiaries		(52,257	)		52,834			(6,061	)		5,484			—		—
Net cash provided by (used in) financing activities			(58,454	)		52,113			(6,061	)		5,484			—		(6,918	)
Net decrease in cash and equivalents			(1,891	)		(99	)		—			(1	)		—		(1,991	)
Cash and equivalents at beginning of year			9,439			(5,403	)		—			2			—		4,038
Cash and equivalents at end of year		$	7,548		$	(5,502	)	$	—		$	1		$	—	$	2,047

F–1–37

MICHAEL FOODS, INC.
PREDECESSOR QUARTERLY FINANCIAL DATA (UNAUDITED)

(In thousands, except per share amounts)

		QUARTER
		FIRST		SECOND		THIRD		FOURTH
2000
Net sales		$	251,926	$	266,616	$	276,568	$	285,491
Gross profit			46,855		49,635		47,748		47,225
Net earnings			9,489		12,275		11,818		11,128
Net earnings per share
	Basic	$	.47	$	.64	$	.65	$	.61
	Diluted		.47		.64		.64		.60
Weighted average shares outstanding
	Basic		20,158		19,083		18,278		18,286
	Diluted		20,371		19,299		18,516		18,585
1999
Net sales		$	253,378	$	258,031	$	269,911	$	271,952
Gross profit			42,131		50,139		46,749		53,997
Net earnings			8,417		11,746		10,713		13,180
Net earnings per share
	Basic	$	.40	$	.57	$	.53	$	.65
	Diluted		.40		.57		.52		.64
Weighted average shares outstanding
	Basic		21,009		20,463		20,251		20,278
	Diluted		21,230		20,702		20,522		20,544

F–1–38

Report of Independent Certified Public Accountants

BOARD OF DIRECTORS
MICHAEL FOODS, INC.

    We have audited the accompanying balance sheet of M-Foods Dairy, LLC (a majority owned subsidiary of Michael Foods, Inc.) as of April 1, 2001. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit.

    We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation. We believe our audit provides a reasonable basis for our opinion.

    In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of M-Foods Dairy, LLC (a majority owned subsidiary of Michael Foods, Inc.) as of April 1, 2001, in conformity with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

May 15, 2001

F–2–1

Report of Independent Certified Public Accountants

BOARD OF DIRECTORS
MICHAEL FOODS, INC.

    We have audited the accompanying balance sheets of Kohler Mix—MN (an operating unit of Michael Foods, Inc.) (the "Predecessor") as of December 31, 2000 and 1999 and March 31, 2001 and the related statements of operating unit earnings, unit holder and operating unit equity, and operating unit cash flows for each of the three years in the period ended December 31, 2000 and the three months ended March 31, 2001. These financial statements are the responsibility of the Predecessor's management. Our responsibility is to express an opinion on these financial statements based on our audits.

    We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion.

    In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kohler Mix—MN (an operating unit of Michael Foods, Inc.) as of December 31, 2000 and 1999 and March 31, 2001 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 and for the three months ended March 31, 2001, in conformity with accounting principles generally accepted in the United States of America.

    We have also audited Schedule II for each of the three years in the period ended December 31, 2000. In our opinion, this schedule, when considered in relation to the basic financial statement taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

May 15, 2001

F–2–2

M-FOODS DAIRY, LLC
(A Majority Owned Subsidiary of Michael Foods, Inc.)

BALANCE SHEETS

				Company		Predecessor
								December 31,
				April 1, 2001		March 31, 2001
								2000		1999
ASSETS
CURRENT ASSETS
	Cash and equivalents			$	7,092	$	7,092	$	—	$	—
	Accounts receivable, less allowances				12,972,482		12,972,482		6,325,301		6,915,325
	Inventories				2,815,078		2,793,078		2,261,660		2,738,154
	Prepaid expenses and other				71,858		71,858		94,300		436,176
			Total current assets		15,866,510		15,844,510		8,681,261		10,089,655
PROPERTY, PLANT AND EQUIPMENT — AT COST
	Land				854,796		854,796		854,796		854,796
	Buildings and improvements				4,398,729		7,828,113		7,828,113		7,196,048
	Machinery and equipment				9,882,123		17,351,100		13,720,915		14,423,994
					15,135,648		26,034,009		22,403,824		22,474,838
	Less accumulated depreciation				—		10,898,361		10,603,442		12,519,195
					15,135,648		15,135,648		11,800,382		9,955,643
OTHER ASSETS
	Goodwill, net				3,958,747		1,764,370		1,786,792		1,876,480
	Other assets				3,632		3,632		7,264		21,791
					3,962,379		1,768,002		1,794,056		1,898,271
				$	34,964,537	$	32,748,160	$	22,275,699	$	21,943,569
LIABILITIES AND UNIT HOLDER AND OPERATING UNIT EQUITY
CURRENT LIABILITIES
	Accounts payable			$	3,065,257	$	3,065,257	$	1,962,402	$	2,343,374
	Accrued liabilities:
		Compensation			385,485		385,485		418,906		999,243
		Recall claims			—		—		—		600,000
		Insurance			15,484		15,484		207,362		113,432
		Customer programs			690,586		690,586		550,307		581,134
		Other			546,140		546,140		203,956		531,170
			Total current liabilities		4,702,952		4,702,952		3,342,933		5,168,353
DEFERRED INCOME TAXES					737,000		728,000		690,000		540,000
COMMITMENTS AND CONTINGENCIES					—		—		—		—
UNIT HOLDER AND OPERATING UNIT EQUITY
	Class A — voting common units				18,189		—		—		—
	Class B — non-voting common units				356,250		—		—		—
	Preferred units				29,150,146		—		—		—
	Operating unit equity				—		27,317,208		18,242,766		16,235,216
					29,524,585		27,317,208		18,242,766		16,235,216
				$	34,964,537	$	32,748,160	$	22,275,699	$	21,943,569

The accompanying notes are an integral part of these statements.

F–2–3

M-FOODS DAIRY, LLC
(A Majority Owned Subsidiary of Michael Foods, Inc.)

STATEMENTS OF OPERATING UNIT EARNINGS

		Predecessor
		Three months ended March 31,						Years ended December 31,
		2001			2000			2000		1999			1998
					(Unaudited)
Net sales		$	17,683,987		$	14,907,547		$	68,102,293	$	86,494,069		$	103,019,552
Cost of sales			14,993,910			13,442,821			59,947,831		78,450,858			92,712,846
	Gross profit		2,690,077			1,464,726			8,154,462		8,043,211			10,306,706
Selling, general and administrative expenses			1,027,451			930,421			3,668,547		2,781,370			2,472,184
Recall insurance settlement			(3,217,426	)		—			—		—			—
	Operating profit		4,880,052			534,305			4,485,915		5,261,841			7,834,522
Other income (expense)			1,295			(1,060	)		6,518		(5,639	)		(8,996	)
	Earnings before income taxes		4,881,347			533,245			4,492,433		5,256,202			7,825,526
Income tax expense			1,918,000			210,000			1,766,000		2,066,000			3,153,000
	NET EARNINGS	$	2,963,347		$	323,245		$	2,726,433	$	3,190,202		$	4,672,526

The accompanying notes are an integral part of these statements.

F–2–4

M-FOODS DAIRY, LLC
(A Majority Owned Subsidiary of Michael Foods, Inc.)

STATEMENTS OF UNIT HOLDER AND OPERATING UNIT EQUITY

Predecessor	Operating Unit Equity
Balance at January 1, 1998	$	13,561,320
Net dividends paid		(6,060,919	)
Net earnings		4,672,526
Balance at December 31, 1998		12,172,927
Net additional capital invested		872,087
Net earnings		3,190,202
Balance at December 31, 1999		16,235,216
Net dividends paid		(718,883	)
Net earnings		2,726,433
Balance at December 31, 2000		18,242,766
Net additional capital invested		6,111,095
Net earnings		2,963,347
Balance at March 31, 2001	$	27,317,208
Company
Balance at March 31, 2001	$	27,317,208
Merger with M-Food Investors, LLC		(27,317,208	)
Issuance of:
Class A — voting common units, 50 units issued and outstanding, net of deemed dividend of $561		18,189
Class B — non-voting common units, 950 units issued and outstanding		356,250
Preferred units, 29,981 units issued and outstanding, net of deemed dividend of $831,104		29,150,146
Balance at April 1, 2001	$	29,524,585

The accompanying notes are an integral part of these statements.

F–2–5

M-FOODS DAIRY, LLC
(A Majority Owned Subsidiary of Michael Foods, Inc.)

STATEMENTS OF OPERATING UNIT CASH FLOWS

				Predecessor
				Three months ended March 31,						Years ended December 31,
				2001			2000			2000			1999			1998
							(Unaudited)
Cash flows from operating activities:
	Net earnings			$	2,963,347		$	323,245		$	2,726,433		$	3,190,202		$	4,672,526
	Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
		Depreciation			328,665			348,927			1,335,790			1,242,683			1,170,669
		Amortization			26,053			26,053			104,215			104,217			104,217
		Deferred income taxes			38,000			38,000			150,000			150,000			(166,000	)
		Changes in operating assets and liabilities:
			Accounts receivable		(6,647,181	)		656,168			590,024			(696,086	)		(1,465,344	)
			Inventories		(531,418	)		(40,159	)		476,494			1,206,903			(572,260	)
			Prepaid expenses and other		22,442			128,175			341,876			(5,286	)		54,614
			Accounts payable		1,102,855			1,127,032			(380,972	)		(5,432,411	)		3,226,739
			Accrued liabilities		257,165			(1,079,564	)		(1,444,448	)		723,533			808,922
Net cash provided by (used in) operating activities					(2,440,072	)		1,527,877			3,899,412			483,755			7,834,083
Cash flows from investing activities:
	Capital expenditures				(3,663,931	)		(297,927	)		(3,180,529	)		(1,355,842	)		(1,773,164	)
Net cash used in investing activities					(3,663,931	)		(297,927	)		(3,180,529	)		(1,355,842	)		(1,773,164	)
Cash flows from financing activities:
	Net additional capital invested or (dividends paid)				6,111,095			(1,229,950	)		(718,883	)		872,087			(6,060,919	)
Net cash provided by (used in) financing activities					6,111,095			(1,229,950	)		(718,883	)		872,087			(6,060,919	)
Net increase in cash and equivalents					7,092			—			—			—			—
Cash and equivalents at beginning of period					—			—			—			—			—
Cash and equivalents at end of period				$	7,092		$	—		$	—		$	—		$	—

The accompanying notes are an integral part of these statements.

F–2–6

M-FOODS DAIRY, LLC
(A Majority Owned Subsidiary of Michael Foods, Inc.)

NOTES TO FINANCIAL STATEMENTS

NOTE A—ORGANIZATION, BUSINESS AND MERGER

Organization

    M-Foods Dairy, LLC (the "Company") is a majority owned subsidiary of Michael Foods, Inc., a wholly owned subsidiary of M-Foods Holdings, Inc. following the Merger described below. Kohler Mix—MN (the "Predecessor," "Operating Unit" or the "Unit") was an operating unit of Michael Foods, Inc. prior to the Merger. The change in control of Michael Foods, Inc. and the reorganization of the operating unit into M-Foods Dairy, LLC are more fully described below.

Business

    The Company processes and distributes soft serve ice cream mix, frozen yogurt mix, milk and specialty dairy products, many of which are ultra-high temperature pasteurized, from its facility in Minnesota.

Merger

    On December 21, 2000, Michael Foods, Inc. entered into a definitive agreement providing for the acquisition of Michael Foods, Inc. and its subsidiaries ("Michael Foods") by an investor group comprised of a management group led by Michael Foods Chairman, President and Chief Executive Officer, Gregg A. Ostrander, affiliates of Jeffrey Michael, a member of the Michael Foods Board of Directors, and affiliates of two private equity investment firms, Vestar Capital Partners and Goldner Hawn Johnson & Morrison Incorporated, collectively, M-Foods Investors, LLC. This acquisition transaction (the "Merger") was completed on April 10, 2001. Under the terms of the Merger agreement, all outstanding shares of Michael Foods common stock were converted into the right to receive $30.10 per share in cash, or value equal thereto, and all outstanding stock options were converted into the right to receive, in cash, $30.10 per share reduced by the exercise price per share for all shares subject to such stock options. The purchase of the outstanding shares was financed through new equity financing of approximately $175,000,000, a senior secured credit facility of up to $470,000,000 at market-based variable interest rates (effective rate of 7.5% at April 10, 2001), and $200,000,000 of senior subordinated notes at an 11.75% annual interest rate.

    Simultaneous with the close of the Merger, Michael Foods contributed the assets of its Dairy division into two limited liability corporations, M-Foods Dairy, LLC and M-Foods Dairy TXCT, LLC (collectively, the "Dairy LLCs") and in exchange received voting preferred and voting common units from these entities equal to the fair value of the net assets contributed, which collectively were approximately $40,000,000. (The approximate fair value contributed to M-Foods Dairy, LLC was $30,000,000.) The preferred units issued to Michael Foods have an annual 10% preferred return guarantee and represent 100% of the preferred units issued and outstanding. In addition, Michael Foods received 5% of the common units issued by each of the Dairy LLCs with the common units held by Michael Foods representing 100% of the voting common units issued and outstanding. These common units have a stated value of $25,000. The remaining 95% of the common units, which are non-voting, are owned by M-Foods Dairy Holdings, LLC, which is owned by the same owners, or affiliates of such owners, in the same proportion, as the unit holders of M-Foods Investors, LLC. The Dairy LLCs common unit interest owned by M-Foods Dairy Holdings, LLC was purchased for $475,000 as of April 1, 2001.

F–2–7

    Following the Merger, Michael Foods, Inc. became an indirect wholly owned subsidiary of M-Foods Investors, LLC and M-Foods Dairy LLC became a majority owned subsidiary of Michael Foods, Inc.

    The Merger has been accounted for as a purchase in accordance with Accounting Principles Board Opinion 16, Business Combinations and EITF 88-16, Basis in Leveraged Buyout Transactions. Accordingly, the acquired assets and liabilities have been recorded at fair value for the interests acquired by new investors and at the carryover basis for continuing investors. As a result, the assets and liabilities are assigned new values, which are part Predecessor cost and part fair value, in the same proportions as the carryover basis of the residual interests retained by the continuing management investors and continuing affiliate investors of the Michael family and the new interests acquired by the new investors. The deemed dividend related to the Michael Foods investment in the assets and liabilities of the Dairy LLCs was pushed down to these majority owned subsidiaries, as if they were wholly owned subsidiaries since Michael Foods owns all of the voting stock and the Dairy LLCs are being operated by the management of Michael Foods. The amount of the deemed dividend at Michael Foods was $66,631,000 and the portion attributable to M-Foods Dairy, LLC was $831,665.

    For ease of presentation, the Merger has been reflected in the accompanying balance sheet as if it had occurred on April 1, 2001. Management determined that no material transactions occurred during the period from April 1 through April 9, 2001. The Company's balance sheet has been presented on a comparative basis with the Predecessor's historical operating unit balance sheets, prior to the date of Merger. Different bases of accounting have been used to prepare the Company and Predecessor financial statements. In the future, the primary differences will relate to the 10% yield on preferred units and depreciation and amortization of fixed assets and other intangible assets recorded at fair value at the date of acquisition.

    For accounting purposes, the Merger was considered a leveraged buyout. The total purchase price of approximately $562,881,000 was allocated to the acquired assets and assumed liabilities of Michael Foods based on their fair values at April 1, 2001, net of the deemed dividend. Those allocations of the purchase price are as follows:

Working capital	$	88,663,000
Property, plant & equipment		310,416,000
Other assets		30,269,000
Goodwill		354,533,000
Long-term debt		588,426,000
Other liabilities		49,270,000

    These allocations, and those shown in the following table, were based primarily on a preliminary valuation report issued by a third party appraisal firm. Accordingly, the allocations related to property, plant and equipment and intangible assets, including goodwill, could change when the final report is received. However, final allocations are not expected to vary significantly from the allocations indicated.

    The fair value contributed by Michael Foods to M-Foods Dairy, LLC was $30,000,000. In addition, $356,250 was contributed by new investors in exchange for Class B-non voting common units. This

F–2–8

combined amount was allocated to the acquired assets and liabilities based on their fair values at April 1, 2001, net of the deemed dividend. Those allocations are as follows:

Working capital	$	11,163,558
Property, plant & equipment		15,135,648
Other assets, including goodwill		3,962,379
Other liabilities		737,000

    The following unaudited pro forma revenue and net earnings for the year ended December 31, 2000 and for the three months ended March 31, 2001 are derived from the application of pro forma adjustments to the Predecessor historical statements of earnings, and assumes the Merger had occurred on January 1, 2000:

	Three months ended March 31, 2001		Year ended December 31, 2000
Revenue	$	17,683,987	$	68,102,293
Net earnings		2,954,000		2,693,000

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

    The accompanying Operating Unit financial statements as of December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000 and as of and for the three months ended March 31, 2001 have been prepared from the historical books and records of Michael Foods and include an allocation of general and administrative costs incurred by Michael Foods and allocations from this Operating Unit to the other Dairy LLC operating unit, M-Foods Dairy TXCT, LLC. The accompanying unaudited consolidated financial statements and footnote information for the three-months ended March 31, 2000 have been prepared in accordance with Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") using the historical cost basis of assets and liabilities of the Predecessor. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the results of operations and cash flows for the three months ended March 31, 2000. The Unit's financial statements include an allocation for general and administrative costs incurred by Michael Foods. Management believes its allocations to these Operating Unit financial statements are reasonable. Additionally, Operating Unit equity includes the annual net advances between the Operating Unit and Michael Foods, Inc. that are considered additional capital invested from or constructive dividends to, Michael Foods. Accordingly, the accompanying financial statements may not necessarily be indicative of the results that could have been obtained if the Operating Unit had been operated as a stand-alone entity. The Operating Unit's historical results of the Predecessor for the three months ended March 31, 2001 are not necessarily indicative of the results of the Company for a full year period.

    The accounting policies of the Predecessor have been adopted by the Company.

F–2–9

Use of Estimates

    Preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related revenues and expenses and disclosure about contingent assets and liabilities at the date of the financial statements. Actual results could differ from the estimates used by management.

Cash and Equivalents

    The Company considers all highly liquid temporary investments with original maturities of three months or less to be cash equivalents.

Inventories

    Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or market. The Company's finished goods inventory at April 1, 2001 is recorded at estimated selling prices, less cost of disposal and a selling profit allowance. Inventory values at April 1, 2001 for raw material and supply inventories are valued at Predecessor cost, which approximates replacement costs. Work-in-process inventories at April 1, 2001 were not material and have been recorded at Predecessor cost.

    Inventories consist of the following:

	Company		Predecessor
					December 31,
	April 1, 2001		March 31, 2001
					2000		1999
Raw materials and supplies	$	1,084,187	$	1,084,187	$	918,972	$	1,469,695
Work in process and finished goods		1,730,891		1,708,891		1,342,688		1,268,459
	$	2,815,078	$	2,793,078	$	2,261,660	$	2,738,154

Property, Plant and Equipment

    Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally on the straight-line basis. Estimated service lives range from 10-40 years for buildings and improvements and 3-10 years for machinery and equipment. Accelerated and straight-line methods are used for income tax purposes.

Goodwill

    The Operating Unit's acquisitions have been accounted for as purchases and the excess of the total acquisition costs over the fair value of the net assets acquired were recorded as goodwill. Goodwill is amortized on a straight-line basis over 40 years. Accumulated amortization was $1,823,224 at March 31, 2001 and $1,800,802 and $1,711,114 at December 31, 2000 and 1999. The Operating Unit evaluates its goodwill annually to determine potential impairment by comparing the carrying value of the goodwill to the undiscounted future cash flows of the related assets.

F–2–10

    At April 1, 2001, goodwill was recorded for the excess of total acquisition costs over the fair value of net assets acquired based on the total cost of the Merger. The Company expects to amortize its goodwill over a 40 year period. The Company evaluates its goodwill annually to determine potential impairment by comparing the carrying value of the goodwill to the undiscounted future cash flows of the related assets.

    In June 2001, the FASB announced they intend to issue two statements in late June 2001: Business Combinations and Goodwill and Intangible Assets. These pronouncements are expected to, among other things, eliminate the pooling-of-interest method of accounting for business combinations and eliminate the amortization of goodwill for financial reporting purposes. However, goodwill will then be tested for impairment annually or whenever an impairment indicator arises. The elimination of goodwill amortization is expected to be effective for the Company in January 2002. The terms and conditions of these pronouncements could change significantly before they are issued, including implementation guidelines and effective dates.

Revenue Recognition

    Sales are recognized when goods are shipped to customers and are recorded net of estimated customer programs.

New Accounting Pronouncements

    Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, requires entities to recognize all derivatives in their financial statements as either assets or liabilities measured at fair value. SFAS 133 also specifies new methods of accounting for derivatives used in risk management strategies (hedging activities), prescribes the items and transactions that may be hedged, and specifies detailed criteria required to qualify for hedge accounting. SFAS 137 deferred the effective date of SFAS 133 to fiscal years beginning after June 15, 2000. Effective January 1, 2001, the Predecessor adopted SFAS 133, which has not had a material effect on the Operating Unit's financial statements.

NOTE C—CONTINUED ADVANCES FROM PARENT

    The Operating Unit has historically been part of the Dairy division of Michael Foods, along with Kohler Mix—TXCT. The Operating Unit has historically acted as the funding source for Kohler Mix—TXCT and has relied upon Michael Foods to fund those needs and, at times, its own operations and capital additions. Management of Michael Foods, Inc. intends to continue to provide advances to the Company in order to sustain its operations and those of Kohler Mix—TXCT.

NOTE D—SETTLEMENT OF RECALL INSURANCE CLAIM

    During the three months ended March 31, 2001, the Unit settled its insurance claim related to a product recall, which occurred in early 1999. The settlement reimbursed the Unit for recall related costs incurred, as well as a partial reimbursement for lost business as a result of the recall.

F–2–11

NOTE E—INCOME TAXES

Predecessor

    The activity of the Operating Unit has been included in the income tax return of Michael Foods, Inc. for financial reporting purposes. The Unit has been allocated a provision for income taxes in an amount generally equivalent to the provision that would have resulted had the Unit filed a separate income tax return. The provision for income taxes consists of the following:

		Three months ended March 31,				Years ended December 31,
		2001		2000		2000		1999		1998
Current
	Federal	$	1,622,000	$	149,000	$	1,394,000	$	1,631,000	$	2,975,000
	State		258,000		23,000		222,000		285,000		344,000
			1,880,000		172,000		1,616,000		1,916,000		3,319,000
Deferred
	Federal		34,000		34,000		136,000		143,000		(151,000	)
	State		4,000		4,000		14,000		7,000		(15,000	)
			38,000		38,000		150,000		150,000		(166,000	)
		$	1,918,000	$	210,000	$	1,766,000	$	2,066,000	$	3,153,000

    Tax effects of the cumulative temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes are as follows:

			December 31,
	March 31, 2001
			2000		1999
Depreciation	$	708,000	$	689,000	$	613,000
Other		20,000		1,000		(73,000	)
	$	728,000	$	690,000	$	540,000

    The following is a reconciliation of the Federal statutory income tax rate to the effective tax rate:

	Three months ended March 31,				Years ended December 31,
	2001		2000		2000		1999		1998
Federal statutory rate	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%
State income taxes	3.5		3.3		3.4		3.6		2.7
Goodwill	0.2		1.5		0.7		0.6		0.4
Other	0.6		(0.5	)	0.2		0.1		1.2
	39.3	%	39.3	%	39.3	%	39.3	%	39.3	%

F–2–12

Company

    The Merger was accomplished through a cash-for-stock transaction. As a result, the tax basis of the Company's assets and liabilities did not change for income tax reporting purposes. As of April 1, 2001, the tax effects of the cumulative temporary differences between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes are as follows:

	April 1, 2001
Depreciation	$	708,000
Other		29,000
	$	737,000

    Goodwill arising through the Merger will not be deductible and is considered a permanent difference.

    The Internal Revenue Service is currently examining the Michael Food's Federal tax returns for the years 1996, 1997 and 1998. Adjustments, if any, resulting from these examinations will adjust goodwill recorded at the time of the Merger. The Company does not expect any material adjustments to result from these examinations.

    For income tax purposes the income or loss resulting from the Company's operations will be allocated as follows:

•

Losses will first be allocated to the common unit holders to the extent of their capital accounts. The maximum loss allocation is, therefore, limited to $375,000 which would be allocated $18,750 to Michael Foods, Inc. and $365,250 to the non-voting common unit holders, thereafter, all losses are allocated to Michael Foods, Inc.;



•

The Company's income will be allocated to Michael Foods, Inc. until all preferred units and return on preferred units of both Dairy LLCs have been recovered. The Company's preferred units have a value of approximately $30,000,000 and earn 10% per year;



•

Income in excess of the preferred unit amount and preferred unit return is distributed, subject to various limitations, to the common unit holders. Michael Foods, Inc. will receive 5% of this income, for their portion of the common units outstanding and the other common unit holders will receive 95%. The other common unit holders are permitted to keep an amount of this distribution equal to the tax due on the income they receive. Any additional distribution, in excess of the taxes due, must be contributed in exchange for capital stock of M-Foods Holdings, Inc. until such time as all of the revolving credit facility, A and B term loans and senior subordinated notes have been repaid.



•

In the event the Company is sold while Michael Foods, Inc.'s revolving credit facility, senior term loans A and B or subordinated debt is outstanding, the gain or loss on the sale will follow the allocation methods described above and gains must be contributed in exchange for capital stock of M-Foods Holdings, Inc. until all of the revolving credit facility, A and B term loans and senior subordinated notes have been retired. The total amount of Michael Foods, Inc.

F–2–13

outstanding debt subject to this distribution restriction is approximately $592,800,000 at April 1, 2001.

NOTE F—EMPLOYEE RETIREMENT PLAN

    Full-time employees who meet certain service requirements are eligible to participate in a defined contribution retirement plan of Michael Foods, Inc. The Company matches up to 4% of each participant's eligible compensation. The Predecessor's contributions related to the Unit's eligible employees totaled $190,089, $136,134 and $86,973 in the years ended December 31, 2000, 1999 and 1998 and $48,191 and $48,703 for the three months ended March 31, 2001 and 2000.

NOTE G—COMMITMENTS AND CONTINGENCIES

Leases

    The Company leases certain equipment and property under operating lease agreements expiring at various dates through 2004. Rent expense totaled $688,514, $527,338, and $399,760 in the years ended December 31, 2000, 1999 and 1998 and $146,191 and $154,241 for the three months ended March 31, 2001 and 2000.

    Minimum future lease obligations under these operating leases are as follows for the years ending December 31:

2001	$	354,360
2002		354,360
2003		354,360
2004		313,830

Litigation

    The Company is engaged in routine litigation incidental to its business. Management believes the ultimate outcome of this litigation will not have a material effect on the accompanying statements of financial position, liquidity or results of operations.

NOTE H—STOCK OPTION PLANS

    Certain officers and employees of the Operating Unit participated in various stock option plans sponsored by its parent, Michael Foods, Inc. Michael Foods, Inc. followed Accounting Principal Board Opinion No. 25 ("APB 25") in accounting for stock options issued under their plans. Under APB 25, no compensation expense was recognized by Michael Foods, Inc. related to the Unit's officers or employees for any of the periods presented. At the time of the Merger, all stock options issued and outstanding under these plans vested and were retired. For more information related to the Michael Foods, Inc. stock option plans, refer to Note H of their financial statements contained elsewhere in this registration statement.

F–2–14

Report of Independent Certified Public Accountants

BOARD OF DIRECTORS
MICHAEL FOODS, INC.

    We have audited the accompanying balance sheet of M-Foods Dairy TXCT, LLC (a majority owned subsidiary of Michael Foods, Inc.) as of April 1, 2001. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit.

    We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation. We believe our audit provides a reasonable basis for our opinion.

    In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of M-Foods Dairy TXCT, LLC (a majority owned subsidiary of Michael Foods, Inc.) as of April 1, 2001, in conformity with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

May 15, 2001

F–3–1

Report of Independent Certified Public Accountants

BOARD OF DIRECTORS
MICHAEL FOODS, INC.

    We have audited the accompanying balance sheets of Kohler Mix—TXCT (an operating unit of Michael Foods, Inc.) (the "Predecessor") as of December 31, 2000 and 1999 and March 31, 2001 and the related statements of operating unit earnings, unit holder and operating unit equity, and operating unit cash flows for each of the three years in the period ended December 31, 2000 and the three months ended March 31, 2001. These financial statements are the responsibility of the Predecessor's management. Our responsibility is to express an opinion on these financial statements based on our audits.

    We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion.

    In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kohler Mix—TXCT (an operating unit of Michael Foods, Inc.) as of December 31, 2000 and 1999 and March 31, 2001 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 and for the three months ended March 31, 2001, in conformity with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

May 15, 2001

F–3–2

M-FOODS DAIRY TXCT, LLC
(A Majority Owned Subsidiary of Michael Foods, Inc.)

BALANCE SHEETS

				Company		Predecessor
								December 31,
				April 1, 2001		March 31, 2001
								2000		1999
ASSETS
CURRENT ASSETS
	Accounts receivable			$	5,928,019	$	5,928,019	$	5,684,164	$	4,464,379
	Inventories				3,511,027		3,484,727		2,394,414		2,421,210
	Prepaid expenses and other				53,687		53,687		57,247		54,154
			Total current assets		9,492,733		9,466,433		8,135,825		6,939,743
PROPERTY, PLANT AND EQUIPMENT — AT COST
	Buildings and improvements				2,893,864		3,853,618		3,853,618		94,369
	Machinery and equipment				9,494,307		16,019,352		13,768,871		11,366,692
					12,388,171		19,872,970		17,622,489		11,461,061
	Less accumulated depreciation				—		3,610,642		3,193,422		2,132,332
					12,388,171		16,262,328		14,429,067		9,328,729
OTHER ASSETS
	Deferred tax asset				2,113,000		—		—		—
	Non-compete agreement				1,953,103		8,166,667		8,666,667		10,666,667
					4,066,103		8,166,667		8,666,667		10,666,667
				$	25,947,007	$	33,895,428	$	31,231,559	$	26,935,139
LIABILITIES AND UNIT HOLDER AND OPERATING UNIT EQUITY
CURRENT LIABILITIES
	Current maturities of non-compete commitment			$	2,400,000	$	2,400,000	$	2,400,000	$	2,400,000
	Accounts payable				4,138,393		4,138,393		3,133,493		3,202,287
	Accrued liabilities:
		Compensation			264,705		264,705		186,915		160,080
		Insurance			32,413		32,413		34,155		31,973
		Customer programs			151,378		151,378		139,000		201,753
		Other			438,103		438,103		402,570		184,407
			Total current liabilities		7,424,992		7,424,992		6,296,133		6,180,500
DEFERRED INCOME TAXES					—		47,000		64,000		132,000
NON-COMPETE COMMITMENT, less current maturities					4,800,000		4,800,000		4,800,000		7,200,000
COMMITMENTS AND CONTINGENCIES					—		—		—		—
UNIT HOLDER AND OPERATING UNIT EQUITY
	Class A — voting common units				8,500		—		—		—
	Class B — non-voting common units				118,750		—		—		—
	Preferred units				13,594,765		—		—		—
	Operating unit equity				—		21,623,436		20,071,426		13,422,639
					13,722,015		21,623,436		20,071,426		13,422,639
				$	25,947,007	$	33,895,428	$	31,231,559	$	26,935,139

The accompanying notes are an integral part of these statements.

F–3–3

M-FOODS DAIRY TXCT, LLC
(A Majority Owned Subsidiary of Michael Foods, Inc.)

STATEMENTS OF OPERATING UNIT OPERATIONS

		Predecessor
		Three months ended March 31,						Years ended December 31,
		2001			2000			2000			1999			1998
					(Unaudited)
Net sales		$	17,643,815		$	13,606,211		$	73,814,277		$	59,754,232		$	37,691,427
Cost of sales			17,107,779			12,705,910			70,447,336			55,641,450			35,599,411
	Gross profit		536,036			900,301			3,366,941			4,112,782			2,092,016
Selling, general and administrative expenses			1,712,068			1,875,703			7,412,196			5,624,793			3,178,982
	Operating loss		(1,176,032	)		(975,402	)		(4,045,255	)		(1,512,011	)		(1,086,966	)
	Loss before income taxes		(1,176,032	)		(975,402	)		(4,045,255	)		(1,512,011	)		(1,086,966	)
Income tax benefit			(447,000	)		(371,000	)		(1,537,000	)		(575,000	)		(415,000	)
	NET LOSS	$	(729,032	)	$	(604,402	)	$	(2,508,255	)	$	(937,011	)	$	(671,966	)

The accompanying notes are an integral part of these statements.

F–3–4

M-FOODS DAIRY TXCT, LLC
(A Majority Owned Subsidiary of Michael Foods, Inc.)

STATEMENTS OF UNIT HOLDER AND OPERATING UNIT EQUITY

Predecessor	Total Operating Unit Equity
Balance at January 1, 1998	$	3,253,614
Net additional capital invested		5,484,227
Net loss		(671,966	)
Balance at December 31, 1998		8,065,875
Net additional capital invested		6,293,775
Net loss		(937,011	)
Balance at December 31, 1999		13,422,639
Net additional capital invested		9,157,042
Net loss		(2,508,255	)
Balance at December 31, 2000		20,071,426
Net additional capital invested		2,281,042
Net loss		(729,032	)
Balance at March 31, 2001	$	21,623,436
Company
Balance at March 31, 2001	$	21,623,436
Merger with M-Food Investors, LLC		(21,623,436	)
Issuance of:
Class A — voting common units, 50 units issued and outstanding, additional carryover basis adjustment of $2,250		8,500
Class B — non-voting common units, 950 units issued and outstanding		118,750
Preferred units, 14,304 units issued and outstanding, additional carryover basis adjustment of $3,601,015		13,594,765
Balance at April 1, 2001	$	13,722,015

The accompanying notes are an integral part of these statements.

F–3–5

M-FOODS DAIRY TXCT, LLC
(A Majority Owned Subsidiary of Michael Foods, Inc.)

STATEMENTS OF OPERATING UNIT CASH FLOWS

				Predecessor
				Three months ended March 31,						Years ended December 31,
				2001			2000			2000			1999			1998
							(Unaudited)
Cash flows from operating activities:
	Net loss			$	(729,032	)	$	(604,402	)	$	(2,508,255	)	$	(937,011	)	$	(671,966	)
	Adjustments to reconcile net loss to net cash provided (used in) by operating activities:
		Depreciation			417,220			271,623			1,283,976			990,133			480,495
		Amortization			500,000			500,000			2,000,000			1,333,333			—
		Deferred income taxes			(17,000	)		(17,000	)		(68,000	)		(123,000	)		(16,000	)
		Changes in operating assets and liabilities:
			Accounts receivable		(243,855	)		(763,398	)		(1,219,785	)		(801,621	)		(2,345,485	)
			Inventories		(1,090,313	)		(803,178	)		26,796			(969,096	)		(209,818	)
			Prepaid expenses and other		3,560			(18,333	)		(3,093	)		(31,806	)		(22,348	)
			Accounts payable		1,004,900			1,687,940			(68,794	)		1,072,264			(81,434	)
			Accrued liabilities		123,959			1,798			184,427			329,862			85,777
Net cash provided by (used in) operating activities					(30,561	)		255,050			(372,728	)		863,058			(2,780,779	)
Cash flows from investing activities:
	Capital expenditures				(2,250,481	)		(658,527	)		(6,384,314	)		(4,757,833	)		(2,704,448	)
Net cash used in investing activities					(2,250,481	)		(658,527	)		(6,384,314	)		(4,757,833	)		(2,704,448	)
Cash flows from financing activities:
	Payments on non-compete commitment				—			—			(2,400,000	)		(2,400,000	)		—
	Net additional capital invested				2,281,042			403,477			9,157,042			6,293,775			5,484,227
Net cash provided by financing activities					2,281,042			403,477			6,757,042			3,893,775			5,484,227
Net decrease in cash and equivalents					—			—			—			(1,000	)		(1,000	)
Cash and equivalents at beginning of period					—			—			—			1,000			2,000
Cash and equivalents at end of period				$	—		$	—		$	—		$	—		$	1,000

    In conjunction with the purchase of the Connecticut facility during 1999, the company recorded a non-compete agreement of $12,000,000 and a related non-compete commitment for $12,000,000 of which $2,400,000 was paid in both 1999 and 2000. (See Note D).

The accompanying notes are an integral part of these statements.

F–3–6

M-FOODS DAIRY TXCT, LLC

(A Majority Owned Subsidiary of Michael Foods, Inc.)

NOTES TO FINANCIAL STATEMENTS

NOTE A—ORGANIZATION, BUSINESS AND MERGER

Organization

    M-Foods Dairy TXCT, LLC (the "Company") is a majority owned subsidiary of Michael Foods, Inc., who is a wholly owned subsidiary of M-Foods Holdings, Inc. following the Merger described below. Kohler Mix—TXCT (the "Predecessor," "Operating Unit" or the "Unit") was an operating unit of Michael Foods, Inc. prior to the Merger. The change in control of Michael Foods, Inc. and the reorganization of the operating unit into M-Foods Dairy TXCT, LLC are more fully described below.

Business

    The Company processes and distributes soft serve ice cream mix, frozen yogurt mix, milk and specialty dairy products, many of which are ultra-high temperature pasteurized, from its facilities in Texas and Connecticut.

Merger

    On December 21, 2000, Michael Foods, Inc. entered into a definitive agreement providing for the acquisition of Michael Foods, Inc. and its subsidiaries ("Michael Foods") by an investor group comprised of a management group led by Michael Foods Chairman, President and Chief Executive Officer, Gregg A. Ostrander, affiliates of Jeffrey Michael, a member of the Michael Foods Board of Directors, and affiliates of two private equity investment firms, Vestar Capital Partners and Goldner Hawn Johnson & Morrison Incorporated, collectively, M-Foods Investors, LLC. This acquisition transaction (the "Merger") was completed on April 10, 2001. Under the terms of the Merger agreement, all outstanding shares of Michael Foods common stock were converted into the right to receive $30.10 per share in cash, or value equal thereto, and all outstanding stock options were converted into the right to receive, in cash, $30.10 per share reduced by the exercise price per share for all shares subject to such stock options. The purchase of the outstanding shares was financed through new equity financing of approximately $175,000,000, a senior secured credit facility of up to $470,000,000 at market-based variable interest rates (effective rate of 7.5% at April 10, 2001), and $200,000,000 of senior subordinated notes at an 11.75% annual interest rate.

    Simultaneous with the close of the Merger, Michael Foods contributed the assets of its Dairy division into two limited liability corporations, M-Foods Dairy, LLC and M-Foods Dairy TXCT, LLC (collectively, the "Dairy LLCs") and in exchange received voting preferred and voting common units from these entities equal to the fair value of the net assets contributed, which collectively were approximately $40,000,000. (The approximate fair value contributed to M-Foods Dairy TXCT, LLC was $10,000,000.) The preferred units issued to the Company have an annual 10% preferred return guarantee and represent 100% of the preferred units issued and outstanding. In addition, the Company received 5% of the common units issued by each of the Dairy LLCs with the common units held by the Company representing 100% of the voting common units issued and outstanding. These common units have a stated value of $25,000. The remaining 95% of the common units, which are non-voting, are owned by M-Foods Dairy Holdings, LLC, which is owned by the same owners, or affiliates of such owners, in the same proportion, as the unit holders of M-Foods Investors, LLC. The Dairy LLCs common unit interest, owned by M-Foods Dairy Holdings, LLC, was purchased for $475,000 as of April 1, 2001.

F–3–7

    Following the Merger, Michael Foods, Inc. became an indirect wholly owned subsidiary of M-Foods Investors, LLC and M-Foods Dairy TXCT, LLC became a majority owned subsidiary of Michael Foods, Inc.

    The Merger has been accounted for as a purchase in accordance with Accounting Principles Board Opinion 16, Business Combinations and EITF 88-16, Basis in Leveraged Buyout Transactions. Accordingly, the acquired assets and liabilities have been recorded at fair value for the interests acquired by new investors and at the carryover basis for continuing investors. As a result, the assets and liabilities are assigned new values, which are part Predecessor cost and part fair value, in the same proportions as the carryover basis of the residual interests retained by the continuing management investors and continuing affiliate investors of the Michael family and the new interests aquired by the new investors. The deemed dividend related to the Michael Foods investment in the assets and liabilities of the Dairy LLCs was pushed down to these majority owned subsidiaries, as if they were wholly owned subsidiaries since Michael Foods owns all of the voting stock and the Dairy LLCs are being operated by the management of Michael Foods. The amount of the deemed dividend at Michael Foods was $66,631,000. However, the historical cost basis equity of the continuing investors of the Company was $21,623,436, which exceeded the Company's fair market value by $11,623,436. This resulted in an allocation of carryover basis in excess of the fair market value of the Company in the amount of $3,603,265.

    For ease of presentation, the Merger has been reflected in the accompanying balance sheet as if it had occurred on April 1, 2001. Management determined that no material transactions occurred during the period from April 1 through April 9, 2001. The Company's balance sheet has been presented on a comparative basis with the Predecessor's historical operating unit financial statements, prior to the date of Merger. Different bases of accounting have been used to prepare the Company and Predecessor financial statements. In the future, the primary differences will relate to the 10% yield on preferred units and depreciation and amortization of fixed assets and other intangible assets recorded at fair value at the date of Merger.

    For accounting purposes, the Merger was considered a leveraged buyout. The total purchase price of approximately $562,881,000 was allocated to the acquired assets and assumed liabilities of Michael Foods based on their fair values at April 1, 2001, net of the deemed dividend. Those allocations of the purchase price are as follows:

Working capital	$	88,663,000
Property, plant & equipment		310,416,000
Other assets		30,269,000
Goodwill		354,533,000
Long-term debt		588,426,000
Other liabilities		49,270,000

    These allocations, and those shown in the following table, were based primarily on a preliminary valuation report issued by a third party appraisal firm. Accordingly, the allocations related to property, plant and equipment and intangible assets, including goodwill, could change when the final report is received. However, final allocations are not expected to vary significantly from the allocations indicated.

F–3–8

    The fair value contributed by Michael Foods to M-Foods Dairy TXCT, LLC was $10,000,000 and this amount, plus an additional carryover basis of $3,603,265 was allocated to the acquired assets and liabilities based on their fair values at April 1, 2001. In addition, $118,750 was contributed by the new investors in exchange for Class B — non-voting common units. Those allocations are as follows:

Working capital	$	2,067,741
Property, plant & equipment		12,388,171
Other assets		4,066,103
Long-term debt		4,800,000

    The fair market value of the net assets exceeded the fair market value of the Company by $4,453,054. This negative goodwill was allocated pro rata to long-term assets as follows: $3,874,157 to property, plant and equipment, and $578,897 to the non-compete agreement.

    The following unaudited pro forma revenue and net loss for the year ended December 31, 2000 and for the three months ended March 31, 2001 are derived from the application of pro forma adjustments to the Predecessor historical statements of earnings, and assumes the Merger had occurred on January 1, 2000:

	Three months ended March 31, 2001			Year ended December 31, 2000
Revenue	$	17,643,815		$	73,814,277
Net loss		(573,000	)		(1,883,000	)

NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

    The accompanying Operating Unit financial statements as of December 31, 2000 and 1999 and for each of the three years in the period ended December 31, 2000 and as of and for the three months ended March 31, 2001 have been prepared from the historical books and records of Michael Foods and include an allocation of general and administrative costs incurred by Michael Foods and allocations from this Operating Unit to the other Dairy LLC operating unit, M-Foods Dairy, LLC. The accompanying unaudited consolidated financial statements and footnote information for the three-months ended March 31, 2000 have been prepared in accordance with Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") using the historical cost basis of assets and liabilities of the Predecessor. In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the results of operations and cash flows for the three months ended March 31, 2000. The Unit's financial statements include an allocation for general and administrative costs incurred by Michael Foods. Management believes its allocations to these Operating Unit financial statements are reasonable. Additionally, Operating Unit equity includes the annual net advances between the Operating Unit and Michael Foods, Inc. are considered additional capital invested from or constructive dividends to, Michael Foods. Accordingly, the accompanying financial statements may not necessarily be indicative of the results that could have been obtained if the Operating Unit had been operated as a stand-alone entity. The Operating Unit's historical results of

F–3–9

the Predecessor for the three months ended March 31, 2001 are not necessarily indicative of the results of the Company for a full year period.

    The accounting policies of the Predecessor have been adopted by the Company.

Use of Estimates

    Preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related revenues and expenses and disclosure about contingent assets and liabilities at the date of the financial statements. Actual results could differ from the estimates used by management.

Cash and Equivalents

    The Operating Unit considers all highly liquid temporary investments with original maturities of three months or less to be cash equivalents.

Inventories

    Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or market. The Company's finished goods inventory at April 1, 2001 is recorded at estimated selling prices, less cost of disposal and a selling profit allowance. Inventory values at April 1, 2001 for raw material and supply inventories are valued at Predecessor cost, which approximates replacement costs. Work-in-process inventories at April 1, 2001 were not material and have been recorded at Predecessor cost.

    Inventories consist of the following:

	Company		Predecessor
					December 31,
	April 1, 2001		March 31, 2001
					2000		1999
Raw materials and supplies	$	1,622,704	$	1,622,704	$	1,504,003	$	1,349,270
Work in process and finished goods		1,888,323		1,862,023		890,411		1,071,940
	$	3,511,027	$	3,484,727	$	2,394,414	$	2,421,210

Property, Plant and Equipment

    Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally on the straight-line basis. Estimated service lives range from 10-40 years for buildings and improvements and 3-10 years for machinery and equipment. Accelerated and straight-line methods are used for income tax purposes.

Revenue Recognition

    Sales are recognized when goods are shipped to customers and are recorded net of estimated customer programs.

F–3–10

New Accounting Pronouncements

    Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, requires entities to recognize all derivatives in their financial statements as either assets or liabilities measured at fair value. SFAS 133 also specifies new methods of accounting for derivatives used in risk management strategies (hedging activities), prescribes the items and transactions that may be hedged, and specifies detailed criteria required to qualify for hedge accounting. SFAS 137 deferred the effective date of SFAS 133 to fiscal years beginning after June 15, 2000. Effective January 1, 2001, the Predecessor adopted SFAS 133, which has not had a material effect on the Operating Unit's financial statements.

NOTE C—CONTINUED ADVANCES FROM PARENT

    The Operating Unit has historically been part of the Dairy division of Michael Foods, along with Kohler Mix—MN. The Operating Unit has shown losses for all periods presented; however, when combined with Kohler Mix—MN, the Dairy division generally produces net earnings and positive cash flow. Management of Michael Foods, Inc. intends to continue to provide advances to the Company in order to sustain its operations.

NOTE D—NON-COMPETE AGREEMENT AND COMMITMENT

    During 1999, as part of the purchase consideration for its Connecticut facility, the Unit entered into a $12,000,000 non-compete agreement. Under the agreement, the Operating Unit agreed to make five annual $2,400,000 payments beginning in 1999. The total remaining commitment at December 31, 2000 and 1999 was $7,200,000 and $9,600,000. Additionally, a related asset of $12,000,000 was recorded in 1999 and is being amortized over the term of the six-year non-compete agreement. At April 1, 2001, no fair value was allocated to the non-compete agreement. However, its carryover basis value, net of a negative goodwill adjustment, was $1,953,103 and will be amortized over the agreement's remaining life.

NOTE E—INCOME TAXES

Predecessor

    The activity of the Operating Unit has been included in the income tax return of Michael Foods, Inc. for financial reporting purposes. The Unit has been allocated a benefit for income taxes in

F–3–11

an amount generally equivalent to the benefit that would have resulted had the Unit filed a separate income tax return. The provision for income taxes consists of the following:

		Three months ended March 31,						Years ended December 31,
		2001			2000			2000			1999			1998
Current
	Federal	$	(378,000	)	$	(311,000	)	$	(1,288,000	)	$	(387,000	)	$	(349,000	)
	State		(52,000	)		(43,000	)		(181,000	)		(65,000	)		(50,000	)
			(430,000	)		(354,000	)		(1,469,000	)		(452,000	)		(399,000	)
Deferred
	Federal		(15,000	)		(15,000	)		(62,000	)		(118,000	)		(15,000	)
	State		(2,000	)		(2,000	)		(6,000	)		(5,000	)		(1,000	)
			(17,000	)		(17,000	)		(68,000	)		(123,000	)		(16,000	)
		$	(447,000	)	$	(371,000	)	$	(1,537,000	)	$	(575,000	)	$	(415,000	)

    Tax effects of the cumulative temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes are as follows:

				December 31,
	March 31, 2001
				2000			1999
Depreciation	$	970,000		$	879,000		$	518,000
Non-compete		(886,000	)		(770,000	)		(308,000	)
Other		(37,000	)		(45,000	)		(78,000	)
	$	47,000		$	64,000		$	132,000

    The following is a reconciliation of the Federal statutory income tax rate to the effective tax rate:

	Three months ended March 31,				Years ended December 31,
	2001		2000		2000		1999		1998
Federal statutory rate	(35.0	)%	(35.0	)%	(35.0	)%	(35.0	)%	(35.0	)%
State income taxes	(3.0	)	(3.0	)	(3.0	)	(3.0	)	(3.0	)
	(38.0	)%	(38.0	)%	(38.0	)%	(38.0	)%	(38.0	)%

Company

    The Merger was accomplished through a cash-for-stock transaction. As a result, the tax basis of the Company's assets and liabilities did not change for income tax reporting purposes. As of April 1, 2001,

F–3–12

the tax effects of the cumulative temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes are as follows:

	April 1, 2001
Depreciation	$	970,000
Non-compete		(3,056,000	)
Other		(27,000	)
	$	(2,113,000	)

    The Internal Revenue Service is currently examining the Michael Food's Federal tax returns for the years 1996, 1997 and 1998. Adjustments, if any, resulting from these examinations will adjust goodwill recorded at the time of the Merger. The Company does not expect any material adjustments to result from these examinations.

    For income tax purposes the income or loss resulting from the Company's operations will be allocated as follows:

•

Losses will first be allocated to the common unit holders to the extent of their capital accounts. The maximum loss allocation is, therefore, limited to $125,000 which would be allocated $6,250 to Michael

Foods, Inc. and $118,750 to the non-voting common unit holders; thereafter, all losses are allocated to Michael Foods, Inc.;

•

The Company's income will be allocated to Michael Foods, Inc. until all preferred units and return on preferred units of both Dairy LLCs have been recovered. The Company's preferred units have a value of approximately $10,000,000 and earn 10% per year;



•

Income in excess of the preferred unit amount and preferred unit return is distributed, subject to various limitations, to the common unit holders. Michael Foods, Inc. will receive 5% of this income, for their portion of the common units outstanding and the other common unit holders will receive 95%. The other common unit holders are permitted to keep an amount of this distribution equal to the tax due on the income they receive. Any additional distribution, in excess of the taxes due, must be contributed in exchange for capital stock of M-Foods Holdings, Inc. until such time as all of the revolving credit facility, A and B term loans and senior subordinated notes have been repaid.



•

In the event the Company is sold while Michael Foods, Inc.'s revolving credit facility, A and B term loans or senior subordinated notes are outstanding, the gain or loss on the sale will follow the allocation methods described above and gains must be contributed in exchange for capital stock of M-Foods Holdings, Inc. until all of the revolving credit facility, A and B term loans and senior subordinated notes have been retired. The total amount of Michael Foods, Inc. outstanding debt subject to this distribution restriction is approximately $592,800,000 at April 1, 2001.

NOTE F—EMPLOYEE RETIREMENT PLAN

    Full-time employees who meet certain service requirements are eligible to participate in a defined contribution retirement plan of Michael Foods, Inc. The Company matches up to 4% of each

F–3–13

participant's eligible compensation. The Predecessor's contributions related to the Unit's eligible employees totaled $103,653, $69,245 and $25,660 in the years ended December 31, 2000, 1999 and 1998 and $32,987 and $27,228 for the three months ended March 31, 2001 and 2000.

NOTE G—COMMITMENTS AND CONTINGENCIES

Leases

    The Company leases certain equipment and property under operating lease agreements expiring at various dates through 2007. Rent expense totaled $2,593,189, $1,496,302 and $837,414 in the years ended December 31, 2000, 1999 and 1998 and $528,628 and $636,412 for the three months ended March 31, 2001 and 2000.

    Minimum future lease obligations under lease obligations are as follows for the years ending December 31:

2001	$	2,265,262
2002		2,320,128
2003		2,320,128
2004		2,320,128
2005		1,511,480
Thereafter		3,120,218

Litigation

    The Company is engaged in routine litigation incidental to its business. Management believes the ultimate outcome of this litigation will not have a material effect on the accompanying statements of financial position, liquidity or results of operations.

NOTE H—STOCK OPTION PLANS

    Certain officers and employees of the Operating Unit participated in various stock option plans sponsored by its parent, Michael Foods, Inc. Michael Foods, Inc. followed Accounting Principal Board No. 25 ("APB 25") in accounting for stock options issued under their plans. Under APB 25, no compensation expense was recognized by Michael Foods, Inc. related to the Unit's officers or employees for any of the periods presented. At the time of the merger, all stock options issued and outstanding under these plans vested and were retired. For information related to Michael Foods, Inc. stock option plans, refer to Note H of their financial statements contained elsewhere in this document.

F–3–14

$200,000,000

Offer to Exchange $200,000,000
11³/4% Senior Subordinated Notes due 2011, Series B
for any and all outstanding
11³/4% Senior Subordinated Notes due 2011

PROSPECTUS

             , 2001

PART II: INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20: Indemnification of Directors and Officers.

    The following is a summary of the statutes, charter and bylaw provisions or other arrangements under which the Registrants' directors and officers are insured or indemnified against liability in their capacities as such. All of the directors and officers of the Registrants are covered by insurance policies maintained and held in effect by Michael Foods, Inc. against certain liabilities for actions taken in their capacities as such, including liabilities under the Securities Act.

Registrants Incorporated Under Connecticut Law

    Kohler Mix Specialties of Connecticut, Inc. is incorporated under the laws of the State of Connecticut. The Connecticut Stock Corporation Act (the "Act") provides for indemnification of directors, officers, shareholders, employees and agents of a corporation. Under the Act, a corporation is required to indemnify a director against judgments and other expenses of litigation when he is sued by reason of his being a director in any proceeding brought, other than on behalf of the corporation, if a director is successful on the merits in defense, or acted in good faith and in a manner reasonably believed to be in the best interests of the corporation, or in a criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. In a proceeding brought on behalf of a corporation (a derivative action), a director is entitled to be indemnified by the corporation for reasonable expenses of litigation, if the director is finally adjudged not to have breached his duty to the corporation. In addition, a director is entitled to indemnification for both derivative and non-derivative actions, if a court determines, upon application, that the director is fairly and reasonably entitled to be indemnified. Under Article VIII of Kohler Mix Specialties of Connecticut's Certificate of Incorporation, Kohler Mix Specialties of Connecticut will indemnify its directors for money damages in excess of the compensation received by the director for serving the corporation and, upon any change in the Connecticut Business Corporation Act, will indemnify such director, or any other officer or agent of the corporation to the fullest extent provided by Connecticut law.

Registrants Incorporated Under Delaware Law

    Michael Foods of Delaware, Inc. is incorporated under the laws of the State of Delaware. Section 145 of the General Corporation Law of the State of Delaware (the "Delaware Statute") provides that a Delaware corporation may indemnify any persons who are, or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding"), other than an action by or in the right of such corporation, by reason of the fact that such person is or was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise (an "indemnified capacity"). The indemnity may include expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was illegal. Similar provisions apply to actions brought by or in the right of the corporation, except that no indemnification shall be made without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director has actually and reasonably incurred. Section 145 of the Delaware Statute further authorizes a corporation to purchase and maintain insurance on behalf of any indemnified person against any liability asserted against him and incurred by him in any indemnified capacity, or arising out of his status as such, regardless of whether the corporation would otherwise have the power to indemnify him under the Delaware Statute.

II–1

Article 6 of the Amended and Restated Certificate of Incorporation of Michael Foods of Delaware provides that the corporation may indemnify any person who was or is a party to any action, suit or proceeding to the fullest extent provided by the Delaware General Corporation Law. In addition, Michael Foods of Delaware shall indemnify its directors for all liabilities arising from a breach of fiduciary duty except when such breach results in an improper benefit receipt.

Registrants Formed Under the Delaware Limited Liability Company Act

    M-Foods Dairy, LLC and M-Foods Dairy TXCT, LLC are limited liability companies formed under the laws of the state of Delaware. Section 18-108 of the Delaware Limited Liability Company Act provides that, subject to any standards and restrictions, if any, set forth in a company's limited liability company agreement, a limited liability company may indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever. The Limited Liability Company Agreements of M-Foods Dairy, LLC and M-Foods Dairy TXCT, LLC provide indemnification for all officers, directors, unitholders and/or legal representatives of each company against all claims, actions or proceedings that such person is made a party by reason of his involvement with such company, provided that such person has acted in good faith with regard to the actions underlying such claims.

Registrants Incorporated Under Minnesota Law

    Michael Foods, Inc., Northern Star Co., Minnesota Products, Inc., Kohler Mix Specialties, Inc., Midwest Mix, Inc., Crystal Farms Refrigerated Distribution Company, Papetti's Hygrade Egg Products, Inc. and Casa Trucking, Inc. are incorporated under the laws of the State of Minnesota. Minnesota Statutes Section 302A.521 provides that a corporation shall indemnify any person made or threatened to be made a party to a proceeding by reason of the former or present official capacity of such person against judgments, penalties, fines (including, without limitation, excise taxes assessed against such person with respect to any employee benefit plan), settlements and reasonable expenses, including attorneys' fees and disbursements, incurred by such person in connection with the proceeding, if, with respect to the acts or omissions of such person complained of in the proceeding, such person: (1) has not been indemnified therefor by another organization or employee benefit plan; (2) acted in good faith; (3) received no improper personal benefit and Section 302A.255 (with respect to director conflicts of interest), if applicable, has been satisfied; (4) in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful; and (5) reasonably believed that the conduct was in the best interests of the corporation in the case of acts or omissions in such person's official capacity for the corporation or reasonably believed that the conduct was not opposed to the best interests of the corporation in the case of acts or omissions in such person's official capacity for other affiliated organizations.

    Article IX of the Bylaws of Michael Foods, Inc. provides that the corporation shall indemnify its officers and directors against any actions, suits or proceedings arising out of their duties as officers or directors to the fullest extent provided by the Minnesota Statutes. Article IX of the Articles of Incorporation of Papetti's Hygrade Egg Products, Inc. provides for indemnification of directors and officers of the corporation to the fullest extent provided by the Minnesota Statutes. Article IX of the Articles of Incorporation of Casa Trucking, Inc. provides for indemnification of directors and officers of the corporation to the fullest extent provided by the Minnesota Statutes. Article V of the Articles of Incorporation of Crystal Farms Refrigerated Distribution Company provide that the corporation shall indemnify a director of the corporation for actions claiming breach of fiduciary duty as a director, except for (i) liability based upon breach of a duty of loyalty; (ii) liability for acts not performed in good faith; (iii) liability based on payment of an improper dividend; or (iv) liability based on a transaction in which the director received an improper personal benefit. Article XII of the Articles of Incorporation of Minnesota Products, Inc. provides that the corporation shall indemnify all persons made party to pending or threatened actions by reason of the fact that such person acted as a director,

II–2

officer, employee or agent of the corporation provided that such person acted in good faith and in a manner he reasonably believed to be not opposed to the best interests of the corporation. Section 45 of the Bylaws of Midwest Mix, Inc. provides that the corporation shall indemnify any person to be made a party to any pending or threatened action, suit or proceeding as a result of serving as a director or officer of the corporation, provided that such person acted in good faith and in a manner in which such person reasonably believed to be in the best interests of the corporation. The articles of incorporation and bylaws of Kohler Mix Specialties, Inc. and Northern Star Co. contain no articles, sections or provisions relating to indemnification.

Registrants Incorporated Under Nebraska Law

    M.G. Waldbaum Company is incorporated under the laws of the State of Nebraska. Under Nebraska law, indemnification of directors and officers may be provided for judgments, fines, settlements, and expenses, including attorney's fees, incurred in connection with any threatened, pending, or completed action, suit, or proceeding other than an action by or in the right of Commercial. This applies to any civil, criminal, investigative or administrative action provided that the director or officer involved acted in good faith, in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

    Indemnification of directors and officers also may be provided for judgments, fines, settlements, and expenses, including attorney's fees, incurred in connection with any threatened, pending, or completed action, or suit by or in the right of the corporation if such director or officer acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation. However, no indemnification shall be made in respect of any claim, issue or matter in which such person is adjudged to be liable for negligence or misconduct in the performance of his duties to the corporation unless the court in which the action is brought deems indemnity proper. Article VIII of the Articles of Incorporation of M.G. Waldbaum Company provides that the corporation shall indemnify all persons acting as directors, officers, or agents of the employee made a party to any action, suit or proceeding unless the underlying conduct of such person was not in good faith or the person acted in a way that he did not reasonably believe was not opposed to the best interests of the corporation.

Registrants Incorporated Under Nevada Law

    Farm Fresh Foods, Inc. is incorporated under the laws of the State of Nevada. The Nevada General Corporation Law requires Farm Fresh to indemnify officers and directors for any expenses, including attorneys' fees, incurred by any officer or director in connection with any actions or proceedings, whether civil, criminal, administrative, or investigative, brought against such officer or director because of his or her status as an officer or director, to the extent that the director or officer has been successful on the merits or otherwise in defense of the action or proceeding. The Nevada General Corporation Law permits a corporation to indemnify an officer or director, even in the absence of an agreement to do so, for expenses incurred in connection with any action or proceeding if such officer of director acted in good faith and in a manner in which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and such indemnification is authorized by the stockholders, by a quorum of disinterested directors, by independent legal counsel in a written opinion authorized by a majority vote of a quorum of directors consisting of disinterested directors or by independent legal counsel in a written opinion if a quorum of disinterested directors cannot be obtained. The Nevada General Corporation Law prohibits indemnification of a director or officer if a final adjudication establishes that the officer's or director's acts or omissions involved intentional misconduct, fraud, or a knowing violation of the law and were material to the cause of action. Despite the foregoing limitations on indemnification, the Nevada General Corporation Law may permit an officer or director to apply to the court for approval of indemnification even if the officer or director is

II–3

adjudged to have committed intentional misconduct, fraud, or a knowing violation of the law. The Nevada General Corporation Law also provides that indemnification of directors is not permitted for the unlawful payment of distributions, except for those directors registering their dissent to the payment of the distribution. Article VI of the Amended and Restated Articles of Incorporation of Farm Fresh Foods, Inc. provides that the corporation shall indemnify all persons who, as a result of their service to the corporation in an official capacity, are made a party to any action, suit or proceeding to the fullest extent provided by the General Corporation Law of Nevada.

Registrants Incorporated Under New Jersey Law

    Papetti Electroheating Corporation is incorporated under the laws of the State of New Jersey. The New Jersey Business Corporation Act provides that a New Jersey corporation has the power to indemnify a director or officer against his or her expenses and liabilities in connection with any proceeding involving the director or officer by reason of his or her being or having been such a director or officer, other than a proceeding by or in the right of the corporation, if such director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation; and with respect to any criminal proceeding, such director or officer had no reasonable cause to believe his or her conduct was unlawful.

    The indemnification and advancement of expenses shall not exclude any other rights, including the right to be indemnified against liabilities and expenses incurred in proceedings by or in the right of the corporation, to which a director or officer may be entitled under a certificate of incorporation, by-law, agreement, vote of shareholders, or otherwise; provided, that no indemnification shall be made to or on behalf of a director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his or her acts or omissions (a) were in breach of his or her duty of loyalty to the corporation or its shareholders, (b) were not in good faith or involved a knowing violation of law or (c) resulted in receipt by the director or officer of an improper personal benefit. Article Seven of the Certificate of Incorporation of Papetti Electroheating Corporation provides that the corporation will indemnify any and all corporate agents to the fullest extent provided by the New Jersey Business Corporation Act.

Registrants Incorporated Under Wisconsin Law

    WFC, Inc. and Wisco Farm Cooperative are each incorporated under the laws of the State of Wisconsin. Sections 180.0850 to 180.0859 of the Wisconsin Corporate Statutes (the "Wisconsin Statute") require a corporation to indemnify any director or officer who is a party to any threatened, pending or completed proceeding, to the extent the director or officer has been successful on the merits or otherwise in the defense of the proceeding, for all reasonable expenses incurred in the proceeding if the director or officer was a party because he or she is a director or officer of the corporation. If the director or officer is not successful in defense of the proceeding, a corporation must indemnify the director or officer unless the liability was incurred as a result of the breach or failure to perform a duty which the director or officer owes to the corporation and the breach or failure to perform constitutes: (1) a willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest; (2) a violation of criminal law, unless the person has reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful; (3) a transaction from which the person derived an improper personal profit; or (4) willful misconduct. A corporation's articles of incorporation may limit its obligation to indemnify under these provisions. The Wisconsin Statute also provides that a corporation may purchase and maintain insurance for officers and directors against liabilities incurred while acting in such capacities whether or not the corporation would be empowered to indemnify such persons under the Wisconsin Statute. Article VII of the Articles of Incorporation of WFC, Inc. provides for indemnification of its officers to the full extent provided by the Wisconsin Statute, and for all money damages except for those resulting from willful failure to deal fairly with the corporation in

II–4

connection with a matter in which the director has a material conflict of interest or where the director has violated criminal law, unless the director had no reasonable cause to believe his activities were unlawful, the director received an improper personal benefit or the director committed willful misconduct. The articles and bylaws of Wisco Farm Cooperative do not provide for the indemnification of its officers or directors.

Item 21. Exhibits.

    (a) The following exhibits are filed as part of this Registration Statement or incorporated by reference herein:

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated December 21, 2000, by and among Michael Foods Acquisition Corp., Michael Foods, Inc. and M-Foods Holdings, Inc.
2.2	Amendment Number One to Agreement and Plan of Merger, dated March 6, 2001, by and among Michael Foods Acquisition Corp., Michael Foods, Inc. and M-Foods Holdings, Inc.
3.1	Amended and Restated Articles of Incorporation of Michael Foods, Inc.
3.2	Bylaws of Michael Foods, Inc.
3.3	Certificate of Incorporation of Michael Foods of Delaware, Inc.
3.4	Bylaws of Michael Foods of Delaware, Inc.
3.5	Articles of Incorporation of WFC, Inc.
3.6	Bylaws of WFC, Inc.
3.7	Articles of Incorporation of Wisco Farm Cooperative.
3.8	Bylaws of Wisco Farm Cooperative.
3.9	Articles of Incorporation of Crystal Farms Refrigerated Distribution Company.
3.10	Bylaws of Crystal Farms Refrigerated Distribution Company.
3.11	Articles of Incorporation of Northern Star Co.
3.12	Bylaws of Northern Star Co.
3.13	Articles of Incorporation of Minnesota Products, Inc.
3.14	Bylaws of Minnesota Products, Inc.
3.15	Articles of Incorporation of Farm Fresh Foods, Inc.
3.16	Bylaws of Farm Fresh Foods, Inc.
3.17	Articles of Kohler Mix Specialties, Inc.
3.18	Bylaws of Kohler Mix Specialties, Inc.
3.19	Articles of Kohler Mix Specialties of Connecticut, Inc.
3.20	Bylaws of Kohler Mix Specialties of Connecticut, Inc.
3.21	Articles of Incorporation of Midwest Mix, Inc.
3.22	Bylaws of Midwest Mix, Inc.
3.23	Certificate of Formation of M-Foods Dairy, LLC.
3.24	Limited Liability Company Agreement of M-Foods Dairy, LLC.

II–5

3.25	Certificate of Formation of M-Foods Dairy TXCT, LLC.
3.26	Limited Liability Company Agreement of M-Foods Dairy TXCT, LLC.
3.27	Articles of Incorporation of M. G. Waldbaum Company.
*3.28	Bylaws of M. G. Waldbaum Company.
3.29	Articles of Incorporation of Papetti's Hygrade Food Products, Inc.
3.30	Bylaws of Papetti's Hygrade Food Products, Inc.
3.31	Articles of Incorporation of Papetti Electroheating Corporation.
3.32	Bylaws of Papetti Electroheating Corporation.
3.33	Articles of Incorporation of Casa Trucking, Inc.
3.34	Bylaws of Casa Trucking, Inc.
4.1	Purchase Agreement, dated March 16, 2001, between Michael Foods Acquisition Corp., Michael Foods, Inc., and Banc of America Securities, LLC and Bear, Stearns & Co.
4.2	Indenture, dated March 27, 2000, between Michael Foods Acquisition Corp. and BNY Midwest Trust Company, as trustee.
4.3	Supplemental Indenture, dated as of April 10, 2001, by and among Michael Foods, Inc., M-Foods Holdings, Inc., Michael Foods of Delaware, Inc., Northern Star Co., Minnesota Products, Inc., Farm Fresh Foods, Inc., Crystal Farms Refrigerated Distribution Company, WFC, Inc., Wisco Farm Cooperative, M. G. Waldbaum Company, Papetti's Hygrade Egg Products, Inc., Casa Trucking, Inc., Papetti Electroheating Corporation, Kohler Mix Specialties, Inc., Midwest Mix, Inc., Kohler Mix Specialties of Connecticut, Inc. and Midwest Mix, Inc. and BNY Midwest Trust Company.
4.4	Second Supplemental Indenture, dated as of May 2, 2001, by and among M-Foods Dairy, LLC and M-Foods Dairy TXCT, LLC, Michael Foods, Inc. and BNY Midwest Trust Company.
4.5	Registration Rights Agreement, dated March 27, 2001, by and among Michael Foods Acquisition Corp., and Banc of America Securities, LLC and Bear, Stearns & Co.
4.6	Collateral Pledge and Security Agreement, dated March 27, 2001, between Michael Foods Acquisition Corp., and Banc of America Securities, LLC and Bear, Stearns & Co. and BNY Midwest Trust Company as collateral agent and securities intermediary.
*5.1	Opinion of Kirkland & Ellis regarding the validity of the securities offered hereby.
*8.1	Opinion of Kirkland & Ellis regarding federal income tax considerations.
10.1	Credit Agreement, dated April 10, 2001, among Michael Foods, Inc., M-Foods Holdings, Inc., the Guarantors, Bank of America, N.A., as Agent, Banc of America Securities, LLC, as Sole Lead Arranger and Sole Book Running Manager, and Bear, Stearns & Co., as Syndication Agent.
10.2	Pledge Agreement, dated April 10, 2001, between Michael Foods, Inc., Bank of America, N.A. and Banc of America Securities, LLC.
*10.3	M-Foods Holdings, Inc. 2001 Option Plan.
*10.4	Form of M-Foods Holdings Stock Option Award Agreement.
10.5	Employment Agreement, dated April 10, 2001, by and among Michael Foods, Inc., M-Foods Holdings, Inc. and Gregg A. Ostrander.

II–6

10.6	Employment Agreement, dated April 10, 2001, by and among Michael Foods, Inc., M-Foods Holdings, Inc. and John D. Reedy.
10.7	Employment Agreement, dated April 10, 2001, by and among Michael Foods, Inc., M-Foods Holdings, Inc. and James D. Clarkson.
10.8	Employment Agreement, dated April 10, 2001, by and among Michael Foods, Inc., M-Foods Holdings, Inc. and Bill L. Goucher.
10.9	Severance and Deferred Compensation Agreement, dated April 10, 2001, by and among Michael Foods, Inc., M-Foods Holdings, Inc. and James Mohr.
10.10	Severance and Deferred Compensation Agreement, dated April 10, 2001, by and among Michael Foods, Inc., M-Foods Holdings, Inc. and Harold D. Sprinkle.
10.11	Severance and Deferred Compensation Agreement, dated April 10, 2001, by and among Michael Foods, Inc., M-Foods Holdings, Inc. and Max Hoffmann.
10.12	Severance and Deferred Compensation Agreement, dated April 10, 2001, by and among Michael Foods, Inc., M-Foods Holdings, Inc. and Bradley Cook.
10.13	Amended and Restated Limited Liability Company Agreement of M-Foods Investors, LLC.
10.14	Securityholders Agreement, dated April 10, 2001, between M-Foods Dairy Holdings, LLC, Marathon Dairy Investment Corp., Vestar Capital Partners IV, L.P., 4J2R1C Limited Partnership, 3J2R Limited Partnership, Gregg A. Ostrander, John D. Reedy, Bill L. Goucher, James D. Clarkson, James Mohr, Harold D. Sprinkle, Bradley Cook, and Max Hoffmann.
10.15	Management Stock Purchase and Unit Subscription Agreement, dated April 10, 2001, among M-Foods Investors, LLC, M-Foods Holdings, Inc., and Gregg A. Ostrander.
10.16	Management Stock Purchase and Unit Subscription Agreement, dated April 10, 2001, among M-Foods Investors, LLC, M-Foods Holdings, Inc., and John D. Reedy.
10.17	Management Stock Purchase and Unit Subscription Agreement, dated April 10, 2001, among M-Foods Investors, LLC, M-Foods Holdings, Inc., and James D. Clarkson.
10.18	Management Stock Purchase and Unit Subscription Agreement, dated April 10, 2001, among M-Foods Investors, LLC, M-Foods Holdings, Inc., and Bill L. Goucher.
10.19	Management Stock Purchase and Unit Subscription Agreement, dated April 10, 2001, among M-Foods Investors, LLC, M-Foods Holdings, Inc., and Max Hoffmann.
10.20	Management Stock Purchase and Unit Subscription Agreement, dated April 10, 2001, among M-Foods Investors, LLC, M-Foods Holdings, Inc., and Harold D. Sprinkle.
10.21	Management Stock Purchase and Unit Subscription Agreement, dated April 10, 2001, among M-Foods Investors, LLC, M-Foods Holdings, Inc., and Bradley Cook.
10.22	Management Stock Purchase and Unit Subscription Agreement, dated April 10, 2001, among M-Foods Investors, LLC, M-Foods Holdings, Inc., and James Mohr.
10.23	Management Unit Subscription Agreement, dated April 10, 2001, between M-Foods Dairy Holdings, LLC, and Gregg A. Ostrander.
10.24	Management Unit Subscription Agreement, dated April 10, 2001, between M-Foods Dairy Holdings, LLC, and John D. Reedy.
10.25	Management Unit Subscription Agreement, dated April 10, 2001, between M-Foods Dairy Holdings, LLC, and James D. Clarkson.

II–7

10.26	Management Unit Subscription Agreement, dated April 10, 2001, between M-Foods Dairy Holdings, LLC, and Bill L. Goucher.
10.27	Management Unit Subscription Agreement, dated April 10, 2001, between M-Foods Dairy Holdings, LLC, and Max Hoffmann.
10.28	Management Unit Subscription Agreement, dated April 10, 2001, between M-Foods Dairy Holdings, LLC, and Harold D. Sprinkle.
10.29	Management Unit Subscription Agreement, dated April 10, 2001, between M-Foods Dairy Holdings, LLC, and Bradley Cook.
10.30	Management Unit Subscription Agreement, dated April 10, 2001, between M-Foods Dairy Holdings, LLC, and James Mohr.
*10.31	Securityholders Agreement, dated April 10, 2001, between M-Foods Investors, LLC, M-Foods Holdings, Inc., Marathon Fund Limited Partnership IV, Vestar Capital Partners IV, L.P., 4J2R1C Limited Partnership, 3J2R Limited Partnership, Gregg A. Ostrander, John D. Reedy, Bill L. Goucher, James D. Clarkson, James Mohr, Harold D. Sprinkle, Bradley Cook, and Max Hoffmann.
*12	Computation of ratio of earnings to fixed charges.
21.1	Subsidiaries of Michael Foods, Inc.
23.1	Consent of Grant Thornton LLP—Michael Foods, Inc., M-Foods Dairy, LLC and M-Foods Dairy TXCT, LLC.
*23.2	Consents of Kirkland & Ellis (included in Exhibits 5.1 and 8.1).
24.1	Power of Attorney (included on the signature pages hereto).
*25.1	Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939 of BNY Midwest Trust Company.
*99.1	Form of Letter of Transmittal.
*99.2	Instructions to the Trustee.
*99.3	Form of Tender Instructions.
*99.4	Form of Notice of Guaranteed Delivery.

*

To be filed by amendment.

(b)

The following financial statement schedules are included in this Registration Statement:

    Schedule II Valuation and Qualifying Accounts

        All other schedules for which provision is made in the applicable accounting regulations of the Commission are not required under the related instructions, are inapplicable or not material, or the information called for thereby is otherwise included in the financial statements and has therefore been omitted.

II–8

Item 22. Undertakings.

    Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 20 or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

    The undersigned registrants hereby undertake:

(1)

To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.



(2)

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:



(A)

To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933.



(B)

To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.



(C)

To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(3)

That, for the purpose of determining liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.



(4)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the exchange offer.



(5)

To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of the receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

II–9

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Michael Foods, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

MICHAEL FOODS, INC.
By:	/s/ JOHN D. REEDY John D. Reedy Executive Vice President, Chief Financial Officer and Treasurer

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Principal Executive Officer and Director
/s/ JOHN D. REEDY John D. Reedy	Principal Financial and Accounting Officer
/s/ JAMES P. KELLEY James P. Kelley	Director
/s/ J. CHRISTOPHER HENDERSON J. Christopher Henderson	Director

II–10

/s/ JOHN L. MORRISON John L. Morrison	Director
/s/ JEFFREY J. MICHAEL Jeffrey J. Michael	Director
/s/ LEONARD LIEBERMAN Leonard Lieberman	Director
/s/ DANIEL M. O'CONNELL Daniel M. O'Connell	Director
/s/ KEVIN A. MUNDT Kevin A. Mundt	Director

II–11

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Michael Foods of Delaware, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

MICHAEL FOODS OF DELAWARE, INC.
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–12

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, M. G. Waldbaum Company has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

M. G. WALDBAUM COMPANY
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–13

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Papetti's Hygrade Egg Products, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

PAPETTI'S HYGRADE EGG PRODUCTS, INC.
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities and on the dates indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–14

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Papetti Electroheating Corporation has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

PAPETTI ELECTROHEATING CORPORATION
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–15

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Casa Trucking, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

CASA TRUCKING, INC.
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–16

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Crystal Farms Refrigerated Distribution Company has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

CRYSTAL FARMS REFRIGERATED DISTRIBUTION   COMPANY
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–17

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, WFC, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

WFC, INC.
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–18

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Wisco Farm Cooperative has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

WISCO FARM COOPERATIVE
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director
/s/ MARK D. WITMER Mark D. Witmer	Director

II–19

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Northern Star Co. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

NORTHERN STAR CO.
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–20

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Minnesota Products, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

MINNESOTA PRODUCTS, INC.
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–21

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Farm Fresh Foods, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

FARM FRESH FOODS, INC.
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–22

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Kohler Mix Specialties, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

KOHLER MIX SPECIALTIES, INC.
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–23

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Kohler Mix Specialties of Connecticut, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

KOHLER MIX SPECIALTIES OF CONNECTICUT, INC.
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–24

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, Midwest Mix, Inc. has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

MIDWEST MIX, INC.
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–25

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, M-Foods Dairy, LLC has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

M-FOODS DAIRY, LLC
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–26

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, M-Foods Dairy TXCT, LLC has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on the 22^nd day of June, 2001.

M-FOODS DAIRY TXCT, LLC
By:	/s/ JOHN D. REEDY John D. Reedy Vice President

POWER OF ATTORNEY

    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregg A. Ostrander, John D. Reedy and J. Christopher Henderson, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and power of attorney have been signed by the following persons in the capacities indicated on the 22^nd day of June, 2001.

Signature	Title
/s/ JOHN D. REEDY John D. Reedy	Vice President and Director
/s/ GREGG A. OSTRANDER Gregg A. Ostrander	Director

II–27

SCHEDULE II

Michael Foods, Inc.
(A wholly owned subsidiary of M-Foods Holdings, Inc.)

VALUATION AND QUALIFYING ACCOUNTS

Allowance for Doubtful Accounts:

Years Ended December 31,	Balance at Beginning of Period		Charged to Cost and Expense		Charge to Other Accounts		Deductions(A)		Balance at end of Period
1998	$	1,748,000	$	861,000	$	—	$	484,000	$	2,125,000
1999		2,125,000		504,000		—		578,000		2,051,000
2000		2,051,000		2,360,000		—		2,179,000		2,232,000

(A)

Write-offs of accounts deemed uncollectible

SCHEDULE II

M-Foods Dairy, LLC
(A majority owned subsidiary of Michael Foods, Inc.)

VALUATION AND QUALIFYING ACCOUNTS

Allowance for Doubtful Accounts:

Years Ended December 31,	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts		Deductions(A)		Balance at End of Period
1998	$	90,000	$	65,547	$	—	$	17,547	$	138,000
1999		138,000		—		—		—		138,000
2000		138,000		853,000		—		837,709		153,291

(A)

Write-offs of accounts deemed uncollectible

QuickLinks

TABLE OF CONTENTS
MARKET, RANKING AND OTHER DATA
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
PROSPECTUS SUMMARY
General
Industry Trends
Competitive Strengths
Business Strategy
The Acquisition
Summary of the Exchange Offer
Summary of Terms of the Exchange Notes
SUMMARY HISTORICAL AND CONDENSED CONSOLIDATED PRO FORMA FINANCIAL DATA
RISK FACTORS
THE ACQUISITION
EXCHANGE OFFER
USE OF PROCEEDS
CAPITALIZATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2000 (in thousands)
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS FOR THE THREE MONTHS ENDED MARCH 31, 2001 (in thousands)
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (in thousands) December 31, 2000 and March 31, 2001
SELECTED HISTORICAL FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
Industry Trends
Competitive Strengths
Business Strategy
MANAGEMENT
Summary Compensation Table
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
DESCRIPTION OF SENIOR CREDIT FACILITY
DESCRIPTION OF NOTES
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
PLAN OF DISTRIBUTION
LEGAL MATTERS
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AVAILABLE INFORMATION
INDEX TO FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants
Report of Independent Certified Public Accountants
MICHAEL FOODS, INC. (A wholly owned subsidiary of M-Foods Holdings, Inc.) CONSOLIDATED BALANCE SHEETS
MICHAEL FOODS, INC. (A wholly owned subsidiary of M-Foods Holdings, Inc.) CONSOLIDATED STATEMENTS OF EARNINGS (000's, except per share amounts)
MICHAEL FOODS, INC. (A wholly owned subsidiary of M-Foods Holdings, Inc.) CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
MICHAEL FOODS, INC. (A wholly owned subsidiary of M-Foods Holdings, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS
MICHAEL FOODS, INC. (A wholly owned subsidiary of M-Foods Holdings, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidating Balance Sheets
Condensed Consolidating Income Statement
Condensed Consolidating of Cash Flows
Condensed Consolidating Income Statement
Condensed Consolidating of Cash Flows
Condensed Consolidating Balance Sheets
Condensed Consolidating Income Statement
Condensed Consolidating of Cash Flows
Condensed Consolidating Balance Sheets
Condensed Consolidating Income Statement
Condensed Consolidating of Cash Flows
Condensed Consolidating Income Statement
Condensed Consolidating of Cash Flows
MICHAEL FOODS, INC. PREDECESSOR QUARTERLY FINANCIAL DATA (UNAUDITED) (In thousands, except per share amounts)
Report of Independent Certified Public Accountants
Report of Independent Certified Public Accountants
M-FOODS DAIRY, LLC (A Majority Owned Subsidiary of Michael Foods, Inc.) BALANCE SHEETS
M-FOODS DAIRY, LLC (A Majority Owned Subsidiary of Michael Foods, Inc.) STATEMENTS OF OPERATING UNIT EARNINGS
M-FOODS DAIRY, LLC (A Majority Owned Subsidiary of Michael Foods, Inc.) STATEMENTS OF UNIT HOLDER AND OPERATING UNIT EQUITY
M-FOODS DAIRY, LLC (A Majority Owned Subsidiary of Michael Foods, Inc.) STATEMENTS OF OPERATING UNIT CASH FLOWS
M-FOODS DAIRY, LLC (A Majority Owned Subsidiary of Michael Foods, Inc.) NOTES TO FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants
Report of Independent Certified Public Accountants
M-FOODS DAIRY TXCT, LLC (A Majority Owned Subsidiary of Michael Foods, Inc.) BALANCE SHEETS
M-FOODS DAIRY TXCT, LLC (A Majority Owned Subsidiary of Michael Foods, Inc.) STATEMENTS OF OPERATING UNIT OPERATIONS
M-FOODS DAIRY TXCT, LLC (A Majority Owned Subsidiary of Michael Foods, Inc.) STATEMENTS OF UNIT HOLDER AND OPERATING UNIT EQUITY
M-FOODS DAIRY TXCT, LLC (A Majority Owned Subsidiary of Michael Foods, Inc.) STATEMENTS OF OPERATING UNIT CASH FLOWS
M-FOODS DAIRY TXCT, LLC (A Majority Owned Subsidiary of Michael Foods, Inc.) NOTES TO FINANCIAL STATEMENTS
PART II: INFORMATION NOT REQUIRED IN THE PROSPECTUS
SCHEDULE II Michael Foods, Inc. (A wholly owned subsidiary of M-Foods Holdings, Inc.) VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II M-Foods Dairy, LLC (A majority owned subsidiary of Michael Foods, Inc.) VALUATION AND QUALIFYING ACCOUNTS

EX-2.1

                                                                     Exhibit 2.1
================================================================================
                                                                  EXECUTION COPY

                          AGREEMENT AND PLAN OF MERGER

                                   dated as of

                                December 21, 2000

                                  by and among

                             M-FOODS HOLDINGS, INC.,

                            PROTEIN ACQUISITION CORP.

                                       and

                               MICHAEL FOODS, INC.

================================================================================


                                TABLE OF CONTENTS

                                                                            Page

ARTICLE 1
         THE MERGER............................................................2
         1.1      The Merger...................................................2
         1.2      Closing......................................................2
         1.3      Effective Date and Time......................................2
         1.4      Effects of the Merger........................................2
         1.5      Subsequent Actions...........................................2
         1.6      Articles of Incorporation....................................3
         1.7      Bylaws.......................................................3
         1.8      Officers and Directors of Surviving Corporation..............3
         1.9      Effect on Capital Stock......................................3
         1.10     Options......................................................4
         1.11     Surrender and Payment........................................4
         1.12     Lost Certificates............................................6
         1.13     Unclaimed Merger Consideration...............................6
         1.14     Dissenting Shares............................................7

ARTICLE 2
         REPRESENTATIONS AND WARRANTIES........................................7
         2.1      Representations and Warranties of the Company................7
         2.2      Representations and Warranties of Holdings and Merger Sub...20

ARTICLE 3
         COVENANTS RELATING TO CONDUCT OF BUSINESS............................23
         3.1      Covenants of the Company....................................23
         3.2      Advice of Changes; Government Filings.......................25
         3.3      Financing Related Cooperation...............................25

ARTICLE 4
         ADDITIONAL AGREEMENTS................................................26
         4.1      Preparation of the Proxy Statement; Schedule 13E; the
                  Company Shareholders Meeting................................26
         4.2      Access to Information.......................................27
         4.3      Approvals and Consents; Cooperation.........................28
         4.4      Acquisition Proposals.......................................29
         4.5      Employee Benefits...........................................30
         4.6      Fees and Expenses...........................................31
         4.7      Indemnification; Directors' and Officers' Insurance.........31
         4.8      Public Announcements........................................32
         4.9      Further Assurances..........................................32
         4.10     Disposition of Litigation...................................32
         4.11     Delisting...................................................33



ARTICLE 5
         CONDITIONS PRECEDENT.................................................33
         5.1      Conditions to Each Party's Obligation to Effect the Merger..33
         5.2      Conditions to the Obligations of Holdings and Merger Sub
                  to Effect the Merger........................................33
         5.3      Conditions to the Obligations of the Company to Effect
                  the Merger..................................................34

ARTICLE 6
         TERMINATION AND AMENDMENT............................................35
         6.1      Termination by Either the Company or Holdings...............35
         6.2      Termination by Holdings.....................................35
         6.3      Termination by the Company..................................36
         6.4      Effect of Termination.......................................36
         6.5      Amendment...................................................38
         6.6      Extension; Waiver...........................................38

ARTICLE 7
         GENERAL PROVISIONS...................................................38
         7.1      Non-Survival of Representations, Warranties and Agreements;
                  No Other Representations and Warranties.....................38
         7.2      Notices.....................................................38
         7.3      Interpretation..............................................40
         7.4      Counterparts................................................41
         7.5      Entire Agreement; No Third Party Beneficiaries; Liability...41
         7.6      Governing Law...............................................41
         7.7      Severability................................................41
         7.8      Assignment..................................................41
         7.9      Enforcement.................................................42


                                      -ii-


                                CROSS REFERENCES

                                                                         Section
                                                                         -------
Acquisition Proposal..................................................... 4.4(e)
Agreement...............................................................Preamble
Articles of Merger...........................................................1.3
Banc of America Bridge................................................... 2.2(c)
Bank Commitment Letter................................................... 2.2(c)
Bank of America.......................................................... 2.2(c)
CERCLA................................................................ 2.1(n)(i)
Certificate.............................................................. 1.9(c)
Closing......................................................................1.2
Closing Date.................................................................1.2
Code..................................................................... 2.1(h)
Commitment Letters....................................................... 2.2(c)
Company.................................................................Preamble
Company Benefit Plans................................................. 2.1(l)(i)
Company Board...........................................................Recitals
Company Common Stock....................................................Recitals
Company Disclosure Schedule..................................................2.1
Company Material Contracts............................................... 2.1(r)
Company Participants.................................................. 2.1(l)(i)
Company Representatives.................................................. 4.4(a)
Company SEC Reports..........................................................2.1
Company Shareholders Meeting............................................. 4.1(a)
Company Voting Debt................................................. 2.1(b)(iii)
Confidentiality Agreement....................................................4.2
Dissenting Shares...........................................................1.14
Effective Date...............................................................1.3
Effective Time...............................................................1.3
Environmental, Health, and Safety Requirements....................... 2.1(n)(ii)
ERISA................................................................. 2.1(l)(i)
Exchange Act............................................................ 1.11(c)
Executive Incentive Plan....................................................1.10
Executive Performance Plan..................................................1.10
Expense Payment.......................................................... 6.4(b)
Expenses.....................................................................4.6
Financing................................................................ 2.2(c)
Funds................................................................... 1.11(a)
GAAP.................................................................. 2.1(d)(i)
Governmental Entity..................................................... 1.13(b)
Holdings................................................................Preamble
Holdings Disclosure Schedule.................................................2.2
HSR Act............................................................. 2.1(c)(iii)
Indemnified Parties...................................................... 4.7(c)


                                     -iii-


Indemnified Party........................................................ 4.7(c)
Intellectual Property................................................. 2.1(m)(i)
Investors...............................................................Recitals
Leases................................................................ 2.1(k)(i)
Liens................................................................ 2.1(b)(ii)
Management Equity Agreements............................................Recitals
Marathon................................................................. 2.2(c)
Marathon Fund Commitment Letter.......................................... 2.2(c)
Material Adverse Effect.................................................. 2.1(a)
MBCA.........................................................................1.1
Merger..................................................................Recitals
Merger Sub..............................................................Preamble
NASDAQ.............................................................. 2.1(c)(iii)
Option(s)...................................................................1.10
Option Plans................................................................1.10
Ordinary Course...................................................... 2.1(d)(ii)
Organizational Documents................................................. 2.1(a)
Other Equity Agreements.................................................Recitals
Owned Real Property................................................... 2.1(k)(i)
Paying Agent............................................................ 1.11(a)
Permits.................................................................. 2.1(f)
Person.................................................................. 1.11(c)
Price Per Share.......................................................... 1.9(c)
Proxy Statement....................................................... 2.1(e)(i)
Required Approvals...........................................................4.3
Schedule 13E-3........................................................... 4.1(c)
SEC..........................................................................2.1
Securities Act...................................................... 2.1(c)(iii)
Share Awards.......................................................... 2.1(b)(i)
Special Committee.......................................................Recitals
Special Meeting.......................................................... 6.1(d)
Subsidiary............................................................ 2.1(b)(i)
Superior Proposal........................................................ 4.4(f)
Surviving Corporation........................................................1.1
SWDA.................................................................. 2.1(n)(i)
Tax, Taxes, Taxable..................................................... 1.11(c)
Tax Returns.............................................................. 2.1(h)
Terminating Company Breach............................................... 6.2(b)
Terminating Holdings Breach.............................................. 6.3(a)
Termination Fee.......................................................... 6.4(c)
U.S. Bancorp Piper Jaffray............................................... 2.1(o)
Vestar................................................................... 2.2(c)
Vestar Commitment Letter................................................. 2.2(c)
Violation............................................................ 2.1(c)(ii)


                                      -iv-


                          AGREEMENT AND PLAN OF MERGER

            THIS AGREEMENT AND PLAN OF MERGER, dated as of December 21, 2000
(this "Agreement"), by and among M-Foods Holdings, Inc., a Delaware corporation
("Holdings"), Protein Acquisition Corp., a Minnesota corporation and a wholly
owned subsidiary of Holdings ("Merger Sub"), and Michael Foods, Inc., a
Minnesota corporation (the "Company").

                              W I T N E S S E T H :

            WHEREAS, Merger Sub and the Company have each determined that it is
in their respective best interests for Merger Sub to acquire the Company, upon
the terms and subject to the conditions set forth in this Agreement;

            WHEREAS, the respective boards of directors of Holdings, Merger Sub
and the Company each have approved this Agreement, the Merger and the other
transactions contemplated by this Agreement, with each share of the Company's
common stock, par value $0.01 per share (the "Company Common Stock"), issued and
outstanding immediately prior to the Effective Time being cancelled,
extinguished and converted into and becoming a right to receive a price per
share equal to the Price Per Share, subject to the terms and conditions set
forth herein;

            WHEREAS, as of the date hereof, (1) certain executives of the
Company will enter into letter agreements with M-Foods Investors, LLC, a
Delaware limited liability company ("Investors"), pursuant to which such persons
agree to execute, immediately prior to the Closing, certain agreements (the
"Management Equity Agreements") which will provide for, among other things, (a)
the cancellation of a portion of their options to purchase Company Common Stock
as of the Effective Date in exchange for rights under a deferred compensation
arrangement with Holdings and (b) the purchase of membership interests in
Investors by such persons and (2) certain beneficial and record shareholders of
the Company will enter into letter agreements with Investors pursuant to which
such persons agree to execute, immediately prior to the Closing, certain
agreements (the "Other Equity Agreements") which will provide that, among other
things, such persons will exchange shares of the Company Common Stock they hold
for a price per share equal to the Price Per Share and membership interests in
Investors;

            WHEREAS, as soon as may be permitted after satisfaction or waiver of
the conditions set forth herein, Merger Sub shall be merged with and into the
Company (the "Merger") in accordance with this Agreement and the relevant
provisions of the MBCA, and the surviving corporation of the Merger shall be the
Company; and

            WHEREAS, the board of directors of the Company (the "Company
Board"), subsequent to the unanimous recommendation of a special committee of
the Company Board (the "Special Committee"), has determined that this Agreement
and the transactions contemplated hereby, including the Merger, are fair to and
in the best interests of the shareholders of the Company, has declared the
Merger and this Agreement to be advisable and has recommended approval of the
Merger and adoption of this Agreement by the shareholders of the Company.



            NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:

                                    ARTICLE 1
                                   THE MERGER

            1.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, Merger Sub shall be merged with and into the Company at
the Effective Time. Following the Merger, the separate corporate existence of
Merger Sub shall cease and the Company, as a wholly owned subsidiary of
Holdings, shall continue as the surviving corporation (the "Surviving
Corporation"). The Merger will be effected pursuant to the provisions of, and
with the effect provided in, the Minnesota Business Corporation Act (the
"MBCA").

            1.2 Closing. The closing of the Merger (the "Closing") will take
place as soon as practicable, but no later than the fourth business day, after
satisfaction or waiver (as permitted by this Agreement and applicable law) of
the conditions (excluding conditions that, by their terms, cannot be satisfied
until the Closing Date) set forth in Article 5 (the "Closing Date"), unless
another time or date is agreed to in writing by the parties hereto. The Closing
shall be held at the offices of Kirkland & Ellis, 200 East Randolph Drive,
Chicago, Illinois 60601, unless another place is agreed to in writing by the
parties hereto.

            1.3 Effective Date and Time. Upon the Closing, the parties shall
file with the Secretary of State of the State of Minnesota appropriate articles
of merger or other appropriate documents (in any such case, the "Articles of
Merger") executed in accordance with the relevant provisions of the MBCA and
shall make all other filings, recordings or publications required under the MBCA
in connection with the Merger. The Merger shall become effective as of the date
and time of such filings or such other time after such filings as the parties
hereto shall agree to in the Articles of Merger (the "Effective Time"). The date
on which the Effective Time shall occur is referred to as the "Effective Date."

            1.4 Effects of the Merger. At the Effective Time, the separate
corporate existence of Merger Sub shall cease and the Surviving Corporation
shall continue its corporate existence under the laws of the State of Minnesota.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers, immunities and
franchises of Merger Sub and the Company shall vest in the Surviving
Corporation, and all debts, liabilities, obligations and duties of Merger Sub
and the Company shall become the debts, liabilities, obligations and duties of
the Surviving Corporation.

            1.5 Subsequent Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Merger Sub acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger or otherwise to carry out this


                                       -2-


Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of either the
Company or Merger Sub, all such deeds, bills of sale, assignments and assurances
and to take, in the name and on behalf of each of such corporations or
otherwise, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out the transactions contemplated by this Agreement.

            1.6 Articles of Incorporation. Subject to Section 4.7(a), at the
Effective Time, the articles of incorporation of the Company (as amended and
restated in substantially the form set forth in Exhibit A hereto) shall be the
articles of incorporation of the Surviving Corporation, until thereafter amended
as provided by the MBCA and the provisions of such articles of incorporation.

            1.7 Bylaws. At the Effective Time, the bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, shall become the bylaws of the
Surviving Corporation until thereafter amended as provided by the MBCA, the
provisions of the articles of incorporation of the Surviving Corporation and
such bylaws.

            1.8 Officers and Directors of Surviving Corporation. The officers of
the Company immediately prior to the Effective Time shall be, from and after the
Effective Time, the officers of the Surviving Corporation, until the earlier of
their resignation or removal or otherwise ceasing to be an officer. The
directors of Merger Sub immediately prior to the Effective Time shall be, from
and after the Effective Time, the directors of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.

            1.9 Effect on Capital Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of the
Company Common Stock or any shares of capital stock of Merger Sub:

            (a) Capital Stock of Merger Sub. Each share of capital stock of
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into and become one fully paid and nonassessable share of common
stock, par value $.01 per share, of the Surviving Corporation.

            (b) Cancellation of Treasury Stock; Merger Sub-Owned Stock. Each
share of the Company Common Stock that is issued and outstanding immediately
prior to the Effective Time and owned by Merger Sub or by the Company or any
direct or indirect wholly owned subsidiary of the Company, shall be cancelled,
extinguished and retired, and no payment of any consideration shall be made with
respect thereto.

            (c) Company Common Stock. Each share of the Company Common Stock
issued and outstanding immediately prior to the Effective Time (other than
shares to be cancelled in accordance with Section 1.9(b) and any Dissenting
Shares) will, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive $30.10 in cash per share
of Company Common Stock without any interest thereon (the "Price Per Share"),
subject to


                                       -3-


appropriate adjustment for any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange with respect to the Company
Common Stock occurring before the Effective Time. As of the Effective Time, all
such shares of the Company Common Stock shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each holder
of a stock certificate which immediately prior to the Effective Time represented
any such shares of the Company Common Stock (a "Certificate") shall cease to
have any rights with respect thereto, except the right to receive, upon the
surrender of such Certificates as provided in Section 1.11, the Price Per Share
in cash.

            1.10 Options. Except as may be otherwise agreed in writing between
the Company and any holder of any Option (as hereinafter defined), upon the
consummation of the Merger, each option to acquire Company Common Stock
outstanding immediately prior to the Effective Time under the Company's 1994
Executive Incentive Plan, as amended (the "Executive Incentive Plan"), the
Company's 1997 Stock Incentive Plan, as amended, the Company's 1994 Executive
Performance Stock Award Plan, as amended (the "Executive Performance Plan"), the
Company's 1987 Non-Qualified Stock Option Plan, as amended and the Company's
Stock Option Plan for Non-Employee Directors, as amended (such plans referred to
herein as the "Option Plans"), whether vested or unvested (each, an "Option,"
collectively, the "Options"), shall automatically become immediately vested and
exercisable and each holder of an Option shall have the right to receive from
the Surviving Corporation a cash payment (less applicable federal, state and
local withholding taxes) in an aggregate amount equal to the difference, if any,
between the Price Per Share less the applicable exercise price per share of
Company Common Stock applicable to such Option for all Company Common Stock
subject to the Option as expressly stated in the applicable Option Plan, stock
option agreement or other agreement. Options with an exercise price equal to or
greater than the Price Per Share will be cancelled without any consideration.
The Company shall use its reasonable best efforts (including, without
limitation, giving requisite notices to holders of Options advising them of such
accelerated vesting and rights pursuant to this Section 1.10) to fully advise
holders of Options of their rights under this Agreement and the Options, to
facilitate their timely exercise of such rights and to effectuate the provisions
of this Section 1.10. From and after the Effective Time, other than as expressly
set forth in this Section 1.10, no holder of an Option shall have any other
rights in respect thereof other than to receive payment for his or her Options
as set forth in this Section 1.10, and the Company shall take all necessary
actions to terminate effective as of the Effective Time the Company's Option
Plans, stock option agreements and similar arrangements.

            1.11 Surrender and Payment.

            (a) Paying Agent. Before the Effective Time, Holdings shall
designate a bank or trust company reasonably acceptable to the Company to act as
agent for the record holders of shares of the Company Common Stock in connection
with the Merger (the "Paying Agent"). At or before the Effective Time, Holdings
will deposit, or cause Merger Sub to deposit, as applicable, in trust for the
benefit of the holders of Certificates with the Paying Agent immediately
available funds (the "Funds") in an amount necessary to make the payments for
the shares of the Company Common Stock contemplated by this Agreement on a
timely basis. The Paying Agent will be authorized, at the request of Holdings,
to invest any Funds held by it in (i) investment grade money market instruments,
(ii) direct obligations of the United States of America, (iii) obligations for
which the


                                       -4-


full faith and credit of the United States of America is pledged to provide for
the payment of principal and interest, (iv) commercial paper rated the highest
quality by either Moody's Investors Services, Inc. or Standard & Poor's
Corporation or (v) certificates of deposit, bank repurchase agreements or
bankers' acceptances of commercial banks with capital exceeding $10 billion, in
each case having maturities not to exceed 30 days and as designated by Holdings,
with any interest earned thereon being paid to Holdings at the earlier of (A)
payment in full of the aggregate Price Per Share to all record holders of
Company Common Stock immediately prior to the Effective Time of the Merger and
(B) 180 days after the Effective Time; provided that no loss on investments made
pursuant to this Section 1.11(a) shall relieve Holdings of its obligations to
pay the Price Per Share to all record holders of Company Common Stock as
provided in Article 1 of this Agreement.

            (b) Surrender of Certificates. Promptly (and in any event not later
than five (5) business days) after the Effective Time, Holdings and the
Surviving Corporation will cause the Paying Agent to mail and/or make available
to each record holder of Certificates that immediately prior to the Effective
Time represented shares of the Company Common Stock (other than holders of
Certificates representing Dissenting Shares or representing shares covered by
Section 1.9(b)), a notice and letter of transmittal and instructions in standard
form for use in effecting the surrender of all Certificates held by such record
holder.

            (c) Payment Procedures. Upon surrender to the Paying Agent of a
Certificate, together with such letter of transmittal duly executed and
completed, the Paying Agent shall pay to the holder of such Certificate the
aggregate Price Per Share attributable to the number of shares of the Company
Common Stock represented by such Certificate, and such Certificate will then be
cancelled. Until surrendered in accordance with the provisions of this Section
1.11, each Certificate (other than Certificates representing Dissenting Shares
and Certificates representing shares covered by Section 1.9(b)) will represent
for all purposes only the right to receive the aggregate Price Per Share
relating thereto. No interest shall accrue or be paid in respect of cash payable
upon the surrender of Certificates. After the Effective Time, holders of
Certificates shall cease to have any rights as shareholders of the Company,
except as provided herein or under applicable state corporation law. If any
payment of cash in respect of cancelled shares of the Company Common Stock is to
be paid to a Person other than the registered holder of the shares represented
by the Certificate or Certificates surrendered in exchange therefor, it shall be
a condition to such payment that the Certificate or Certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Paying Agent any transfer or
other Taxes required as a result of such payment to a Person other than the
registered holder of such shares or establish to the satisfaction of the Paying
Agent that such Tax has been paid or is not payable. Any consideration otherwise
payable pursuant to this Agreement shall be subject to all applicable federal,
state and local Tax withholding requirements. For purposes of this Agreement,
"Tax" (including, with correlative meaning, the terms "Taxes" and "Taxable")
means all federal, state, local and foreign income, profits, franchise, gross
receipts, environmental, customs duty, capital stock, severance, stamp, payroll,
sales, transfer, employment, unemployment disability, use, property,
withholding, excise, production, value added, occupancy and other taxes, duties
or assessments of any nature whatsoever, together with all interest, penalties,
fines and additions to tax imposed with respect to such amounts and any interest
in respect of such penalties and additions to tax. For purposes of this
Agreement, "Person" means an individual, corporation, partnership, limited


                                       -5-


liability company association, trust, unincorporated organization, entity or
group (as defined in the Securities and Exchange Act of 1934, as amended (the
"Exchange Act")).

            (d) No Transfer. After the Effective Time, there will be no
transfers of shares of the Company Common Stock recorded on the stock transfer
books of the Surviving Corporation. If, after the Effective Time, Certificates
are presented to the Paying Agent or the Surviving Corporation for any reason
they will be cancelled and exchanged for the Price Per Share as provided in
Section 1.13(a) below.

            1.12 Lost Certificates. If any Certificate has been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such Person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Paying Agent
shall issue in exchange for such lost, stolen or destroyed Certificate the Price
Per Share due to such Person as provided in Section 1.13(a) of this Agreement.

            1.13 Unclaimed Merger Consideration.

            (a) Transfer to Surviving Corporation. Any portion of the Funds made
available to the Paying Agent pursuant to Section 1.11(a) that remain unclaimed
by holders of Certificates that immediately prior to the Effective Time
represented shares of Company Common Stock for 180 days after the Effective Time
will be transferred to the Surviving Corporation upon demand. Any holder of
Certificates who has not theretofore complied with this Article 1 will
thereafter look only to the Surviving Corporation for payment of the Price Per
Share in accordance with this Agreement upon surrender of such Certificates.

            (b) No Escheat of Remaining Funds. None of Holdings, Merger Sub, the
Company or the Paying Agent will be liable to any Person in respect of any cash
delivered from the Funds to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificates have not been
surrendered before seven years after the Effective Time (or immediately before
such earlier date on which any payment pursuant to this Section 1.13 would
otherwise escheat to or become the property of any Governmental Entity), the
aggregate Price Per Share payable in respect to such Certificates will, unless
otherwise provided by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any Person previously
entitled thereto. For purposes of this Agreement, "Governmental Entity" means
any supranational, foreign, national, state, municipal or local government, any
instrumentality, subdivision, court, administrative agency or commission or
other authority thereof, or any quasi-governmental or private body exercising
any regulatory, taxing or other governmental or quasi-governmental authority.

            (c) Merger Consideration. Any portion of the Funds made available to
the Paying Agent pursuant to Section 1.11(a) to pay the Price Per Share for
shares of the Company Common Stock issued and outstanding immediately prior to
the Effective Time for which appraisal rights have been perfected shall be
returned to Holdings, upon demand.


                                       -6-


            1.14 Dissenting Shares. Notwithstanding Section 1.9 hereof, shares
of the Company Common Stock issued and outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who has properly demanded and perfected such
holder's right to dissent from the Merger and to be paid the fair value of such
shares in accordance with Sections 302A.471 and 302A.473 of the MBCA (and who
has neither effectively withdrawn nor lost his right to dissent) ("Dissenting
Shares"), shall not be converted into a right to receive cash pursuant to
Section 1.9, and the holder thereof shall be entitled to only such rights as are
granted by the MBCA. If after the Effective Time such holder fails to perfect or
withdraws or otherwise loses his right to dissent, such shares of Company Common
Stock shall be treated as if they had been converted as of the Effective Time
into the right to receive cash as provided in Section 1.9, without interest
thereon. The Company shall give Holdings reasonably prompt notice of any demands
for payment received by the Company under Sections 302A.471 and 302A.473 of the
MBCA, and Holdings shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with the
prior written consent of Holdings, make any payment with respect to, or settle
or offer to settle, any such demands.

                                    ARTICLE 2
                         REPRESENTATIONS AND WARRANTIES

            2.1 Representations and Warranties of the Company. Except as set
forth in the Company Disclosure Schedule delivered by the Company to Holdings at
or prior to the execution and delivery of this Agreement (the "Company
Disclosure Schedule") (the Company Disclosure Schedule is arranged by sections
corresponding to the lettered and numbered sections contained in this Section
2.1 and the disclosure in any one section of the Company Disclosure Schedule
shall qualify only that particular section of this Section 2.1 unless a
cross-reference is made to another lettered or numbered section to which such
disclosure also qualifies or the context of such disclosure makes it reasonably
clear, if read in the context of such other lettered or numbered section, that
such disclosure affects or modifies such other lettered or numbered section) or
any reports, schedules, forms, statements and other documents required to be
filed by the Company with the Securities and Exchange Commission (the "SEC")
since December 31, 1997 through the date of this Agreement, including all
exhibits thereto (the "Company SEC Reports"), the Company represents and
warrants to Holdings and Merger Sub:

            (a) Organization, Standing and Power. Each of the Company and each
of its Subsidiaries (i) has been duly organized and is validly existing and in
good standing under the laws of its jurisdiction of organization, (ii) is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
qualification necessary, (iii) has all requisite corporate power and authority
to own or lease and operate its properties and assets, and to carry on its
business as now conducted and (iv) has obtained all licenses, permits,
franchises and other governmental authorizations necessary to the ownership or
operation of its properties or the conduct of its business as now conducted,
except, in the cases of clauses (i) (with respect to Subsidiaries only), (ii),
(iii) and (iv), as would not reasonably be expected to have a Material Adverse
Effect on the Company. For purposes of this Agreement, "Material Adverse Effect"
means, with respect to any entity, any adverse change, circumstance or


                                       -7-


effect that, individually or aggregated with other changes, circumstances and
effects, is materially adverse to the business, operations, cash flows, assets,
liabilities, condition (financial or otherwise), or results of operations of
such entity and its Subsidiaries taken as a whole. True and complete copies of
the Organizational Documents, as amended and currently in force, and all
corporate minute books and records of the Company and each of its Subsidiaries
have been furnished by the Company to Holdings for inspection to the extent
requested by Holdings. For purposes of this Agreement, "Organizational
Documents" means, with respect to any entity, the certificate of incorporation,
bylaws and/or other similar governing documents of such entity.

            (b) Capital Structure.

                  (i) The authorized capital stock of the Company consists
      solely of (A) 40,000,000 shares of the Company Common Stock, of which
      18,289,484 shares are outstanding as of December 20, 2000, and (B)
      10,000,000 shares of undesignated shares, of which no shares are
      outstanding. All issued and outstanding shares of the Company Common Stock
      are duly authorized, validly issued, fully paid and nonassessable, and
      were not issued in violation of any preemptive rights. No Subsidiary of
      the Company owns any capital stock of the Company. There are no
      outstanding options, warrants or other rights (including preemptive
      rights) to acquire capital stock of the Company other than Options
      representing in the aggregate the right to purchase 1,814,915 shares (all
      of which have a per share exercise price that is less than the Price Per
      Share) of the Company Common Stock under the Option Plans and share awards
      outstanding under the Executive Incentive Plan and Executive Performance
      Plan (the "Share Awards"). Section 2.1(b)(i) of the Company Disclosure
      Schedule identifies, as of the date indicated thereon, the holder of each
      outstanding Option, the number of shares of Company Common Stock issuable
      upon exercise of each Option and the exercise price and expiration date
      thereof. Section 2.1(b)(i) of the Company Disclosure Schedule also
      identifies as of the date indicated thereon, the number of shares of
      Company Common Stock subject to the Share Awards and the recipients
      thereof. For purposes of this Agreement, "Subsidiary" when used with
      respect to any party means any corporation or other organization, whether
      incorporated or unincorporated, (i) of which such party or any other
      Subsidiary of such party is a general partner (excluding partnerships, the
      general partnership interests of which held by such party or any
      Subsidiary of such party do not have a majority of the voting and economic
      interests in such partnership) or (ii) at least a majority of the
      securities or other interests of which having by their terms ordinary
      voting power to elect a majority of the board of directors or others
      performing similar functions with respect to such corporation or other
      organization is directly or indirectly owned or controlled by such party
      or by any one or more of its Subsidiaries, or by such party and one or
      more of its Subsidiaries.

                  (ii) All of the issued and outstanding shares of capital stock
      of the Company's Subsidiaries are duly authorized, validly issued, fully
      paid and nonassessable and are owned directly or indirectly by the Company
      free and clear of any liens, claims, encumbrances, restrictions,
      preemptive rights or any other claims of any third party ("Liens"). Except
      for the capital stock of its Subsidiaries, the Company does not own,
      directly or indirectly, any capital stock or other ownership interest in
      any Person.


                                       -8-


                  (iii) No bonds, debentures, notes or other indebtedness of the
      Company having, or convertible into other securities having, the right to
      vote on any matters on which shareholders may vote ("Company Voting Debt")
      are issued or outstanding.

                  (iv) Except for the Options and the Share Awards, there are no
      securities, options, warrants, calls, rights, commitments, agreements,
      arrangements or undertakings of any kind to which the Company or any of
      its Subsidiaries is a party or by which any of them is bound obligating
      the Company or any of its Subsidiaries to issue, deliver or sell, or cause
      to be issued, delivered or sold, additional shares of capital stock or
      other voting securities of the Company or any of its Subsidiaries or
      obligating the Company or any of its Subsidiaries to issue, grant, extend
      or enter into any such security, option, warrant, call, right, commitment,
      agreement, arrangement or undertaking. 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
      its Subsidiaries. There is no voting trust or other agreement or
      understanding to which the Company or any of its Subsidiaries is a party
      or is bound, or, to the knowledge of the Company, to which any shareholder
      of such entity is a party or is bound, with respect to the voting of the
      capital stock or other voting securities of the Company or any of its
      Subsidiaries, other than agreements contemplated by this Agreement. The
      Company has the ability to effect any action requiring the approval of the
      shareholders of any of its Subsidiaries and to designate all of the
      members of the board of directors of each of its Subsidiaries.

            (c) Authority; No Conflicts.

                  (i) The Company has all requisite corporate power and
      corporate authority to execute and deliver this Agreement and, subject to
      the adoption of this Agreement by the requisite vote of the holders of the
      Company Common Stock, to consummate the transactions contemplated hereby.
      The execution and delivery of this Agreement and the consummation of the
      transactions contemplated hereby have been duly authorized by all
      necessary corporate action on the part of the Company, subject in the case
      of the consummation of the Merger to any required adoption of this
      Agreement by the holders of the Company Common Stock. Subject to the
      adoption of this Agreement by the requisite vote of the holders of the
      Company Common Stock, this Agreement has been duly executed and delivered
      by the Company and (assuming the due authorization and valid execution and
      delivery of this Agreement by Holdings and Merger Sub) constitutes a valid
      and binding agreement of the Company, enforceable against it in accordance
      with its terms.

                  (ii) The execution and delivery of this Agreement by the
      Company does not or will not, as the case may be, and the consummation by
      the Company of the transactions contemplated hereby will not, conflict
      with, or result in any violation of, or constitute a default (with or
      without notice or lapse of time, or both) under, or give rise to a right
      of termination, amendment, cancellation or acceleration of any material
      obligation or the loss of a material benefit under, or the creation of a
      Lien on any assets pursuant to (any such conflict, violation, default,
      right of termination, amendment, cancellation or acceleration, loss or
      creation, a "Violation"): (A) any provision of the Organizational
      Documents of the Company or any of its Subsidiaries or (B) except for such
      Violations as


                                       -9-


      would not reasonably be expected to have a Material Adverse Effect on the
      Company or impair the ability of the Company to perform its material
      obligations under this Agreement or delay in any material respect or
      prevent the consummation of the Merger, and subject to obtaining or making
      the consents, approvals, orders, authorizations, registrations,
      declarations and filings referred to in Section 2.1(c)(iii) below, any
      loan or credit agreement, note, mortgage, bond, indenture, lease, benefit
      plan or other agreement, obligation, instrument, permit, concession,
      franchise or license binding upon or held by the Company or any Subsidiary
      or any judgment, order, decree, statute, law, ordinance, rule or
      regulation applicable to the Company, its Subsidiaries or their respective
      properties or assets.

                  (iii) No material consent, approval, order or authorization
      of, or registration, declaration or filing with, any Governmental Entity
      is required by or with respect to the Company or any of its Subsidiaries
      in connection with the execution and delivery of this Agreement by the
      Company or the consummation by the Company of the transactions
      contemplated hereby, except for those required under or in relation to (A)
      the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
      "HSR Act"), (B) state securities or "blue sky" laws, (C) the Securities
      Act of 1933, as amended (the "Securities Act"), (D) the Exchange Act, (E)
      the MBCA with respect to the filing and recordation of appropriate
      articles of merger or other documents, (F) rules and regulations of the
      NASDAQ National Market ("NASDAQ") and (G) any applicable federal and state
      laws governing the transfer of food processing and distribution facilities
      subject to licensing or permit requirements, inspection agreements, and
      similar facility-wide approvals (including, but not limited to, the Egg
      Products Inspection Act and the Minnesota Consolidated Food Licensing
      Law).

            (d) Reports and Financial Statements.

                  (i) The Company has filed all required Company SEC Reports.
      None of the Company's Subsidiaries is required to file any form, report or
      other document with the SEC. None of the Company SEC Reports, as of their
      respective dates (and, if amended or superseded by a filing prior to the
      date of this Agreement, then on the date of such filing), contained any
      untrue statement of a material fact or omitted to state a material fact
      required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading.
      Each of the financial statements (including the related notes) included in
      the Company SEC Reports presents fairly, in all material respects, the
      consolidated financial position and consolidated results of operations and
      cash flows of the Company and its Subsidiaries as of the respective dates
      or for the respective periods set forth therein, all in conformity with
      generally accepted accounting principles ("GAAP") consistently applied
      during the periods involved except as otherwise noted therein, and
      subject, in the case of the unaudited interim financial statements, to
      normal year-end adjustments and exceptions permitted by Form 10-Q under
      the Exchange Act. Since December 31, 1999, there has been no material
      change in the Company's accounting methods or principles except as
      described in the notes to the consolidated financial statements of the
      Company contained in the Company SEC Reports. All of such Company SEC
      Reports, as of their respective dates (and as of the date of any amendment
      to the respective Company SEC Report), complied as to form in all material
      respects with the applicable requirements


                                      -10-


      of the Securities Act and the Exchange Act and the rules and regulations
      promulgated thereunder.

                  (ii) Except as set forth in the consolidated balance sheets
      (and notes thereto) of the Company and its consolidated Subsidiaries
      included in the Company SEC Reports, and except for liabilities or
      obligations incurred in the Ordinary Course or in connection with the
      transactions contemplated by this Agreement since September 30, 2000,
      neither the Company nor any of its Subsidiaries has incurred any
      liabilities or obligations of any nature which would reasonably be
      expected to have a Material Adverse Effect on the Company. For purposes of
      this Agreement, "Ordinary Course" means, with respect to any entity, any
      actions taken in the regular and ordinary course of that entity's
      business, consistent in all material respects with past practices.

            (e) Information Supplied.

                  (i) None of the information supplied or to be supplied by the
      Company in writing specifically for inclusion or incorporation by
      reference in (A) the proxy or information statement related to the meeting
      of the Company's shareholders to be held in connection with the Merger and
      the transactions contemplated by this Agreement (the "Proxy Statement") or
      (B) the Schedule 13E-3 will, (1) at the respective times such documents
      are filed, and, with respect to the Proxy Statement when first published,
      sent or given to the shareholders of the Company, contain an untrue
      statement of material fact or omit to state a material fact required to be
      stated therein or necessary in order to make the statements therein, in
      light of the circumstances under which they are made, not misleading or
      (2) in the case of the Proxy Statement or any amendment thereof or
      supplement thereto, at the time of the Company Shareholders Meeting and at
      the Effective Time, contain an untrue statement of a material fact or omit
      to state any material fact required to be stated therein or necessary in
      order to make the statements made therein, in light of the circumstances
      under which they are made, not misleading or necessary to correct any
      statement in any earlier communication with respect to any solicitation of
      proxies for the Company Shareholders Meeting which shall have become false
      or misleading. The Proxy Statement when filed will comply as to form in
      all material respects with the applicable requirements of the Exchange Act
      and the Securities Act and the rules and regulations of the SEC
      thereunder.

                  (ii) Notwithstanding the foregoing provisions of this Section
      2.1(e), no representation or warranty is made by the Company with respect
      to (A) statements made or incorporated by reference in the Proxy Statement
      and the Schedule 13E-3 based on information supplied by Holdings or Merger
      Sub for inclusion or incorporation by reference therein or (B) any
      forward-looking information which may have been supplied by the Company
      and incorporated into the Proxy Statement or the Schedule 13E-3.

            (f) Compliance with Applicable Laws; Regulatory Matters. The Company
and its Subsidiaries hold all permits, licenses, certificates, franchises,
registrations, variances, exemptions, orders and approvals of all Governmental
Entities ("Permits") which are necessary to each of them to own, lease and
operate its properties or to carry on its business as now being conducted,
except for such failures to have received such Permits as would not reasonably
be


                                      -11-


expected to have a Material Adverse Effect on the Company. The Company and its
Subsidiaries and the Owned Real Property and the Leases are in compliance with
the terms of such Permits, except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect on the Company. The
businesses of the Company and its Subsidiaries are not being and have not been
conducted in violation of any law, ordinance, regulation, judgment, decree,
injunction, rule or order of any Governmental Entity, except for violations
which would not reasonably be expected to have a Material Adverse Effect on the
Company. No investigation by any Governmental Entity with respect to the Company
or any of its Subsidiaries is pending or, to the knowledge of the Company,
threatened, other than investigations which would not reasonably be expected to
have a Material Adverse Effect on the Company.

            (g) Litigation. There is no litigation, arbitration, grievance,
claim, suit, action, investigation or proceeding pending or, to the knowledge of
the Company, threatened, against or affecting the Company or any of its
Subsidiaries or any of their respective assets which would reasonably be
expected to have a Material Adverse Effect on the Company. There is no judgment,
award, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any of its Subsidiaries which
would reasonably be expected to have a Material Adverse Effect on the Company.

            (h) Taxes. (i) The Company and each of its Subsidiaries have duly
and timely filed (taking into account any extension of time within which to
file) all material Tax Returns required to be filed by any of them, and all such
filed Tax Returns are complete and accurate in all material respects, (ii) the
Company and each of its Subsidiaries have paid all Taxes that are required to be
paid in respect to the periods covered by such returns whether or not shown on
such filed Tax Returns or that the Company or any of its Subsidiaries are
obligated to withhold from amounts owing to any shareholder, employee, creditor
or third party, except with respect to matters contested in good faith and for
which adequate reserves have been established in accordance with GAAP as
reflected in the most recent consolidated balance sheet or for such amounts that
would not reasonably be expected to have a Material Adverse Effect on the
Company, (iii) there are no pending or, to the knowledge of the Company,
threatened audits, examinations, investigations or other proceedings in respect
of Taxes or Tax matters relating to the Company or any of its Subsidiaries
which, if determined adversely to the Company or any of its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect on the Company, (iv)
there are no deficiencies or claims for any Taxes that have been proposed,
asserted or assessed against the Company or any of its Subsidiaries which, if
such deficiencies or claims were finally resolved against the Company or any of
such Subsidiaries, would reasonably be expected to have a Material Adverse
Effect on the Company, (v) there are no material Liens for Taxes upon the assets
of the Company or any of its Subsidiaries, other than Liens for current Taxes
not yet due and payable and Liens for Taxes that are being contested in good
faith by appropriate proceedings and (vi) none of the Company or its
Subsidiaries has made an election under Section 341(f) of the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder
(the "Code"). Neither the Company nor any of its Subsidiaries has been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the past five years. Neither the Company nor any of its
Subsidiaries is a party to, bound by or has any obligation under, any Tax
sharing agreement or similar contract or arrangement or any agreement that
obligates it to make any payment computed by reference to the Taxes, taxable
income or taxable losses of any other Person (other than contracts


                                      -12-


or arrangements entered into with employees, consultants or independent
contractors or in connection with purchase or sale agreements or sale
leasebacks, which contracts and arrangements would not reasonably be expected to
have a Material Adverse Effect on the Company). The Company and its Subsidiaries
(A) are not, and have not been, a member of an affiliated group filing a
consolidated federal income Tax Return other than a group the common parent of
which is the Company and (B) have no liability for Taxes of any Person under
Treasury Regulation 1.1502-6(a) (or any similar provision of state, local or
foreign law), or as a transferee or successor, by contract or otherwise. No
claim has ever been made by a taxing authority in a jurisdiction where the
Company or any of its Subsidiaries does not file Tax Returns that such Person is
or may be subject to taxation by such jurisdiction which, if determined
adversely to the Company or such Subsidiary, would reasonably be expected to
have a Material Adverse Effect on the Company. None of the Company or its
Subsidiaries has consented to extend the time, or is the beneficiary of any
extension of time, in which any Tax may be assessed or collected by any taxing
authority. None of the Company or its Subsidiaries will be required to include
any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) ending after the Closing Date as a
result of any (i) change in method of accounting for a taxable period ending on
or prior to the Closing Date under Code ss. 481(c) (or any corresponding or
similar provision of state, local or foreign income Tax law), (ii) "closing
agreement" as described in Code ss. 7121 (or any corresponding or similar
provision of state, local or foreign income Tax law), (iii) deferred
intercompany gain or any excess loss account described in Treasury Regulations
under Code ss. 1502 (or any corresponding or similar provision of state, local
or foreign income Tax law) or (iv) installment sale made prior to the Closing
Date. For purposes of this Agreement, "Tax Return" means all returns and reports
(including elections, claims, declarations, disclosures, schedules, estimates,
computations and information returns) required to be supplied to a Tax authority
in any jurisdiction relating to Taxes, including any amendments thereof.

            (i) Absence of Certain Changes or Events. Since September 30, 2000
other than in connection with or arising out of this Agreement and the
transactions contemplated hereby, the Company and its Subsidiaries have
conducted their respective businesses in the Ordinary Course and there has not
been (i) any condition, event or occurrence which has had or would reasonably be
expected to have a Material Adverse Effect on the Company or (ii) any action
which, if it had been taken after the date hereof, would have required Holdings'
consent under Section 3.1.

            (j) Vote Required. The affirmative vote of the holders of a majority
of the voting power of all shares of the Company Common Stock entitled to vote
is the only vote of the holders of any class or series of the capital stock of
the Company necessary to approve this Agreement and the transactions
contemplated hereby.

            (k) Real Property.

                  (i) Section 2.1(k)(i) of the Company Disclosure Schedule sets
      forth the street address of each parcel of real property owned by the
      Company or one of its Subsidiaries, the "Owned Real Property"). The
      Company and its Subsidiaries have good and marketable fee simple title to
      the Owned Real Property, free and clear of all Liens, except where such
      impairment to title would not reasonably be expected to have a Material
      Adverse Effect on the Company. Section 2.1(k)(i) of the Company Disclosure
      Schedule sets forth a


                                      -13-


      true and complete list of all leases, subleases, licenses and other
      agreements (true and correct copies of which have been delivered to
      Holdings) pursuant to which the Company and its Subsidiaries occupy and
      use any real property (the "Leases"). The Leases are in full force and
      effect in all material respects, free and clear of all Liens, except for
      such exceptions as would not reasonably be expected to have a Material
      Adverse Effect on the Company. To the best knowledge of the Company, no
      parties to the Leases are in material breach or default of such leases.

                  (ii) Neither the Company nor any of its Subsidiaries is
      obligated under or bound by any agreement, option, right of first refusal,
      purchase contract, or other contractual right to sell, lease or dispose of
      any Owned Real Property or any portions thereof or interests therein which
      property, portions and interests, individually or in the aggregate, are
      material to the conduct of the business of the Company or its Subsidiaries
      as currently conducted. Neither the Company nor any of its Subsidiaries or
      any affiliates of any of the foregoing has an ownership, financial or
      other interest in the landlord under any of the Leases which exceeds a 50%
      ownership, financial or other interest in such landlord. The Owned Real
      Property and the Leases comprise all of the real property used in the
      Company's and its Subsidiaries' business.

            (l) Employee Benefit Plans; Labor Matters.

                  (i) Section 2.1(l)(i) of the Company Disclosure Schedule
      contains a true and complete list of each written material (a) employee
      benefit plan, policy and program (including, without limitation, each
      "employee benefit plan," within the meaning of Section 3(3) of the
      Employee Retirement Income Security Act of 1974, as amended ("ERISA") and
      each "multiemployer plan" within the meaning of Section 3(37) of ERISA)
      sponsored, maintained or contributed to by the Company or any of its
      Subsidiaries for the benefit of employees, directors, consultants or
      independent contractors and (b) benefit arrangement and contract between
      the Company or its Subsidiaries and any current or former employees (which
      have or have had an annual base salary of more than $100,000), directors,
      consultants and independent contractors, under which any such current or
      former employee, director, consultant or independent contractor of the
      Company or any of its Subsidiaries (the "Company Participants") has any
      present or future right to material benefits (collectively, the "Company
      Benefit Plans").

                  (ii) (a) Each of the Company Benefit Plans has been
      established, operated and administered in compliance with applicable law,
      including but not limited to ERISA and the Code, except where such
      noncompliance would not reasonably be expected to have a Material Adverse
      Effect on the Company, (b) each of the Company Benefit Plans intended to
      be "qualified" within the meaning of Section 401(a) of the Code has
      received a favorable determination letter from the Internal Revenue
      Service to such effect and the Company knows of no event that would cause
      the disqualification of any such Company Benefit Plan, (c) no Company
      Benefit Plan provides welfare or insurance benefits (whether or not
      insured) to Company Participants or their dependents or beneficiaries
      beyond the Company Participant's termination of employment or termination
      of service of non-employees with the Company or any of its Subsidiaries,
      which benefits would reasonably be expected to have


                                      -14-


      a Material Adverse Effect on the Company, other than coverage mandated by
      applicable law or benefits the full cost of which is borne by the Company
      Participant (or his or her dependent or beneficiary), (d) neither the
      Company nor any Subsidiary nor any other entity, that together with the
      Company or any Subsidiary is treated as a single employer under Section
      414 of the Code, maintains, contributes to, or has any material liability
      with respect to a "multiemployer plan," as such term is defined in Section
      3(37) or 4001 of ERISA, nor does such entity have any pension benefit plan
      subject to Section 412 of the Code or Title IV of ERISA, (e) neither the
      Company nor any of its Subsidiaries have engaged in a transaction with
      respect to any Company Benefit Plan which to the Company's knowledge
      subjects such entity to either a civil penalty assessed pursuant to
      Sections 502(i) or 502(e) of ERISA or a Tax imposed pursuant to Section
      4975 or 4976 of the Code, in each case which penalty or Tax would
      reasonably be expected to have a Material Adverse Effect on the Company,
      (f) to the knowledge of the Company, there are no pending or threatened
      claims (other than routine claims for benefits) by, on behalf of or
      against any of the Company Benefit Plans or any trusts related thereto,
      which would reasonably be expected to have a Material Adverse Effect on
      the Company, (g) no event has occurred and no condition exists that to the
      Company's knowledge would subject the Company or any of its Subsidiaries
      to any Tax, fine, lien, penalty or other liability (other than liabilities
      incurred in the ordinary course of the plan's operations that are
      reflected in the Company's financial statements) with respect to any
      Company Benefit Plan imposed by ERISA or the Code, which would reasonably
      be expected to have a Material Adverse Effect on the Company and (h) all
      material contributions or other material amounts payable by the Company or
      any of its Subsidiaries as of the Effective Time with respect to any
      Company Benefit Plan in respect of current or prior plan years which are
      required to be reflected in the Company's financial statements in
      accordance with GAAP have been, in all material respects, paid or accrued
      in accordance with GAAP.

                  (iii) Except as provided pursuant to this Agreement, neither
      the execution, delivery or performance of this Agreement by the Company
      nor the consummation by the Company of the transactions contemplated
      hereby shall (a) result in any payment becoming due to any Company
      Participant, (b) increase any benefits otherwise payable under any Company
      Benefit Plan, (c) result in any acceleration of the time of payment or
      vesting of any benefits under any Company Benefit Plan or (d) violate the
      provisions of any agreement between a Company Participant and the Company
      or any of its Subsidiaries, except in each case where such payment,
      increase, acceleration or violation would not reasonably be expected to
      have a Material Adverse Effect on the Company.

                  (iv) (a) Neither the Company nor any of its Subsidiaries is a
      party to any collective bargaining or other labor union contract and no
      collective bargaining agreement is being negotiated by the Company or any
      of its Subsidiaries, (b) there is no pending or to the knowledge of the
      Company, threatened labor dispute, strike, work stoppage, lockout or other
      labor controversy involving the Company or any of its Subsidiaries which
      may interfere with the respective business activities of the Company or
      any of its Subsidiaries, except where such dispute, strike or work
      stoppage would not reasonably be expected to have a Material Adverse
      Effect on the Company nor has the Company or any of its Subsidiaries
      experienced any such labor controversy within the past three years, (c)
      there is no pending


                                      -15-


      or, to the knowledge of the Company, threatened action, complaint,
      arbitration, proceeding or investigation against the Company or any of its
      Subsidiaries by or before (or that could be brought before) any court,
      governmental agency, administrative agency, board, commission or
      arbitrator brought by or on behalf of any prospective, current or former
      employee, labor organization or other representative of employees of the
      Company or any of its Subsidiaries which would reasonably be expected to
      have a Material Adverse Effect on the Company (d) the Company and its
      Subsidiaries are in compliance with all applicable laws, agreements, and
      policies relating to employment, employment practices and terms and
      conditions of employment except where such noncompliance would not
      reasonably be expected to have a Material Adverse Effect on the Company
      and (e) neither the Company nor any of its Subsidiaries has closed any
      plant or facility, effectuated any layoffs of employees or implemented any
      early retirement, separation or window program within the past year, nor
      has the Company or any of its Subsidiaries planned or announced any such
      action or program for the future.

            (m) Intellectual Property.

                  (i) The Company or one of its Subsidiaries owns, or has the
      right to use, pursuant to written license agreements set forth on Section
      2.1(m) of the Company Disclosure Schedule, free and clear of all liens,
      security interests or other encumbrances, all trademarks, tradenames,
      service marks, Internet domain names, trade dress, patents, patent
      applications or other applications for registration of intellectual
      property, copyrights, technology, software, know-how, trade secrets and
      processes used by the Company or any of its Subsidiaries in their
      respective businesses as presently conducted or necessary therefor (the
      "Intellectual Property"), except for those the failure to own or have such
      legal right to use as would not reasonably be expected to have a Material
      Adverse Effect on the Company.

                  (ii) No claim has been asserted and is pending by any Person
      challenging the use of any such Intellectual Property or the validity or
      effectiveness of any such Intellectual Property, except for such matters
      as would not reasonably be expected to have a Material Adverse Effect on
      the Company.

                  (iii) The conduct of the Company's and its Subsidiaries'
      businesses does not infringe on the intellectual property or other rights
      of any Person, except for such claims and infringements that would not
      reasonably be expected to have a Material Adverse Effect on the Company.

                  (iv) To the Company's knowledge, no third party has infringed
      any of the Intellectual Property, except for such infringements as would
      not reasonably be expected to have a Material Adverse Effect on the
      Company.

                  (v) Except to the extent that it would not reasonably be
      expected to have a Material Adverse Effect on the Company, the owners of
      any Intellectual Property licensed to the Company have taken all
      reasonably necessary and desirable actions to maintain and protect such
      Intellectual Property.


                                      -16-


            (n) Environmental, Health, and Safety Matters.

                  (i) Except as would not reasonably be expected to have a
      Material Adverse Effect on the Company, each of the Company and its
      Subsidiaries has complied and is in compliance with all Environmental,
      Health, and Safety Requirements, including, without limitation, all
      permits, licenses and other authorizations that are required pursuant to
      Environmental, Health, and Safety Requirements for the occupation of its
      facilities and the operation of its business. Except as would not
      reasonably be expected to have a Material Adverse Effect on the Company,
      none of the Company or its Subsidiaries has received any notice, report or
      other information regarding any actual or alleged violation of
      Environmental, Health, and Safety Requirements, or any liabilities or
      potential liabilities (whether accrued, absolute, contingent, unliquidated
      or otherwise), including any investigatory, remedial or corrective
      obligations, relating to any of them or its facilities arising under
      Environmental, Health, and Safety Requirements. Except as would not
      reasonably be expected to have a Material Adverse Effect on the Company,
      none of the Company, its Subsidiaries, or their respective predecessors
      has treated, stored, disposed of, arranged for or permitted the disposal
      of, transported, handled, or released any substance, including without
      limitation any hazardous substance, or owned or operated any property or
      facility (and no such property or facility is contaminated by any such
      substance) in a manner that has given rise to liabilities or could
      reasonably be expected to give rise to liabilities, including any
      liability for response costs, corrective action costs, personal injury,
      property damage, natural resource damages or attorney fees, pursuant to
      the Comprehensive Environmental Response, Compensation and Liability Act
      of 1980, as amended ("CERCLA"), the Solid Waste Disposal Act, as amended
      ("SWDA"), or any other Environmental, Health, and Safety Requirements,
      except for such obligations as would not reasonably be expected to have a
      Material Adverse Effect on the Company. Neither this Agreement nor the
      consummation of the transaction that is the subject of this Agreement will
      result in any obligations for site investigation or cleanup, or
      notification to or consent of government agencies or third parties,
      pursuant to any of the so-called "transaction-triggered" or "responsible
      property transfer" Environmental, Health, and Safety Requirements. Except
      as would not reasonably be expected to have a Material Adverse Effect,
      neither the Company nor any of its Subsidiaries has assumed, undertaken,
      or otherwise become subject to, any liability, including without
      limitation any obligation for corrective or remedial action, of any other
      person or entity relating to Environmental, Health, and Safety
      Requirements. Except as would not reasonably be expected to have a
      Material Adverse Effect on the Company, no facts, events or conditions
      relating to the past or present facilities, properties or operations of
      the Company, its Subsidiaries, or any of their respective predecessors
      will prevent, hinder or limit continued compliance with Environmental,
      Health, and Safety Requirements, give rise to any investigatory, remedial
      or corrective obligations pursuant to Environmental, Health, and Safety
      Requirements, or give rise to any other liabilities (whether accrued,
      absolute, contingent, unliquidated or otherwise) pursuant to
      Environmental, Health, and Safety Requirements, including without
      limitation any relating to onsite or offsite releases or threatened
      releases of hazardous materials, substances or wastes, personal injury,
      property damage or natural resources damage.


                                      -17-


                  (ii) The Company has provided to Holdings and the Merger Sub,
      copies of all material environmental reports, audits, assessments, and
      investigations, and any other material environmental documents, related to
      the past or present facilities, properties or operations of the Company,
      its Subsidiaries, or any of their respective predecessors, to the extent
      the forgoing are in the possession, custody, or control of the Company or
      any of its Subsidiaries.

For purposes of this Agreement, "Environmental, Health, and Safety Requirements"
shall mean all federal, state, local and foreign statutes, regulations,
ordinances and other provisions having the force or effect of law, all judicial
and administrative orders and determinations, all contractual obligations and
all common law concerning public health and safety, worker health and safety,
and pollution or protection of the environment, including without limitation all
those relating to food or to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, release, threatened release, control, or cleanup
of any hazardous materials, substances or wastes, chemical substances or
mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation,
each as amended.

            (o) Brokers or Finders. Except for the engagement of Merrill Lynch &
Co. and U.S. Bancorp Piper Jaffray Inc. ("U.S. Bancorp Piper Jaffray"), no
agent, broker, investment banker, financial advisor or other firm or Person is
or will be entitled to any broker's or finder's fee or any other similar
commission or fee in connection with any of the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company.

            (p) Insurance. Section 2.1(p) of the Company Disclosure Schedule
contains a list of all material insurance policies which are owned by the
Company and any of its Subsidiaries and which name the Company or any of its
Subsidiaries as an insured, including without limitation self-insurance programs
and those which pertain to the Company's assets, employees or operations. All
such insurance policies are in full force and effect and the Company has not
received notice of cancellation of any such insurance policies other than those
policies the absence or cancellation of which would not reasonably be expected
to have a Material Adverse Effect on the Company.

            (q) Affiliate Transactions. There are no contracts, commitments,
agreements, arrangements or other transactions between the Company or any of its
Subsidiaries, on the one hand, and any (i) present officer or director of the
Company or any of its Subsidiaries or any of their immediate family members
(including their spouses) or (ii) affiliate of any such officer, director,
family member or beneficial owner, on the other hand, required to be disclosed
pursuant to Item 404 of Regulation S-K of the SEC.

            (r) Material Contracts. Section 2.1(r) of the Company Disclosure
Schedule sets forth a list of all of the Company Material Contracts as of the
date of this Agreement and, prior to the date hereof, the Company has made
available to Holdings true copies of each Company Material Contract and
summaries of all oral Company Material Contracts. For purposes of this
Agreement, the term "Company Material Contracts" shall mean: (i) all contracts
required to be disclosed pursuant to Items 401 or 601 of Regulation S-K of the
SEC as an exhibit to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31,1999 or any Company SEC Report filed


                                      -18-


thereafter, in each case under the rules and regulations of the SEC, (ii) all
contracts for the future purchase of materials, supplies, merchandise or
equipment providing for remaining payments in excess of $3 million in the
aggregate, (iii) all contracts for the sale or lease of any of the assets of the
Company or its Subsidiaries, other than sales of inventory in the Ordinary
Course, providing for payments in excess of $3 million in the aggregate, (iv)
all mortgages, pledges, conditional sales contracts, security agreements,
factoring agreements or other similar agreements with respect to any assets of
the Company providing for payments in excess of $1 million in the aggregate, (v)
all consulting agreements providing for payments thereunder in excess of
$250,000 in the aggregate, (vi) all non-competition or similar agreements which
restrict or may hereafter restrict in any material respect the geographic or
operational scope of the business of the Company or any of its affiliates or the
ability of the Company or any of its affiliates to enter into new lines of
business, (vii) all agreements or indentures relating to borrowed money or other
indebtedness or the mortgaging, pledging or otherwise placing a Lien on any
material asset or material group of assets of the Company or its Subsidiaries,
(viii) all contracts under which the Company has advanced or loaned any other
Person in the aggregate exceeding $250,000, (ix) all sales, distribution or
franchise agreements the termination of which would have a Material Adverse
Effect on the Company, (x) all warranty agreements and (xi) all agreements by
which the Company or its Subsidiaries guarantee, endorse or otherwise becomes or
is contingently liable for the debt, obligation or other liability of any other
Person or guarantees the payment of dividends or other distribution upon the
shares of any other Person. All such written Company Material Contracts are
valid, binding and enforceable in accordance with their respective terms
(assuming the other parties thereto are bound) and are in full force and effect,
except to the extent they have previously expired in accordance with their
terms, or, except where such invalidity or unenforceability would not reasonably
be expected to have a Material Adverse Effect on the Company. No payment
default, breach or violation by the Company or its Subsidiaries or to the
Company's knowledge, by any other party thereto exists under such Company
Material Contracts, except for defaults, breaches or violations which would not
reasonably be expected to have a Material Adverse Effect on the Company.

            (s) State Takeover Statutes. The Company Board and a special
committee thereof satisfying the requirements of Section 673 Subd. 1(d)(1) of
the MBCA has approved the execution of this Agreement and authorized and
approved the Merger prior to the execution by the Company of this Agreement in
accordance with the Section 673 of the MBCA, so that such Section will not apply
to this Agreement or the transactions contemplated hereby (including the
Merger). The Company Board has taken all such action required to be taken by it
to provide that this Agreement and the transactions contemplated hereby shall be
exempt from the requirements of any "moratorium," "control share," "fair price"
or other anti-takeover laws or regulations of any state (including without
limitation Section 671 of the MBCA).

            (t) Financial Advisory Opinion. U.S. Bancorp Piper Jaffray has
delivered to the Company Board its written opinion, subject to the
qualifications and limitations stated therein, to the effect that the
consideration to be received by the holders of the Company Common Stock pursuant
to the Merger is fair to the holders of the Company Common Stock (other than any
holders of Company Common Stock who will be shareholders of the Surviving
Corporation or hold interests in Investors or Holdings after consummation of the
Merger) from a financial point of view.


                                      -19-


            (u) Compliance with Applicable Food Laws. The Company and its
Subsidiaries have produced and distributed and are producing and distributing
food products that are in compliance with the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 321 et seq.), the Federal Egg Products Inspection Act (21 U.S.C.
1031 et seq.), the Minnesota Food Law (Minnesota Statutes, Ch. 31), all other
applicable federal and state laws governing the production of food, and all
applicable regulations and administrative interpretations promulgated under any
such laws, except for such failures to be in compliance as would not reasonably
be expected to have a Material Adverse Effect on the Company.

            2.2 Representations and Warranties of Holdings and Merger Sub.
Except as set forth in the Holdings Disclosure Schedule delivered by Holdings to
the Company at or prior to the execution and delivery of this Agreement (the
"Holdings Disclosure Schedule"), Holdings and Merger Sub each represent and
warrant to the Company that:

            (a) Organization, Standing and Power. Each of Holdings and Merger
Sub has been duly organized and is validly existing and in good standing under
the laws of its jurisdiction of organization. Each of Holdings and Merger Sub is
duly qualified and in good standing to do business in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification necessary, except as would not reasonably be expected to have
a Material Adverse Effect on Holdings and Merger Sub. True and complete copies
of the Organizational Documents of the Holdings and Merger Sub have been
furnished by Holdings to the Company for inspection to the extent requested by
the Company.

            (b) Authority; No Conflicts.

                  (i) Each of Holdings and Merger Sub has all requisite power
      and authority to execute and deliver this Agreement and to consummate the
      transactions contemplated hereby. The execution and delivery of this
      Agreement and the consummation of the transactions contemplated hereby
      have been duly authorized by all necessary action on the part of Holdings
      and Merger Sub. This Agreement has been duly executed and delivered by
      Holdings and Merger Sub and (assuming the due authorization and valid
      execution and delivery of this Agreement by the Company) constitutes a
      valid and binding agreement of Holdings and Merger Sub, enforceable
      against them in accordance with its terms.

                  (ii) The execution and delivery of this Agreement by Holdings
      and Merger Sub does not or will not, as the case may be, and the
      consummation by Holdings and Merger Sub of the transactions contemplated
      hereby will not, result in any Violation of: (A) any provision of the
      Organizational Documents of Holdings and Merger Sub or (B) except for such
      Violations as would not reasonably be expected to have a Material Adverse
      Effect on Holdings and Merger Sub or impair the ability of Holdings or
      Merger Sub to perform their material obligations under this Agreement or
      delay in any material respect or prevent the consummation of the Merger,
      and subject to obtaining or making the consents, approvals, orders,
      authorizations, registrations, declarations and filings referred to in
      paragraph (iii) below, any loan or credit agreement, note, mortgage, bond,
      indenture, lease, benefit plan or other agreement, obligation, instrument,
      permit, concession, franchise or license binding


                                      -20-


      upon or held by Holdings or Merger Sub or any judgment, order, decree,
      statute, law, ordinance, rule or regulation applicable to Holdings or
      Merger Sub or their respective properties or assets.

                  (iii) No material consent, approval, order or authorization
      of, or registration, declaration or filing with, any Governmental Entity
      is required by or with respect to Holdings or Merger Sub in connection
      with the execution and delivery of this Agreement by Holdings or Merger
      Sub or the consummation by Holdings or Merger Sub of the transactions
      contemplated hereby, except for (A) the consents, approvals, orders,
      authorizations, registrations, declarations and filings required under or
      in relation to Section 2.1(c)(iii) and (B) such consents, approvals,
      orders, authorizations, registrations, declarations and filings the
      failure of which to make or obtain would not reasonably be expected to
      have a Material Adverse Effect on Holdings and Merger Sub or impair or
      delay the ability of Holdings or Merger Sub to consummate the transactions
      contemplated hereby.

                  (iv) Each of Holdings and Merger Sub holds all Permits which
      are material to the operation of their respective businesses, taken as a
      whole.

            (c) Financing Commitments. An executed commitment letter from Bank
of America, N.A. ("Bank of America"), Banc of America Bridge LLC ("Banc of
America Bridge") and Banc of America Securities LLC dated as of December 20,
2000 (the "Bank Commitment Letter"), is included in Section 2.2(c) of the
Holdings Disclosure Schedule. Pursuant to the Bank Commitment Letter and subject
to the terms and conditions contained therein, (i) Bank of America has committed
to provide senior debt financing to Merger Sub in the amount of $470,000,000,
consisting of a $370,000,000 term loan and a $100,000,000 revolving credit
facility and Banc of America Bridge has committed to purchase unsecured senior
subordinated debt securities of the Company in the aggregate amount of
$200,000,000. The Company has also received a copy of a commitment letter, a
true and correct copy of which is included in Section 2.2(b) of the Holdings
Disclosure Schedule (the "Vestar Commitment Letter"), dated December 20, 2000
from Vestar Capital Partners IV, L.P. ("Vestar") pursuant to which Vestar has
committed, subject to the terms and conditions contained therein, to purchase
equity securities of Investors for an aggregate purchase price of $133,900,405.
The Company has also received a copy of a commitment letter, a true and correct
copy of which is included in Section 2.2(c) of the Holdings Disclosure Schedule
(the "Marathon Fund Commitment Letter" and, together with the Bank Commitment
Letter and the Vestar Commitment Letter, the "Commitment Letters" and the
financing to be provided thereunder, the "Financing"), dated December 20, 2000
from Marathon Fund Limited Partnership IV ("Marathon") pursuant to which
Marathon has committed, subject to the terms and conditions contained therein,
to purchase equity securities of Investors for an aggregate purchase price of
$35,000,000. The obligations to fund the commitments under the Commitment
Letters are not subject to any condition other than set forth in the Commitment
Letters. Holdings and Merger Sub have no actual knowledge of any fact or
occurrence existing on the date of this Agreement which in their good faith
judgment would reasonably be expected to (i) make the material assumptions or
statements set forth in the Bank Commitment Letter inaccurate, (ii) cause the
Bank Commitment Letter to be ineffective or (iii) preclude in any material
respect the satisfaction of the conditions set forth in the Bank Commitment
Letter. As of the date hereof, the Commitment Letters are in full force and
effect and have not been amended in any material respect. To the knowledge of
Holdings


                                      -21-


and Merger Sub, assuming all of the representations and warranties of the
Company set forth herein are true, the funds contemplated to be received
pursuant to the Commitment Letters together with the roll over contributions to
be made as set forth in the Management Equity Agreements and the Other Equity
Agreements will be sufficient to consummate the Merger and to pay all related
fees and expenses. The financing and other fees that are due and payable under
the Commitment Letters have been paid in full. Holdings and Merger Sub believe
that, upon consummation of the transactions contemplated by this Agreement,
including the Financing, (i) the Surviving Corporation will not be insolvent,
(ii) the Surviving Corporation will not be left with unreasonably small capital,
(iii) the Surviving Corporation will not have incurred debts beyond its ability
to pay such debts as they mature and (iv) the capital of the Surviving
Corporation will not be impaired.

            (d) Information Supplied.

                  (i) The Schedule 13E-3 and any amendments or supplements
      thereto, will, when filed, comply as to form in all material respects with
      the applicable requirements of the Exchange Act and the rules and
      regulations thereunder.

                  (ii) None of the information supplied or to be supplied by
      Holdings or Merger Sub in writing specifically for inclusion or
      incorporation by reference in the Proxy Statement, the Schedule 13E-3 and
      any other documents to be filed with the SEC in connection with the
      transactions contemplated hereby, including any amendment or supplement to
      such documents, will, at the respective times such documents are filed,
      and, with respect to the Proxy Statement, when first published, sent or
      given to shareholders of the Company, contain any untrue statement of a
      material fact or omit to state any material fact required to be stated
      therein or necessary in order to make the statements made therein, in
      light of the circumstances under which they are made, not misleading or,
      in the case of the Proxy Statement or any amendment thereof or supplement
      thereto, at the time of the Company Shareholders Meeting, and at the
      Effective Time, contain any untrue statement of a material fact, or omit
      to state any material fact required to be stated therein or necessary in
      order to make the statements made therein, in light of the circumstances
      under which they are made, not misleading or necessary to correct any
      statement in any earlier communication with respect to any solicitation of
      proxies for the Company Shareholders Meeting which shall have become
      misleading.

                  (iii) Notwithstanding the foregoing provisions of this Section
      2.2(d), no representation or warranty is made by Holdings or Merger Sub
      with respect to statements made or incorporated by reference in the
      Schedule 13E-3 based on information supplied by the Company for inclusion
      or incorporation by reference therein.

            (e) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Holdings or Merger Sub, other than Vestar Capital Partners and
Goldner Hawn Johnson & Morrison Incorporated.


                                      -22-


            (f) Ownership of Company Capital Stock. As of the date of this
Agreement, neither Holdings nor, to the best of its knowledge, any of its
affiliates or associates (as such terms are defined under the Exchange Act) (i)
beneficially owns, directly or indirectly or (ii) is party to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of, in case of either clause (i) or (ii), shares of the capital stock
of the Company. Holdings has provided the Company with true and correct copies
of the form of Management Equity Agreements and the form of Other Equity
Agreements and related letter agreements, which are included in Section 2.2(f)
of the Holdings Disclosure Schedule.

            (g) Other Information Regarding Holdings and Merger Sub. Each of
Holdings and Merger Sub is a newly organized corporation, each formed solely for
the purpose of engaging in the transactions contemplated hereby. Prior to the
date hereof, neither Holdings nor Merger Sub has engaged in any business
activities or conducted any operations other than in connection with the
transactions contemplated hereby. Merger Sub is a wholly owned Subsidiary of
Holdings, and, as of the date hereof, Holdings does not own, directly or
indirectly, any capital stock or other ownership interest in any Person other
than Merger Sub.

                                    ARTICLE 3
                    COVENANTS RELATING TO CONDUCT OF BUSINESS

            3.1 Covenants of the Company. During the period from the date of
this Agreement and continuing until the Effective Time (except as expressly
contemplated or permitted by this Agreement, as set forth in Section 3.1 of the
Company Disclosure Schedule or to the extent that Holdings shall otherwise
consent in writing):

            (a) Ordinary Course. The Company and its Subsidiaries shall carry on
their respective businesses in the Ordinary Course and shall use all reasonable
efforts to preserve intact their present business organizations and their
relationships with customers, suppliers and others having business dealings with
them.

            (b) Dividends; Changes in Share Capital. The Company shall not, and
shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare or pay any dividends on or make other distributions in respect of any of
its capital stock, except dividends by the Company or its Subsidiaries in the
Ordinary Course, (ii) split, combine or reclassify any of its capital stock or
issue or authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for, shares of its capital stock or (iii)
repurchase, redeem or otherwise acquire any shares of its capital stock or any
securities convertible into or exercisable for any shares of its capital stock.

            (c) Issuance of Securities. The Company shall not, and shall cause
its Subsidiaries not to, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock of any class, any
Company Voting Debt or any securities convertible into or exercisable for, or
any rights, warrants or options to acquire, any such shares or Company Voting
Debt, or enter into any agreement with respect to any of the foregoing, other
than (i) the issuance of shares of the Company Common Stock (A) upon the
exercise of Options issued in the Ordinary Course prior to the date hereof in
accordance with the terms of the Option Plans as in effect


                                      -23-


on the date of this Agreement or (B) under the Share Awards outstanding on the
date of this Agreement and (ii) the issuance of Share Awards in an amount not to
exceed that number of shares of Company Common Stock equal to $1,025,000 divided
by the market price of Company Common Stock as determined in accordance with the
terms of the Executive Performance Plan and the Executive Incentive Plan.

            (d) Organizational Documents. Except to the extent required to
comply with their respective obligations hereunder, by law or by the rules and
regulations of the NASDAQ, the Company and its Subsidiaries shall not amend or
propose to amend their respective Organizational Documents.

            (e) Indebtedness and Other Matters. The Company shall not, and shall
not permit any of its Subsidiaries to, (i) other than incurrence of indebtedness
under existing working capital facilities in the ordinary course of business
consistent with past practices, incur any indebtedness for borrowed money or
guarantee, assume, endorse or otherwise become responsible for any such
indebtedness or issue or sell any debt securities or warrants or rights to
acquire any debt securities of the Company or its Subsidiaries or of other
Persons, other than indebtedness of the Company or its Subsidiaries to the
Company or its Subsidiaries, (ii) make any loans or advances other than by the
Company or its Subsidiaries to or in the Company or its Subsidiaries or other
than to customers for the purchase of products from the Company in the ordinary
course of business consistent with past practices, (iii) make any capital
contributions to, or investments in, any other Person, other than by the Company
or its domestic Subsidiaries to or in the Company or its domestic Subsidiaries,
(iv) other than the payment, discharge or satisfaction of claims, liabilities
and obligations in the ordinary course of business consistent with past
practices not in excess of amounts duly accrued or accruable therefor, pay,
discharge or satisfy any claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), (v) make capital expenditures
in excess of $32,000,000 prior to the Closing Date or enter into binding
contracts to make capital expenditures in excess of $46 million during the 2001
fiscal year, (vi) issue, deliver, sell, lease, sell and leaseback, pledge,
dispose of or encumber material properties or material assets of the Company or
any of its Subsidiaries other than inventory in the Ordinary Course, except
Liens for Taxes not currently due, (vii) (A) make or change any Tax election or
method of accounting with respect to Taxes, (B) file any amended Tax Return or
(C) settle or compromise any examination or proceeding with respect to any
material Tax liability, (viii) settle or compromise any litigation (whether or
not commenced prior to the date of this Agreement), other than settlements
involving amounts payable by the Company and its Subsidiaries that are not in
excess of $500,000 in the aggregate over amounts fully recoverable from insurers
of the Company and its Subsidiaries, (ix) enter into any new or amended contract
or agreement with any labor unions representing employees of the Company or any
Subsidiary, (x) enter into or amend, modify, renew or terminate any material
agreement or material transaction, including, without limitation, any material
transaction involving any merger, consolidation, joint venture, license
agreement, partial or complete liquidation or dissolution, reorganization,
recapitalization, restructuring, or a purchase, sale, lease or other acquisition
or disposition of any assets or capital stock, (xi) knowingly undertake any
action or fail to take any action that will result in a breach of the
representations and warranties set forth in Section 2.1 as if made on and as of
the Closing Date or (xii) agree, or commit to agree, to take any action not
permitted to be taken pursuant to this Section 3.1(e).


                                      -24-


            (f) Benefit Plans. The Company shall not, and shall not permit any
of its Subsidiaries to, (i) establish, adopt, enter into, or amend any Company
Benefit Plan, or any plan, agreement, program, policy, trust, fund or other
arrangement that would be a Company Benefit Plan if it were in existence as of
the date of this Agreement, except as required by law, (ii) increase the
compensation payable or to become payable to (A) any of its directors or
officers, except to the extent required under agreements existing as of the date
of this Agreement or as consistent with the Company's 2001 operating budget
previously provided to Holdings; provided that such increases shall not exceed,
in the aggregate, 5% of current levels, or (B) except in the Ordinary Course
consistent with the Company's 2001 operating budget, other employees or (iii)
take any action with respect to the grant, modification or amendment of any
severance or termination pay, or stay, bonus or other incentive arrangement
(other than pursuant to benefit plans and policies in effect on the date of this
Agreement).

            3.2 Advice of Changes; Government Filings. Each of the Company and
Holdings shall (a) confer on a regular and frequent basis with the other, (b)
report (to the extent permitted by law, regulation and any applicable
confidentiality agreement) to the other on operational matters and (c) promptly
advise the other orally and in writing of (i) any representation or warranty
made by it contained in this Agreement becoming untrue or inaccurate in any
respect such that the conditions set forth in Section 5.2(a) or 5.3(a) would not
be satisfied, (ii) the failure by it (A) to comply with or satisfy in any
respect any covenant, condition or agreement required to be complied with or
satisfied by it under this Agreement that is qualified as to materiality or (B)
to comply with or satisfy in any material respect any covenant, condition or
agreement required to be complied with or satisfied by it under this Agreement
that is not so qualified as to materiality or (iii) any change, event or
circumstance that has had a Material Adverse Effect on such party or materially
and adversely affects its ability to consummate the transactions contemplated
hereby in a timely manner; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the parties
or the conditions to the obligations of the parties under this Agreement. The
Company and Holdings and Merger Sub shall file all reports required to be filed
by each of them with the SEC (and all other Governmental Entities) between the
date of this Agreement and the Effective Time and shall (to the extent permitted
by law or regulation or any applicable confidentiality agreement) deliver to the
other party copies of all such reports promptly after the same are filed.
Subject to applicable laws relating to the exchange of information, each of the
Company and Holdings shall have the right to review in advance, and to the
extent practicable each will consult with the other, with respect to all the
information relating to the other party and each of their respective
Subsidiaries, which appears in any filings, announcements or publications made
with, or written materials submitted to, any third party or any Governmental
Entity in connection with the transactions contemplated by this Agreement. In
exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable. Each of the Company and Holdings
agrees that, to the extent practicable, it will consult with the other party
with respect to the obtaining of all Permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement and each
further agrees to keep the other apprized of the status of matters relating to
completion of the transactions contemplated hereby.

            3.3 Financing Related Cooperation. The Company agrees to provide,
and will cause its Subsidiaries and its and their respective officers, employees
and advisors to provide, all


                                      -25-


cooperation reasonably necessary in connection with the arrangement of any
financing to be consummated contemporaneously with or at or after the expiration
of the Effective Time in respect of the transactions contemplated by this
Agreement, including participation in meetings, due diligence sessions, road
shows, the preparation of offering memoranda, private placement memoranda,
prospectuses and similar documents, the execution and delivery of any commitment
letters, underwriting or placement agreements, pledge and security documents,
other definitive financing documents, or other requested certificates or
documents, including a certificate of the chief financial officer of the Company
with respect to solvency matters, comfort letters of accountants and legal
opinions as may be reasonably requested by Holdings and taking such other
actions as are reasonably required to be taken by the Company in the Commitment
Letters, provided that Holdings and Merger Sub shall use reasonable efforts not
to materially interfere with the duties of such officers, employees and advisors
such that the Company's business and results of operations would be materially
adversely affected thereby. In addition, in conjunction with the obtaining of
any such financing, the Company agrees, at the reasonable request of Holdings,
to call for prepayment or redemption, or to prepay, redeem and/or renegotiate,
as the case may be, any then existing indebtedness of the Company and its
Subsidiaries; provided that no call for redemption or prepayment shall be
irrevocably made until contemporaneously with or after the Effective Time.
Holdings and Merger Sub shall use their commercially reasonable best efforts to
cause the Financing to be fulfilled in accordance with the terms of the
Commitment Letters.

                                    ARTICLE 4
                              ADDITIONAL AGREEMENTS

            4.1 Preparation of the Proxy Statement; Schedule 13E; the Company
Shareholders Meeting.

            (a) Company Shareholders Meeting. The Company shall, acting through
the Company's Board, as soon as practicable following execution of this
Agreement and in accordance with this Agreement, duly call, give notice of,
convene and hold a special meeting of its shareholders (the "Company
Shareholders Meeting") for the purpose of considering and taking action upon the
approval of the Merger and the adoption of this Agreement, and the Company
shall, through the Company Board, recommend to its shareholders that they adopt
this Agreement; provided, however, that the Company Board may withdraw, modify
or change such recommendation in accordance with the terms of Section 4.4 of
this Agreement. Holdings and Merger Sub shall vote or cause to be voted all the
shares of the Company Common Stock owned of record or beneficially by Holdings
or any of its Subsidiaries in favor of this Agreement and the transactions
contemplated by this Agreement.

            (b) Proxy Statement. As soon as practicable following the execution
of this Agreement, the Company shall prepare and file with the SEC the Proxy
Statement with respect to the Company Shareholders Meeting, and use its
reasonable good faith efforts to have a Proxy Statement cleared by the SEC and
mailed to the Company's shareholders. Holdings and Merger Sub and the Company
shall cooperate with each other in the preparation of the Proxy Statement. The
Proxy Statement (i) shall contain (A) subject to the fiduciary duties of the
Company Board, statements of the Company Board that it has (x) determined that
this Agreement and the transactions contemplated hereby, including the Merger,
are fair to and in the best interests of the shareholders


                                      -26-


of the Company, (y) declared the Merger and this Agreement to be advisable and
(z) recommended unanimously that the shareholders of the Company vote in favor
of the approval of the Merger and the adoption of this Agreement and (B) the
written opinion of U.S. Bancorp Piper Jaffray and (ii) shall comply as to form
and content in all material respects with the applicable provisions of the
federal securities laws. Holdings and its counsel shall be given an opportunity
to review and comment upon the Proxy Statement and any amendment or supplement
thereto prior to the filing thereof with the SEC, and the Company shall consider
any such comments in good faith. The Company agrees to provide to Holdings and
its counsel any comments which the Company or its counsel may receive from the
staff of the SEC with respect to the Proxy Statement promptly after receipt
thereof. Holdings and Merger Sub will promptly supply to the Company in writing,
for inclusion in the Proxy Statement, all information concerning Holdings and
Merger Sub required by law, rule or regulation to be included in the Proxy
Statement. The Company, Holdings and Merger Sub agree to promptly correct any
information provided by any of them for use in the Proxy Statement which shall
have become false or misleading in any respect, and the Company further agrees
to take all steps reasonably necessary to cause such Proxy Statement as so
corrected to be filed with the SEC and disseminated to the Company's
shareholders, in each case as and to the extent required by the applicable
provisions of the federal securities laws. The Company agrees to use its
reasonable best efforts, after consultation with the other parties hereto, and
each of Holdings and Merger Sub agree to use its reasonable best efforts to
promptly provide the Company with any information necessary to respond promptly
to any comments made by the Commission with respect to the Proxy Statement and
any preliminary version thereto or amendment thereof, filed by it, and each of
the Company, Holdings and Merger Sub shall use reasonable efforts to cause the
Proxy Statement to be mailed to the Company's shareholders at the earliest
practicable time.

            (c) Schedule 13E. Concurrently with the filing of the Proxy
Statement, Holdings and Merger Sub and their respective affiliates (to the
extent required by law) shall prepare and file with the SEC, together with the
Company, a Rule 13E-3 Transaction Statement on Schedule 13E-3 (together with all
supplements and amendments thereto, the "Schedule 13E-3") with respect to the
transactions contemplated by this Agreement. The Company shall promptly furnish
to Holdings all information concerning the Company as may reasonably be
requested in connection with the preparation of the Schedule 13E-3. The Company
shall promptly supplement, update and correct any information provided by it for
use in the Schedule 13E-3 if and to the extent that it is or shall have become
incomplete, false or misleading. In any such event, Holdings and the Company
shall take all steps necessary to cause the Schedule 13E-3 as so supplemented,
updated or corrected to be filed with the SEC and to be disseminated to the
holders of Company Common Stock, in each case, as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be given
an opportunity to review and comment on the Schedule 13E-3 and each supplement,
amendment or response to comments with respect thereto prior to its being filed
with or delivered to the SEC and Holdings shall consider any such comments in
good faith. Holdings agrees to provide the Company and its counsel with any
comments that Holdings or its counsel may receive from the staff of the SEC
promptly after receipt thereof.

            4.2 Access to Information. Upon reasonable notice, each of the
Company and Holdings shall (and shall cause their respective Subsidiaries, to)
afford to the officers, employees, accountants, counsel, financial advisors and
other representatives of the other party reasonable access during normal
business hours, during the period prior to the Effective Time, to all its
properties,


                                      -27-


books, contracts, commitments and records and its officers, employees and
representatives and, during such period, each of the Company and Holdings shall
(and shall cause its Subsidiaries, to) furnish promptly to the other party (a) a
copy of each report, schedule, registration statement and other document filed,
published, announced or received by it during such period pursuant to the
requirements of federal or state securities laws, as applicable (other than
reports or documents which such party is not permitted to disclose under
applicable law) and (b) consistent with its legal obligations, all other
information concerning its business, properties and personnel as the other party
may reasonably request. Such information shall be held in confidence to the
extent required by, and in accordance with, the provisions of the letter dated
September 9, 1999, between the Company and Vestar (the "Confidentiality
Agreement"), which Confidentiality Agreement shall remain in full force and
effect.

            4.3 Approvals and Consents; Cooperation. Each of the Company,
Holdings and Merger Sub shall cooperate with each other and use (and shall cause
their respective Subsidiaries to use) its reasonable best efforts to take or
cause to be taken all actions, and do or cause to be done all things, necessary,
proper or advisable on their part under this Agreement and applicable laws to
consummate and make effective the Merger and the other transactions contemplated
by this Agreement as soon as practicable, including without limitation (i)
preparing and filing as promptly as practicable all documentation to effect all
necessary applications, notices, petitions, filings, Tax ruling requests and
other documents and to obtain as promptly as practicable all consents, waivers,
licenses, orders, registrations, approvals, Permits, Tax rulings and
authorizations necessary or advisable to be obtained from any third party and/or
any Governmental Entity in order to consummate the Merger or any of the other
transactions contemplated by this Agreement (including, but not limited to,
those approvals, consents, orders, registrations, declarations and filings
required under Section 2.1(c)(iii)) (collectively, the "Required Approvals") and
(ii) taking all reasonable steps as may be necessary to obtain all such Required
Approvals. Without limiting the generality of the foregoing, each of the Company
and Holdings and Merger Sub agree to make all necessary filings in connection
with the Required Approvals as promptly as practicable after the date of this
Agreement, and to use its reasonable best efforts to furnish or cause to be
furnished, as promptly as practicable, all information and documents requested
with respect to such Required Approvals, and shall otherwise cooperate with any
applicable Governmental Entity in order to obtain any Required Regulatory
Approvals in as expeditious a manner as possible. Each of the Company, Holdings
and Merger Sub shall use its reasonable best efforts to resolve such objections,
if any, as any Governmental Entity may assert with respect to this Agreement and
the transactions contemplated hereby in connection with the Required Approvals.
In the event that a suit is instituted by a Person or Governmental Entity
challenging this Agreement and the transactions contemplated hereby as violative
of applicable antitrust or competition laws, each of the Company and Holdings
shall use its reasonable best efforts to resist or resolve such suit. The
Company and Holdings each shall, upon request by the other, furnish the other
with all information concerning itself, its Subsidiaries, affiliates, directors,
officers and shareholders and such other matters as may reasonably be necessary
or advisable in connection with the Proxy Statement, the Schedule 13E-3 or any
other statement, filing, Tax ruling request, notice or application made by or on
behalf of the Company, Holdings or any of their respective Subsidiaries to any
third party and/or any Governmental Entity in connection with the Merger or the
other transactions contemplated by this Agreement.


                                      -28-


            4.4 Acquisition Proposals.

            (a) Neither the Company nor any of its Subsidiaries shall (whether
directly or indirectly through advisors, agents or other intermediaries), nor
shall the Company or any of its Subsidiaries authorize or permit any of its or
their officers, directors, agents, representatives or advisors (the "Company
Representatives") to (a) solicit, initiate, knowingly encourage (including by
way of furnishing non-public information) or take any action knowingly to
facilitate the submission of any inquiries, proposals or offers (whether or not
in writing) from any Person (other than Holdings and its affiliates), other than
the transactions contemplated by this Agreement, that constitute, or are
reasonably expected to lead to, an Acquisition Proposal (as defined below), or
(b) enter into or participate in any discussions or negotiations regarding an
Acquisition Proposal; provided, however, that, at any time during the period
following the execution of this Agreement and prior to the Effective Time, if
the Company receives a proposal or offer that was not solicited by the Company
or a Company Representative, and that the Company Board determines in good faith
(after consultation with its outside legal counsel and financial advisors) is a
Superior Proposal (as defined below but ignoring, for purposes of this Section
4.4(a) only, clause (i) of the definition of Superior Proposal), and subject to
compliance with Section 4.4(b), the Company Board may, or may authorize any
committee thereof or any Company Representatives to, (x) furnish information
with respect to the Company and its Subsidiaries to the Person making such
proposal or offer pursuant to a confidentiality agreement on terms not less
favorable to the Company than the Confidentiality Agreement and (y) participate
in discussions or negotiations regarding such proposal or offer.

            (b) The Company shall notify Holdings promptly (and in any case
prior to providing any information or access referred to below) after receipt by
the Company (or any Company Representative) of any Acquisition Proposal or any
inquiry regarding the making of an Acquisition Proposal or any request for
non-public information in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company or any of its Subsidiaries by
any Person that informs the Company that it is considering making, or has made,
an Acquisition Proposal. Such notice shall be made orally and in writing and
shall indicate in reasonable detail the identity of the offeror and the terms
and conditions of such proposal, inquiry or contact. The Company shall continue
to keep Holdings informed, on a reasonably current basis, of the status of any
such discussions or negotiations and the terms being discussed or negotiated.

            (c) Neither the Company nor the Company Board nor any committee
thereof shall withdraw or modify, or propose to withdraw or modify, in any
manner adverse to Holdings, the approval or recommendation of this Agreement or
the Merger, or propose publicly to approve or recommend an Acquisition Proposal,
unless the withdrawal or modification of such approval or recommendation or such
approval or recommendation is, in the good faith judgment of the Company Board
or such committee thereof (after consultation with its outside legal counsel),
necessary to comply with its fiduciary obligations to the Company's shareholders
under applicable law. Nothing contained in this Agreement shall prohibit the
Company nor the Company Board nor any committee thereof from taking and
disclosing to its shareholders a position contemplated by Rule 14e-2 and Rule
14d-9 promulgated under the Exchange Act or from making any disclosure to the
Company's shareholders if, in the good faith judgment of the Company Board or
such committee thereof (after consultation with its outside legal counsel) the
failure to make such disclosure would be inconsistent with its fiduciary duties
to the Company's shareholders or other obligations under applicable law.


                                      -29-


Notwithstanding anything to the contrary contained in this Section 4.4 or
elsewhere in this Agreement, prior to the Effective Time, the Company may, in
connection with a possible Acquisition Proposal, refer any third party to this
Section 4.4 and to Section 6.2, and make a copy of this Section 4.4 and Section
6.2 available to such third party.

            (d) The Company will immediately cease and cause its advisors,
agents and other intermediaries to cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing, and shall use its reasonable best efforts to cause any
such parties in possession of confidential information about the Company that
was furnished by or on behalf of the Company to return or destroy all such
information in the possession of any such party or in the possession of any
agent or advisor of any such party. The Company agrees not to release any third
party from or waive any provisions of confidentiality in any confidentiality
agreement to which the Company is a party.

            (e) "Acquisition Proposal" means any inquiry, proposal or offer for
(i) an acquisition or purchase of 10 percent or more of the consolidated assets
of the Company and its Subsidiaries or of 10 percent or more of any class of
equity securities of the Company or any of its Subsidiaries, (ii) any tender
offer (including a self tender offer) or exchange offer that if consummated
would result in any Person beneficially owning 10 percent or more of any class
of equity securities of the Company or any of its Subsidiaries or (iii) any
merger, consolidation, business combination, sale of substantially all assets,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries whose assets, individually or in the
aggregate, constitute 10 percent or more of the consolidated assets of the
Company.

            (f) "Superior Proposal" means a proposal with respect to any of the
transactions described in the definition of Acquisition Proposal (with all of
the percentages included in the definition of such term replaced with "all or
substantially all" for purposes of this definition) with respect to which the
Company Board shall have concluded in good faith, after consultation with its
outside legal counsel and financial advisor, (i) is reasonably likely to be
completed, taking into account all legal, financial, regulatory and other
aspects of the Acquisition Proposal, including the status of the financing
therefor and the Person making the proposal and (ii) would, if consummated,
result in a transaction more favorable to the Company's shareholders from a
financial point of view than the transactions contemplated by this Agreement.

            4.5 Employee Benefits.

            (a) For a period of one year immediately following the Effective
Time, the Surviving Corporation shall maintain in effect employee benefit plans
and arrangements with overall employee benefits which are substantially
comparable, in the aggregate, to the benefits provided by the Company Benefit
Plans as of the date hereof (not taking into account the value of any benefits
under any such plans which are equity-based).

            (b) For purposes of determining eligibility to participate or
vesting where length of service is relevant under any employee benefit plan or
arrangement of the Surviving Corporation or any of their respective
Subsidiaries, employees of the Company and its Subsidiaries as of the Effective
Time shall receive service credit for service with the Company and its
Subsidiaries to the


                                      -30-


same extent such service credit was granted under the Company Benefit Plans,
subject to offsets for previously accrued benefits and no duplication of
benefits.

            (c) Upon the consummation of the Merger, each Share Award
outstanding immediately prior to the Effective Time shall automatically become
immediately vested and each holder of a Share Award shall have the right to
receive from the Surviving Corporation a cash payment (less applicable federal,
state and local withholding taxes) in an aggregate amount equal to the Price Per
Share for each share of Company Common Stock subject to such Share Award.

            4.6 Fees and Expenses. Whether or not the Merger is consummated, all
Expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such Expenses, except
(a) if the Merger is consummated, the Surviving Corporation shall pay, or cause
to be paid, all expenses of Holdings and Merger Sub incurred in connection with
the transactions contemplated by this Agreement and (b) as set forth in Section
6.4(b). For purposes of this Agreement, "Expenses" includes all out-of-pocket
expenses (including all fees and expenses of counsel, accountants, investment
bankers, financing sources and their counsel, experts and consultants to a party
hereto and its affiliates) incurred by a party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby,
including the preparation, printing, filing and mailing of the Proxy Statement
and the Schedule 13E-3 and the solicitation of shareholder approvals and all
other matters related to the transactions contemplated hereby.

            4.7 Indemnification; Directors' and Officers' Insurance.

            (a) Continuation of Organizational Documents Obligations. The
Company shall and, from and after the Effective Time until the sixth anniversary
of the Effective Time, the Surviving Corporation shall maintain the right to
indemnification and exculpation of officers and directors provided for in the
Organizational Documents of the Company as in effect on the date hereof, with
respect to indemnification and exculpation for acts and omissions occurring
prior to the Effective Time, including, without limitation, the transactions
contemplated by this Agreement.

            (b) Continuation of Directors' and Officers' Insurance. Until the
sixth anniversary of the Effective Time, the Surviving Corporation shall
maintain officers' and directors' liability insurance covering the Persons who
are presently covered by the Company's officers' and directors' liability
insurance policies (copies of which have heretofore been delivered to Holdings)
with respect to actions and omissions occurring prior to the Effective Time, by
obtaining tail coverage of such existing insurance policies on terms which are
not less favorable than the terms of such current insurance in effect for the
Company on the date hereof and providing coverage only with respect to matters
occurring prior to the Effective Time, to the extent that such tail coverage can
be maintained at an annual cost to the Surviving Corporation of not greater than
200% of the annual premium for the Company's current insurance policies and, if
such tail coverage cannot be so maintained at such cost, providing as much of
such insurance as can be so maintained at a cost equal to 200% of the annual
premium for the Company's current insurance policies.

            (c) Indemnification. The Company shall and, from and after the
Effective Time, the Surviving Corporation shall, to the fullest extent permitted
under applicable law and to the extent


                                      -31-


such Person would have been indemnified under the articles of incorporation and
bylaws of the Company or any Company Subsidiary as such documents were in effect
on the date of this Agreement, indemnify and hold harmless each present and
former director and officer of the Company or any Company Subsidiary (each an
"Indemnified Party" and collectively, the "Indemnified Parties") against any
costs or expenses, together with such person's heirs, executors or
administrators (including by advancing attorney's fees and expenses in advance
of the final disposition of any claim, action, suit, proceeding or investigation
to the fullest extent permitted by and subject to the conditions of law),
judgments, fines, losses, claims, damages, liabilities and amounts paid in
settlement in connection with any pending, threatened or completed claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to any action or
omission based upon or arising from his or her capacity as an officer or
director of the Company or any Company Subsidiary occurring prior to the
Effective Time (including, without limitation, any claim, action, suit,
proceeding or investigation arising out of or pertaining to the transactions
contemplated by this Agreement).

            (d) Survival. This Section 4.7 shall survive the closing of the
transactions contemplated hereby, is intended to benefit the Company, Merger Sub
and the Surviving Corporation and each of the Indemnified Parties (each of whom
shall be entitled to enforce this Section 4.7 against the Company, Merger Sub
and the Surviving Corporation, as the case may be), and shall be binding on all
successors and assigns of the Surviving Corporation.

            (e) Merger, Assignment, etc. If the Surviving Corporation or any of
its successors or assigns (i) consolidates with or merges into any other Person
and shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Surviving
Corporation assume the obligations set forth in this Section 4.7.

            4.8 Public Announcements. Neither party hereto shall make any press
release or public announcement with respect to this Agreement, the Merger or the
transactions contemplated hereby without the prior written consent of the other
party hereto (which consent shall not be unreasonably withheld); provided,
however, that each party hereto may make any disclosure or announcement which
such party, after consultation with its legal counsel, determines that it is
obligated to make pursuant to applicable law or regulation of any national
securities exchange or in order to discharge its fiduciary duties, in which
case, the party desiring to make the disclosure shall consult with the other
party hereto prior to making such disclosure or announcement.

            4.9 Further Assurances. In case at any time after the Effective Time
any further action is reasonably necessary to carry out the purposes of this
Agreement or the transactions contemplated by this Agreement, the proper
officers of the Company, Holdings and the Surviving Corporation shall take any
such reasonably necessary action.

            4.10 Disposition of Litigation. In connection with any litigation
which may be brought against the Company or its directors relating to the
transactions contemplated hereby, the Company shall keep Holdings, and any
counsel which Holdings may retain at its own expense, informed of the status of
such litigation and will provide Holdings' counsel the right to participate


                                      -32-


in the defense of such litigation to the extent Holdings is not otherwise a
party thereto, and the Company shall not enter into any settlement or compromise
of any such stockholder litigation without Holdings' prior written consent,
which consent shall not be unreasonably withheld or delayed.

            4.11 Delisting. Each of the parties agrees to cooperate with each
other in taking, or causing to be taken, all actions necessary to delist the
Company Common Stock from NASDAQ and to terminate registration under the
Exchange Act, provided that such delisting and termination shall not be
effective until after the Effective Time of the Merger.

                                    ARTICLE 5
                              CONDITIONS PRECEDENT

            5.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of Holdings, Merger Sub and the Company to effect the
Merger are subject to the satisfaction or waiver on or prior to the Closing Date
of the following conditions:

            (a) Shareholder Approval. The Company shall have obtained all
approvals of holders of shares of the capital stock of the Company required
under the MBCA to approve this Agreement and the transactions contemplated
hereby;

            (b) HSR Act. Any waiting period applicable to the Merger under the
HSR Act (including any extension thereof) shall have been terminated or shall
have expired; and

            (c) No Injunctions or Restraints, Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
a United States federal or state court of competent jurisdiction shall be in
effect and have the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.

            5.2 Conditions to the Obligations of Holdings and Merger Sub to
Effect the Merger. The respective obligations of Holdings and Merger Sub to
effect the Merger are subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:

            (a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement (other than those
representations and warranties that address matters as of particular dates)
shall be true and correct as of the Closing Date and any representation and
warranty of the Company set forth in this Agreement that addresses matters as of
a particular date shall be true and correct as of the date referred to therein;
it being understood that (i) any inaccuracies in such representations and
warranties shall be disregarded if the circumstances giving rise to such
inaccuracies (considered collectively) do not constitute a Material Adverse
Effect on the Company and (ii) for purposes of determining whether such
representations and warranties are true and correct, all "Material Adverse
Effect" qualifications and any other materiality qualifications in such
representations and warranties shall be disregarded;


                                      -33-


            (b) Performance. The Company shall have performed all obligations
and complied in all material respects with all agreements or covenants to be
performed or complied with by it under this Agreement;

            (c) Prohibitions to Merger. There shall not be pending any action or
proceeding by a United States federal or state Governmental Entity of competent
jurisdiction nor shall a statute, rule or regulation have been promulgated or
enacted by a United States federal or state Governmental Entity of competent
jurisdiction after the date of this Agreement which would have the effect of (i)
restraining or prohibiting the consummation of the Merger, (ii) prohibiting or
restricting the ownership or operation by Holdings (or any of its affiliates or
Subsidiaries) of a material portion of the business or assets of the Company and
its Subsidiaries taken as a whole, or compelling Holdings (or any of its
affiliates or Subsidiaries) to dispose of or hold separate a material portion of
the business or assets of the Company and its Subsidiaries taken as a whole,
(iii) imposing material limitations on the ability of Holdings (or any of its
affiliates or Subsidiaries) effectively to acquire or to hold or to exercise
full rights of ownership of the shares of the Company Common Stock, including,
without limitation, the right to vote such shares purchased by Holdings (or any
of its affiliates or Subsidiaries) on all matters properly presented to the
shareholders of the Company, (iv) imposing any material limitations on the
ability of Holdings (or any of its affiliates or Subsidiaries) effectively to
control in any material respect the business and operations of the Company or
(v) obtaining material damages from Holdings or any of its affiliates in
connection with the making or consummation of the Merger and there shall not be
in effect any injunction, order, decree, judgment or ruling issued by a United
States federal or state court of competent jurisdiction having any effect set
forth in clauses (i) through (v) above;

            (d) Financing. Merger Sub shall have received the proceeds of the
financing contemplated by the Commitment Letters on the terms and conditions set
forth therein and with other material terms satisfactory to Holdings, in the
amounts necessary to consummate the Merger and pay all related fees and
expenses; or

            (e) No Material Adverse Effect. There shall not have occurred any
event or circumstance that has had or would be reasonably likely to have a
Material Adverse Effect on the Company since the date of the Agreement.

            5.3 Conditions to the Obligations of the Company to Effect the
Merger. The obligations of the Company to effect the Merger are subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:

            (a) Representations and Warranties. The representations and
warranties of Holdings and Merger Sub set forth in this Agreement (other than
those representations and warranties that address matters as of particular
dates) shall be true and correct as of the Closing Date and any representation
and warranty of Holdings and Merger Sub set forth in this Agreement that
addresses matters as of a particular date shall be true and correct as of the
date referred to therein; it being understood that (i) any inaccuracies in such
representations and warranties shall be disregarded if the circumstances giving
rise to such inaccuracies (considered collectively) do not constitute a Material
Adverse Effect on Holdings and Merger Sub, taken as a whole and (ii) for
purposes of determining whether such representations and warranties are true and
correct, all "Material Adverse Effect"


                                      -34-


qualifications and any other materiality qualifications in such representations
and warranties shall be disregarded; and

            (b) Performance. Holdings and Merger Sub shall have performed all
obligations and complied in all material respects with all agreements or
covenants to be performed or complied with by them under this Agreement.

                                    ARTICLE 6
                            TERMINATION AND AMENDMENT

            6.1 Termination by Either the Company or Holdings. This Agreement
may be terminated at any time prior to the Effective Time by either the Company
or Holdings, whether before or after adoption of this Agreement by the Company's
shareholders:

            (a) by the mutual written consent of Holdings and the Company, by
action of their respective boards of directors;

            (b) if any United States federal or state Governmental Entity shall
have issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable; provided, however, that the party seeking to terminate
this Agreement shall have used its commercially reasonably efforts to remove or
lift such order, decree, ruling or other action;

            (c) if the Merger has not been consummated by May 31, 2001, provided
that the party seeking to exercise such right is not then in breach in any
material respect of any of its obligations under this Agreement; and

            (d) if, at a duly held shareholders meeting of the Company or any
adjournment thereof at which this Agreement and the Merger are voted upon (the
"Special Meeting"), the requisite shareholder adoption and approval shall not
have been obtained.

            6.2 Termination by Holdings. This Agreement may also be terminated
by Holdings at any time prior to the Effective Time:

            (a) if the Company or the Company Board shall have (i) withdrawn,
modified or amended in any respect adverse to Holdings or Merger Sub any of its
recommendations described in Section 4.1(a) hereof, (ii) approved, recommended
or entered into an agreement with respect to, or consummated, any Acquisition
Proposal from a Person other than Holdings or any of its affiliates, (iii) in
response to the commencement of any tender offer or exchange offer for
outstanding shares of Company Common Stock, not recommended rejection of such
tender offer or exchange offer within ten (10) business days of commencement of
such tender offer or exchange offer, or (iv) resolved to do any of the foregoing
or publicly announced its intention to do any of the foregoing; or


                                      -35-


            (b) (i) if (A) any covenant or agreement of the Company contained in
this Agreement shall be materially breached, (B) any of the Company's
representations and warranties contained in this Agreement shall have been
inaccurate as of the date of this Agreement such that the condition set forth in
Section 5.2(a) would not be satisfied (assuming that the phrase "date of this
Agreement" is substituted for the phrase "Closing Date" contained in Section
5.2(a)), or (C) any of the Company's representations and warranties contained in
this Agreement shall have become inaccurate after the date of this Agreement
such that the condition set forth in Section 5.2(a) would not be satisfied
(each, a "Terminating Company Breach"); and (ii) such Terminating Company Breach
shall not have been cured by the Company within twenty (20) days of receipt of
written notice of such Terminating Company Breach.

            6.3 Termination by the Company. This Agreement may also be
terminated by the Company at any time prior to the Effective Time:

            (a) (i) if (A) any covenant or agreement of the Holdings or Merger
Sub contained in this Agreement shall be materially breached, (B) any of the
representations and warranties of Holdings or Merger Sub contained in this
Agreement shall have been inaccurate as of the date of this Agreement such that
the condition set forth in Section 5.3(a) would not be satisfied (assuming that
the phrase "date of this Agreement" is substituted for the phrase "Closing Date"
contained in Section 5.3(a)), or (C) any of the representations and warranties
of Holdings or Merger Sub contained in this Agreement shall have become
inaccurate after the date of this Agreement such that the condition set forth in
Section 5.3(a) would not be satisfied (each, a "Terminating Holdings Breach");
and (ii) such Terminating Holdings Breach shall not have been cured by Holdings
or Merger Sub within twenty (20) days of receipt of written notice of such
Terminating Holdings Breach; or

            (b) if the Company Board approves a Superior Proposal; provided,
however, that (A) the Company shall have complied with the terms of Section 4.4
and (B) this Agreement may not be terminated pursuant to this Section 6.3(b)
unless (x) concurrently with such termination, the Company pays to Holdings the
Termination Fee (as hereinafter defined) less any Expense Payment (as
hereinafter defined) previously paid and (y) the Company shall have provided
Holdings with at least five business days' advance notice of such termination
and Holdings does not make, within four (4) business days of receipt of the
Company's notification of its intention to terminate this Agreement, an offer
that the Company Board determines, in good faith after consultation with its
outside legal counsel and financial advisors, is at least as favorable to the
shareholders of the Company as such Superior Proposal.

            6.4 Effect of Termination.

            (a) In the event of termination of this Agreement by either the
Company or Holdings as provided in this Article 6, this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of Holdings, Merger Sub or the Company or their respective officers, directors,
shareholders, affiliates, representatives, agents, employees or advisors,
except, with respect to Holdings, Merger Sub and the Company, (i) with respect
to Section 4.6, this Section 6.4, Article 7 and the last sentence of Section 4.2
and (ii) with respect to any liabilities or damages incurred or suffered by a
party as a result of the willful breach by the other party or parties of this
Agreement.


                                      -36-


            (b) The Company shall (provided that neither Holdings nor the Merger
Sub is then in material breach of its obligations under this Agreement) (i) upon
the termination of this Agreement pursuant to Section 6.1(d), promptly, but in
no event later than two business days following written notice thereof, pay to
Holdings and Merger Sub $5 million for its out-of-pocket expenses and fees
(including fees payable to banks, investment banking firms and other financial
institutions, and their respective agents and counsel, and fees of counsel,
accountants, financial printers, advisors, experts and consultants to Holdings
and its affiliates) or (ii) upon the termination of this Agreement pursuant to
Section 6.2(b), promptly, but in no event later than two business days following
written notice thereof, together with reasonable supporting documentation,
reimburse Holdings and Merger Sub in an amount up to $2,500,000 for its
out-of-pocket expenses and fees (including fees payable to banks, investment
banking firms and other financial institutions, and their respective agents and
counsel, and fees of counsel, accountants, financial printers, advisors, experts
and consultants to Holdings and its affiliates) (either of the payments in
clauses (i) or (ii) being referred to herein as the "Expense Payment"). It is
understood that in the event that Holdings is paid a Termination Fee, to the
extent not previously paid, the Expense Payment shall not be paid.

            (c) In the event that this Agreement is terminated by Holdings
pursuant to Section 6.2(a) or by the Company pursuant to Section 6.3(b), the
Company shall pay to Holdings, by wire transfer of immediately available funds
to an account designated by Holdings on the next business day following such
termination (or, in the case of a termination by the Company pursuant to Section
6.3(b), by wire transfer of immediately available funds to an account designated
by Holdings, concurrently with the effectiveness of such termination), an amount
equal to $20 million (the "Termination Fee"), less any Expense Payment
previously paid.

            (d) If all of the following events have occurred:

                  (i) (A) this Agreement is terminated pursuant to Section
      6.1(c) (other than on account of a failure of the conditions set forth in
      Sections 5.1(a), 5.1(c), 5.2(c), 5.2(d), 5.3(a) or 5.3(b)), Section 6.1(d)
      or Section 6.2(b) and (B) an Acquisition Proposal is publicly disclosed or
      publicly proposed to the Company or its shareholders at any time on or
      after the date of this Agreement but (x) in the case of a termination
      pursuant to Section 6.1(c) or Section 6.2(b), prior to such termination,
      or (y) in the case of a termination pursuant to Section 6.1(d), prior to
      or at the time of the Special Meeting; and

                  (ii) thereafter, within 12 months of the date of such
      termination, the Company enters into a definitive agreement with respect
      to, or consummates, the Acquisition Proposal referred to in clause (i), or
      any proposal with respect to any of the transactions described in clause
      (i), (ii) or (iii) of the definition of Acquisition Proposal (with all of
      the percentages included in the definition of such term raised to 50% for
      purposes of this definition); then, the Company shall pay to Holdings,
      concurrently with the earlier of the execution of such definitive
      agreement or the consummation of such Acquisition Proposal, an amount
      equal to the Termination Fee (less any Expense Payment previously paid).

            (e) The Company acknowledges that the agreements contained in
Sections 6.4(b), (c) and (d) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Holdings and
Merger Sub would not enter into this Agreement.


                                      -37-


            6.5 Amendment. This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective boards of directors, at any
time before or after adoption of this Agreement by the Company's shareholders,
but, after any such adoption, no amendment shall be made which by law or in
accordance with the rules of the NASDAQ requires further approval by such
shareholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.

            6.6 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective boards of
directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party. No delay on
the part of any party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any party hereto of any right, power or privilege hereunder operate as a waiver
of any other right, power or privilege hereunder, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder. Unless otherwise provided, the rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies which
the parties hereto may otherwise have at law or in equity. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.

                                    ARTICLE 7
                               GENERAL PROVISIONS

            7.1 Non-Survival of Representations, Warranties and Agreements; No
Other Representations and Warranties. None of the representations, warranties,
covenants and other agreements in this Agreement or in any instrument delivered
pursuant to this Agreement, including any rights arising out of any breach of
such representations, warranties, covenants and other agreements, shall survive
the Effective Time, except for those covenants and agreements contained herein
and therein that by their terms apply or are to be performed in whole or in part
after the Effective Time and/or the provisions of this Article 7. Each party
hereto agrees that, except for the representations and warranties contained in
this Agreement, none of the Company, Holdings or Merger Sub makes any other
representations or warranties, and each hereby disclaims any other
representations and warranties made by itself or any of its officers, directors,
employees, agents, financial and legal advisors or other representatives, with
respect to the execution and delivery of this Agreement, the documents and the
instruments referred to herein, or the transactions contemplated hereby or
thereby, notwithstanding the delivery or disclosure to the other party or the
other party's representatives of any documentation or other information with
respect to any one or more of the foregoing.

            7.2 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, (b) on the first


                                      -38-


business day following the date of dispatch if delivered by a nationally
recognized next-day courier service, (c) on the third business day following the
date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid or (d) if sent by facsimile transmission, with a copy
mailed on the same day in the manner provided in (a) or (b) above, when
transmitted and receipt is confirmed by telephone. All notices hereunder shall
be delivered as set forth below, or pursuant to such other instructions as may
be designated in writing by the party to receive such notice:

            if to Holdings or Merger Sub:

            c/o Vestar Capital Partners IV, L.P.
            1225 Seventeenth Street
            Suite 1660
            Denver, CO 80202
            Attention: James P. Kelley
            Facsimile: (303) 292-6639

            and

            c/o Goldner Hawn Johnson & Morrison Incorporated
            5250 Wells Fargo Center
            Minneapolis, MN 55402-4123
            Attention: John L. Morrison
                       Michael T. Sweeney
            Facsimile: (612) 338-2860

            with copies to:

            Vestar Capital Partners IV, L.P.
            245 Park Avenue
            41st Floor
            New York, NY 10167
            Attention: General Counsel
            Facsimile: (212) 808-4922

            and

            Kirkland & Ellis
            200 East Randolph Drive
            Chicago, IL 60601
            Attention: Stephen L. Ritchie
            Facsimile: (312) 861-2118


                                      -39-


            and

            Faegre & Benson
            2200 Wells Fargo Center
            90 South Seventh Street
            Minneapolis, MN 55402-3901
            Attention: Bruce M. Engler
            Facsimile: (612) 336-3026

            if to the Company:

            Michael Foods, Inc.
            324 Signal Bank Building
            5353 Wayzata Boulevard
            Minneapolis, MN 55416
            Attention: President
            Facsimile: (952) 546-3711

            with copies to:

            Kaplan, Strangis & Kaplan, P.A.
            90 S. Seventh Street
            Suite 5500
            Minneapolis, MN 55402
            Attention: James C. Melville
            Facsimile: (612) 375-1143

            7.3 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents, cross references and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statue or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the content requires otherwise. It is understood
and agreed that neither the specifications of any dollar amount in this
Agreement nor the inclusion of any specific item in the Schedules or Exhibits is
intended to imply that such amounts or higher or lower amounts, or the items so
included or other items, are or are not material, and neither party shall use
the fact of setting of such amounts or the fact of the inclusion of such item in
the Schedules or Exhibits in any dispute or controversy between the parties as
to whether any obligation, item or matter is or is not material for purposes
hereof.


                                      -40-


            7.4 Counterparts. This Agreement may be executed in two or more
counterparts (including by means of telecopied signature pages), all of which
shall be considered one and the same agreement and shall become effective when
two or more counterparts have been signed by each of the parties and delivered
to the other party, it being understood that both parties need not sign the same
counterpart.

            7.5 Entire Agreement; No Third Party Beneficiaries; Liability.

            (a) This Agreement (including the Schedules and Exhibits)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, other than the Confidentiality Agreement, which shall
survive the execution and delivery of this Agreement.

            (b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement, other than
Section 4.7 (which is intended to be for the benefit of the Persons covered
thereby and may be enforced by such Persons).

            (c) No affiliate, officer, director or shareholder of any party
hereto shall have any liability hereunder.

            7.6 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Minnesota, without regard to the laws
that might be applicable under conflicts of laws principles.

            7.7 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible. Any provision of this Agreement
held invalid or unenforceable only in part, degree or certain jurisdictions will
remain in full force and effect to the extent not held invalid or unenforceable.
To the extent permitted by applicable law, each party waives any provision of
law which renders any provision of this Agreement invalid, illegal or
unenforceable in any respect.

            7.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other parties, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.


                                      -41-


            7.9 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.

                                    * * * * *


                                      -42-


            IN WITNESS WHEREOF, the Company and Merger Sub have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of date first written above.

                             M-FOODS HOLDINGS, INC., a Delaware corporation

                             By: ____________________________________
                                 Name:
                                 Title:


                             PROTEIN ACQUISITION CORP., a Minnesota corporation

                             By: ____________________________________
                                 Name:
                                 Title:


                             MICHAEL FOODS, INC., a Minnesota corporation

                             By: ____________________________________
                                 Name:
                                 Title:




                                    Exhibit A

               Articles of Incorporation of Surviving Corporation

                                 [See Attached]


                                      -44-

EX-2.2

                                                                     Exhibit 2.2

                               AMENDMENT NO. 1 TO
                          AGREEMENT AND PLAN OF MERGER

     This Amendment No. 1 to Agreement and Plan of Merger, dated as of March 6,
2001 (the "AMENDMENT"), amends that certain Agreement and Plan of Merger, dated
December 21, 2000 (the "MERGER AGREEMENT"), by and among M-Foods Holdings, Inc.,
a Delaware corporation ("HOLDINGS"), Michael Foods Acquisition Corp. (f/k/a
Protein Acquisition Corp.), a Minnesota corporation and a wholly owned
subsidiary of Holdings ("MERGER SUB") and Michael Foods, Inc., a Minnesota
corporation (the "COMPANY"). Capitalized terms used herein and not otherwise
defined herein have the meanings ascribed to them in the Merger Agreement.

     WHEREAS, Holdings, Merger Sub and the Company have entered into the Merger
Agreement and mutually desire to amend the Merger Agreement as set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the undersigned hereby agree as follows:

     1.   Amendment to Merger Agreement.

          A.   SECTION 6.3(b) shall be amended as follows: the phrase "the
               Company pays to Holdings the Termination Fee (as hereinafter
               defined) less any" shall be deleted and replaced with the phrase
               "the Company pays the Termination Fee (as hereinafter defined) in
               the manner described in SECTION 6.4(c) less any";

          B.   SECTION 6.4(b) shall be amended and restated in its entirety as
               follows:

               "(b) The Company shall (provided that neither Holdings nor Merger
               Sub is then in material breach of its obligations under this
               Agreement) (i) upon the termination of this Agreement pursuant to
               SECTION 6.1(d), promptly, but in no event later than two business
               days following written notice thereof, pay to Investors, Holdings
               and Merger Sub an aggregate amount equal to $5 million, such
               amount being distributed in full to Holdings, as disbursing
               agent, and allocated (x) to Holdings and Merger Sub for the
               out-of-pocket expenses and fees (including fees payable to banks,
               investment banking firms and other financial institutions, and
               their respective agents and counsel, and fees of counsel,
               accountants, financial printers, advisors, experts and
               consultants to Holdings and its affiliates) incurred by each
               (such amount to not exceed $5 million) and (y) to Investors to
               the extent of the excess, if any, of $5 million over the amount
               allocated to Holdings and Merger Sub pursuant to the preceding
               clause (x) or (ii) upon the termination of this Agreement
               pursuant to SECTION 6.2(b), promptly, but in no event later than
               two business days following written notice thereof, together with
               reasonable supporting documentation, reimburse Holdings and
               Merger Sub in an aggregate amount up



               to $2,500,000 for the out-of-pocket expenses and fees (including
               fees payable to banks, investment banking firms and other
               financial institutions, and their respective agents and counsel,
               and fees of counsel, accountants, financial printers, advisors,
               experts and consultants to Holdings and its affiliates) incurred
               by each, such amount being distributed in full to Holdings, as
               disbursing agent (either of the payments and allocations in
               clauses (i) or (ii) being referred to herein as the "EXPENSE
               PAYMENT"). It is understood that in the event a Termination Fee
               is paid, to the extent not previously paid, the Expense Payment
               shall not be paid."

          C.   SECTION 6.4(c) shall be amended and restated in its entirety as
               follows:

               "(c) In the event that this Agreement is terminated by Holdings
               pursuant to SECTION 6.2(a) or by the Company pursuant to SECTION
               6.3(b), the Company shall pay to Holdings, as disbursing agent,
               by wire transfer of immediately available funds to an account
               designated by Holdings, on the next business day following such
               termination (or, in the case of a termination by the Company
               pursuant to SECTION 6.3(b), by wire transfer of immediately
               available funds to an account designated by Holdings,
               concurrently with the effectiveness of such termination), an
               aggregate amount equal to $20 million, such amount being
               allocated (x) to Holdings and Merger Sub for the out-of-pocket
               expenses and fees (including fees payable to banks, investment
               banking firms and other financial institutions, and their
               respective agents and counsel, and fees of counsel, accountants,
               financial printers, advisors, experts and consultants to Holdings
               and its affiliates) incurred by each (such amount to not exceed
               $20 million) and (y) to Investors to the extent of the excess, if
               any, of $20 million over the amount allocated to Holdings and
               Merger Sub pursuant to the preceding clause (x) (the payments and
               allocations under clauses (x) and (y) together, the "TERMINATION
               FEE"), less, any Expense Payment previously paid."

          D.   SECTION 6.4(d)(ii) shall be amended and restated in its entirety
               as follows:

               "(ii) thereafter, within 12 months of the date of such
               termination, the Company enters into a definitive agreement with
               respect to, or consummates, the Acquisition Proposal referred to
               in clause (i), or any proposal with respect to any of the
               transactions described in clause (i), (ii) or (iii) of the
               definition of Acquisition Proposal (with all of the percentages
               included in the definition of such term raised to 50% for
               purposes of this definition); then, the Company shall pay to
               Holdings, as disbursing agent, concurrently with the earlier of
               the execution of such definitive agreement or the consummation of
               such Acquisition Proposal, an aggregate amount equal to the
               Termination Fee, less any Expense Payment previously paid."



          E.   SECTION 7.5(b) shall be amended as follows: the phrase "other
               than SECTION 4.7 (which is intended" shall be deleted and
               replaced with the phrase "other than SECTION 4.7 and SECTION 6.4
               (each of which is intended".

     2.   Continuing Effect. Except as provided in the foregoing SECTION 1 to
          this Amendment, this Amendment shall not constitute an amendment or
          waiver of any provision of the Merger Agreement, which shall continue
          and remain in full force and effect in accordance with its terms.

     3.   Counterparts. This Amendment may be executed simultaneously in
          counterparts (including by means of telecopied signature pages), any
          one of which need not contain the signatures of more than one party,
          but all such counterparts taken together shall constitute one and the
          same Amendment.

     4.   Governing Law. This Amendment shall be governed and construed in
          accordance with the laws of the State of Minnesota, without regard to
          the laws that might be applicable under conflicts of laws principles.

                          *  *  *  *  *  *  *  *  *



     IN WITNESS WHEREOF, Holdings, Merger Sub and the Company have caused this
Amendment to be signed by their respective officers thereunto duly authorized as
of the date first written above.


                    M-FOODS HOLDINGS, INC., a Delaware corporation

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


                    MICHAEL FOODS ACQUISITION CORP., a Minnesota corporation

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


                    MICHAEL FOODS, INC., a Minnesota corporation

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

EX-3.1

                                                                    Exhibit 3.1

                             AMENDED AND RESTATED
                         ARTICLES OF INCORPORATION OF
                          NORTH STAR UNIVERSAL, INC.


     The undersigned President of North Star Universal, Inc., a corporation
subject to the provisions of Minnesota Statutes Chapter 302A., known as the
Minnesota Business Corporation Act, do hereby certify that at a meeting of
the shareholders of said corporation duly called and held at the Marriot
Southwest, 5801 Opus Parkway, Minneapolis, Minnesota, at 1:00 p.m. on
December 30, 1997, pursuant to notice mailed to all shareholders entitled to
vote thereon, the following Amended and Restated Articles of Incorporation
were adopted by a majority vote of all of the shares of stock present at such
meeting and entitled to vote to supersede and take the place of the existing
articles of incorporation and all amendments and restatements thereto, to wit.

                                  ARTICLE I.
                                     Name
                                     ----
     The name of this corporation shall be Michael Foods, Inc.

                                  ARTICLE II.
                                   Purpose
                                   -------

     This corporation shall have general business purposes.

                                 ARTICLE III.
                              Registered Office
                              -----------------

     The registered office of this corporation shall be 324 Park National
Bank Building, 5353 Wayzata Boulevard, Minneapolis, Minnesota, 55416, County
of Hennepin.

                                 ARTICLE IV.
                                Capital Stock
                                -------------

     This corporation shall have authorized capital stock consisting of
50,000,000 shares, which shall be composed of 40,000,000 shares of common
stock having a par value of $.01 per share and 10,000,000 undesignated
shares. Each share of common stock shall be entitled to one vote on all
matters presented to the shareholders for a vote.

     The Board of Directors may, from time to time, establish by resolution,
different classes or series of shares and may fix the rights and preferences
of said shares in any class or series. The Board of Directors shall have the
authority to issue shares of a class or series, shares of which may then be
outstanding to holders of shares of another class or to effectuate share
dividends, splits, or conversions of its outstanding shares.

                                  ARTICLE V.
                         Certain Shareholder Rights
                         --------------------------

     Shareholders shall have no preemptive rights to purchase, subscribe for
or otherwise acquire any new or additional securities of the corporation. No
shareholder shall be entitled to cumulative voting rights.



                                  ARTICLE VI.
                                   Directors
                                   ---------

     1.  The business of this corporation shall be managed by or under the
direction of a board of directors consisting of not less than three (3)
directors. Directors need not be shareholders of the corporation. The Board
of Directors in its discretion may elect honorary directors who shall serve
without voting power.

     2.  Directors shall be elected for a term of one (1) year and until
their successors are elected and qualified. If any vacancy occurs in the
board of directors, the remaining directors, by the affirmative vote of a
majority thereof, shall elect a director or directors to fill the vacancy
until the next regular meeting of the shareholders.

     3.  The directors shall have all of the powers conferred upon directors
by the Minnesota Business Corporation Act.

     4.  An action required or permitted to be taken by the board of
directors of this corporation may be taken by written action signed by the
number of directors that would be required to take the same action at a
meeting of the board at which all directors are present except as to those
matters which require shareholder approval, in which case the written action
must be signed by all members of the board of directors.

     5.  To the full extent permitted by the Minnesota Business Corporation
Act, as it exists on the date hereof or may hereafter be amended, a director
of this corporation shall not be liable to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director.
No amendment to or repeal of this section shall apply to or have any effect
on the liability or alleged liability of any director of the corporation for
or with respect to acts or omissions of such director occurring prior to such
amendment or repeal.

                                 ARTICLE VII.
                               Indemnification
                               ---------------

     The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of the corporation) to the full
extent permitted by the Minnesota Business Corporation Act.

                                  ARTICLE VIII.

     The private property of the shareholders of this corporation shall not
be subject to the payment of corporate debts to any extent whatsoever.

     I have hereunto set my hand this 28th day of February, 1997.

                                               /s/ Gregg A. Ostrander
                                               ------------------------------
                                               GREGG A. OSTRANDER
                                               President

  STATE OF MINNESOTA
  DEPARTMENT OF STATE
        FILED
     FEB 28 1997
/s/ Joan Anderson Grove
  Secretary of State

EX-3.2

                                                                     Exhibit 3.2

                                     BY-LAWS
                                       of
                               MICHAEL FOODS, INC.

                                TABLE OF CONTENTS

SHAREHOLDERS .................................................................1

   Section 1.01   Place of Meetings...........................................1
   Section 1.02   Regular Meetings............................................1
   Section 1.03   Special Meetings............................................1
   Section 1.04   Meetings Held Upon Shareholder Demand.......................1
   Section 1.05   Adjournments................................................2
   Section 1.06   Notice of Meetings..........................................2
   Section 1.07   Waiver of Notice............................................2
   Section 1.08   Voting Rights...............................................2
   Section 1.09   Proxies.....................................................2
   Section 1.10   Quorum......................................................3
   Section 1.11   Acts of Shareholders........................................3
   Section 1.12   Action Without a Meeting....................................3

DIRECTORS.....................................................................3
   Section 2.01   Number; Qualifications......................................3
   Section 2.02   Term........................................................3
   Section 2.03   Vacancies...................................................4
   Section 2.04   Place of Meetings...........................................4
   Section 2.05   Regular Meetings............................................4
   Section 2.06   Special Meetings............................................4
   Section 2.07   Waiver of Notice; Previously Scheduled Meetings.............4
   Section 2.08   Quorum......................................................4
   Section 2.09   Acts of Board...............................................5
   Section 2.10   Participation by Electronic Communications..................5
   Section 2.11   Absent Directors............................................5
   Section 2.12   Action Without a Meeting....................................5
   Section 2.13   Committees..................................................5
   Section 2.14   Special Litigation Committee................................6
   Section 2.15  Compensation.................................................6

OFFICERS......................................................................6
   Section 3.01   Number and Designation......................................6
   Section 3.02   Chief Executive Officer.....................................6
   Section 3.03   Chief Financial Officer.....................................6
   Section 3.04   President...................................................7
   Section 3.05   Vice Presidents.............................................7


                                        i


   Section 3.06   Secretary...................................................7
   Section 3.07   Treasurer...................................................7
   Section 3.08   Authority and Duties........................................7
   Section 3.09   Term........................................................7
   Section 3.10   Salaries....................................................8

INDEMNIFICATION...............................................................8
   Section 4.01   Indemnification.............................................8
   Section 4.02   Insurance...................................................8

SHARES........................................................................8
   Section 5.01   Certificated and Uncertificated Shares......................8
   Section 5.02   Declaration of Dividends and Other Distributions............9
   Section 5.03   Transfer of Shares..........................................9
   Section 5.04   Record Date.................................................9

MISCELLANEOUS.................................................................9
   Section 6.01   Execution of Instruments....................................9
   Section 6.02   Advances...................................................10
   Section 6.03   Corporate Seal.............................................10
   Section 6.04   Fiscal Year................................................10
   Section 6.05   Amendments.................................................10

      This Table of Contents is not part of the By-Laws of the Corporation. It
is intended merely to aid in the utilization of the By-Laws.


                                       ii


                                     BY-LAWS

                                       of

                               MICHAEL FOODS, INC.

                                  SHAREHOLDERS

            Section 1.01 Place of Meetings. Each meeting of the shareholders
shall be held at the principal executive office of the Corporation or at such
other place as may be designated by the Board of Directors or the Chief
Executive Officer; provided, however, that any meeting called by or at the
demand of a shareholder or shareholders shall be held in the county where the
principal executive office of the Corporation is located.

            Section 1.02 Regular Meetings. Regular meetings of the shareholders
may be held on an annual or other less frequent basis as determined by the Board
of Directors; provided, however, that if a regular meeting has not been held
during the immediately preceding 15 months, a shareholder or shareholders
holding three percent or more of the voting power of all shares entitled to vote
may demand a regular meeting of shareholders by written demand given to the
Chief Executive Officer or Chief Financial Officer of the Corporation. At each
regular meeting the shareholders shall elect qualified successors for directors
who serve for an indefinite term or whose terms have expired or are due to
expire within six months after the date of the meeting and may transact any
other business, provided, however, that no business with respect to which
special notice is required by law shall be transacted unless such notice shall
have been given.

            Section 1.03 Special Meetings. A special meeting of the shareholders
may be called for any purpose or purposes at any time by the Chief Executive
Officer; by the Chief Financial Officer; by the Board of Directors or any two or
more members thereof; or by one or more shareholders holding not less than ten
percent of the voting power of all shares of the Corporation entitled to vote
(except that a special meeting for the purpose of considering any action to
directly or indirectly facilitate or effect a business combination, including
any action to change or otherwise affect the composition of the Board for that
purpose, must be called by shareholders holding not less than 25 percent of the
voting power of all shares of the Corporation entitled to vote), who shall
demand such special meeting by written notice given to the Chief Executive
Officer or the Chief Financial Officer of the Corporation specifying the
purposes of such meeting.

            Section 1.04 Meetings Held Upon Shareholder Demand. Within 30 days
after receipt of a demand by the Chief Executive Officer or the Chief Financial
Officer from any shareholder or shareholders entitled to call a meeting of the
shareholders, it shall be the duty of the Board of Directors of the Corporation
to cause a special or regular meeting of shareholders, as the case may be, to be
duly called and held on notice no later than 90 days after receipt of such
demand. If the Board fails to cause such a meeting to be called and held as
required by this Section, the shareholder or shareholders making the demand may
call the meeting by giving notice as provided in Section 1.06 hereof at the
expense of the Corporation.


                                       1


            Section 1.05 Adjournments. Any meeting of the shareholders may be
adjourned from time to time to another date, time and place. If any meeting of
the shareholders is so adjourned, no notice as to such adjourned meeting need be
given if the adjourned meeting is to be held not more than 120 days after the
date fixed for the original meeting and the date, time and place at which the
meeting will be reconvened are announced at the time of adjournment.

            Section 1.06 Notice of Meetings. Unless otherwise required by law,
written notice of each meeting of the shareholders, stating the date, time and
place and, in the case of a special meeting, the purpose or purposes, shall be
given at least ten days and not more than 60 days prior to the meeting to every
holder of shares entitled to vote at such meeting except as specified in Section
1.05 or as otherwise permitted by law. The business transacted at a special
meeting of shareholders is limited to the purposes stated in the notice of the
meeting.

            Section 1.07 Waiver of Notice. A shareholder may waive notice of the
date, time, place and purpose or purposes of a meeting of shareholders. A waiver
of notice by a shareholder entitled to notice is effective whether given before,
at or after the meeting, and whether given in writing, orally or by attendance.
Attendance by a shareholder at a meeting is a waiver of notice of that meeting,
unless the shareholder objects at the beginning of the meeting to the
transaction of business because the meeting is not lawfully called or convened,
or objects before a vote on an item of business because the item may not
lawfully be considered at that meeting and does not participate in the
consideration of the item at that meeting.

            Section 1.08 Voting Rights. Subdivision 1. A shareholder shall have
one vote for each share held which is entitled to vote. Except as otherwise
required by law, a holder of shares entitled to vote may vote any portion of the
shares in any way the shareholder chooses. If a shareholder votes without
designating the proportion or number of shares voted in a particular way, the
shareholder is deemed to have voted all of the shares in that way.

            Subdivision 2. The Board of Directors may fix, or authorize an
officer to fix, a date not more than 60 days before the date of a meeting of
shareholders as the date for the determination of the holders of shares entitled
to notice of and entitled to vote at the meeting. When a date is so fixed, only
shareholders on that date are entitled to notice of and permitted to vote at
that meeting of shareholders.

            Section 1.09 Proxies. A shareholder may cast or authorize the
casting of a vote by filing a written appointment of a proxy, signed by the
shareholder, with an officer of the Corporation at or before the meeting at
which the appointment is to be effective. Any copy, facsimile, telecommunication
or other reproduction of the original may be used in lieu of the original,
provided that it is a complete and legible reproduction of the entire original.

            Section 1.10 Quorum. The holders of a majority of the voting power
of the shares entitled to vote at a shareholders meeting are a quorum for the
transaction of business. If a quorum is present when a duly called or held
meeting is convened, the shareholders present may continue to transact business
until adjournment, even though the withdrawal of a number of the shareholders
originally present leaves less than the proportion or number otherwise required
for a quorum.


                                       2


            Section 1.11 Acts of Shareholders. Subdivision 1. Except as
otherwise required by law or specified in the Articles of Incorporation of the
Corporation, the shareholders shall take action by the affirmative vote of the
holders of the greater of (a) a majority of the voting power of the shares
present and entitled to vote on that item of business or (b) a majority of the
voting power of the minimum number of shares entitled to vote that would
constitute a quorum for the transaction of business at a duly held meeting of
shareholders.

            Subdivision 2. A shareholder voting by proxy authorized to vote on
less than all items of business considered at the meeting shall be considered to
be present and entitled to vote only with respect to those items of business for
which the proxy has authority to vote. A proxy who is given authority by a
shareholder who abstains with respect to an item of business shall be considered
to have authority to vote on that item of business.

            Section 1.12 Action Without a Meeting. Any action required or
permitted to be taken at a meeting of the shareholders of the Corporation may be
taken without a meeting by written action signed by all of the shareholders
entitled to vote on that action. The written action is effective when it has
been signed by all of those shareholders, unless a different effective time is
provided in the written action.

                                    DIRECTORS

            Section 2.01 Number; Qualifications. Except as authorized by the
shareholders pursuant to a shareholder control agreement or unanimous
affirmative vote, the business and affairs of the Corporation shall be managed
by or under the direction of a Board of one or more directors. Directors shall
be natural persons. The number of directors to constitute the Board shall be
determined from time to time by resolution of the Board. Directors need not be
shareholders.

            Section 2.02 Term. Each director shall serve for an indefinite term
that expires at the next regular meeting of the shareholders. A director shall
hold office until a successor is elected and has qualified or until the earlier
death, resignation, removal or disqualification of the director.

            Section 2.03. Removal and Resignation. Any director or the entire
board of directors may be removed at any time, with or without cause, by the
holders of a majority of the shares then entitled to vote at an election of
directors. Whenever the holders of any class or series are entitled to elect one
or more directors by the provisions of the corporation's certificate of
incorporation, the provisions of this section shall apply, in respect to the
removal without cause of a director or directors so elected, to the vote of the
holders of the outstanding shares of that class or series and not to the vote of
the outstanding shares as a whole. Any director may resign at any time upon
written notice to the corporation.

            Section 2.04 Vacancies. Vacancies on the Board of Directors
resulting from the death, resignation, removal or disqualification of a director
may be filled by the affirmative vote of a majority of the remaining members of
the Board, though less than a quorum. Vacancies on the Board resulting from
newly created directorships may be filled by the affirmative vote of a majority
of the directors serving at the time such directorships are created. Each person
elected to fill a vacancy shall hold office until a qualified successor is
elected by the shareholders at the next regular meeting or at any special
meeting duly called for that purpose.


                                       3


            Section 2.05 Place of Meetings. Each meeting of the Board of
Directors shall be held at the principal executive office of the Corporation or
at such other place as may be designated from time to time by a majority of the
members of the Board or by the Chief Executive Officer. A meeting may be held by
conference among the directors using any means of communication through which
the directors may simultaneously hear each other during the conference.

            Section 2.06 Regular Meetings. Regular meetings of the Board of
Directors for the election of officers and the transaction of any other business
shall be held without notice at the place of and immediately after each regular
meeting of the shareholders.

            Section 2.07 Special Meetings. A special meeting of the Board of
Directors may be called for any purpose or purposes at any time by any member of
the Board by giving not less than two days' notice to all directors of the date,
time and place of the meeting, provided that when notice is mailed, at least
four days' notice shall be given. The notice need not state the purpose of the
meeting.

            Section 2.08 Waiver of Notice; Previously Scheduled Meetings.
Subdivision 1. A director of the Corporation may waive notice of the date, time
and place of a meeting of the Board. A waiver of notice by a director entitled
to notice is effective whether given before, at or after the meeting, and
whether given in writing, orally or by attendance. Attendance by a director at a
meeting is a waiver of notice of that meeting, unless the director objects at
the beginning of the meeting to the transaction of business because the meeting
is not lawfully called or convened and thereafter does not participate in the
meeting.

            Subdivision 2. If the day or date, time and place of a Board meeting
have been provided herein or announced at a previous meeting of the Board, no
notice is required. Notice of an adjourned meeting need not be given other than
by announcement at the meeting at which adjournment is taken of the date, time
and place at which the meeting will be reconvened.

            Section 2.09 Quorum. The presence in person of a majority of the
directors currently holding office shall be necessary to constitute a quorum for
the transaction of business. In the absence of a quorum, a majority of the
directors present may adjourn a meeting from time to time without further notice
until a quorum is present. If a quorum is present when a duly called or held
meeting is convened, the directors present may continue to transact business
until adjournment, even though the withdrawal of a number of the directors
originally present leaves less than the proportion or number otherwise required
for a quorum.

            Section 2.10 Acts of Board. Except as otherwise required by law or
specified in the Articles of Incorporation of the Corporation, the Board shall
take action by the affirmative vote of the greater of (a) a majority of the
directors present at a duly held meeting at the time the action is taken or (b)
a majority of the minimum proportion or number of directors that would
constitute a quorum for the transaction of business at the meeting.

            Section 2.11 Participation by Electronic Communications. A director
may participate in a Board meeting by any means of communication through which
the director, other


                                       4


directors so participating and all directors physically present at the meeting
may simultaneously hear each other during the meeting. A director so
participating shall be deemed present in person at the meeting.

            Section 2.12 Absent Directors. A director of the Corporation may
give advance written consent or opposition to a proposal to be acted on at a
Board meeting. If the director is not present at the meeting, consent or
opposition to a proposal does not constitute presence for purposes of
determining the existence of a quorum, but consent or opposition shall be
counted as the vote of a director present at the meeting in favor of or against
the proposal and shall be entered in the minutes or other record of action at
the meeting, if the proposal acted on at the meeting is substantially the same
or has substantially the same effect as the proposal to which the director has
consented or objected.

            Section 2.13 Action Without a Meeting. An action required or
permitted to be taken at a Board meeting may be taken without a meeting by
written action signed by all of the directors. Any action, other than an action
requiring shareholder approval, if the Articles of Incorporation so provide, may
be taken by written action signed by the number of directors that would be
required to take the same action at a meeting of the Board at which all
directors were present. The written action is effective when signed by the
required number of directors, unless a different effective time is provided in
the written action. When written action is permitted to be taken by less than
all directors, all directors shall be notified immediately of its text and
effective date.

            Section 2.14 Committees. Subdivision 1. A resolution approved by the
affirmative vote of a majority of the Board may establish committees having the
authority of the Board in the management of the business of the Corporation only
to the extent provided in the resolution. Committees shall be subject at all
times to the direction and control of the Board, except as provided in Section
2.14 or otherwise provided by law.

            Subdivision 2. A committee shall consist of one or more natural
persons, who need not be directors, appointed by affirmative vote of a majority
of the directors present at a duly held Board meeting.

            Subdivision 3. Section 2.04 and Sections 2.06 to 2.12 hereof shall
apply to committees and members of committees to the same extent as those
sections apply to the Board and directors.

            Subdivision 4. Minutes, if any, of committee meetings shall be made
available upon request to members of the committee and to any director.

            Section 2.15 Special Litigation Committee. Pursuant to the procedure
set forth in Section 2.13, the Board may establish a committee composed of one
or more independent directors or other independent persons to determine whether
it is in the best interests of the Corporation to consider legal rights or
remedies of the Corporation and whether those rights and remedies should be
pursued. The committee, once established, is not subject to the direction or
control of, or (unless required by law) termination by, the Board. To the extent
permitted by law, a vacancy on the


                                       5


committee may be filled by a majority vote of the remaining committee members.
The good faith determinations of the committee are binding upon the Corporation
and its directors, officers and shareholders to the extent permitted by law. The
committee terminates when it issues a written report of its determinations to
the Board.

            Section 2.16 Compensation. The Board may fix the compensation, if
any, of directors.

                                    OFFICERS

            Section 3.01 Number and Designation. The Corporation shall have one
or more natural persons exercising the functions of the offices of Chief
Executive Officer and Chief Financial Officer. The Board of Directors may elect
or appoint such other officers or agents as it deems necessary for the operation
and management of the Corporation, with such powers, rights, duties and
responsibilities as may be determined by the Board, including, without
limitation, a President, one or more Vice Presidents, a Secretary and a
Treasurer, each of whom shall have the powers, rights, duties and
responsibilities set forth in these By-Laws unless otherwise determined by the
Board. Any of the offices or functions of those offices may be held by the same
person.

            Section 3.02 Chief Executive Officer. Unless provided otherwise by a
resolution adopted by the Board of Directors, the Chief Executive Officer (a)
shall have general active management of the business of the Corporation; (b)
shall, when present, preside at all meetings of the shareholders and Board; (c)
shall see that all orders and resolutions of the Board are carried into effect;
(d) may maintain records of and certify proceedings of the Board and
shareholders; and (e) shall perform such other duties as may from time to time
be assigned by the Board.

            Section 3.03 Chief Financial Officer. Unless provided otherwise by a
resolution adopted by the Board of Directors, the Chief Financial Officer (a)
shall keep accurate financial records for the Corporation; (b) shall deposit all
monies, drafts and checks in the name of and to the credit of the Corporation in
such banks and depositories as the Board shall designate from time to time; (c)
shall endorse for deposit all notes, checks and drafts received by the
Corporation as ordered by the Board, making proper vouchers therefor; (d) shall
disburse corporate funds and issue checks and drafts in the name of the
Corporation, as ordered by the Board; (e) shall render to the Chief Executive
Officer and the Board, whenever requested, an account of all of such officer's
transactions as Chief Financial Officer and of the financial condition of the
Corporation; and (f) shall perform such other duties as may be prescribed by the
Board or the Chief Executive Officer from time to time.

            Section 3.04 President. Unless otherwise determined by the Board of
Directors, the President shall be the Chief Executive Officer of the
Corporation. If an officer other than the President is designated Chief
Executive Officer, the President shall perform such duties as may from time to
time be assigned by the Board.

            Section 3.05 Vice Presidents. Any one or more Vice Presidents, if
any, may be designated by the Board of Directors as Executive Vice Presidents or
Senior Vice Presidents. During the absence or disability of the President, it
shall be the duty of the highest ranking Executive Vice


                                       6


President, and, in the absence of any such Vice President, it shall be the duty
of the highest ranking Senior Vice President or other Vice President, who shall
be present at the time and able to act, to perform the duties of the President.
The determination of who is the highest ranking of two or more persons holding
the same office shall, in the absence of specific designation of order of rank
by the Board, be made on the basis of the earliest date of appointment or
election, or, in the event of simultaneous appointment or election, on the basis
of the longest continuous employment by the Corporation.

            Section 3.06 Secretary. The Secretary, unless otherwise determined
by the Board of Directors, shall attend all meetings of the shareholders and all
meetings of the Board, shall record or cause to be recorded all proceedings
thereof in a book to be kept for that purpose, and may certify such proceedings.
Except as otherwise required or permitted by law or by these By-Laws, the
Secretary shall give or cause to be given notice of all meetings of the
shareholders and all meetings of the Board.

            Section 3.07 Treasurer. Unless otherwise determined by the Board of
Directors, the Treasurer shall be the Chief Financial Officer of the
Corporation. If an officer other than the Treasurer is designated Chief
Financial Officer, the Treasurer shall perform such duties as may from time to
time be assigned by the Board.

            Section 3.08 Authority and Duties. In addition to the foregoing
authority and duties, all officers of the Corporation shall respectively have
such authority and perform such duties in the management of the business of the
Corporation as may be designated from time to time by the Board of Directors.
Unless prohibited by a resolution approved by the affirmative vote of a majority
of the directors present, an officer elected or appointed by the Board may,
without the approval of the Board, delegate some or all of the duties and powers
of an office to other persons.

            Section 3.09 Term. Subdivision 1. All officers of the Corporation
shall hold office until their respective successors are chosen and have
qualified or until their earlier death, resignation or removal.

            Subdivision 2. An officer may resign at any time by giving written
notice to the Corporation. The resignation is effective without acceptance when
the notice is given to the Corporation, unless a later effective date is
specified in the notice.

            Subdivision 3. An officer may be removed at any time, with or
without cause, by a resolution approved by the affirmative vote of a majority of
the directors present at a duly held Board meeting.

            Subdivision 4. A vacancy in an office because of death, resignation,
removal, disqualification or other cause may, or in the case of a vacancy in the
office of Chief Executive Officer or Chief Financial Officer shall, be filled
for the unexpired portion of the term by the Board.

            Section 3.10 Salaries. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors or by the Chief Executive
Officer if authorized by the Board.


                                       7


                                 INDEMNIFICATION

            Section 4.01 Indemnification. The Corporation shall indemnify its
officers and directors for such expenses and liabilities, in such manner, under
such circumstances, and to such extent, as required or permitted by Minnesota
Statutes, Section 302A.521, as amended from time to time, or as required or
permitted by other provisions of law.

            Section 4.02 Insurance. The Corporation may purchase and maintain
insurance on behalf of any person in such person's official capacity against any
liability asserted against and incurred by such person in or arising from that
capacity, whether or not the Corporation would otherwise be required to
indemnify the person against the liability.

                                     SHARES

            Section 5.01 Certificated and Uncertificated Shares. Subdivision 1.
The shares of the Corporation shall be either certificated shares or
uncertificated shares. Each holder of duly issued certificated shares is
entitled to a certificate of shares.

            Subdivision 2. Each certificate of shares of the Corporation shall
bear the corporate seal, if any, and shall be signed by the Chief Executive
Officer, or the President or any Vice President, and the Chief Financial
Officer, or the Secretary or any Assistant Secretary, but when a certificate is
signed by a transfer agent or a registrar, the signature of any such officer and
the corporate seal upon such certificate may be facsimiles, engraved or printed.
If a person signs or has a facsimile signature placed upon a certificate while
an officer, transfer agent or registrar of the Corporation, the certificate may
be issued by the Corporation, even if the person has ceased to serve in that
capacity before the certificate is issued, with the same effect as if the person
had that capacity at the date of its issue.

            Subdivision 3. A certificate representing shares issued by the
Corporation shall, if the Corporation is authorized to issue shares of more than
one class or series, set forth upon the face or back of the certificate, or
shall state that the Corporation will furnish to any shareholder upon request
and without charge, a full statement of the designations, preferences,
limitations and relative rights of the shares of each class or series authorized
to be issued, so far as they have been determined, and the authority of the
Board to determine the relative rights and preferences of subsequent classes or
series.

            Subdivision 4. A resolution approved by the affirmative vote of a
majority of the directors present at a duly held meeting of the Board may
provide that some or all of any or all classes and series of the shares of the
Corporation will be uncertificated shares. Any such resolution shall not apply
to shares represented by a certificate until the certificate is surrendered to
the Corporation.

            Section 5.02 Declaration of Dividends and Other Distributions. The
Board of Directors shall have the authority to declare dividends and other
distributions upon the shares of the Corporation to the extent permitted by law.


                                       8


            Section 5.03 Transfer of Shares. Shares of the Corporation may be
transferred only on the books of the Corporation by the holder thereof, in
person or by such person's attorney. In the case of certificated shares, shares
shall be transferred only upon surrender and cancellation of certificates for a
like number of shares. The Board of Directors, however, may appoint one or more
transfer agents and registrars to maintain the share records of the Corporation
and to effect transfers of shares.

            Section 5.04 Record Date. The Board of Directors may fix a time, not
exceeding 60 days preceding the date fixed for the payment of any dividend or
other distribution, as a record date for the determination of the shareholders
entitled to receive payment of such dividend or other distribution, and in such
case only shareholders of record on the date so fixed shall be entitled to
receive payment of such dividend or other distribution, notwithstanding any
transfer of any shares on the books of the Corporation after any record date so
fixed.

                                  MISCELLANEOUS

            Section 6.01 Execution of Instruments. Subdivision 1. All deeds,
mortgages, bonds, checks, contracts and other instruments pertaining to the
business and affairs of the Corporation shall be signed on behalf of the
Corporation by the Chief Executive Officer, or the President, or any Vice
President, or by such other person or persons as may be designated from time to
time by the Board of Directors.

            Subdivision 2. If a document must be executed by persons holding
different offices or functions and one person holds such offices or exercises
such functions, that person may execute the document in more than one capacity
if the document indicates each such capacity.

            Section 6.02 Advances. The Corporation may, without a vote of the
directors, advance money to its directors, officers or employees to cover
expenses that can reasonably be anticipated to be incurred by them in the
performance of their duties and for which they would be entitled to
reimbursement in the absence of an advance.

            Section 6.03 Corporate Seal. The seal of the Corporation, if any,
shall be a circular embossed seal having inscribed thereon the name of the
Corporation and the following words:

                           "Corporate Seal Minnesota".

            Section 6.04 Fiscal Year. The fiscal year of the Corporation shall
be determined by the Board of Directors.

            Section 6.05 Amendments. The Board of Directors shall have the power
to adopt, amend or repeal the By-Laws of the Corporation, subject to the power
of the shareholders to change or repeal the same, provided, however, that the
Board shall not adopt, amend or repeal any By-Law fixing a quorum for meetings
of shareholders, prescribing procedures for removing directors or filling
vacancies in the Board, or fixing the number of directors or their
classifications, qualifications or terms of office, but may adopt or amend a
By-Law that increases the number of directors.


                                       9

EX-3.3

                                                                     Exhibit 3.3

                               State of Delaware

                        Office of the Secretary of State

      I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF
"MICHAEL FOODS OF DELAWARE, INC.", FILED IN THIS OFFICE ON THE TWENTY-THIRD DAY
OF MAY, A.D. 1997, AT 3:30 O'CLOCK P.M.

      A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.

[DELAWARE STATE LOGO]                    /s/ Edward J. Freel
                                         --------------------------------------
                                         Edward J. Freel, Secretary of State

                                         AUTHENTICATION:
2118984  8100                                                 8480743
                                         DATE:
971170527                                                     05-27-97


                              AMENDED AND RESTATED
                         CERTIFICATE OF INCORPORATION OF
                         MICHAEL FOODS OF DELAWARE, INC.
                          FORMERLY MICHAEL FOODS, INC.

      We, the undersigned, Gregg A. Ostrander and Jeffrey M. Shapiro,
respectively the president and secretary of Michael Foods of Delaware, Inc., a
corporation subject to the provisions of the Delaware General Corporation Law,
do hereby certify that in accordance with Sections 242 and 245 of the Delaware
General Corporation Law, the original certificate of incorporation of Michael
Foods, Inc. filed on March 3, 1987 has been amended and restated in its entirety
as follows:

                                   ARTICLE 1.
                                      NAME

      The name of the corporation is Michael Foods of Delaware, Inc.

                                   ARTICLE 2.
                                REGISTERED OFFICE

      The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle,
Delaware, 19801. The name of its registered agent at such address is The
Corporation Trust Company.

                                   ARTICLE 3.
                                     PURPOSE

      The nature of the business to be conducted or promoted and the purpose of
the corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Laws of Delaware.

                                   ARTICLE 4.
                                  CAPITAL STOCK

      The total number of shares of stock which this corporation shall have
authority to issue is 3,000, all of which shall be common stock, having a par
value of $1.00 per share. Except as may be otherwise required by law or by the
Certificate of Incorporation, each holder of common stock shall have one (1)
vote in respect of each share of common stock held by him on all matters voted
upon by the stockholders.


                                   ARTICLE 5.
                                   DIRECTORS

      The number of directors of the corporation shall not be less than two (2)
and shall be fixed by, or in the manner provided in, the Bylaws of the
corporation. Directors need not be stockholders of the corporation. Directors
shall be elected for a term of one (1) year and until their successors are
elected and qualified. If any vacancy occurs in the board of directors, the
remaining directors by affirmative vote of a majority thereof shall elect a
director to fill such vacancy until the next annual meeting of stockholders.

      The Board of Directors shall have all of the powers granted to them by the
Delaware General Corporation Law.

                                    ARTICLE 6.
                                 INDEMNIFICATION

        The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of the corporation) to the full extent
permitted by the Delaware General Corporation Law. In addition, no director of
the corporation shall be liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability: (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders; (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii) under
Section 174 of the Delaware General Corporation Law; or (iv) for any transaction
from which the director derived an improper personal benefit.

IN WITNESS WHEREOF we have subscribed our names this 21st day of May, 1997.

                                          /s/ Gregg A. Ostrander
                                          -------------------------------------
                                          GREGG A. OSTRANDER, President

                                          /s/ Jeffrey M. Shapiro
                                          -------------------------------------
                                          JEFFREY M. SHAPIRO, Secretary

STATE OF MINNESOTA      )
                        ) ss.
COUNTY OF HENNEPIN      )

      Gregg A. Ostrander and Jeffrey M. Shapiro, being first duly sworn on oath,
depose and say that they are respectively the President and Secretary of Michael
Foods of Delaware, Inc., the corporation named in the foregoing certificate;
that said certificate contains the true statement


                                      -2-


of the action of the directors and stockholders of said corporation; that said
certificate is executed on behalf of said corporation by its express authority;
and they further acknowledge the same to be their free act and deed and the free
act and deed of said corporation.

                                          /s/ Gregg A. Ostrander
                                          -------------------------------------
                                          GREGG A. OSTRANDER, President

                                          /s/ Jeffrey M. Shapiro
                                          -------------------------------------
                                          JEFFREY M. SHAPIRO, Secretary

Subscribed and sworn to before me this 21st day of May, 1997.

/s/ Carole A. Leonard
- ---------------------------
Notary Public

[MINNESOTA STATE LOGO]         CAROLE A LEONARD
                            NOTARY PUBLIC - MINNESOTA
                              HENNEPIN COUNTY
                       My Comm. Expires Jan. 31, 2OOO

5/20/97, AAW, 46338_1N


                                      -3-

EX-3.4

                                                                     Exhibit 3.4

                          BYLAWS OF MICHAEL FOODS, INC.
                        (AS AMENDED THROUGH JUNE 5,1996)

                                    ARTICLE 1
                                    OFFICES

      Section 1.1. Offices. The registered office in the State of Delaware shall
be in the City of Wilmington, County of New Castle. The principal office of the
Company shall be in the City of Minneapolis, State of Minnesota. The Company
shall also have offices or agencies at such other places as the Board of
Directors from time to time may designate or as the business of the Company may
require.

                                    ARTICLE 2
                            MEETINGS OF STOCKHOLDERS

      Section 2.1. Place of Meeting. Meetings of the stockholders shall be held
in the City of Minneapolis, Minnesota, or such other place as the Board of
Directors from time to time may designate.

      Section 2.2. Annual Meeting. The annual meeting of the stockholders for
the election of directors and for the transaction of such other business as may
be properly brought before the meeting shall be held at such time and place as
shall from time to time be designated by the Board of Directors, on or before
the last day of September in each year.

      Section 2.3. Special Meetings. Special meetings of the stockholders for
any purpose or purposes may be called to be held at any time by the Chairman of
the Board, the President, or a majority of the members of the Board of Directors
then in office. Special meetings shall be called upon the written request,
addressed to the Chairman of the Board, the President or the Secretary of the
Company, of holders of record of not less than twenty percent (20%) of the total
number of shares of stock outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting.

      Section 2.4. Notice of Meetings. Written or printed notice of the time and
place of each annual meeting of stockholders, and of the time, place and purpose
or purposes of each special meeting of stockholders, shall be given by the
Secretary, either personally or by mail, to each stockholder entitled to vote at
such meeting, not less than ten or more than sixty days before the date of the
meeting.

      If mailed, the notice of an annual or special meeting of stockholders
shall be deemed to be given when deposited in the United States mail, postage
prepaid, addressed to each stockholder entitled to vote at such meeting at his
address as appears on the stock records of the Company.


      If any meeting of the stockholders is adjourned to another time and place,
no notice of such adjourned meeting need be given, other than by announcement at
the meeting at which such adjournment is taken.

      Notice of the time, place and purpose or purposes of any meeting of the
stockholders may be waived in writing by any stockholder either before or after
the meeting, and any such waiver shall be filed with the Secretary or entered
upon the records of the meeting. Whenever all of the stockholders shall consent
in writing to the holding of a meeting, such meeting shall be valid without call
or notice.

      Section 2.5. Quorum and Adjournment. At any meeting of the stockholders,
the holders of record of a majority of the total number of outstanding shares of
stock of the corporation entitled to vote, present in person or represented by
proxy, shall constitute a quorum for all purposes, provided that at any meeting
at which the holders of any series or class of stock shall be entitled, voting
as a class, to elect directors, the holders of record of a majority of the total
number of outstanding shares of such series or class, present in person or
represented by proxy, shall constitute a quorum for the purpose of such
election.

      If a quorum is present at any meeting of stockholders, the vote of the
holders of a majority of the shares present in person or represented by proxy at
the meeting shall be sufficient for the transaction of any business, unless
otherwise provided by law or by the Certificate of Incorporation.

      In the absence of a quorum at any meeting, the holders of a majority of
the shares of stock entitled to vote thereat, present in person or represented
by proxy at the meeting, may adjourn the meeting, from time to time, unless the
holders of the number of shares requisite to constitute a quorum shall be
present in person or represented at the meeting. At any adjourned meeting at
which a quorum is present, any business may be transacted that might have been
transacted at the meeting as originally convened.

      Section 2.6. Organization. The Chairman of the Board, or in his absence,
the President, or in his absence, the Vice Presidents in the order determined by
the Board of Directors, or, if all of such officers are absent, a stockholder
chosen by the holders of a majority in number of shares of stock present in
person or represented by proxy, shall act as chairman of the meeting. The
Secretary, or in his absence, an Assistant Secretary, or in the absence of both
the Secretary and an Assistant Secretary, any person designated by the chairman,
shall act as secretary of the meeting.

      Section 2.7. Voting. At each meeting of the stockholders, each holder of
shares of stock of any series or class entitled to vote at such meeting shall,
as to all matters in respect of which such stock has voting power, be entitled
to vote in person or by proxy appointed by an instrument in writing signed by
such stockholder or by a duly authorized attorney and, except as otherwise
provided by law, shall have one vote for each share of stock standing in his
name on the books of the Company upon each matter submitted to a vote at the


                                      -2-


meeting. All proxies shall be in writing and shall be filed with the Secretary
of the meeting before being voted. Such proxy shall entitle the holder thereof
to vote at any adjournment of such meeting, but shall not be voted after the
final adjournment thereof. No proxy shall be valid after the expiration of
eleven (11) months from the date of its execution, unless the stockholder
executing it shall have specified therein the length of time it is to continue
in force, which shall be for some limited period.

      The vote upon the election of directors and, upon demand of any
stockholder, the vote upon any matter submitted to a vote at a meeting of the
stockholders, shall be by ballot.

      Prior to each meeting of stockholders, the Board of Directors shall
appoint two Inspectors who shall receive and determine the validity of proxies
and the qualifications of voters, and receive, inspect, count, and report to the
meeting the votes cast on all matters submitted to a vote at such meeting. In
the case of failure of the Board of Directors to make such appointments or in
the case of failure of any Inspector so appointed to act, the chairman of the
meeting shall make such appointments or fill such vacancies.

                                   ARTICLE 3
                               BOARD OF DIRECTORS

      Section 3.1. General Powers. The business, property, and affairs of the
corporation shall be managed under the direction of its Board of Directors.

      Section 3.2. Number, Tenure and Vacancies. The number of directors shall
be as fixed from time to time by resolution adopted by the Board, but shall in
no event be less than three. Each director shall hold office during the term for
which he shall have been elected and until his successor shall have been elected
and qualified or until his earlier death, resignation or removal.

      Section 3.3. Vacancies. If any vacancy shall occur in the Board of
Directors, the remaining directors though less than a quorum by affirmative vote
of a majority thereof shall elect a director to fill such vacancy until the next
annual meeting of the stockholders, and each director so elected shall hold
office until his successor is elected and qualified.

      Section 3.4. Resignations. Any director may resign at any time by giving
written notice to the Chairman of the Board, the President or to the Secretary
of the Company. Such resignation shall take effect at the date of receipt of
such notice or at any later time specified therein; and, unless otherwise
specified therein, the acceptance of such resignation by the Board of Directors
shall not be necessary to make it effective.

      Section 3.5. Place of Meetings. The Board of Directors may hold its
meetings at such place or places, within or without the State of Delaware, as
the Board of Directors may from time to time determine.


                                      -3-


      Section 3.6. Annual Meeting. A meeting of the Board of Directors, to be
known as the annual meeting, shall be held without notice immediately after, and
at the same place as, the meeting of the stockholders at which such Board of
Directors is elected, for the purpose of electing the officers of the Company
and any committees of the Board of Directors, to be elected under the provisions
of Articles 4 and 5.

      Section 3.7. Regular Meetings. Regular meetings of the Board of Directors
shall be held at least once quarterly at such time and place as may be set forth
in the notice calling said meeting. Such meetings shall be called in the same
manner as provided for the calling of a special meeting.

      Section 3.8. Special Meetings. Special meetings of the Board of Directors
may be called at any time by the Chairman of the Board or by the President, and
shall be called by the Secretary upon the written request of one-third or more
of the directors then in office. Any such special meeting may be held at such
place as shall be specified in the call, but if no place is specified, then at
the principal office of the Company in the City of Minneapolis, Minnesota.

      Section 3.9. Notices. Written or telegraphic notice of each special
meeting shall be given by the Secretary to each director, by personal delivery
or by mail or telegram addressed to him at his usual business address, at least
two days prior to the meeting in case of notice by telegram or by personal
delivery, which notice shall specify the purpose or purposes of such special
meeting. Any director may waive notice of any meeting, and the attendance of a
director at any meeting shall constitute a waiver of notice of such meeting. No
business shall be transacted at any special meeting except such as shall have
been specified in the notice of waiver thereof.

      Section 3.10. Organization. Unless the Board of Directors shall by
resolution otherwise provide, the Chairman of the Board, or in his absence, the
President, or in his absence, a Vice President designated by the Board of
Directors, or if all such officers are absent, a director chosen by a majority
of the directors present, shall act as chairman at all meetings of the Board of
Directors; and the Secretary, or in his absence, an Assistant Secretary, or in
the absence of both the Secretary and an Assistant Secretary, such person as may
be designated by the Chairman, shall act as secretary at all such meetings.

      A majority of the directors in office at the time shall constitute a
quorum necessary for the transaction of business, and the action of a majority
of the directors present at any meeting at which a quorum is present shall be
the act of the Board of Directors. If at any meeting of the Board of Directors a
quorum is not present, a majority of the Directors present may adjourn the
meeting from time to time.

      Section 3.11. Action Without a Meeting. Any action that might be taken at
a meeting of the Board of Directors may be taken without a meeting upon the
signed concurrence in writing of all the directors.


                                      -4-


      Section 3.12. Compensation of Directors. Each Director, as such, shall be
entitled to receive reimbursement for his reasonable expenses incurred in
attending meetings or otherwise in connection with his attention to the affairs
of the Company, and to compensation fixed by the Board of Directors from time to
time.

                                    ARTICLE 4
                                   COMMITTEES

      Section 4.1. Appointment of Committees. The Board of Directors from time
to time may appoint from among its members such committees as the Board may
determine, which shall in each case consist of not less than two (2) directors,
and which shall have such powers and duties as shall from time to time be
prescribed by the Board. Each member of any such committee shall be entitled to
receive reimbursement for his reasonable expenses incurred in attending meetings
or otherwise in connection with his attention to the affairs of the Company, and
to such compensation as may be fixed from time to time by the Board of
Directors.

      A majority of the members of any committee may fix its rules of procedure.
All action by any committee shall be reported to the Board of Directors at a
meeting succeeding such action and shall be subject to revision, alteration, and
approval of the Board of Directors; provided that no rights or acts of third
parties shall be affected by any such revision or alteration.

      Section 4.2. Executive Committee. The Board of Directors may, in its
discretion, by majority vote of the whole Board, elect annually from the
directors an Executive Committee, consisting, in addition to the Chairman of the
Board and the President, who shall be members ex officio, of such a number of
directors, not less than three nor more than five, as from time to time shall be
prescribed by the Board of Directors; and may change the membership of, fill
vacancies in, or dissolve such Committee. Unless otherwise provided by
resolution of the Board of Directors, the Executive Committee shall have and may
exercise the powers of the Board of Directors when it is not in session, except
such powers as may not be delegated pursuant to the Delaware General Corporation
Law and except action in respect of dividends to stockholders, election of
officers or the filling of vacancies in the Board of Directors or the Executive
Committee. Among its powers, the Executive Committee shall have power to
authorize the seal of the Company to be affixed to all papers which may require
it.

      The Executive Committee shall elect a Chairman to serve for such term as
it may determine, shall determine its own rules of procedure and shall meet at
such times and places and upon such call or notice as shall be provided by such
rules. It shall keep a record of its acts and proceedings, and all action of the
Committee shall be reported to the Board of Directors at the next meeting of the
Board. At each meeting of the Committee, the presence of a majority of the
Committee shall be necessary to constitute a quorum for


                                      -5-


the transaction of business, and if a quorum is present the concurrence of a
majority of those present shall be necessary for the taking of any action
thereat.

      Each member of the Executive Committee shall be entitled to receive
reimbursement for his reasonable expenses incurred in attending meetings or
otherwise in connection with his attention to the affairs of the Company, and to
such compensation as may be fixed from time to time by the Board of Directors.

                                    ARTICLE 5
                                    OFFICERS

      Section 5.1. Officers. The officers of the Company shall be a Chairman of
the Board, a President, one or more Vice Presidents, a Secretary, one or more
Assistant Secretaries, a Treasurer, one or more Assistant Treasurers, all of
whom shall be elected by the Board of Directors.

      The Board of Directors may elect or appoint such other officers and agents
as it shall deem necessary or as the business of the Company may require, each
of whom shall hold office for such period, have such authority and perform such
duties as the Board of Directors may prescribe from time to time. The President
shall have authority to appoint any officers, agents or employees other than
those elected or appointed by the Board of Directors, and to prescribe their
authority and duties, which may include the authority to appoint subordinate
officers, agents or employees, but, as to major executive officers, such
appointments shall be with the advice and consent of the Executive Committee.

      Any two or more offices, except those of President and Vice President, and
President and Secretary, may be held by the same person, but no officers shall
execute, acknowledge or verify any instrument in more than one capacity.

      In case of the election of more than one Vice President, the Board of
Directors may determine the rank of the respective Vice Presidents, by
designating them as First Vice President, Second Vice President, and so on, or
in any other manner authorized by the Board of Directors.

      Section 5.2. Term of Office. Each officer elected or appointed by the
Board of Directors shall hold office until the next annual meeting of the Board
of Directors and until his successor is elected. Any officer may be removed at
any time, with or without cause, by the affirmative vote of a majority of the
whole Board of Directors. Any officers, agents or employees not elected or
appointed by the Board of Directors shall hold office at the discretion of the
President or of the officer appointing him.

      Section 5.3. Resignation. Any officer may resign at any time by giving
written notice to the Board of Directors, or to the President or Secretary, or
to the officer appointing him. Any such resignation shall take effect at the
date of the receipt of such notice or at any later


                                      -6-


time specified therein; and, unless otherwise specified therein, the acceptance
of such resignation shall not be necessary to make it effective.

      Section 5.4. Vacancies. A vacancy in any office caused by the death,
resignation, removal or disqualification of the person elected or appointed
thereto, or by any other cause, shall be filled for the unexpired portion of the
term in the same manner as prescribed in these Bylaws for regular election or
appointment to such office. In case of the absence or disability or refusal to
act of any officer of the Company, or for any other reason that the Board of
Directors shall deem sufficient, the Board may delegate, for the time being, the
powers and duties, or any of them, of such officer to any other officer or to
any director.

      Section 5.5. The Chairman of the Board. The Chairman of the Board shall be
elected from among the directors of the Company. He shall, when present, preside
as Chairman of all meetings of the stockholders and of the Board of Directors.
The Chairman of the Board shall advise with the President concerning the affairs
of the Company, the preparation of the Annual Budget and on matters of general
policy affecting the business and operation of the Company, and, in addition,
shall have such other authority and perform such other duties as the Board of
Directors or the Executive Committee may from time to time prescribe. He shall
be ex officio a member of the Executive Committee and may call meetings of the
Executive Committee when he deems it necessary, and shall call meetings of the
Executive Committee when requested to do so by two or more of the members
thereof.

      Section 5.6. The President. The President shall be elected from among the
directors of the Company. He shall have general charge, control, and supervision
over the management and direction of the business, property, and affairs of the
Company, subject to the control and direction of the Board of Directors. He
shall consult with the Chairman of the Board concerning the affairs of the
Company, the preparation of the Annual Budget and on matters of general policy
affecting the business and operation of the Company. He shall be ex officio
member of the Executive Committee.

      The President is authorized to sign, execute and acknowledge, in the name
and on behalf of the Company, all deeds, mortgages, bonds, notes, debentures,
stock certificates, contracts, leases, reports, and other documents and
instruments, except where the signing and execution thereof by some other
officer, agent or representative of the Company shall be expressly authorized
and directed by law or by the Board of Directors or by these Bylaws. Unless
otherwise provided by law or the Board of Directors, the President may authorize
any officer, employee or agent of the Company to sign, execute and acknowledge,
in the name and on behalf of the Company and in this place and stead, all such
documents and instruments. The President shall have such other powers and
perform such other duties as are incident to the office of President and as from
time to time may be prescribed by the Chairman or the Board of Directors.

      Section 5.7. The Vice Presidents. In the absence of the President or
during his disability or refusal to act, his powers and duties shall temporarily
devolve upon such one


                                      -7-


of the Vice Presidents as shall be designated by the Board of Directors or, if
not designated by the Board of Directors, by the President; provided, however,
that no Vice President shall act as a member of or chairman of any committee of
which the President is a member or chairman by designation or ex officio, except
at the direction of the Board of Directors.

      Each Vice President shall have such powers and perform such other duties
as from time to time may be assigned to him by the Board of Directors or be
delegated to him by the President, including, unless otherwise ordered by the
Board of Directors, the power to sign, execute and acknowledge all documents and
instruments referred to in Section 6 of this Article 5. The Board of Directors
may assign to any Vice President general supervision and charge over any branch
of the business and affairs of the Company, subject to the control of the Board
of Directors and the President.

      Section 5.8. The Secretary. The Secretary shall attend and keep the
minutes of meetings of the stockholders, of the Board of Directors and, unless
otherwise directed by such committee, of all committees, in books of the Company
provided for that purpose; shall have custody of the corporate records of the
Company; shall see that notices are given and records and reports properly kept
and filed by the Company as required by these Bylaws or as required by law;
shall be the custodian of the corporate seal of the Company and see that it is
affixed to all documents to be executed on behalf of the Company under its seal;
and, in general, shall have such other powers and perform such other duties as
are incident to the office of Secretary and as may from time to time be assigned
to him by the Board of Directors, the Chairman of the Board or the President.

      Section 5.9. Assistant Secretaries. In the absence of the Secretary, or
during his disability or refusal to act, his powers and duties shall temporarily
devolve upon such one of the Assistant Secretaries as the President or the Board
of Directors may direct, or, if there be but one Assistant Secretary, then upon
such Assistant Secretary. The Assistant Secretaries shall have such other powers
and perform such other duties as from time to time may be assigned to them,
respectively, by the Board of Directors or be delegated to them by the Chairman
of the Board, the President or the Secretary.

      Section 5.10. Treasurer. The Treasurer shall have responsibility for the
custody and safekeeping of all funds of the Company and shall have charge of
their collection, receipt and disbursement; shall have responsibility for the
custody and safekeeping of all securities of the Company; shall receive and
have authority to sign receipts for all moneys paid to the Company and shall
deposit the same in the name and to the credit of the Company in such banks or
depositories as the Board of Directors shall approve; shall endorse for
collection on behalf of the Company all checks, drafts, notes and other
obligations payable to the Company; shall disburse the funds of the Company
only in such manner as provided in these Bylaws or as the Board of Directors may
require; shall sign or countersign all notes, endorsements, guaranties and
acceptances made on behalf of the Company when and as directed by the Board of
Directors; shall keep full and accurate accounts of the transactions of his
office in books belonging to the Company and render to the Board of Directors,


                                      -8-


whenever it may require, an account of his transactions as Treasurer; and, in
general, shall have such other powers and perform such other duties as are
incident to the office of Treasurer and as from time to time may be prescribed
by the Board of Directors.

      The Treasurer shall give bond for the faithful discharge of his duties in
such sum and with such surety or sureties as the Board of Directors may require.

      Section 5.11. Assistant Treasurers. In the absence of the Treasurer or
during his disability or refusal to act, his powers and duties shall temporarily
devolve upon such one of the Assistant Treasurers as the President or the Board
of Directors may direct, or, if there be but one Assistant Treasurer, then upon
such Assistant Treasurer. The Assistant Treasurers shall have such other powers
and perform such other duties as from time to time may be assigned to them,
respectively, by the Board of Directors or be delegated to them by the President
or the Treasurer. Each Assistant Treasurer shall give bond for the faithful
discharge of his duties in such sum and with such surety or sureties as the
Board of Directors may require.

      Section 5.12. Compensation. The salaries or other compensation of all
officers elected or appointed by the Board of Directors shall be fixed from time
to time by the Board of Directors. The salaries or other compensation of all
other officers, agents and employees of the Company shall be fixed from time to
time by the President, but only within such limits as to amount, and in
accordance with such other conditions, if any, as from time to time may be
prescribed by the Board of Directors.

                                    ARTICLE 6
                                VOTING OF STOCKS

      Unless otherwise ordered by the Board of Directors, the President shall
have full power and authority, in the name and on behalf of the Company, to
attend, act and vote at any meeting of stockholders of any corporation in which
the Company may hold shares of stock, and at any such meeting shall possess and
may exercise any and all rights and powers incident to the ownership of such
shares of stock and which, as the holder thereof, the Company might possess and
exercise if personally present, and may exercise such power and authority
through the execution of proxies or may delegate such power and authority to any
other officer, agent or employee of the Company.

                                    ARTICLE 7
              CERTIFICATES FOR SHARES OF STOCK AND THEIR TRANSFER

      Section 7.1. Certificates of Stock. Certificates representing shares of
the capital stock of the Company shall be in such form, consistent with law and
the Certificate of Incorporation, as shall be approved by the Board of
Directors. They shall be consecutively numbered by series or classes in the
order of their issue and shall be signed by the President or a Vice President
and by the Secretary or an Assistant Secretary, and shall be sealed with


                                      -9-


the corporate seal of the Company. Such seal and the signatures of such officers
of the Company, or any of them, may be engraved or printed facsimiles, if such
certificates are signed by a Transfer Agent or Transfer Clerk and registered by
a Registrar appointed by the Board of Directors. In case any officer who shall
have signed any such certificate, or whose facsimile signature shall have been
used thereon, shall cease to be such officer before such certificate shall have
been issued by the Company, such certificate may, nevertheless, be used by the
Company with the same effect as if such officer had not ceased to be such at the
date of issuance of such certificate.

      The names and addresses of the persons to whom certificates for shares of
capital stock are issued, and the number of series or class of shares
represented by and the date of issue and transfer of each certificate, shall be
entered on books of the Company kept for that purpose. The stock record and
transfer books and the blank stock certificates shall be kept by such Transfer
Agent or Transfer Clerk or by the Secretary or such other officer as shall be
designated by the Board of Directors for that purpose. Every certificate
surrendered to the Company for transfer or exchange shall be canceled and shall
show thereon the date of cancellation.

       Section 7.2. Transfer of Stock. Shares of capital stock of the Company
shall be transferred on the books of the Company only upon surrender of the
certificate or certificates therefor to the Secretary of the Company, or to the
Transfer Agent or Transfer Clerk of such Agent or Clerk be appointed, properly
endorsed or accompanied by proper assignments duly executed by the registered
holder thereof in person or by his attorney duly authorized in writing. Until so
transferred on the books of the Company, the Company shall deem and treat the
registered holder of each certificate for shares of capital stock as the owner
of such shares for all purposes.

      Section 7.3. Transfer Agent and Registrar; Regulations. The Company shall,
if and whenever the Board of Directors shall so determine, maintain one or more
transfer offices or agencies, each in charge of a Transfer Agent designated by
the Board of Directors, where the shares of the capital stock of the Company may
be transferable, and also one or more registry offices, each in charge of a
Registrar designated by the Board of Directors, where such shares of capital
stock may be registered, and no certificates for shares of the capital stock of
the Company in respect of which a Transfer Agent and Registrar shall have been
designated shall be valid unless countersigned by such Transfer Agent and
registered by such Registrar. The Board of Directors may also make such
additional rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates for shares of the capital stock of the
Company.

      Section 7.4. Lost, Destroyed and Mutilated Certificates. The holder of
any shares of capital stock of the Company shall immediately notify the Company
of any loss, destruction or mutilation of the certificate therefor, and the
Board of Directors may, in its discretion, cause a new certificate or
certificates to be issued to him, upon the surrender of the mutilated
certificate, or, in case of loss or destruction of the certificate, upon
satisfactory


                                      -10-


proof of such loss or destruction and upon such terms and indemnity as the Board
of Directors may prescribe.

       Section 7.5. Closing of Stock Transfer Books. When and as from time to
time ordered by the Board of Directors, the stock transfer books of the Company
shall be closed for a period not exceeding sixty days preceding the date for
payment of any dividend or the date for the allotment of any rights or the date
when any change or conversion or exchange of stock of the Company shall become
effective, or for a period not exceeding sixty days in connection with obtaining
the consent of stockholders for any purpose.

       In lieu of closing the stock transfer books as aforesaid, the Board of
Directors may from time to time fix in advance a date, not exceeding sixty days
preceding the date of any meeting of stockholders, or the date for the payment
of any dividend, or the date for the allotment of any rights, or the date when
any change or conversion or exchange of capital stock shall become effective, or
a date in connection with obtaining any such consent, as a record date for the
determination of the stockholders entitled to notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of capital stock or to give
such consent, and only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting and any adjournment thereof, or to receive payment of such dividend, or
to receive such allotment of rights, or to exercise such rights, or to give such
consent, as the case may be, notwithstanding any transfer of any shares of
capital stock on the books of the Company after any such record date so fixed.

                                    ARTICLE 8
                                      SEAL

       The Board of Directors shall provide a suitable corporate seal containing
the name of the corporation, the year of its organization, and the words
"Corporate Seal, Delaware." The seal may be used by causing it or a facsimile to
be impressed or affixed or reproduced or otherwise. The Secretary shall have
custody of such seal, but when so directed by the Board of Directors, a
duplicate of the seal may be kept and used by any Assistant Secretary.

                                    ARTICLE 9
                                   AMENDMENTS

      These Bylaws may be altered, amended, or repealed, and new bylaws may be
adopted, at any meeting of the Board of Directors called for the purpose, by the
affirmative vote of a majority of the whole Board of Directors.


                                      -11-

EX-3.5

                                                                     Exhibit 3.5

                            ARTICLES OF INCORPORATION
                                       OF
                                    WFC, INC.

      I, the undersigned, for the purpose of forming a corporation under and
pursuant to the provisions of Chapter 180 of the Laws of Wisconsin. and any
amendments thereto, do hereby associate myself as a body corporate and do hereby
adopt the following Articles of Incorporation.

                                    ARTICLE I

      The name of this corporation shall be "WFC, INC."

                                   ARTICLE II

      The purpose and general nature of its business shall be for general
business purposes.

                                   ARTICLE III

      The location and post office address of the registered office of this
corporation shall be 450 North C.P. Avenue, Lake Mills, Wisconsin 53551,
Jefferson County. The registered agent of the corporation and his address shall
be: Russell P. Roedl, 450 North C.P. Avenue, Lake Mills, Wisconsin 53551,
Jefferson County.

                                   ARTICLE IV

      The aggregate number of shares of common stack which the corporation shall
have the authority to issue shall be Ten Thousand (10,000) shares of common
capital stack with a par value of one cent ($.01) per share.

      The sale of the stock of this corporation by any shareholder may be
restricted in the Bylaws or in any contract between two or more shareholders to
the extent that said stock may be required by such Bylaws or contract to be
offered first to the corporation


or to other shareholders at a price to be fixed in accordance with such Bylaws
or contract; provided, however, that no such restrictions shall be valid unless
stated upon the stock certificate.

      Each holder of record of common stock shall be entitled to one (1) vote
per share for each share of common stock standing in his or her name on the
books of the corporation. No shareholder entitled to vote shall have or exercise
the right to accumulate his or her votes in electing directors, and there shall
be no cumulative voting for any purpose whatsoever.

                                    ARTICLE V

      The number of directors which shall constitute the whole Board of
Directors ohall be at least three (3) except that in cases where all of the
shares of the corporation are owned beneficially and of record by either one or
two shareholders, the number of directors may be less than three (3) but not
less than the number of shareholders. Each director shall continue in office for
the term for which he or she was named or elected and until his or her successor
is elected and qualified. The number of Directors will be fixed by Bylaws.

      The names and addresses of the members of the first Board of Directors are
as follows:

                       Richard G. Olson
                       Michael Foods, Inc.
                       324 Park National Bank Building
                       5353 Wayzata Boulevard
                       Minneapolis, Minnesota 55416

                       Mr. Jeffrey M. Shapiro
                       Michael Foods, Inc.
                       324 Park National Bank Building
                       5353 Wayzata Boulevard
                       Minneapolis, Minnesota 55416


                                     - 2 -


                                   ARTICLE VI

      The Board of Directors of this corporation shall have full power and
authority to make and adopt Bylaws for the government of this corporation and
its affairs as it may deem advisable and necessary, and as shall not be
inconsistent with the provisions of these Articles of Incorporation and to amend
or alter such Bylaws from time to time; provided, however, that the authority to
make and alter such Bylaws vested hereby in said board shall be subject to the
power and right of the shareholders to change or repeal such Bylaws and provided
further, that said board shall not make or alter any Bylaws fixing the number,
qualifications, classification or term of each member of said board.

                                   ARTICLE VII

      The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of the corporation) to the full extent
permitted by the Wisconsin Business Corporation Law. In addition, no director of
the corporation shall be liable to the corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director, except for
liability for:

      (1) A willful failure to deal fairly with the corporation or its
shareholders in connection with a matter in which the director or officer has a
material conflict of interest;

      (2) A violation of criminal law, unless the director or officer had
reasonable cause to believe his or her conduct was lawful or no reasonable cause
to believe his or her conduct was unlawful;


                                     - 3 -


      (3) A transaction from which the director or officer derived an improper
personal profit; or

      (4) Willful misconduct.

                                  ARTICLE VIII

      These Articles of Incorporation may be amended by the affirmative vote of
the holder or holders of the majority of the voting power of the common stock
present at a shareholders' meeting wherein said amendments are submitted to a
vote.

                                   ARTICLE IX

      The name and post office address of the incorporator is as follows:

              John Reedy
              c/o Michael Foods, Inc.
              324 Park National Bank Building
              5353 Wayzata Boulevard
              Minneapolis, Minnesota 55416

      IN WITNESS WHEREOF, the undersigned has hereunto subscribed his hand this
11th day of January, 1989.

                                      /s/ John Reedy
                                      -------------------------------
                                      John D. Reedy

                                                              STATE OF WISCONSIN
                                                                    FILED
                                                                 JAN 20 1989

                                                             DOUGLAS LA FOLLETTE
                                                              SECRETARY OF STATE

  STATE OF MINNESOTA    )
                        )
  COUNTY OF [ILLEGIBLE] )

      On this 11th day of January, 1999, before me, a Notary Public, personally
appeared John Reedy to me known to be the person named in and who executed the
foregoing instrument and acknowledged to me that he executed the same as his
free act and deed and for the uses and purposes therein expressed.

                                    /s/ [ILLEGIBLE]
                                    --------------------------------
                                    Notary Public

[NOTARY SEAL]

                                     - 4 -


                                                            STATE OF WISCONSIN )
                                                                             WI.
                                                            Jefferson County   )
[ILLEGIBLE]
                                                Received on record this 27th day
                                                of January A.D., 1989 at 9:00
      848140                                    o'clock A.M. and recorded Vol.
                                                729 of records, page 882
                                                Phyllis F. Hess Register
                                                ________________Deputy


                            United States of America
Form 14                         State of Wisconsin
                        OFFICE OF THE SECRETARY OF STATE

                    To All to Whom These Presents Shall Come:

      The undersigned, as Secretary of State of the State of Wisconsin,
certifies that the attached is a duplicate of a document accepted and filed in
my office.

                                            IN TESTIMONY WHEREOF, I have
                                            hereunto set my hand and affixed
                                            my official seal, at Madison, on
                                            the date of filing of said doc-
                                            ument.



                                            /s/ Douglas LaFollette
                                            DOUGLAS La FOLLETTE
[NOTARY SEAL]                               Secretary of State

                                            [ILLEGIBLE]

EX-3.6

                                                                     Exhibit 3.6

                                    BYLAWS OF
                                    WFC, INC.

                                    ARTICLE I

                                Name and Location

      Section 1. The name of this corporation shall be "WFC, INC."

      Section 2. The registered office of this corporation shall be located at
450 North C.P. Avenue, Lake Mills, Wisconsin 53551, Jefferson County. This
registered place of business may be transferred to such place as the Board of
Directors may from time to time determine and certify to the Secretary of State,
and other offices for the transaction of business may be located at such place
as the Board of Directors may deem desirable.

      Section 3. There shall be NO CORPORATE SEAL for this corporation.

                                   ARTICLE II

                            Meetings of Shareholders

      Section 1. Meetings of the shareholders of this corporation shall be held
at the registered office of the corporation or at such place as is designated by
the Board of Directors or by consent of all shareholders entitled to vote
thereat.

      Section 2. The regular meeting of the shareholders of this corporation
shall be held on the first Friday of January of each year if called by the
president or two directors. At such meeting the shareholders shall elect a Board
of Directors to serve (for a term of one year or until the next regular meeting
of shareholders) and until their successors are elected and qualified. The


shareholders shall transact such other business at the regular meeting as may
properly come before them. A regular meeting of shareholders shall be called at
least once every two (2) years.

      Section 3. Special meetings of the shareholders may be called for any
purpose at any time by the president, by the Board of Directors or by any two
(2) or more members thereof.

      Section 4. Every holder of common stock of this corporation shall be
entitled to one (1) vote for each share held in his or her name on the books of
the corporation. Such votes may be cast by each shareholder either in person or
by proxy.

      A majority of the shares of common stock issued and outstanding,
represented in person or by proxy, shall constitute a quorum for the transaction
of business at any meeting, but the shareholders present at any meeting, though
less than a quorum, may adjourn the meeting to a future time.

      Section 5. Written notice of the holding of the regular meeting or any
special meeting of shareholders shall be mailed to each shareholder entitled to
vote thereat at least five (5) days prior to the meeting. Such notice shall
state the time and place of the meeting and the purpose of the meeting if it is
a special meeting. it shall be mailed to the last known address of such
shareholder as the same appears upon the books of the corporation. Notice may be
waived in writing either before or after the meeting.


                                     - 2 -


                                   ARTICLE III

                                    Directors

      Section 1. The Board of Directors of this corporation shall have the
management and control of the business, of the property and of the affairs of
the corporation, and it shall have all the powers that may be exercised and
performed by the corporation pursuant to law, to the Articles of Incorporation
and to the Bylaws.

      Section 2. The Board of Directors shall consist of not less than three (3)
members, except that in cases where all of the shares of the corporation are
owned beneficially and of record by either one or two shareholders, the number
of directors may be less than three (3) but not less than the number of
shareholders. The number of directors may be increased by the board without
amendment of the Articles or Bylaws. Directors shall be elected by the holders
of the common stock at the regular meeting of shareholders. Each director shall
hold office until the next regular meeting of shareholders or until his or her
successor shall be elected and qualified, but such indefinite term shall not
exceed five years.

      Section 3. Whenever any vacancy shall occur in the Board of Directors by
death, resignation, increase in the number of directors or otherwise, such
vacancy may be filled by the affirmative vote of a majority of the remaining
directors, though less than a quorum, of the Board of Directors. If, after such
resignation, no director remains, then any vacancy may be filled by a majority
vote of the shareholders at a special meeting called for the purpose of such
election. A director so elected to fill a


                                     - 3 -


vacancy shall be a director until his or her successor is elected by the
shareholders, who may make such election at the next regular meeting or at any
special meeting of such shareholders called for that purpose.

      Section 4. The meetings of the Board of Directors of this corporation,
both regular and special, shall be held at such place as the directors may from
time to time determine.

      Section 5. The Board of Directors shall meet immediately after the final
adjournment of each regular meeting of shareholders, for the purpose of
organization, election of officers and consideration of any other business that
may properly be brought before the meeting. No notice of any kind to either old
or new members of the Board of Directors for such meeting shall be necessary.

      Section 6. Special meetings of the Board of Directors may be called by the
president or any two (2) members of the Board of Directors. Notice of all
special meetings shall be mailed by the Secretary to each director at least five
(5) days prior to the time fixed for the meeting. All notices of special
meetings shall state the purpose thereof. Notice may be waived in writing or by
telegram before or after any meeting.

      Section 7. A majority of the Board of Directors shall constitute a quorum
for the transaction of business. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors except as may be otherwise specifically provided by statute, by the
Articles of Incorporation or by these Bylaws.


                                     - 4 -


      Section 8. To the full extent permitted by the Minnesota Business
Corporation Act, as the same exists or may hereby be amended, a director of this
corporation shall not be personally liable to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director.

                                   ARTICLE IV

                                    Officers

      Section 1. The officers of this corporation shall consist of a president,
one or more vice presidents, a secretary, a treasurer and such other officers
and assistant officers and agents as may be deemed necessary by the Board of
Directors. Any two (2) or more offices may be held by the same person.

      Section 2. Whenever any vacancy shall occur in any office by death,
resignation, increase in the number of offices of the corporation or otherwise,
such vacancy shall be filled by an affirmative vote of a majority of the Board
of Directors, and such officer so elected shall hold office until his successor
is elected and qualified.

      Section 3 - President. The president shall be the chief executive officer
and shall have general charge of the business and affairs of the corporation and
perform such other duties as the Bylaws or the Board of Directors shall from
time to time prescribe.

      Section 4 - Vice President(s). A vice president shall perform all duties
incumbent upon the president during the absence or disability of the president
and shall perform such other duties as these Bylaws may require or the Board of
Directors shall prescribe.

      Section 5 - Secretary. The secretary shall:


                                     - 5 -


            A. Keep the minutes of the meetings of the shareholders and of the
      Board of Directors in books provided for that purpose;

            B. See that all notices are duly given in accordance with the
      provisions of these Bylaws and as required by law;

            C. Be custodian of the records of the corporation;

            D. Keep a register of the post office address of each shareholder
      and make all proper changes in such register, retaining and filing his or
      her authority for all such entries;

            E. See that all books, reports, statements, certificates and all
      other documents and records required by law are properly kept and filed;
      and

            F. In general, perform all duties incident to the office of
      secretary and such other duties as these Bylaws may require or the Board
      of Directors may prescribe.

      Section 6 - Treasurer. The treasurer shall be the chief financial officer
and shall keep correct and complete records of accounts, showing accurately at
all times the financial position of the corporation. In addition, he or she
shall:

            A. Have charge and custody of and be responsible for all funds and
      securities of the corporation and deposit all such funds in the name of
      the corporation in such banks, trust companies and other depositories as
      shall be selected by the Board of Directors in accordance with the
      provisions of these Bylaws;


                                     - 6 -


            B. At all times exhibit his or her books of account and records to
      any of the directors of this corporation or any other persons legally
      entitled to inspect said books and records upon application during
      business hours at the office of this corporation or such other place where
      such books are kept;

            C. Render statements of the condition of finance of the corporation
      at all regular meetings of the Board of Directors and at meetings of the
      shareholders if called upon to do so;

            D. Receive and give receipts for all money payments to the
      corporation from any source whatsoever; and

            E. In general, perform all duties incident to and customarily
      performed by such officer and perform such other duties as these Bylaws
      may require or the Board of Directors may prescribe.

      Section 7. In the case of absence of any officer of the corporation, or
for any other reason that the board may deem sufficient, the Board of Directors
may delegate the powers or duties of such officer to any other officer or to any
director or employee of the corporation, for the time being, provided that the
majority of the entire Board of Directors concurs therein.

                                    ARTICLE V

                                 Indemnification

      The corporation shall provide indemnification as follows:


                                     - 7 -


            A. Persons who are or were directors or officers of the corporation
      or who are or were serving at the request of the corporation as directors,
      officers, employees or agents of another corporation, partnership, joint
      venture, trust or other enterprise shall be indemnified by the corporation
      to the full extent required by law under the state of incorporation as now
      or hereafter in force.

            B. Persons who are or were directors or officers of the corporation
      shall be indemnified by the corporation to the full extent permitted by
      law under the state of incorporation as now or hereafter in force in
      respect of matters arising out of service in their capacities as such or
      arising out of service at the request of the corporation as directors,
      officers, agents or employees of another corporation, partnership, joint
      venture, trust or other enterprise, provided that a determination shall
      have been made by a disinterested quorum of directors, independent legal
      counsel or the stockholders that the person acted in good faith and in a
      manner he reasonably believed to be in or not opposed to the best
      interests of the corporation and with respect to any criminal matter, had
      no reasonable cause to believe his conduct was unlawful.

            C. Persons who are or were directors or officers of the corporation
      shall be entitled to the payment of expenses (including attorneys' fees)
      in advance of a


                                     - 8 -


      final disposition of a matter, provided that there shall have been a
      preliminary determination by a disinterested quorum of directors,
      independent legal counsel, or the stockholders that there is a reasonable
      basis for a belief that such person met the applicable standard of conduct
      set forth in clause B, and provided that the corporation receives an
      undertaking by or on behalf of such person reasonably assuring that the
      amount of such payment will be repaid unless it shall ultimately be
      determined that he is entitled to indemnification by the corporation.

                                   ARTICLE VI

      These Bylaws may be altered, amended or repealed:

            A. At any regular or duly called special meeting of shareholders at
      which a quorum is present, by the affirmative vote of a majority of the
      stock entitled to vote at such meetings and present or represented
      thereat; or

            B. At any regular meeting of the Board of Directors or at any
      special meeting of the board, if notice of the proposed alteration or
      amendment or repeal is contained in the notice of such special meeting, by
      the affirmative vote of a majority of the Board of Directors at such
      meeting at which a quorum is present.


                                     - 9 -


                                  CERTIFICATION

      I, John D. Reedy, Vice President, Finance of WFC, Inc., hereby certify
that the above Bylaws were adopted by the Board of Directors of said corporation
on the 11th day of January, 1989.


                                     /s/ John Reedy
                                     -------------------------------
                                     Vice President, Finance


                                     - 10 -

EX-3.7

                                                                    Exhibit 3.7

                     THIRD AMENDED ARTICLES OF INCORPORATION

                                       OF

                             WISCO FARM COOPERATIVE

                                    ARTICLE I
                                      Name


      1.01 The name of this cooperative is WISCO FARM COOPERATIVE. It is a
cooperative organized under Chapter 185 of the Statutes of Wisconsin.

                                   ARTICLE II
                                    Location

      2.01 The registered agent of the cooperative and his address are:

                       Russell P. Roedl
                       423 Margarette Street
                       Lake Mills, WI 53551
                       Jefferson County

                                   ARTICLE III
                                    Purposes

      3.01 General Purpose. This cooperative may engage in any activity within
the purposes for which cooperatives may be organized as provided by Chapter 185,
Wisconsin Statutes.

                                   ARTICLE IV
                                     Capital

      4.01       Capital Stock.

      a. The authorized capital stock of this cooperative shall be two hundred
(200) shares Common Stock at a par value of One Thousand Dollars ($1,000) per
share.

      b. Common Stock shall be issued to and held by any individual, association
or corporation.

      c. Annual dividends may be fixed by the Board of Directors.

      4.02 Transfer. No transfer of stock shall be binding upon the cooperative
unless made on its books. A stockholder who wishes to offer his stock for sale
shall first offer it in writing to the Board of Directors. Until sixty (60) days
after receiving such written offer, the Board shall have the option to buy such
stock for the cooperative as provided by statute. The Board also shall have the
right to recall the stock of any stockholder as provided by statute upon sixty
(60) days notice in


writing by mail to the holder's last post office address as shown by the
cooperative records. When recalling the Common Stock of a holder not entitled to
vote, payment may be made in Capital Equity Certificates issued by the
cooperative at face value. When retiring stock, the cooperative may offset
against it any sum the holder may owe the cooperative. Upon failure to receive a
Certificate of Stock which has been recalled for redemption or for any other
reason within the time fixed for the surrender thereof, the cooperative may
cancel the stock on its books, and carry the value thereof as an account for the
holder without interest until the certificate is presented.

      4.03 Other Forms of Capital.

      a. The cooperative may also issue Preferred Capital Certificates, Capital
Equity Certificates, Certificates of Indebtedness or similar securities on a
patronage basis or otherwise as may be provided for in the By-laws, but no such
security shall entitle the holder thereof to any vote in the affairs of the
cooperative. Each member's ownership shall be recorded in the books and ledgers
of the cooperative and evidenced to him annually by written notice. The property
and participation (including voting) rights and interests of each member in the
cooperative may be unequal and may be determined and fixed by the Board of
Directors in the proportion that the patronage of each member shall bear to the
total patronage of all members of the cooperative, or on any other basis
permitted under Section 185.45 of the Wisconsin Statutes.

      b. All notices of ownership shall be recorded in the records of the
cooperative according to the year in which it is issued. Preferred Capital
Certificates, Capital Equity Certificates or similar securities and other
records of ownership shall be transferable only the books of the cooperative. A
member who wishes to offer his certificate for sale shall first offer it in
writing for sale to the Board of Directors. The Board of Directors may also have
the right to recall any certificate or redeem any evidence of ownership upon
sixty (60) days' notice in writing to the last post office address of the holder
as shown on the cooperative records.

      4.04 Lien. The cooperative shall have first lien on all equities and
securities it has issued for all indebtedness of the holder thereof to the
cooperative.

                                    ARTICLE V
                                   Membership

      5.01 The cooperative may have more than one class of members.


                                     - 2 -


      5.02 The designation, qualifications, requirements, method of acceptance,
incidents of membership and condition and terms of termination of membership of
each class shall be set forth in the By-laws.

                                   ARTICLE VI
                                    Directors

      6.01 The number, method and manner of election of directors shall be set
forth in the By-laws.

                                   ARTICLE VII
                                Patronage Refunds

      7.01 All net proceeds of this cooperative and additions to reserves shall
be distributed, on a cooperative basis, annually only to members holding Common
Stock or the other forms of capital set forth in paragraph 4.03 of these
Articles, and to those patrons who choose to buy stock or such other form of
capital. Patronage refunds may be distributed in cash or in capital equity
credits as more particularly provided for in the By-laws. Stock and capital
equity credits shall be redeemable only at the option of the Board of Directors.
The Board of Directors may, in its discretion, credit any of the net proceeds to
allocated or unallocated surplus or reserves of the cooperative.

                                  ARTICLE VIII
                           Liquidation or Dissolution

      8.01 Upon liquidation or dissolution of the cooperative, any sum remaining
after payment of all debts shall first be applied to the holders of Common Stock
proportionately up to their par value, then to the members and former members on
the basis of their recorded interest in capital proportionately up to face
value. Any sum remaining shall be distributed ratably among the members of the
cooperative.

                                   ARTICLE IX
                                   Amendments

      9.01 The cooperative may amend these Articles or may dissolve in the
manner provided by statute at the time of amendment or dissolution.

                                    ARTICLE X
                               Board of Directors

      10.01 The business and affairs of this cooperative shall be managed by a
board of directors of not less than three (3) persons, as set by the Bylaws.
Every director shall be a voting member or a representative of a voting member
who is other than a


                                     - 3 -


natural person. Directors shall be elected by the voting members of the
cooperative for such terms as the By-laws may prescribe, at the annual meeting
of members.

      Executed in triplicate as of the date below written. The amendments to
these Articles are several, and can be seen by comparing these Third Amended
Articles with the original Articles, the Amended Articles and the Second Amended
Articles. The number of members of this corporation is one (1), and the members
voting for these Third Amended Articles was one (1).

      Subscribed to the 16th day of February 1989.


                                    WFC, INC.


                                    By /s/ Russell P. Roedl
                                       -------------------------------------
                                       Russell P. Roedl, President

                                    By /s/ Helen Nehring
                                       -------------------------------------
                                       Helen Nehring, Secretary

STATE OF WISCONSIN  )
                    )  ss
COUNTY OF JEFFERSON )

      Personally came before me this 16th day of February, 1989, the above named
Russell P. Roedl and Helen Nehring, to me known to be the persons who executed
the foregoing instrument and acknowledged the same as officers of WFC, Inc.

                                      /s/ [ILLEGIBLE]
                                          ----------------------------------
                                          Notary Public

                                          My Commission expires 12/16/90

This document was drafted by:
MAUN, HAYES, SIMON, JOHANNESON,
BREHL AND ODLAUG (PTC)
3500 West 80th Street
Suite 520
Bloomington, MN 55431


                                     - 4 -

EX-3.8

                                                                    Exhibit 3.8

                       SECOND AMENDED AND RESTATED BYLAWS
                                       OF
                             WISCO FARM COOPERATIVE

                                     BYLAW 1
                                      Name

      1.01 Name. The name of this cooperative shall be WISCO FARM COOPERATIVE.

                                     BYLAW 2
                                    Location

      2.01 Principal Office. The principal office shall be located at 450 North
CP Avenue in Lake Mills, Jefferson County, Wisconsin, 53551. Its mailing address
shall be P.O. Box 753, Lake Mills.

      2.02 Other Offices. Other offices for the transaction of business shall be
located at such place as the Board of Directors may from time to time determine.

                                     BYLAW 3
                                   Membership

      3.01 Designation. There shall be two classes of members in this
cooperative: Class A members and Class B members.

      3.02 Class A Members.

      a. Qualifications: Class A members may be any natural person, partnership
or corporation.

      b. Requirements:

            1. Class A members must own at least fifteen (15) shares of Common
            Stock of this cooperative; and

            2. Class A members must comply with any and all applicable laws, and
            any further requirements set by the Board of Directors, including
            the signing of all appropriate documents.

      c. Incidents of Class A Membership.

            1. Class A members shall have the right to purchase shares of Common
            Stock in the cooperative, and to vote.

            2. Class A members shall be entitled to receive as patronage refunds
            any stock dividends which the Board of Directors, in its discretion,
            issues.



            3. Class A members may transfer their capital stock to any person,
            partnership or corporation.

      3.03 Class B Members.

      a. Qualifications.

            1.    Class B members must be a person, partnership, corporation or
                  association of dairy farmers that produces butter, cheese or
                  other dairy products for storage and/or shipment.

            2.    Class B members must have regularly available at least
                  10,000,000 gross pounds annually of butter, cheese or other
                  dairy products which are to be stored or shipped through this
                  cooperative.

      b. Requirements.

            1.    Class B members must have a valid and existing written
                  "Member's Storage and Transportation Agreement" with this
                  cooperative which provides for the storage and transportation
                  of a substantial quantity of their dairy farm products.

            2.    Class B members must own at least one (1) Capital Equity
                  Certificate at $100 per certificate.

            3.    Class B members must comply with any and all applicable state
                  and federal laws, and with any further requirements set by the
                  Board of Directors, including the signing of all appropriate
                  documents.

      c. Incidents of Class B Membership.

            1.    Class B members shall have the right to access to the storage
                  and transportation facilities and services of this cooperative
                  pursuant to the right to enter into a "Member's Storage and
                  Transportation Agreement" with this cooperative.

            2.    Class B members shall have the right to a physical inventory
                  of their dairy farm products taken by the cooperative at no
                  charge, with a maximum of two inventories per year.

            3.    Class B members shall have the right to purchase Capital
                  Equity Certificates at $100 per certificate, and shall have
                  the right to any patronage refunds to which such certificates
                  entitle them under the Articles and Bylaws of this
                  cooperative.


                                     - 2 -


            4.    Class B members shall not have the right to vote.

      3.04 Class A and B Methods of Acceptance.

      a. Members are to be accepted at the sole discretion of the Board. The
Board shall have the conclusive right to determine the qualifications required
for membership at any time, both for the purposes of accepting a member and
termination of membership.

      b. This cooperative may issue a certificate of membership to each member
which shall be in such form as may be prescribed by the Board of Directors.

      c. Class B membership shall not be transferable.

      3.05 Class A and B Method of Termination. A member shall automatically
cease to be a member and lose the right to vote in this cooperative when, as
determined by the Board of Directors, it ceases to meet any of the above
qualifications or requirements.

                                     BYLAW 4
                                    Meetings

      4.01 Regular Meetings. Regular meetings of the members, if any, shall be
held on the date and at the time and place fixed by the president or the Board.
At any regular meeting there shall be an election of qualified successors for
directors who serve for an indefinite term. Any business appropriate for action
by the members may be transacted at a regular meeting. Regular meetings may be
held no more frequently than once per year.

      4.02 Notice. Not less than seven (7) nor more than thirty (30) days before
each regular meeting, written notice of the time and place of the meeting shall
be given to the members personally or by mail to their last known addresses as
shown on the cooperative records; or a meeting may be held on written waiver of
notice signed by all the members.

      4.03 Special Meetings. a. The president may call a special meeting of the
cooperative upon giving notice to the members in the manner herein described for
a regular meeting, except that the notice shall also specify the purpose of the
special meeting. A special meeting may also be called upon written waiver of
notice signed by all Class A members.

      b. Upon written demand signed by one Class A member, the president shall
call a special meeting for the purpose to which the demand relates, in the
manner herein described.


                                     - 3 -


      4.04 Quorum. A quorum at a regular or special meeting shall be a majority
of all members. Members represented by signed vote may be counted in computing a
quorum only on those questions as to which the signed vote is taken.

      4.05 Voting. Each Class A member is entitled to one and only one vote on
each question. Class B Members are not entitled to vote. Voting by proxy is not
allowed in the cooperative, but Class A members may submit a signed vote on a
ballot which sets forth exact questions to be voted upon.

      4.06 Order of Business. The order of business at regular meetings and so
far as applicable at other meetings of the members shall be substantially as
follows:

      a.   Roll call or registration.
      b.   Proof of due notice of meeting or waiver of notice.
      c.   Reading and disposal of unapproved minutes.
      d.   Reports of officers and committees.
      e.   Unfinished business.
      f.   New business.
      g.   Election of directors.
      h.   Adjournment.

      4.07 Rules of Order. Meetings of the members and of the Board of Directors
shall be conducted according to and governed by Roberts Rules of Order (Revised)
except as otherwise provided in these Bylaws or as waived by agreement at the
meeting.

      4.08 Unanimous Consent Without Meeting. Any action required or permitted
by the Articles of Incorporation or Bylaws or any provision of law to be taken
by the members at a meeting or by resolution may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all
persons who are currently members of the cooperative and entitled to vote on
such action.

                                     BYLAW 5
                               Board of Directors

      5.01 Number. The Board of Directors shall consist of three (3) directors.

      5.02 Term. Each director shall hold office until the member meeting next
held after his election, until his successor shall have been elected and shall
qualify, or until he shall resign or shall have been removed as hereinafter
provided.

      5.03 Election. Class A members shall elect the directors at each regular
meeting.


                                     - 4 -


      5.04 Removal. Except as may otherwise be provided by Chapter 185 of the
Wisconsin Statutes, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the Class A
members entitled to vote at an election of directors.

      5.05 Vacancies. Whenever any vacancy shall occur in the Board of Directors
by death, resignation, increase in the number of directors or otherwise, such
vacancy shall be filled by the affirmative vote of a majority of the remaining
directors, though less than a quorum, of the Board of Directors. If, after such
resignation, no director remains, then the vacancy may be filled by a majority
vote of the members at a special meeting called for the purpose of such
election. A director so elected to fill a vacancy shall be a director until his
or his successor is elected by the members, who may make such election at the
next regular meeting or at any special meeting of such members called for that
purpose.

      5.06 Meetings. Meetings of the Board of Directors may be held from to time
at such time and place as the Board of Directors may determine. The president
may call additional meetings at any time and shall be obliged to call such
meetings upon demand of a majority of the directors, or upon demand of the
manager.

      5.07 Notice. One day prior written notice of all directors' meetings shall
be given to each director, or a meeting may be held on written waiver of notice
signed by all the directors.

      5.08 Quorum and Board Actions. A majority of the directors shall be a
quorum at a Board of Directors meeting, but a lesser number may adjourn to
another time upon giving notice to the absent members of the time and place of
the adjourned meeting. Only those acts ratified by a majority vote of the
directors present at a meeting at which a quorum is present shall be an act of
the Board of Directors.

      5.09 Unanimous Consent Without Meeting. Any action required or permitted
by the Articles of Incorporation or Bylaws or any provision of law to be taken
by the Board of Directors at a meeting or by resolution may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the directors then in office.

      5.10 General Powers and Duties, Management, Records, Reports. The
directors shall control the affairs and business of the cooperative. They shall
have installed and maintained an adequate accounting system and require proper
records of all business transactions to be kept and audited, and reports to be
made to the Secretary of State and other officials annually or


                                     - 5 -


otherwise as required by law. Records shall include patronage by each holder of
each class of stock and capital investment of each member class by each member.

      5.11 Compensation. The Board of Directors is authorized to establish the
per diem, mileage and reimbursement for all reasonable and necessary expenses as
compensation for directors incurred in performing the duties of their office.

      5.12 Employees. a. The directors shall employ a manager who shall have
general charge of the ordinary and usual business operations of the cooperative
under and subject to general policies established by the directors. The duties
of the manager shall include attendance at meetings of the Board of Directors,
except that he may be excused when his salary is under review.

      b. The directors shall fix the compensation for the manager and the limits
within which compensation may vary for all other employees.

      5.13 Bonds. The directors may require every officer, manager and employee
to whom funds or other property of the cooperative are entrusted, or who is
empowered to disburse or authorize the disbursement of its funds, or is charged
with making or keeping its records, to furnish at cooperative expense a bond in
such amount as the directors shall determine.

      5.14 Insurance. The directors shall provide for the adequate insurance of
the property of the cooperative and property in its possessions or stored by it,
and not otherwise adequately insured, and for adequate insurance covering
liability to employees and the public subject to annual review.

      5.15 Corporate Seal. The Board of Directors may adopt, alter or abandon
the use of the corporate seal.

                                     BYLAW 6
                                    Officers

      6.01 Election. The directors, at their annual meeting, shall elect a
president and one or more vice-presidents. They shall also elect a secretary and
a treasurer or secretary-treasurer. The term of each officer shall be for one
(1) year, or until his successor is elected and qualified. The directors may
elect such other officers as they deem necessary.

      6.02 Procedure. Officers shall be elected by a unanimous vote of the
directors.

      6.03 Removal. Officers are not subject to removal during their term of
office except upon cause after hearing.


                                     - 6 -


      6.04 Duties. Each officer shall perform the duties which usually and
customarily are ascribed to his office, and such as are described by law. The
Board of Directors may delegate some of the duties of the secretary and the
treasurer, or secretary-treasurer, to an employee or employees of the
cooperative.

      6.05 Check Signing. All checks, notes, bills of exchange and other
instruments calling for the payment of money which shall be issued by the
cooperative shall be signed by such officers or employees as the Board of
Directors may from time to time designate.

      6.06 Compensation. The Board of Directors may set the compensation for
officers.

                                     BYLAW 7
                          The President and the Manager

      7.01 Other Business Forbidden. Neither the president nor the manager shall
engage in business of like nature to that of the cooperative or be employed by
anyone else in such a business.

      7.02 General Powers and Duties. The president and the manager shall have
general charge of the ordinary and usual business operations of the cooperative,
under and subject to the direction, approval and control of the directors.

      7.03 Accounts. The president shall be required to maintain his records and
accounts in such manner that the condition of the business may be correctly
ascertained therefrom at any time. He shall render annual and periodical
statements in the form and manner prescribed by the directors. He shall
carefully preserve all books, documents, correspondence and records of whatever
kind pertaining to the business which may come into his possession.

      7.04 Help. The manager may employ and discharge help, subject to the
general employment policies established by the Board of Directors.

      7.05 Funds. The manager shall handle and account for, in the manner and
form prescribed by the president and directors, all money and other property
belonging to the cooperative which shall come into his possession.

                                     BYLAW 8
                                  Net Proceeds

      8.01 Arriving at the Net Proceeds. At least once annually the directors
shall determine from the total proceeds the net proceeds by making the following
deductions:


                                     - 7 -


      a. All operating expenses and costs;

      b. The cost of supplies, commodities, equipment and other property or
service procured or sold for patrons;

      c. The cost of services performed for patrons;

      d. All taxes and all other expenses;

      e. Reasonable and necessary reserves for depreciation, depletion and
obsolescence of physical property, doubtful accounts and other valuation
reserves, all of which shall be established in accordance with usual and
customary accounting practices.

      The remainder of the total proceeds after the foregoing deductions are
"net proceeds."

      8.02 Distribution of Net Proceeds. The net proceeds shall be distributed
and paid as follows:

      a. A share of the net proceeds may be set aside for or paid to officers or
employees, or both. Such amount shall, pursuant to Section 185.45(2)of the
Wisconsin Statutes for all purposes except the computation of net proceeds, be
deemed an expense of operation of the cooperative.

      b. Dividends may be paid on common stock as authorized by the Articles.

      c. The remainder of the net proceeds shall be distributed as follows:

            1. Any of the net proceeds may be credited to allocated or
unallocated surplus reserves; or reasonable reserves for necessary purposes may
be created which may be credited to member patrons in accordance with the ratio
which their patronage bears to total patronage;

            2. All the remainder of the net proceeds shall be distributed to
member patrons only in accordance with the ratio which their patronage bears to
total patronage;

            3. Distributions to member producers of dairy farm products, or
associations thereof, may be in the form of equity capital credits and
certificates rather than cash.

                                     BYLAW 9
                                Capital Structure

      9.01 Capital. This cooperative shall be so operated that the current and
active member patrons will furnish money for capitalizing the cooperative.


                                     - 8 -


      9.02 Evidence. The capital furnished by member patrons shall be evidenced
by the certificates set forth in the Articles of Incorporation (Article IV) and
by the issuance of credits in capital ledger accounts to the patron annually by
written notice.

      9.03 Revolving Capital. The capital, however evidenced, may be revolved
from time to time as funds are determined by the Board of Directors to be
available for that purpose.

      9.04 Transfers and Retirement. a. All forms of evidence of capital
ownership shall be transferable only on the books of the cooperative. Capital
furnished by members shall be retired fully or on a pro rata basis only at the
discretion of the Board of Directors in the same order as originally issued by
years. The Board of Directors shall also have the power to, at any time, pay off
and retire any form of evidence of capital ownership held by individual owners
to compromise or settle a dispute, to assist in the settling of any estate in
probate, or in bankruptcy or otherwise when such action appears advantageous to
the cooperative.

      b. When purchasing or retiring any form of evidence of capital ownership,
the cooperative, in making payment therefor, may deduct any sum owing to it by
the holder.

      9.05 Conditions. Every form of certificate issued to evidence any capital
ownership shall be subject to such terms and conditions, not inconsistent with
the Articles of Incorporation and these Bylaws, as may be prescribed from time
to time by the Board of Directors. Such terms and conditions shall appear on the
certificate.

      9.06 Patron's Tax Obligation on Patronage Refunds. a. Each person who
hereafter applies for and is accepted to membership in this cooperative and each
member of this cooperative on the effective date of these Bylaws who continues
as a member after such date shall, by such act alone, consent that the amount of
any distributions with respect to his patronage occurring for fiscal years
commencing after December 31, 1962, which are made in written notices of
allocation (as defined in Title 26, United States Code, Section 1388) and which
are received by him from the cooperative, will be taken into account by him at
their stated dollar amounts in computing gross income in the manner provided in
Title 26, United States Code, Section 1385(a), in the taxable year in which such
written notices of allocation are received by him.

      b. This provides that each member of the cooperative who retains his or
its membership after the adoption of this Bylaw or becomes a member after
adoption of this Bylaw, consents that any patronage distributions with respect
to his patronage occurring after a specified date, which are made in written
notices of


                                     - 9 -


allocation in accordance with the Internal Revenue Code as amended by the
Revenue Act of 1962, will be included in his or its income at their stated
dollar amounts.

      9.07 Losses. In the event the cooperative suffers a loss in any year, the
Board of Directors shall prescribe the basis on which the capital furnished by
the patrons shall be reduced on account of any such loss so that it will be
borne by the patrons on a basis deemed equitable by the Board of Directors.

                                    BYLAW 10
                                   Fiscal Year

      10.01 The fiscal year of this cooperative shall end on the Saturday
nearest to December 31.

                                    BYLAW 11
                               Amendment of Bylaws

      11.01 Any Bylaw may be adopted, amended or repealed by a unanimous vote at
any regular member meeting, or at any special meeting where a statement of the
nature of the amendment has been contained in the notice of such special
meeting.

      11.02 The Board may not alter or repeal any Bylaw adopted by the members
of the cooperative, but may by unanimous vote adopt additional Bylaws in harmony
therewith. Any Bylaw adopted by the Board shall be reported at the next regular
member meeting.

These Bylaws were amended by the voting members of the cooperative on May 17,
1989.


                             /s/ John D. Reedy
                             ------------------------------
                             John D. Reedy
                             Vice President/Finance


                                     - 10 -

EX-3.9

                                                                 Exhibit 3.9

                           ARTICLES OF INCORPORATION
                                       OF
                MICHAEL FOODS REFRIGERATED DISTRIBUTION COMPANY

      The undersigned incorporator, being a natural person of full age, in order
to form a corporation under Minnesota Statutes, Chapter 302A, hereby adopts the
following Articles of Incorporation:

                                   ARTICLE I

      The name of this Corporation is Michael Foods Refrigerated Distribution
Company.

                                   ARTICLE II

      The registered office of this Corporation is located at 5353 Wayzata
Boulevard, 324 Park National Bank Building, Minneapolis, Minnesota, 55416. The
registered agent at that address is: John D. Reedy.

                                  ARTICLE III

      3.01 The aggregate number of shares of stock which this Corporation shall
have the authority to issue is 1,500 shares.

      3.02 The Board of Directors may, from time to time, establish by
resolution different classes or series of shares and may fix the rights and
preferences of said shares in any class or series.

      3.03 The Board of Directors shall have the authority to issue shares of a
class or series to holders of shares of another class or series to effecturate
share dividends, splits, or conversion of its outstanding shares.

      3.04 No shareholder of the Corporation shall have any preemptive rights.

      3.05 No shareholder shall be entitled to any cumulative voting rights.

      3.06 The shareholders shall take action by the affirmative vote of the
holders of seventy-five (75%) percent of the voting power of the shares present,
except where a larger portion is required by law or these Articles.

                                   ARTICLE IV

      An action required or permitted to be taken by the Board of Directors of
this Corporation may be taken by written action signed by that number of
directors that would be required to take


the same action at a meeting of the Board at which all directors are present,
except as to those matters requiring shareholder approval, in which case the
written action must be signed by all members of the Board of Directors then in
office.

                                   ARTICLE V

      A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for (1) liability based on a breach of the duty of
loyalty to the corporation or the shareholders; (ii) liability for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law; (iii) liability based on the payment of an improper dividend
or an improper repurchase of the corporation's stock under Section 559 of the
Minnesota Business Corporation Act (Minnesota Statutes, Chap. 302A) or; (iv)
liability for any transaction from which the director derived an improper
personal benefit. If Chapter 302A, the Minnesota Business Corporation Act
hereafter is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the corporation in
addition to the limitation on personal liability provided herein, shall be
limited to the fullest extent permitted by the amended Chapter 302A, the
Minnesota Business Corporation Act. Any repeal or modification of this Article
by the shareholders of the corporation shall be prospective only and shall not
adversely affect any limitation on the personal liability of a director of the
corporation existing at the time of such repeal or modification.

                                   ARTICLE VI

      The name and address of the incorporator is: Philip T. Colton, Esq., Maun
& Simon, 3500 West 80th Street, Suite 520, Minneapolis, Minnesota, 55431.

                                  ARTICLE VII

      The names and addresses of the first Board of Directors is:

      Richard G. Olson
      5353 Wayzata Boulevard
      324 Park National Bank Building
      Minneapolis, Minnesota 55416

      Jeffrey M. Shapiro
      5353 Wayzata Boulevard
      324 Park National Bank Building
      Minneapolis, Minnesota 55416


                                      -2-


                                  ARTICLE VIII
                             AMENDMENT OF ARTICLES

      These Articles of Incorporation may be amended by the affirmative vote of
the holder or holders of the majority of the voting power of the common stock
present at a shareholders' meeting wherein said amendments are submitted to a
vote.

      IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of May,
1990.


                                        /s/ Philip T. Colton
                                        ----------------------
                                        Philip T. Colton, Esq.

STATE OF MINNESOTA
DEPARTMENT OF STATE
       FILED
    MAY 25 1990
  /s/ [ILLEGIBLE]
 Secretary of State


                                      -3-


                               State of Minnesota

                               ------------------
                               SECRETARY OF STATE
                               ------------------

                          CERTIFICATE OF INCORPORATION

      I , Joan Anderson Growe, Secretary of State of Minnesota, do certify that:
Articles of Incorporation, duly signed and acknowledged under oath, have been
filed on this date in the Office of the Secretary of State, for the
incorporation of the following corporation, under and in accordance with the
provisions of the chapter of Minnesota Statutes listed below.

      This corporation is now legally organized under the laws of Minnesota.

      Corporation Name: Michael Foods Refrigerated
      Distribution Company

      Corporate Charter Number : 6R-760

      Chapter Formed Under: 302A

      This certificate has been issued on 05/25/1990.


      [State Seal]                      /s/ Joan Anderson Growe
                                        -----------------------
                                            Secretary of State.


                           ARTICLES OF INCORPORATION
                                       OF
                MICHAEL FOODS REFRIGERATED DISTRIBUTION COMPANY

      The undersigned incorporator, being a natural person of full age, in order
to form a corporation under Minnesota Statutes, Chapter 302A, hereby adopts the
following Articles of Incorporation:

                                   ARTICLE I

      The name of this Corporation is Michael Foods Refrigerated Distribution
Company.

                                   ARTICLE II

      The registered office of this Corporation is located at 5353 Wayzata
Boulevard, 324 Park National Bank Building, Minneapolis, Minnesota, 55416. The
registered agent at that address is: John D. Reedy.

                                   ARTICLE III

      3.01 The aggregate number of shares of stock which this Corporation shall
have the authority to issue is 1,500 shares.

      3.02 The Board of Directors may, from time to time, establish by
resolution different classes or series of shares and may fix the rights and
preferences of said shares in any class or series.

      3.03 The Board of Directors shall have the authority to issue shares of a
class or series to holders of shares of another class or series to effecturate
share dividends, splits, or conversion of its outstanding shares.

      3.04 No shareholder of the Corporation shall have any preemptive rights.

      3.05 No shareholder shall be entitled to any cumulative voting rights.

      3.06 The shareholders shall take action by the affirmative vote of the
holders of seventy-five (75%) percent of the voting power of the shares present,
except where a larger portion is required by law or these Articles.

                                   ARTICLE IV

      An action required or permitted to be taken by the Board of Directors of
this Corporation may be taken by written action signed by that number of
directors that would be required to take


the same action at a meeting of the Board at which all directors are present,
except as to those matters requiring shareholder approval, in which case the
written action must be signed by all members of the Board of Directors then in
office.

                                   ARTICLE V

      A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for (i) liability based on a breach of the duty of
loyalty to the corporation or the shareholders; (ii) liability for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law; (iii) liability based on the payment of an improper dividend
or an improper repurchase of the corporation's stock under Section 559 of the
Minnesota Business Corporation Act (Minnesota Statutes, Chap. 302A) or; (iv)
liability for any transaction from which the director derived an improper
personal benefit. If Chapter 302A, the Minnesota Business Corporation Act
hereafter is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the corporation in
addition to the limitation on personal liability provided herein, shall be
limited to the fullest extent permitted by the amended Chapter 302A, the
Minnesota Business Corporation Act. Any repeal or modification of this Article
by the shareholders of the corporation shall be prospective only and shall not
adversely affect any limitation on the personal liability of a director of the
corporation existing at the time of such repeal or modification.

                                   ARTICLE VI

      The name and address of the incorporator is: Philip T. Colton, Esq., Maun
& Simon, 3500 West 80th Street, Suite 520, Minneapolis, Minnesota, 55431.

                                  ARTICLE VII

      The names and addresses of the first Board of Directors is:

      Richard G. Olson
      5353 Wayzata Boulevard
      324 Park National Bank Building
      Minneapolis, Minnesota 55416

      Jeffrey M. Shapiro
      5353 Wayzata Boulevard
      324 Park National Bank Building
      Minneapolis, Minnesota 55416


                                      -2-


                                  ARTICLE VIII
                             AMENDMENT OF ARTICLES

      These Articles of Incorporation may be amended by the affirmative vote of
the holder or holders of the majority of the voting power of the common stock
present at a shareholders' meeting wherein said amendments are submitted to a
vote.

      IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of May,
1990.


                                                /s/ Philip T. Colton
                                                ----------------------
                                                Philip T. Colton, Esq.

STATE OF MINNESOTA
DEPARTMENT OF STATE
       FILED
    MAY 25 1990
 /s/ [ILLEGIBLE]
 Secretary of State


                                      -3-


        [STATE SEAL]                    RECEIPT NUMBER 452710
                                        TRANSACTION NUMBER [ILLEGIBLE]
                                                           ---------------------
    JOAN ANDERSON GROWE                                   (For Office Use Only)
     SECRETARY OF STATE
     STATE OF MINNESOTA
  180 STATE OFFICE BUILDING
  ST. PAUL, MINNESOTA 55155
FOR FURTHER INFORMATION CALL:
  Repts/Renewals    612/296-9214
  UCC               612/296-2434       [ILLEGIBLE]
  Corporations      612/296-2803
  Elections         612/296-2805                      BUS SER 135.00
  Data Services     612/296-6251                      EXP       5.00
  Refunds           612/296-7976                                TOTL    140.00
                                       [ILLEGIBLE]: 30MAY 25#01 CHCK    140.00

                                                                                                 
52   300   302A   303   308A   317   317A   318   319A   322A   333   1,500 LINE 04             100-   --
|_| A   |_| C   |_| CN   |_| CT   |_| ID   |_| NH   |_| R    |_| RI   |_| RO   |_| TR
|_| AD  |_| CA  |_| CO   |_| D    |_| M    |x| OR   |_| RA   |_| RLP  |_| RQ   |_| VD
|_| AM  |_| CL  |_| CS   |_| EL   |_| MH   |_| OT   |_| RD   |_| RN   |_| TMA  |_| WD
|_| Service of Process     |_| Legal Newspaper      |_|  Auctioneer   |_| Annual Report          35    --
|_| Other:                         |_| Tax ____________
|_| Print Out ____   |_| Statistics ____   |_| Labels ____   |_| Tape ____  |_| Postage ____
UCC Filing: |_| FS |_| NS |_| OS |_| CONT |_| ASSIGN |_| AMEND |_| PR |_| TERM
Search - Initial Fee: |_| FSS |_| NS FSS |_| TLS |_| NS TLS
|_| Listing   |_| PhotoCopy   |_| Certified Copy   |_| Certificate
|_| Additional Fee ____ |_| Surcharge |x| Exp. Service                                            5    --



RE: Michael Foods Refridgerated         TOTAL FEES                      140.00
    Distribution Company                AMOUNT PAID                     140.00

Remitter                                ADDITIONAL FEE DUE
   Maun & Simon                         (PLEASE PUT RECEIPT
   2300 World Trade Cetner              NUMBER LOCATED AT TOP
   St. Paul MN 55101                    OF THIS FROM ON ALL
   Bob W.                               YOUR REMITTANCES:

                                        REFUND
                                        ($1.00 OR LESS WILL
                                        NOT BE REFUNDED PURSUANT
                                        TO M.S. 16A .49.)

                                        OFFICE REFERENCE NUMBER
                                        DATE FILED 5/25/90 [ILLEGIBLE]

                                        YOU WILL RECEIVE A REFUND CHECK FOR
                                        ANYTHING OVER $1.00 WITHIN A FEW WEEKS
                                        FROM THE DEPT. OF FINANCE.

                                        THANK YOU FOR YOUR BUSINESS!

SC-00085-07
WHITE OR PINK: Customer
CANARY: Office Routing Copy Fiscal Operations
GOLDENROD: Fiscal Operations


                               STATE OF MINNESOTA

                                  [STATE SEAL]

                              DEPARTMENT OF STATE

This is to acknowledge that the items described below have been accepted by the
Secretary of State of Minnesota on the date noted. Those documents will be
microfilmed and the original will be returned to the submitter within ten days.
The microfilm will be available for public inspection at the office of the
Secretary of State.

- --------------------------------------------------------------------------------
Description of Item     Date Accepted           RI No. NOT VALID UNTIL
                                                RI NUMBER IS AFFIXED
Articles                5/25/90                         452710
- --------------------------------------------------------------------------------
COMPANY NAME
Michael Foods Refrigerated Distribution Company
- --------------------------------------------------------------------------------

        State of Minnesota
 Office of the Secretary of State               by: /s/ [ILLEGIBLE]
       Corporation Division                         ----------------------
    180 State Office Building                       Evidence of Filing
St. Paul, MN 55155 (612) 296-2803

                                                                     SC-00184-01

EX-3.10

                                                                   Exhibit 3.10

                                   BYLAWS OF
                MICHAEL FOODS REFRIGERATED DISTRIBUTION COMPANY

                                   ARTICLE I
                               LOCATION AND SEAL

      Section 1. The registered place of business of this Corporation may be
transferred to such place as the Board of Directors may from time to time
determine and certify to the Secretary of State, and other offices for the
transaction of business may be located at such place as the Board of Directors
may deem desirable.

      Section 2. There shall be NO CORPORATE SEAL for this corporation.

                                   ARTICLE II
                            MEETINGS OF SHAREHOLDERS

      Section 1. Meetings of the shareholders of this corporation shall be held
at the registered office of the corporation or at such place as is designated by
the Board of Directors or by consent of holders of a majority of shares entitled
to vote thereat.

      Section 2. The regular meeting of the shareholders of this corporation
shall be held on or before the last day of May of each year. The regular meeting
may be called by the president or two directors. At such meeting the
shareholders shall elect a Board of Directors to serve for a term of one year or
until the next regular meeting of shareholders and until their successors are
elected and qualified. The shareholders shall transact such other business at
the regular meeting as may properly come before them. A regular meeting of
shareholders shall be called at least once every three (3) years.

      Section 3. Special meetings of the shareholders may be called for any
purpose at any time by the president, by the Board of Directors or by any more
member thereof.

      Section 4. Every holder of common stock of this corporation shall be
entitled to one (1) vote for each share held in his or her name on the books of
the corporation. Such votes may be cast by each shareholder either in person or
by proxy.

      A majority of the shares of common stock issued and outstanding,
represented in person or by proxy, shall constitute a quorum for the transaction
of business at any meeting, but the shareholders present at any meeting, though
less than a quorum, may adjourn the meeting to a future time.

      Section 5. Written notice of the holding of the regular meeting or any
special meeting of shareholders shall be mailed to each shareholder entitled to
vote thereat at least ten (10) days but not more than sixty (60) days prior to
the meeting. Such notice shall state the time and place of the meeting and the


purpose of the meeting if it is a special meeting. It shall be mailed to the
last known address of such shareholder as the same appears upon the books of the
corporation. Notice may be waived in writing either before or after the meeting.

      Section 6. Any action required or permitted to be taken at a meeting of
the shareholders may be taken without a meeting as authorized by law.

                                  ARTICLE III
                                   DIRECTORS

      Section 1. The Board of Directors of this corporation shall have the
management and control of the business, of the property and of the affairs of
the corporation, and it shall have all the powers that may be exercised and
performed by the corporation pursuant to law, to the Articles of Incorporation
and to the Bylaws.

      Section 2. The Board of Directors shall consist of not less than two (2)
members, which number may be increased by the board without amendment of the
Articles or Bylaws. Directors shall be elected by the holders of the common
stock at the regular meeting of shareholders. Each director shall hold office
until the next regular meeting of shareholders or until his or her successor
shall be elected and qualified, but such indefinite term shall not exceed five
years.

      Section 3. Whenever any vacancy shall occur in the Board of Directors by
death, resignation, increase in the number of directors or otherwise, such
vacancy may be filled by the affirmative vote of a majority of the remaining
directors, though less than a quorum, of the Board of Directors. If, after such
resignation, no director remains, then any vacancy may be filled by a majority
vote of the shareholders at a special meeting called for the purpose of such
election. A director so elected to fill a vacancy shall be a director until his
or her successor is elected by the shareholders, who may make such election at
the next regular meeting or at any special meeting of such shareholders called
for that purpose.

      Section 4. The meetings of the Board of Directors of this corporation,
both regular and special, shall be held at such place as the directors may from
time to time determine.

      Section 5. The Board of Directors shall meet immediately after the final
adjournment of each regular meeting of shareholders, for the purpose of
organization, election of officers and consideration of any other business that
may properly be brought before the meeting. No notice of any kind to either old
or new members of the Board of Directors for such meeting shall be necessary.


                                      -2-


      Section 6. Special meetings of the Board of Directors may be called by the
president or any member of the Board of Directors. Notice of all special
meetings shall be mailed by the Secretary to each director at least five (5)
days prior to the time fixed for the meeting. All notices of special meetings
shall state the purpose thereof. Notice may be waived in writing or by telegram
before or after any meeting.

      Section 7. A majority of the Board of Directors shall constitute quorum
for the transaction of business. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors except as may be otherwise specifically provided by statute, by the
Articles of Incorporation or by these Bylaws.

      Section 8. To the full extent permitted by the Minnesota Business
Corporation Act, as the same exists or may hereby be amended, a director of this
corporation shall not be personally liable to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director.

                                   ARTICLE IV
                                   COMMITTEES

      Section 1. Committees. The Board of Directors may appoint from among its
own members such committees as the Board may determine, which shall in each case
consist of not less than one director, and which shall have such powers and
duties as shall from time to time be prescribed by the Board. The President
shall be a member ex officio of each committee appointed by the Board of
Directors.

      Section 2. Rules of Procedure. A majority of the members of any committee
may fix its rules of procedure. All action by any committee shall be reported to
the Board of Directors at a meeting succeeding such action and shall be subject
to revision, alteration, and approval by the Board of Directors; provided that
no rights or acts of third parties shall be affected by any such revision or
alteration.

                                   ARTICLE V
                                    OFFICERS

      Section 1. The officers of this corporation shall consist of a president,
one or more vice presidents, a secretary, a treasurer and such other officers
and assistant officers and agents as may be deemed necessary by the Board of
Directors. Any two (2) or more offices may be held by the same person.

      Section 2. Whenever any vacancy shall occur in any office by death,
resignation, increase in the number of offices of the corporation or otherwise,
such vacancy shall be filled by an


                                      -3-


affirmative vote of a majority of the Board of Directors, and such officer so
elected shall hold office until his successor is elected and qualified.

      Section 3 - President. The president shall be the chief executive officer
and shall have general charge of the business and affairs of the corporation and
perform such other duties as the Bylaws or the Board of Directors shall from
time to time prescribe.

      Section 4 - Vice President(s). A vice president shall perform all duties
incumbent upon the president during the absence or disability of the president
and shall perform such other duties as these Bylaws may require or the Board of
Directors shall prescribe.

      Section 5 - Secretary. The secretary shall:

            A. Keep the minutes of the meetings of the shareholders and of the
      Board of Directors in books provided for that purpose;

            B. See that all notices are duly given in accordance with the
      provisions of these Bylaws and as required by law;

            C. Be custodian of the records of the corporation;

            D. Keep a register of the post office address of each shareholder
      and make all proper changes in such register, retaining and filing his or
      her authority for all such entries;

            E. See that all books, reports, statements, certificates and all
      other documents and records required by law are properly kept and filed;
      and

            F. In general, perform all duties incident to the office of
      secretary and such other duties as these Bylaws may require or the Board
      of Directors may prescribe.

      Section 6 - Treasurer. The treasurer shall be the chief financial officer
and shall keep correct and complete records of accounts, showing accurately at
all times the financial position of the corporation. In addition, he or she
shall:

            A. Have charge and custody of and be responsible for all funds and
      securities of the corporation and deposit all such funds in the name of
      the corporation in such banks, trust companies and other depositories as
      shall be selected by the Board of Directors in accordance with the
      provisions of these Bylaws;

            B. At all times exhibit his or her books of account and records to
      any of the directors of this corporation or any other persons legally
      entitled to


                                      -4-


      inspect said books and records upon application during business hours at
      the office of this corporation or such other place where such books are
      kept;

            C. Render statements of the condition of finance of the corporation
      at all regular meetings of the Board of Directors and at meetings of the
      shareholders if called upon to do so;

            D. Receive and give receipts for all money payments to the
      corporation from any source whatsoever; and

            E. In general, perform all duties incident to and customarily
      performed by such officer and perform such other duties as these Bylaws
      may require or the Board of Directors may prescribe.

      Section 7. In the case of absence of any officer of the corporation, or
for any other reason that the board may deem sufficient, the Board of Directors
may delegate the powers or duties of such officer to any other officer or to any
director or employee of the corporation, for the time being, provided that the
majority of the entire Board of Directors concurs therein.

                                   ARTICLE VI
                                INDEMNIFICATION

      The corporation shall provide indemnification as follows:

            A. Persons who are or were directors or officers of the corporation
      or who are or were serving at the request of the corporation as directors,
      officers, employees or agents of another corporation, partnership, joint
      venture, trust or other enterprise shall be indemnified by the corporation
      to the full extent required by law under the state of incorporation as now
      or hereafter in force.

            B. Persons who are or were directors or officers of the corporation
      shall be indemnified by the corporation to the full extent permitted by
      law under the state of incorporation as now or hereafter in force in
      respect of matters arising out of service in their capacities as such or
      arising out of service at the request of the corporation as directors,
      officers, agent, or employees of another corporation, partnership, joint
      venture, trust or other enterprise, provided that a determination shall
      have been made by a disinterested quorum of directors, independent legal
      counsel or the shareholders that the person acted in good faith and in a
      manner he or she reasonably believed to be in or not


                                      -5-


      opposed to the best interests of the corporation and with respect to any
      criminal matter, had no reasonable cause to believe his conduct was
      unlawful.

            C. Persons who are or were directors or officers of the corporation
      shall be entitled to the payment of expenses (including attorneys' fees)
      in advance of a final disposition of a matter, provided that there shall
      have been a preliminary determination by a disinterested quorum of
      directors, independent legal counsel, or the shareholders that there is a
      reasonable basis for a belief that such person met the applicable standard
      of conduct set forth in clause B, and provided that the corporation
      receives an undertaking by or on behalf of such person reasonably assuring
      that the amount of such payment will be repaid unless it shall ultimately
      be determined that he is entitled to indemnification by the corporation.

      If Chapter 302A, the Minnesota Business Corporations Act, hereafter is
amended to authorize the further elimination or limitation of the liability of
directors or officers, then the liability of a director or officer of the
Corporation in addition to the limitation on personal liability provided herein,
shall be limited to the fullest extent permitted by Chapter 302A, the Minnesota
Business Corporations Act. Any repeal or modification of this provision by the
shareholders of the Corporation shall be prospective only and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation existing at the time of such repeal or modification.

                                  ARTICLE VIII

      These Bylaws may be altered, amended or repealed:

            A. At any regular or duly called special meeting of shareholders at
      which a quorum is present, by the affirmative vote of a majority of the
      stock entitled to vote at such meetings and present or represented
      thereat; or

            B. At any regular meeting of the Board of Directors or at any
      special meeting of the board, if notice of the proposed alteration or
      amendment or repeal is contained in the notice of such special meeting, by
      the affirmative vote of a majority of the Board of Directors at such
      meeting at which a quorum is present.


                                      -6-


                                 CERTIFICATION

      I, Jeffrey M. Shapiro, secretary of Michael Foods Refrigerated
Distribution Company, hereby certify that the Bylaws were adopted by the Board
of Directors of said on the 25th day of May, 1990.


                                        /s/ Jeffrey M. Shapiro
                                        ----------------------------------------
                                                      Secretary


                                      -7-

EX-3.11

                                                                  Exhibit 3.11

                           ARTICLES OF INCORPORATION

                                       OF

                            MINNESOTA PRODUCTS, INC.

                                * * * * * * * * *

      The undersigned, being a natural person of the age of twenty-one (21)
years or more, acting as incorporator of a corporation under the provisions of
the Minnesota Business Corporation Act, being Chapter 301 of Minnesota Statutes,
as amended, adopt the following Articles of Incorporation:

                                    ARTICLE I

      The name of this corporation shall be MINNESOTA PRODUCTS, INC.

                                   ARTICLE II

      The period of duration of this corporation shall be perpetual.

                                   ARTICLE III

      The purposes for which this corporation is organized are as follows:

      (a)   General business purposes.

      (b)   To do everything necessary, proper, advisable or convenient for the
            accomplishment of the purposes hereinabove set forth and to do all
            other things incidental thereto or connected therewith which are not
            forbidden by the laws under which this corporation is organized, by
            other laws, or by these Articles of Incorporation.



                                   ARTICLE IV

      This corporation shall have all the powers granted to private corporations
organized for profit by said Minnesota Business Corporation Act, and in
furtherance and not in limitation of the powers conferred by the laws of the
State of Minnesota upon corporations organized for the foregoing purposes, the
corporation shall have the power:

      (a)   To acquire, hold, mortgage, pledge or dispose of the shares, bonds,
            securities or other evidences of indebtedness of the United States
            of America, or of any domestic or foreign corporation, and while the
            holder of such shares, to exercise all the privileges of ownership,
            including the right to vote thereon, to the same extent as a natural
            person might or could do, by the president of this corporation or by
            proxy appointed by him, unless some other person, by resolution of
            the Board of Directors, shall be appointed to vote such shares.

      (b)   To purchase or otherwise acquire on such terms and in such manner as
            the By-Laws of this corporation from time to time provide, and to
            own and hold shares of the capital stock of this corporation, and to
            reissue the same from time to time.

      (c)   When and as authorized by the vote of the holders of not less than a
            majority of the shares entitled to vote, at a shareholders' meeting
            called for that purpose or when authorized upon the written consent
            of the holders of a majority of such shares, to sell, lease,
            exchange, or otherwise dispose of all, or substantially all, of its
            property and assets, including its goodwill, upon such terms and for
            such considerations, which may be money, shares, bonds, or other
            instruments, as the Board of Directors deems expedient or advisable.

      (d)   To acquire, hold, lease, encumber, convey, or otherwise dispose of,
            either alone or in conjunction with others, real and personal
            property within or without the state; and to take real and personal
            property by Will or gift.


                                      -2-


      (e)   To acquire, hold, take over as a going concern and thereafter to
            carry on, mortgage, sell or otherwise dispose of, either alone or in
            conjunction with others, the rights, property and business of any
            person, entity, partnership, association, or corporation heretofore
            or hereafter engaged in any business, the purpose of which is
            similar to the purposes set forth in Article III of these Articles
            of Incorporation.

      (f)   To enter into any lawful arrangement for sharing of profits, union
            of interest, reciprocal association or cooperative association with
            any corporation, association, partnership, individual, or other
            legal entity, for the carrying on of any business, the purpose of
            which is similar to the purposes set forth in Article III of these
            Articles of Incorporation, and, insofar as it is lawful, to enter
            into any general or limited partnership, the purpose of which is
            similar to such purposes.

                                    ARTICLE V

      Any agreement for consolidation or merger with one of more foreign or
domestic corporations may be authorized by vote of the holders of a majority of
the shares entitled to vote.

                                   ARTICLE VI

      The location and post office address of the registered office of this
corporation in the State of Minnesota is 707 Degree of Honor Building, St. Paul,
Minnesota.

                                   ARTICLE VII

      The aggregate number of shares which this corporation


                                      -3-


shall have authority to issue is 25,000 shares with a par value of $1.00 per
share, having an aggregate par value of $25,000, which shall be known as "Common
Stock".

      (a)   The holders of the Common Stock shall be entitled to receive, when
            and as declared by the Board of Directors, out of earnings or
            surplus legally available therefor, dividends, payable either in
            cash, in property, or in shares of the capital stock of the
            corporation.

      (b)   The Common Stock may be allotted as and when the Board of Directors
            shall determine, and, under and pursuant to the laws of the State of
            Minnesota, the Board of Directors shall have the power to fix or
            alter, from time to time, in respect to shares then unallotted, any
            or all of the following: the dividend rate; the redemption price;
            the liquidation price; the conversion rights and the sinking or
            purchase fund rights of shares of any class. The Board of Directors
            shall also have the power to fix the terms, provisions and
            conditions of options to purchase or subscribe for shares of any
            class or classes, including the price and conversion basis thereof,
            and to authorize the issuance thereof.

      (c)   No holder of stock of the corporation shall be entitled to any
            cumulative voting rights.

      (d)   No holder of stock of the corporation shall have any preferential
            pre-emptive, or other right of subscription to any shares of any
            class of stock of the corporation allotted or sold, or to be
            allotted or sold, and now or hereafter authorized, or to any
            obligations convertible into stock of the corporation of any class,
            nor any right of subscription to any part thereof.

                                  ARTICLE VIII

      The amount of stated capital with which this corporation


                                      -4-


will begin business will not be less than $1,000.

                                   ARTICLE IX

      Meetings of the shareholders, whether annual or special, shall be held at
the registered office of the corporation at such time and date as may be fixed
by the By-Laws, or at any other place designated by the Board of Directors
pursuant to the By-Laws or consented to in writing by all of the shareholders
entitled to vote thereat.

                                    ARTICLE X

      Section 1. The business of this corporation shall be managed by a Board of
Directors who shall be elected at the annual meeting of the shareholders,
provided, however, that vacancies in the Board of Directors may be filled by the
remaining directors and each person so elected shall be a director until his
successor is elected at an annual meeting of the shareholders or at a special
meeting duly called therefor. A director need not be a shareholder.

      Section 2. The Board of Directors shall have authority to make and alter
By-Laws, subject to the power of the shareholders to change or repeal such
By-Laws, provided, however, that the Board shall not make or alter any By-Laws
fixing the number, qualifications, or term of office of Directors.

      Section 3. The number of directors shall be not less


                                      -5-


than one (1) nor more than seven (7); provided however, that the number of
directors shall never be less than three (3) if there are at least three (3)
shareholders of the corporation. The names and post office addresses of the
first directors of the corporation, whose terms of office shall extend until the
first annual meeting of the shareholders, or until their successors are elected
and have qualified, are as follows:

                  Honnen S. Weiss        2301 Edgcumbe Road
                                         St. Paul, Minnesota

                  Judd S. Mulally        1205 W. Como Boulevard
                                         St. Paul, Minnesota

                  Terence O'Loughlin     27 Birchwood Lane
                                         White Bear Lake, Minnesota

                                   ARTICLE XI

      The name and post office address of the incorporator of this corporation
is Honnen S. Weiss, 2301 Edgcumbe Road, St. Paul, Minnesota.

                                   ARTICLE XII

      (a)   No contract or other transaction between the corporation and one or
            more of its directors, officers or principal stockholders, or
            between the corporation and any other corporation, firm, association
            or other entity, in which one or more of such persons are directors
            or officers, or are financially interested, shall be either void or
            voidable for that reason alone, or by reason of the fact that one or
            more interested directors were present at the meeting of the Board,
            or of a committee thereof, which approved such contract or


                                      -6-


            transaction, or that his or their votes were counted for such
            purpose:

            (1)   If the fact of such common directorship, officership or
                  financial interest was disclosed or known to the Board or
                  committee, and the Board or committee approved such contract
                  or transaction by a vote sufficient for such purpose without
                  counting the vote of any interested or common directors; or

            (2)   If such common directorship, officership or financial interest
                  was disclosed or known to the stockholders entitled to vote
                  thereon, and such contract or transaction was approved by vote
                  of the stockholders; or

            (3)   If the contract or transaction was fair and reasonable as to
                  the corporation at the time it was approved by the Board, a
                  committee or the stockholders

            Any such common interested directors may be counted in determining
            the presence of a quorum at the meeting of the Board or of a
            committee which approves such contract or transaction.

      (b)   The corporation shall indemnify any person who was or is a party or
            is threatened to be made a party to any threatened, pending or
            contemplated action, suit or proceeding wherever brought, whether
            civil, criminal, administrative or investigative other than an
            action by or in the right of the corporation by reason of the fact
            that he is or was a director, officer, employee or agent of the
            corporation or is or was serving at the request of the corporation
            as a director, officer, employee or agent of another corporation,
            partnership, joint venture, trust or other enterprise against
            expenses, including attorneys' fees, judgments, fines and amounts
            paid in settlement actually and reasonably incurred by him in
            connection with such action, suit or proceeding if he acted in good
            faith and in a manner he reasonably believed to be in or not opposed
            to the best interests of the corpora-


                                      -7-


            tion and with respect to any criminal action or proceeding had no
            reasonable cause to believe his conduct was unlawful. The
            termination of any action, suit or proceeding by judgment, order,
            settlement, conviction or upon a plea of nolo contendere or its
            equivalent shall not of itself create a presumption that the person
            did not act in good faith and in a manner which he reasonably
            believed to be in or not opposed to the best interests of the
            corporation and with respect to any criminal action or proceeding
            had reasonable cause to believe that his conduct was unlawful.

      (c)   The corporation shall indemnify any person who was or is a party or
            is threatened to be made a party to any threatened, pending or
            contemplated action, suit or proceeding wherever brought, by or in
            the right of the corporation to procure a judgment in its favor by
            reason of the fact that he is or was a director, officer, employee
            or agent of the corporation or is or was serving at the request of
            the corporation as a director, officer, employee or agent of another
            corporation, partnership, joint venture, trust or other enterprise
            against expenses, including attorneys' fees, actually and reasonably
            incurred by him in connection with the defense or settlement of such
            action or suit if he acted in good faith and in a manner he
            reasonably believed to be in or not opposed to the best interest of
            the corporation and except that no indemnification shall be made in
            respect of any claim, issue or matter as to which such person shall
            have been adjudged, be liable for negligence or misconduct in the
            performance of his duty to the corporation unless and only to the
            extent that the court in which such action or suit was brought shall
            determine upon application that despite the adjudication of
            liability but in view of all circumstances of the case, such person
            is fairly and reasonably entitled to indemnity for such expenses
            which such court shall deem proper.

      (d)   To the extent that a director, officer, employee or agent of this
            corporation has been successful on the merits or otherwise in
            defense of any action, suit or proceeding referred to in Article
            XII(b) and Article XII(c) hereof, or in defense of any claim, issue
            or matter therein, he shall


                                      -8-


            be indemnified against expenses, including attorneys' fees actually
            and reasonably incurred by him in connection therewith.

      (e)   Any indemnification under Article XII(b) hereof, unless ordered by a
            court, shall be made by this corporation only as authorized in the
            specific case upon a determination that indemnification to the
            director, officer, employee or agent is proper in the circumstances
            because he has met the applicable standard of conduct as set forth
            in Article XII(b) hereof. Such determination shall be made:

            (1)   By the Board of Directors by a majority vote of a quorum
                  consisting of directors who were not parties to such action,
                  suit or proceeding; or

            (2)   If such a quorum is not obtainable, or even if obtainable, a
                  quorum of disinterested directors so directs by independent
                  counsel in a written opinion; or

            (3)   By the stockholders.

            Any indemnification under Article XII(c) hereof must be ordered by a
            court.

      (f)   Expenses incurred in defending a civil or criminal action, suit or
            proceeding may be paid by the corporation in advance of the final
            disposition of such action, suit or proceeding as authorized by the
            Board of Directors in the manner provided in Article XII(e) hereof
            upon receipt of an undertaking by or on behalf of the director,
            officer, employee or agent to repay such amount unless it shall
            ultimately be determined that he is entitled to be indemnified by
            the corporation as authorized in this section.

      (g)   The indemnification provided by this Article XII shall continue as
            to a person who has ceased to be a director, officer, employee or
            agent and shall inure to the benefit of the heirs, executors and
            administrators of such a person. No provision made to indemnify
            directors or officers for the defense of any civil or criminal
            action or proceeding whether contained in these Articles


                                      -9-


            of Incorporation or in the By-Laws of this corporation, a resolution
            of the shareholders or directors of this corporation, in agreement
            or otherwise, nor any award of indemnification by a court shall be
            valid unless consistent with this Article XII. Nothing herein
            contained shall affect any rights of indemnification to which
            corporate personnel, other than directors and officers, may be
            entitled by contract or otherwise under law.

      (h)   This corporation shall have power to purchase and maintain insurance
            on behalf of any person who is or was a director, officer, employee
            or agent of this corporation or is or was serving at the request of
            this corporation as a director, officer, employee or agent of
            another corporation, partnership, joint venture, trust or other
            enterprise against any liability asserted against him and incurred
            by him in such capacity, provided that no indemnification shall be
            made under any policy of insurance for any act which could not be
            indemnified by this corporation under this Article XII.

      (i)   Where court approval is required under this Article XII, it shall be
            obtained in the manner provided by law. No indemnification,
            advancement or allowance shall be made under this Article XII where
            the same is prohibited by law.

                                  ARTICLE XIII

      Any provision contained in these Articles of Incorporation may be amended
solely by the affirmative vote of the holders of a majority of the stock
entitled to vote.

      IN WITNESS WHEREOF, I have hereunto set my hand this 8 day of September,
1973.

In the presence of:


        /s/ Marvel Ashby
- ---------------------------------


                                                      /s/ Honnen S. Weiss
                                                 -------------------------------
                                                          Honnen S. Weiss


   /s/ Jean M. [ILLEGIBLE]
- ---------------------------------


                                      -10-


STATE OF MINNESOTA     )
                       )    ss.
COUNTY OF RAMSEY       )

      On this 8th day of September, 1973, before me, a Notary Public within and
for said County, personally appeared Honnen S. Weiss, to me known to be the same
person named in the foregoing instrument, and who acknowledged that he executed
the same as his free act and deed.


                                                     /s/ Marvel Ashby
                                              ----------------------------------

                                         ---------------------------------------
                                                             MARVEL ASHBY
                                                     NOTARY PUBLIC - MINNESOTA
                                         [SEAL]             RAMSEY COUNTY
                                                  My Comm. Expires Nov. 14, 1979
                                         ---------------------------------------

- --------------------------------------------------------------------------------

                               STATE OF MINNESOTA

                               DEPARTMENT OF STATE

I hereby certify that the within instrument was filed for record in this office
on the 13 day of Sept. A.D. 1973, at 8:00 o'clock a.m., and was duly recorded in
Book L-41 of incorporations on page 651

                                                          /s/ Arlen L. Erdahl
                                                           Secretary of State

- --------------------------------------------------------------------------------

                               ---------------------

                                [ILLEGIBLE] FILED
                                [ILLEGIBLE] ________
                                [ILLEGIBLE] ________
                                [ILLEGIBLE] ________
                                ____________________
                                ____________________

                               ---------------------

EX-3.12

                                                                  Exhibit 3.12

                                     BY-LAWS

                            MINNESOTA PRODUCTS, INC.

                                   ARTICLE I

                                    OFFICES

      The registered office of the corporation shall be 707 Degree of Honor
Building, St. Paul, Minnesota 55101.

                                   ARTICLE II

                            MEETINGS OF SHAREHOLDERS

      Section 1. Meetings of the shareholders may be held at the registered
office of the corporation or at any other place within or without the State of
Minnesota which may from time to time be designated by the Board of Directors.

      Section 2. The annual meeting of the shareholders of the corporation shall
be held on such day in the month of January of each year as the Board of
Directors shall by resolution fix, for the purposes of electing a Board of
Directors by plurality vote of the shareholders, and transacting such other
business as may properly come before the meeting.

      Section 3. Special meetings of the shareholders may be called for any
purpose or purposes at any time by the Secretary, upon the request of the
President, any Vice President, by the Board of Directors, or by any one or more
members thereof, or upon request by one or more shareholders holding not less
than one-tenth of the voting power of the shareholders, in writing, by
registered mail or delivered in person to the President, any Vice President or
the Secretary, stating the purpose or purposes of such special meeting, a
special meeting of the shareholders shall be called forthwith by such officer
not less than ten nor more than sixty days after the receipt of such request;
and if notice of such meeting shall not be so given within seven days after
delivery or the date of mailing of such request, the person or persons
requesting the meeting may fix the time of meeting and give notice in the manner
provided by law or these By-Laws. The business transacted at any special meeting
of shareholders shall be limited to the purpose or purposes stated in the notice
thereof.



      Section 4. Written notice of each meeting of shareholders, stating the
time and place, and in the case of any special meeting, the purposes thereof,
shall be delivered or mailed to each shareholder entitled to vote at such
meeting, not less than seven days prior to the meeting.

      Section 5. Except as otherwise provided by law or the Articles of
Incorporation of the corporation, the presence, in person or by proxy, of the
holders of sixty percent (60%) of the shares entitled to vote at any meeting of
shareholders shall constitute a quorum for the transaction of business thereat.
In the absence of a quorum, any meeting of shareholders may be adjourned from
time to time by the shareholders present or represented by proxy to the same or
any other place or places without notice other than the announcement at the
meeting at which any such adjournment is taken, until a quorum shall be present
or represented; and at the meeting at which any such adjournment is taken, until
a quorum shall be present or represented; and at any such adjourned meeting at
which a quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally noticed. At any
duly called or held meeting or adjourned meeting at which a quorum is present
the shareholders present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.

      Section 6. At each meeting of shareholders, at which a quorum is present,
each shareholder of record holding voting stock at the date fixed for the
determination of persons entitled to vote at such meeting shall be entitled to
one vote for each share standing in his name on the books of the corporation. A
shareholder may cast his vote in person or by proxy executed in writing by him
or his duly authorized attorney-in-fact and filed with the Secretary of the
corporation before the meeting. Unless otherwise provided in the appointment,
the authority of any such proxy or attorney-in-fact shall cease eleven months
after the appointment. A termination of any such authority shall be ineffective
until written notice thereof has been given to the Secretary of the corporation.
Except as otherwise provided by law or the Articles of Incorporation of the
corporation, the votes of the holders of sixty percent (60%) of the stock having
voting power present or represented at any meeting of shareholders shall decide
all matters brought before such meeting.

      Section 7. Any action which may be taken at a meeting of the shareholders,
may be taken without a meeting if authorized by a writing or writings signed by
all the holders of the shares who would be entitled to notice of a meeting for
such


                                       -2-


purpose. Such action shall be effective on the date on which the last signature
is placed on such writing or writings or such earlier effective date as if set
forth therein.

                                  ARTICLE III

                                   DIRECTORS

      Section 1. The business of the corporation shall be managed by a board of
not less than 1 nor more than 7 directors; provided, however, that the number of
directors shall never be less than 3 if there are at least 3 shareholders of the
corporation. Directors shall be elected at the annual meeting of shareholders,
to hold office until the next annual meeting of shareholders and until their
successors shall have been elected.

      Section 2. Any director may resign at any time. The entire Board of
Directors or any individual director may be removed from office, with or without
cause, by a vote of shareholders holding sixty percent (60%) of shares.

      Section 3. Any vacancy occurring in the Board of Directors by reason of
death, resignation, retirement, disqualification, removal from office, or in any
other manner may be filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board of Directors, and
each person so elected shall serve as a director until the next annual meeting
of the shareholders and until his successor shall have been elected and
qualified.

                                   ARTICLE IV

                       MEETINGS OF THE BOARD OF DIRECTORS

      Section 1. Meetings of the Board of Directors may be held at such place,
whether in the State of Minnesota or elsewhere, as a majority of the members of
the Board may from time to time determine.

      Section 2. The first meeting of each newly elected Board of Directors
shall be held immediately following the annual meeting of shareholders for the
purposes of electing officers of the corporation and transacting such other
business as may properly come before the meeting. No notice of such meeting to
the newly elected directors shall be necessary to constitute the meeting,
provided a quorum shall be present.

      Section 3. Meetings of the Board of Directors may be held upon such
notice, or without notice, at such time, and at such place as shall from time to
time be determined by the Board.


                                      -3-


      Section 4. Meetings of the Board of Directors may be called by the
President and shall be called by the President upon the request of any director
then holding office.

      Section 5. Except as otherwise provided in these By-Laws, notice shall be
given to each director of the time and place of each meeting of directors, but,
without notice, any director, by his attendance at any meeting, shall be deemed
to have waived notice thereof. Neither the business to be transacted at, nor the
purpose or purposes of, any meeting of the Board of Directors need be stated in
the notice or waiver of notice of such meeting.

      Section 6. Except as hereinafter provided, a majority of the number of
directors then duly elected shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors and, except as otherwise
provided by law or the Articles of Incorporation of the corporation, the acts of
the directors present at a meeting at which a quorum is present shall be the
acts of the Board of Directors. In the absence of a quorum, any meeting of
directors may be adjourned from time to time by the directors present, to the
same or any other place or places, without notice other than the announcement at
the meeting until a quorum shall be present.

      Section 7. Any action which might be taken at a meeting of the Board of
Directors may be taken without a meeting if authorized by a writing or writings
signed by all the directors, and such action shall be effective on the date on
which the last signature is placed on such writing or writings, or such earlier
effective date as is set forth therein.

                                   ARTICLE V

                                    NOTICES

      Section 1. Whenever, under the provisions of statute or of the Articles of
Incorporation of the corporation or of these By-Laws, notice is required to be
given to any director or shareholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or shareholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States Mail.
Notice to directors may also be given by telegram.


                                      -4-


      Section 2. Whenever any notice whatever is required to be given under the
provisions of statute or under the provisions of the Articles of Incorporation
of the corporation or these By-Laws, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the meeting
referred to therein, and filed with the Secretary of the corporation or entered
on the records of such meeting, shall be deemed equivalent to the giving of such
notice.

                                   ARTICLE VI

                                    OFFICERS

      Section 1. The officers of the corporation shall be elected by the Board
of Directors and shall be a President, one or more Vice Presidents, a Secretary
and a Treasurer. Except as hereinafter provided, any person may hold any two of
such offices, except that the same person shall not at the same time be both
President and Vice President. If the corporation has only one shareholder, he
may hold all offices.

      Section 2. The Board of Directors at its first meeting after each annual
meeting of shareholders shall elect a President, and one or more Vice
Presidents, a Secretary and a Treasurer.

      Section 3. The Board of Directors may appoint one or more Assistant Vice
Presidents, Assistant Secretaries and Assistant Treasurers and such other
officers and agents as it shall deem necessary to exercise such powers and to
perform such duties as the Board of Directors and the President shall from time
to time prescribe.

      Section 4. The salaries and other compensation of all officers of the
corporation shall be fixed by the Board of Directors.

      Section 5. All officers shall hold office during the pleasure of the Board
of Directors. Any officer elected or appointed by the Board of Directors may be
removed at any time by the Board of Directors with or without cause. Any vacancy
occurring in any office of the corporation may be filled by the Board of
Directors.

                                  ARTICLE VII

                                 THE PRESIDENT

      Section 1. The President shall be the chief executive officer of the
corporation; he shall preside at all meetings of


                                      -5-


the shareholders and at all meetings of the Board of Directors; he shall have
general and active management of the business of the corporation, subject to the
control of the Board of Directors, and he shall see that all orders and
resolutions of the Board of Directors are carried into effect.

      Section 2. The President shall have the general powers usually vested in
the office of President of a corporation and, unless the Board of Directors
shall authorize the execution thereof in some other manner, he shall execute
bonds, mortgages, promissory notes, deeds and any and all other contracts in
behalf of the corporation, and shall affix the corporate seal to any instrument
requiring it, and when so affixed, the seal shall be attested to by the
signature of the Secretary or Treasurer, or an Assistant Secretary or an
Assistant Treasurer.

                                  ARTICLE VIII

                              VICE PRESIDENTS AND
                           ASSISTANT VICE PRESIDENTS

      Section 1. The Vice President, or if there be more than one, the Vice
Presidents in order of their seniority as indicated in their titles or as
otherwise determined by the Board of Directors, shall, in the absence or
disability of the President, perform the duties and exercise all the powers of
the President; and they shall perform such other duties and exercise such other
powers as the Board of Directors or the President shall from time to time
prescribe.

      Section 2. The Assistant Vice Presidents shall perform such duties and
exercise such powers as the Board of Directors or the President shall prescribe.

                                   ARTICLE IX

                               THE SECRETARY AND
                             ASSISTANT SECRETARIES

      Section 1. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the shareholders and record all votes and the
minutes of all proceedings in a book or books to be kept for that purpose. He
shall give, or cause to be given, notice of all meetings of the shareholders and
meetings of the Board of Directors (unless such notice shall be waived as herein
provided), and he shall perform such other duties as may be prescribed by the
Board of Directors or the President. He shall have custody of the corporate seal
of the


                                      -6-


corporation, and he shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested to his signature. The Board
of Directors may give general authority to any other officer to affix the seal
of the corporation and to attest the affixing by his signature.

      Section 2. The Assistant Secretary, or if there be more than one, the
Assistant Secretaries in the order of their seniority or as otherwise determined
by the Board of Directors, shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and shall perform
such other duties and have such other powers as the Board of Directors or the
President may from time to time prescribe.

                                   ARTICLE X

                               THE TREASURER AND
                              ASSISTANT TREASURERS

      Section 1. The Treasurer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.

      Section 2. The Treasurer shall disburse all funds of the corporation as
may be required by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors,
whenever they may from time to time require it, an account of all his
transactions as Treasurer and of the financial condition of the corporation.

      Section 3. The Assistant Treasurer, or, if there shall be more than one,
the Assistant Treasurers in the order of their seniority or as otherwise
determined by the Board of Directors, shall, in the absence or disability of the
Treasurer, perform the duties and exercise the powers of the Treasurer and shall
perform such other duties and have such other powers as the Board of Directors
or the President may from time to time prescribe.

                                   ARTICLE XI

                            CERTIFICATES FOR SHARES

      Section 1. The certificates of stock of the corporation shall, be in such
form as shall be approved by the Board of


                                      -7-


Directors, and shall be marked with an identifying number and entered into the
books of the corporation as they are issued. Each certificate shall be signed by
the President or any Vice President and the Secretary of Treasurer or any
Assistant Secretary or Treasurer.

      Section 2. The Board of Directors may in its discretion, direct a new
certificate or certificates to be issued in place of any certificate theretofore
issued by the corporation alleged to have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming the certificate
of stock to have been lost, stolen or destroyed; and the Board may, in its
discretion and as a condition precedent to the issuance thereof, require that
the owner of such lost, stolen or destroyed certificate or certificates, to give
the corporation a bond in such sum as it may direct as indemnity against any
claim that may be made against it with respect to any such certificate alleged
to have been lost, stolen or destroyed.

      Section 3. Upon surrender to the corporation of a certificate representing
shares duly endorsed or accompanied by proper evidence of succession, assignment
or authority to transfer, a new certificate shall be issued to the person
entitled thereto, and the old certificate cancelled and the transaction recorded
upon the books of the corporation.

      Section 4. The corporation shall be entitled to treat the holder of record
of any share or shares of stock as the holder in fact thereof, and accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of the State of Minnesota.

                                  ARTICLE XII

                                  RECORD DATE

      Except as otherwise provided by law or the Articles of Incorporation of
the corporation or these By-Laws, the Board of directors may fix a time, not
exceeding sixty (60) days preceding the date of any meeting of shareholders, or
the date fixed for the payment of any dividend or distribution, or the date for
the allotment of rights, or subject to contract rights with respect thereto, the
date when any change or conversion or exchange of shares shall be made or go
into effect, as a record date for the determination of the shareholders entitled
to notice of and to vote at any such meeting, or to receive


                                      -8-


payment of any such dividend, distribution or allotment of rights, or to
exercise rights in respect to any such change, conversion or exchange of shares,
and in such case only shareholders of record on the date so fixed, or their
legal representatives, shall be entitled to notice of and to vote at such
meeting, or to receive payment of any such dividend, distribution or allotment
of rights, or to exercise rights in respect to any such change, conversion or
exchange of shares, notwithstanding any transfer of any shares on the books of
the corporation after any record date so fixed. The Board of Directors may close
the books of the corporation against transfers of shares during the whole or any
part of such period. If the stock transfer books are not closed and no record
date is fixed, the shareholders of record entitled to vote at the date of any
meeting of stockholders shall be entitled to vote thereat, and the shareholders
of record at the date on which the Board of Directors determines that there
shall be payment of any such dividend, distribution or allotment of rights, or
authorizes any such change, conversion or exchange of shares, shall be entitled
to receive payment of any such dividend, distribution or allotment of rights, or
to exercise rights in respect to any such change, conversion or exchange of
shares.

                                  ARTICLE XIII

                                   DIVIDENDS

      Dividends upon the capital stock of the corporation, subject to the
provisions of the Articles of Incorporation relating thereto, may be declared by
the Board of Directors at any meeting. Dividends may be paid in cash, in
property or in shares of the capital stock subject to the provisions of the
Articles of Incorporation and these By-Laws.

                                  ARTICLE XIV

                                    GENERAL

      Section 1. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
may from time to time be designated by, or in a manner determined by, the Board
of Directors.

      Section 2. The fiscal year of the corporation shall be fixed by resolution
of the Board of Directors.


                                      -9-


      Section 3. The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Minnesota". The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.

      Section 4. The share register and all other original books and records of
the corporation may be kept at the registered office of the corporation or at
such other place or places within the United States as the Board of Directors
may determine.

      Section 5. The shareholders may make and alter By-Laws at any regular or
special meeting of stockholders by vote of the holders of a majority of the
shares of stock of the corporation entitled to vote thereat. The Board of
Directors may also make and alter By-Laws at any regular or special meeting by
vote of a majority of the Board, subject to the power of the shareholders to
change or repeal such By-Laws; provided, however, that the Board of Directors
shall not make or alter any By-Law fixing the number, qualifications,
classifications or term of office of directors.


                                      -10-

EX-3.13

                                                                    Exhibit 3.13

                       RESTATED ARTICLES OF INCORPORATION
                                       OF
                                TCW CORPORATION

      We the undersigned, respectively the Vice President and Assistant
Secretary of TCW Corporation, a corporation subject to the provisions of
Minnesota Statutes 302A, known as the Minnesota Business Corporation Act, do
hereby certify that on January 8, 1986, the following Restated Articles of
Incorporation of TCW Corporation were unanimously adopted by a consent
resolution of all shareholders of said Corporation to supersede and take the
place of the existing Articles of Incorporation and all amendments thereto,
to-wit:

                                   ARTICLE I

      The name of this Corporation shall be TCW Corporation.

                                   ARTICLE II

      This Corporation shall have general business purposes.

                                  ARTICLE III

      This Corporation shall have all of the powers granted or available under
the laws of the State of Minnesota and laws amendatory thereof and supplementary
thereto, including the power to acquire, own, sell, lease, mortgage, pledge or
otherwise dispose of and deal in real estate, personal property, shares, bonds,
securities and other evidence of indebtedness of any domestic or foreign
corporation, including those of this Corporation.

                                   ARTICLE IV

      The duration of the Corporation shall be perpetual.

                                   ARTICLE V

      The location and post office address of the registered office of the
Corporation in this state is 610 Park National Bank Building, 5353 Wayzata
Boulevard, Minneapolis, MN 55416, County of Hennepin.

                                   ARTICLE VI


      The total number of shares of all classes of capital stock which the
Corporation has the authority to issue is 25,100,000 shares which are divided
into two classes as follows:

      100,000 shares of preferred stock ("Preferred Stock"), $100 par value, per
share and

      25,000,000 shares of common stock ("Common Stock"), $.01 par value per
share.

      The designations, voting powers, preferences and relative participating,
optional or other special rights, and qualifications, limitations, or
restrictions of the above classes of stock are as follows:

                                       A.
                                Preferred Stock
                                 $100 Par Value

      1. Dividends.

      The holders of the Preferred Stock are not entitled to receive any regular
periodic dividends, but the holders of Preferred Stock are entitled to receive,
to the extent permitted by law, such dividends as may be declared from time to
time by the Board of Directors.

      2. Redemption.

      (a) The Preferred Stock is subject to redemption, in whole or in part at
any time after issuance, at the option of the Corporation by resolution of the
Board of Directors, at a price of $100 per share, together with the amount of
any dividends declared, but unpaid thereon (herein referred to as the
"Redemption Price"). Notice of every such redemption shall be given by the
Corporation by mailing postage prepaid, a copy of such notice at least thirty
(30) days, but not more than sixty (60) days prior to the date fixed for such
redemption to the holders of record of the shares of Preferred Stock to be
redeemed at their address as appearing on the books of the Corporation. Each
such notice shall specify the date of redemption, redemption price, place of
payment, and, if less than all the outstanding shares of Preferred Stock are to
be


                                       -2-


redeemed, the identification of the shares to be redeemed. Any notice mailed in
the manner herein provided shall have been duly given whether the holder
receives the notice or not.

      If the Corporation determines to redeem less than all of the shares of
Preferred Stock then outstanding, the shares so to be redeemed shall be selected
by lot or pro rata not more than sixty (60) days prior to the date of
redemption. In order to facilitate the redemption of any shares of Preferred
Stock that may be selected for redemption, the Corporation will not be required
(i) to issue, transfer or exchange any shares of Preferred Stock during a period
beginning at the opening of business fifteen (15) days before the date of the
mailing of a notice of redemption and ending at the close of business on the day
of such mailing, or (ii) to transfer or exchange any shares of Preferred Stock
so selected for redemption.

      (b) On the date of redemption or prior thereto at the election of the
Corporation, the Corporation shall deposit or set aside funds sufficient to pay
the aggregate redemption price of the shares of Preferred Stock so called for
redemption and outstanding on the date of the deposit. Any interest accrued on
funds so deposited or set aside shall be paid to the Corporation from time to
time, and the holders of shares to be redeemed shall have no claim to any such
interest. Any funds so deposited and set aside which are unclaimed by the
holders of shares called for redemption at the end of five (5) full calendar
years after the redemption date will become the property of the Corporation, and
thereafter, the holders of shares called for redemption may look only to the
Corporation for the payment thereof.

      (c) If the notice of redemption has been given and the funds deposited or
set aside as provided above, then on and after the date of redemption all shares
so called for redemption will no longer be outstanding and all rights of the
holders thereof as stockholders of the Corporation (except the right to receive
payment of the Redemption Price) will cease and terminate.


                                      -3-


      3. Liquidation.

      In the event of any liquidation, dissolution, or winding up of the affairs
of the Corporation, whether voluntary or involuntary, the holders of Preferred
Stock are entitled to receive $100 per share, together with the amount of all
unpaid dividends thereon, but without interest, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) may
be paid to or set apart for the holders of any other class or classes of stock
of the Corporation. If, upon any liquidation, dissolution, or winding up of the
affairs of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of Preferred Stock are insufficient to pay in
full the amount aforesaid, then such assets, or proceeds thereof, shall be
distributed ratably among such holders. After the making of such payments in
full to the holders of the Preferred Stock the remaining assets of the
Corporation shall be distributed to the holders of any other class or classes of
stock of the Corporation, subject to the respective terms and provisions, if
any, applying to such stock. A merger or a consolidation of the Corporation into
or with any other corporation, or the merger or consolidation of any other
corporation into or with the Corporation, or a sale, transfer or lease of all or
any part of the assets of the Corporation is not a liquidation, dissolution or
winding up of the Corporation within the meaning of this paragraph.

      4. Voting Rights.

      The holders of Preferred Stock are not entitled to vote.

                                       B.
                                  Common Stock

      1. Dividends.

      Subject to the preferential rights of the Preferred Stock, the holders of
Common Stock are entitled to receive, to the extent permitted by law, such
dividends as may be declared from time to time by the Board of Directors.

      2. Liquidation.


                                      -4-


      In the event of the voluntary or involuntary liquidation, dissolution,
distribution of assets or winding up of the Corporation, after distribution in
full of the preferential amount to be distributed to the holders of shares of
the Preferred Stock, holders of the Common Stock are entitled to receive all the
remaining assets of the Corporation, of whatever kind available for distribution
of stockholders, ratably in proportion to the numbers of shares of Common Stock
held by them respectively.

      3. Voting Rights.

      Except as may be otherwise required by law or these Articles of
Incorporation, each holder of Common Stock has one vote with respect of each
share of stock held by him of record on the books of the Corporation on all
matters voted upon by the stockholders.

                                       C.
                                Other Provisions

      No stockholder of this Corporation of any class shall have any right to
cumulate his votes in the election of directors and no holder of any share of
any class of stock of this Corporation shall have any pre-emptive right to
subscribe for or purchase any new or additional shares of stock of any class of
this Corporation whether now or hereafter authorized. Notwithstanding any
provisions hereof, any amendment to these Aritcles of Incorporation which
increases or decreases the authorized capital stock of any class or classes may
be adopted by the affirmative vote of the holders of a majority of the
outstanding shares of the voting stock of this Corporation.

                                  ARTICLE VII

      The business of this Corporation shall be managed by a Board of Directors,
of one or more members, who need not be shareholders, who shall each serve for
one (1) year or until such time as their successors shall be elected and
qualified.

      The names and addresses of the directors of this Corporation, who are of
full age, are as follows:


                                      -5-


            James H. Michael
            142 Mississippi River Boulevard North
            St. Paul, MN 55104

            Miles E. Efron
            8901 Westmoreland Lane
            St. Louis Park, MN 55426

            Jeffrey J. Michael
            3343 St. Louis Avenue
            Minneapolis, MN 55416

                                  ARTICLE VIII

      Any action required or permitted to be taken at a Board of Directors
meeting, except for those actions which must be approved by the shareholders,
may be taken by a written action signed by the number of directors that would be
required to take the same action at a meeting of the Board of Directors at which
all directors were present. When any such written action is taken by less than
all directors, all directors shall be notified immediately of its text and
effective date.

                                   ARTICLE IX

      1. The Board of Directors of the Corporation shall have authority to allot
shares and to accept or reject subscriptions for shares.

      2. The Board of Directors may grant rights to convert any of the
Corporation's securities into shares of any class or classes of securities which
the Corporation may at any time be authorized to issue, and may also authorize
the issuance of options to purchase or subscribe for shares of any class or
classes. The Board of Directors may fix the terms, provisions and conditions of
such rights or options, including the conversion basis or bases and the option
price or prices at which shares may be purchased and subscribed for.

      3. The Board of Directors shall have the power to issue shares of stock of
the Corporation for cash, services, or property, as it may from time to time
deem expedient, or in exchange for securities or assets of other business
enterprises or otherwise.


                                      -6-


      4. The Board of Directors shall have the power to restrict the sale or
transfer of the Corporation's stock.

                                   ARTICLE X

      The private property of the shareholders of this Corporation shall not be
subject to the payment of corporate debts to any extent whatsoever.

      IN TESTIMONY WHEREOF, we have set our hands this 8th day of January, 1988.


                                        /s/ James H. Michael
                                        -----------------------------------
                                        James H. Michael, Vice President


                                        /s/ Miles E. Efron
                                        -----------------------------------
                                        Miles E. Efron, Assistant Secretary

STATE OF MINNESOTA      )
                        ) ss.
COUNTY OF RAMSEY        )

      James H. Michael and Miles E. Efron, being first duly sworn on oath depose
and say that they are respectively the Vice President and Assistant Secretary of
TCW Corporation, the corporation named in the foregoing Certificate; that said
Certificate contains a true statement of the action of the shareholders of said
Corporation; that said Certificate is executed on behalf of said Corporation by
its express authority; and they further acknowledge the same to be their free
act and deed and the free act and deed of said Corporation.


                                      -7-


                                        /s/ James H. Michael
                                        -----------------------------------
                                        James H. Michael, Vice President


                                        /s/ Miles E. Efron
                                        -----------------------------------
                                        Miles E. Efron, Assistant Secretary

Subscribed and sworn to before me
this 8th day of January, 1986.


/s/ Karen Clare
- ---------------
Notary Public

[NOTARY SEAL OF KAREN CLARE]

- --------------------------------------------------------------------------------
                               STATE OF MINNESOTA
                              DEPARTMENT OF STATE

I hereby certify that the within instrument was filed for record in this office
on the 20th day of March A.D. 1986, at 11:30 o'clock P.M., and was duly recorded
in [ILLEGIBLE] N-66 of [ILLEGIBLE] 629


                            /s/ Joan Anderson Growe
- --------------------------------------------------------------------------------


                                      -8-

EX-3.14

                                                                    Exhibit 3.14

                                    BY-LAWS

                                       OF

                                TCW CORPORATION

                                   ARTICLE I

                                    OFFICES

      Section 1. Registered Office. The registered office of the corporation
shall be 711 Degree of Honor Building, St. Paul, Ramsey County, Minnesota 55101.

      Section 2. Other Offices. The corporation shall have other offices at such
places as the Board of Directors may from time to time determine.

                                   ARTICLE II

                                  SHAREHOLDERS

      Section 1. Regular Meeting. The regular meeting of the Shareholders
holding voting stock shall be held on such day in the month of September of each
year as shall be fixed by the Board of Directors, for the purpose of electing
Directors and for the transaction of such other business as may come before the
meeting.

      If a regular meeting of the Shareholders has not been held during the
immediately preceding fifteen (15) months, a Shareholder or Shareholders holding
fifty-one percent (51%) or more of the voting power of all shares entitled to
vote may demand a regular meeting of Shareholders by written notice of demand
given to the Chief Executive Officer or the Chief Financial Officer of the
corporation. Within thirty (30) days after receipt of the demand by one of those
officers, the Board shall cause a regular meeting of Shareholders to be called
and held on notice no later than ninety (90) days after receipt of the demand,
all at the expense of the corporation. If the Board fails to cause a regular
meeting to be called and held, the Shareholder or Shareholders making the demand
may call the meeting by giving notice as required by statute, all at the expense
of the corporation.

      Section 2. Special Meetings. Special meetings of the Shareholders, for any
purpose or purposes may be called at any time, by:


            (a) The Chief Executive Officer;

            (b) The Chief Financial Officer;

            (c) Three or more Directors;

            (d) A Shareholder or Shareholders holding fifty-one percent (51%) or
      more of the voting power of all shares entitled to vote, by written notice
      of demand given to the Chief Executive Officer or Chief Financial Officer
      of the corporation and containing the purposes of the meeting. Within
      thirty (30) days after receipt of the demand by one of those officers, the
      Board shall cause a special meeting of Shareholders to be called and held
      on notice no later than ninety (90) days after receipt of the demand, all
      at the expense of the corporation. If the Board fails to cause a special
      meeting to be called and held, the Shareholder or Shareholders making the
      demand may call the meeting by giving notice as required by statute, all
      at the expense of the corporation.

      Section 3. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Minnesota, as the place of regular
meeting or for any special meeting called by the Board of Directors. A waiver of
notice signed by all Shareholders entitled to vote at a meeting may designate
any place, either within or without the State of Minnesota, as the place for the
holding of such meeting. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal office of the
corporation in the State of Minnesota.

      Section 4. Notice of Meeting. Written notice stating the place, day and
hour of the meeting and, in case of a special meeting, the purpose or purposes
for which the meeting is called, shall, unless otherwise prescribed by statute,
be delivered not less than ten (10) nor more than sixty (60) days before the
date of the meeting, either personally or by mail, by or at the direction of the
Chief Executive Officer, or the officer or other persons calling the meeting, to
each Shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
addressed to the Shareholder at his address as it appears in the share register
of the corporation, or, if no address appears, to his last known address, with
postage thereon prepaid.

      The business transacted at a special meeting shall be limited to the
purposes stated in the notice of the meeting. Any business transacted at a
special meeting that is not included in those stated purposes is voidable by or
on behalf


                                      -2-


of the corporation, unless all of the Shareholders have waived notice of the
meeting in accordance with statute or these By-Laws.

      Section 5. Fixing of Record Date. For the purpose of determining
Shareholders entitled to notice of, or to vote at any meeting of Shareholders or
any adjournment thereof, or Shareholders entitled to receive payment of any
distribution, or in order to make a determination of Shareholders for any other
purpose, the Board of Directors of the corporation may fix in advance a date as
the record date for any such determination of Shareholders, such date in any
case to be not more than sixty (60) days and, in case of a meeting of
Shareholders, not less than ten (10) days prior to the date on which the
particular action, requiring such determination of Shareholders, is to be taken.
If no record date is fixed for the determination of Shareholders entitled to
notice of, or to vote at a meeting of Shareholders, or Shareholders entitled to
receive payment of a distribution, the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors declaring
such distribution is adopted, as the case may be, shall be the record date for
such determination of Shareholders. When a determination of Shareholders
entitled to vote at any meeting of Shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof.

      Section 6. Quorum. Fifty-one percent (51%) of the outstanding shares of
the corporation entitled to vote shall constitute a quorum at any meeting of
Shareholders. If less than Fifty-one percent (51%) of the outstanding shares are
represented at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further notice. At such adjourned meeting
at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. The Shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum.

      Section 7. Proxies. A Shareholder may cast or authorize the casting of a
vote by filing a written appointment of a proxy with an officer of the
corporation at or before the meeting at which the appointment is to be
effective. An appointment of a proxy for shares held jointly by two or more
Shareholders is valid if signed by any one of them, unless the corporation
receives from any one of those Shareholders, either written notice denying the
authority of that person to appoint a proxy, or appointing a different proxy.
The appointment of a proxy is valid for eleven (11) months, unless a longer
period is expressly provided in the appointment. No appointment is


                                      -3-


irrevocable unless the appointment is coupled with an interest in the shares or
in the corporation. An appointment may be terminated at will, unless the
appointment is coupled with an interest, in which case it shall not be
terminated except in accordance with the terms of an agreement, if any, between
the parties to the appointment. Termination may be made by filing written notice
of the termination of the appointment with an officer of the corporation, or by
filing a new written appointment of a proxy with an officer of the corporation.
Termination in either manner revokes all prior proxy appointments and is
effective when filed with an officer of the corporation. The death or incapacity
of a person appointing a proxy does not revoke the authority of the proxy,
unless written notice of the death or incapacity is received by an officer of
the corporation before the proxy exercises the authority under that appointment.
Unless the appointment specifically provides otherwise, if two or more persons
are appointed as proxies for a Shareholder, any one of them may vote the shares
on each item of business in accordance with specific instructions contained in
the appointment; and if no specific instructions are contained in the
appointment with respect to voting the shares on a particular item of business,
the shares shall be voted as a majority of the proxies determine. If the proxies
are equally divided, the shares shall not be voted. Unless the appointment of a
proxy contains a restriction, limitation, or specific reservation of authority,
the corporation may accept a vote or action taken by a person named in the
appointment. The vote of a proxy is final, binding, and not subject to
challenge.

      Section 8. Voting of Shares. At each meeting of the Shareholders, the
holder of each share of voting stock shall be entitled to one (1) vote for each
share of stock standing in his name in the share register of the corporation as
of the date fixed for the determination of the persons entitled to vote at such
meeting, whether he appears in person or is represented by proxy. All questions
shall be decided by a majority vote except as otherwise provided herein or by
statute.

      Section 9. Voting of Shares by Certain Holders. Shares standing in the
name of another corporation may be voted by such officer, agent or proxy as the
By-Laws of such corporation may prescribe, or, in the absence of such provision,
as the Board of Directors of such other corporation may determine. Except for
shares held in a fiduciary capacity, shares of a corporation registered in the
name of a subsidiary are not entitled to vote on any matter. Shares of a
corporation in the name of or under the control of the corporation or a
subsidiary in a fiduciary capacity are not entitled to vote on any matter;
except to the extent that the settlor or beneficial owner possesses and
exercises a right to vote or gives the


                                      -4-


corporation binding instructions on how to vote the shares. Shares under the
control of a person in a capacity as a personal representative, an
administrator, executor, guardian, conservator, or attorney-in-fact, may be
voted by the person, either in person or by proxy, without registration of those
shares in the name of the person. Shares registered in the name of a trustee of
a trust or in the name of a custodian may be voted by the person, either in
person or by proxy, but a trustee of a trust or a custodian shall not vote
shares held by the person unless they are registered in the name of the person.
Shares registered in the name of a trustee in bankruptcy or a receiver may be
voted by the trustee or receiver either in person or by proxy. Shares under the
control of a trustee in bankruptcy or a receiver may be voted by the trustee or
receiver without registering the shares in the name of the trustee or receiver,
if authority to do so is contained in an appropriate order of the court by which
the trustee or receiver was appointed. Shares registered in the name of an
organization not described above may be voted either in person or by proxy by
the legal representative of that organization. A Shareholder whose shares are
pledged may vote those shares until the shares are registered in the name of the
pledgee.

      Section 10. Informal Action by Shareholders. Any action required or
permitted to be taken at a meeting of the Shareholders may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the Shareholders entitled to vote with respect to the subject
matter thereof. The written action is effective when it has been signed by all
of those Shareholders, unless a different effective time is provided in the
written action.

                                  ARTICLE III

                                   DIRECTORS

      Section 1. General Powers. The business and affairs of the corporation
shall be managed by its Board of Directors.

      Section 2. Number, Tenure and Qualifications. The number of Directors
shall be three (3). Each Director shall hold office for an indefinite term (not
to exceed five (5) years) until the next regular meeting of Shareholders and
until his successor shall have been elected and qualified. Directors need not be
residents of the State of Minnesota or Shareholders of the corporation.

      Section 3. Regular Meetings. A regular meeting of the Board of Directors
shall be held immediately after, and at the


                                      -5-


same place as the regular meeting of Shareholders. The Board of Directors may
provide, by resolution, the time and place, either within or without the State
of Minnesota, for the holding of additional regular meetings without notice
other than such resolution. If no resolution is passed, the meeting shall be
held at the principal executive office of the corporation.

      Section 4. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chief Executive Officer. The person
authorized to call special meetings of the Board of Directors may fix any place,
either within or without the State of Minnesota, as the place for holding any
special meeting of the Board of Directors called by them.

      Section 5. Electronic Communications. A conference among Directors by any
means of communication through which the Directors may simultaneously hear each
other during the conference constitutes a Board meeting, if the same notice is
given of the conference as would be required by statute or these By-Laws for a
meeting, and if the number of Directors participating in the conference would be
sufficient to constitute a quorum at a meeting. Participation in a meeting by
that means constitutes presence in person at the meeting. A Director may
participate in a Board meeting not described above by any means of communication
through which the Director, other Directors so participating, and all Directors
physically present at the meeting may simultaneously hear each other during the
meeting. Participation in a meeting by that means constitutes presence in person
at the meeting.

      Section 6. Notice. Notice of any special meeting shall be given at least
five (5) days previously thereto by written notice delivered personally or
mailed to each Director at his business or residence address; or by telegram. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, so addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Any director may waive notice of any
meeting. The attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting, except where a Director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of such
meeting.


                                      -6-


      Section 7. Quorum. A majority of the number of Directors then duly elected
which shall include Donald A. Traxler shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors. If less than
such majority including Donald A. Traxler are present at a meeting, a majority
of the Directors present may adjourn the meeting from time to time without
further notice.

      Section 8. Manner of Acting. No resolution of the corporation at any
meeting, whether regular or special, shall be adopted by the Board of Directors
except by the affirmative vote of a majority of all Directors then duly elected
including Donald A. Traxler.

      Section 9. Action without a Meeting. Any action required or permitted to
be taken by the Board of Directors at a meeting may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
the number of Directors that would be required to take the same action at a
meeting at which all Directors were present.

      Section 10. Vacancies. Any vacancy occurring in the Board of Directors
including Donald A. Traxler may be filled by the affirmative vote of a majority
of the remaining Directors though less than a quorum of the Board of Directors.
A Director elected to fill a vacancy shall be elected for the unexpired term of
his predecessor in office. Any directorship to be filled by reason of an
increase in the number of Directors may be filled by election by the Board of
Directors for a term of office continuing only until the next election of
Directors by the Shareholders.

      Section 11. Compensation. By resolution of the Board of Directors, each
Director may be paid his expenses, if any, of attendance at each meeting of the
Board of Directors, and may be paid a stated salary as Director or a fixed sum
for attendance at each meeting of the Board of Directors or both. No such
payment shall preclude any Director from serving the corporation in any other
capacity and receiving compensation therefor.

      Section 12. Absent Directors. A Director may give advance written consent
or opposition to a proposal to be acted on at a Board meeting. If the Director
is not present at the meeting, consent or opposition to a proposal does not
constitute presence for purposes of determining the existence of a quorum, but
consent or opposition shall be counted as a vote in favor of or against the
proposal and shall be entered in the minutes or other record of action at the
meeting, if the proposal acted on at the meeting is substantially the same
effect as the proposal to which the Director has consented or objected.


                                       -7-


                                   ARTICLE IV

                                    OFFICERS

      Section 1. Number. The officers of the corporation shall be a President, a
Vice President, a Treasurer and a Secretary, each of whom shall be elected by
the Board of Directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of Directors. Any two
(2) or more offices may be held by the same person.

      Section 2. Election and Term of Office. The officers of the corporation to
be elected by the Board of Directors shall be elected by the Board of Directors
at the first meeting of the Board of Directors held after each regular meeting
of the Shareholders. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as conveniently may be.
Each officer shall hold office until his successor shall have been duly elected
and shall have qualified or until his death, or until he shall resign or shall
have been removed in the manner hereinafter provided. In the absence of an
election or appointment of officers by the Board, the person or persons
exercising the principal functions of the Chief Executive Officer or the Chief
Financial Officer are deemed to have been elected to those offices, except for
the purpose of determining the location of the principal executive office, which
in that case is the registered office of the corporation.

      Section 3. Removal. Any officer or agent may be removed by the Board of
Directors with or without cause, but such removal shall be without prejudice to
the contract rights, if any, of the person so removed. Election or appointment
of an officer or agent shall not of itself create contract rights.

      Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.

      Section 5. President. The President shall be the Chief Executive Officer
of the corporation; he shall in general, supervise and control all of the
business and affairs of the corporation. He shall, when present, preside at all
meetings of the Shareholders and of the Board of Directors. He may sign, with
the Secretary or any other proper officer of the corporation thereunto
authorized by the Board of Directors, certificates for shares of the corporation
and deeds, mortgages, bonds, contracts, or other instruments which the Board of
Directors has authorized to be executed, except in cases where the signing and
execution thereof shall be


                                      -8-


expressly delegated by the Board of Directors or by these By-Laws to some other
officer or agent of the corporation, or shall be required by statute to be
otherwise signed or executed. He shall, in general, perform all duties incident
to the office of Chief Executive Officer and such other duties as may be
prescribed by the Board of Directors from time to time.

      Section 6. Vice President. The Vice President, or if there be more than
one, the Vice Presidents, in order of their seniority as indicated in their
titles or as otherwise determined by the Board of Directors, shall, in the
absence or disability of the President, perform the duties and exercise all of
the powers of the Chief Executive Officer; and they shall perform such other
duties and exercise such other powers as the Board of Directors or the President
shall prescribe.

      Section 7. The Treasurer. The Treasurer shall be the Chief Financial
Officer of the corporation; he shall: (a) have charge and custody of and be
responsible for all funds and securities of the corporation; (b) receive and
give receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of Article V of these By-Laws; and (c) in general perform
all of the duties incident to the office of Chief Financial Officer and such
other duties as from time to time may be assigned to him by the President or by
the Board of Directors. If required by the Board of Directors, the President
shall give a bond for the faithful discharge of his duties in such sum and with
such surety or sureties as the Board of Directors shall determine.

      Section 8. The Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the Shareholders and record all votes and
the minutes of all proceedings in a book or books to be kept for that purpose.
He shall give, or cause to be given, notice of all meetings of the Shareholders
and meetings of the Board of Directors (unless such notice shall be waived as
herein provided), and he shall perform such other duties as may be prescribed by
the Board of Directors or the Chief Executive Officer. He shall have custody of
the corporate seal of the corporation, and he shall have authority to affix the
same to any instrument requiring it and when so affixed, it may be attested to
his signature. The Board of Directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.

      Section 9. Salaries. The salaries of the officers shall be fixed from time
to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
corporation.


                                       -9-


                                   ARTICLE V

                     CONTRACTS, LOANS, CHECKS AND DEPOSITS

      Section 1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.

      Section 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.

      Section 3. Checks, Drafts, etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation shall be signed by such officer or officers, agent or agents of
the corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.

      Section 4. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositaries as the Board of Directors may
select.

                                   ARTICLE VI

                   CERTIFICATES FOR SHARES AND THEIR TRANSFER

      Section 1. Certificates for Shares. Certificates representing shares of
the corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President and by the
Secretary. The signatures of such officers upon a certificate may be facsimiles
if the certificate is manually signed on behalf of a transfer agent or a
registrar, other than the corporation itself or one of its employees. Each
certificate for shares shall be consecutively numbered or otherwise indentified.
The name and address of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered in the
share register of the corporation. All certificates surrendered to the
corporation for transfer shall be cancelled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and cancelled, except that in case of a lost, destroyed or mutilated
certificate a new one may be issued therefor upon such terms and indemnity to
the corporation as the Board of Directors may prescribe.


                                      -10-


      Section 2. Transfer of Shares. Transfer of shares of the corporation shall
be made only on the books of the corporation, or of its registrar and transfer
agent, by the holder of record thereof or by his legal representative, who shall
furnish proper evidence of authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the corporation, and on surrender for cancellation of the certificate for such
shares. The corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof, and accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of the
State of Minnesota.

      Section 3. Restriction on Transfer or Registration of Shares. A
restriction on the transfer, or registration of transfer, of shares of the
corporation may be imposed by a resolution adopted by the Shareholders, or by an
agreement among or other written action by a number of Shareholders or among
them and the corporation. A restriction shall not be binding with respect to
shares issued prior to the adoption of the restriction, unless the holders of
those shares are parties to the agreement, or voted in favor of the restriction.
A written restriction on the transfer or registration of transfer of shares of
the corporation that is not manifestly unreasonable under the circumstances and
is noted conspicuously on the face or back of the share certificate may be
enforced against the holder of the restricted shares or a successor or
transferee of the holder, including a pledgee or a legal representative. Unless
noted conspicuously on the face or back of the certificate, a restriction, even
though permitted by statute or by this section, is ineffective against a person
without knowledge of the restriction. A restriction hereunder shall be deemed to
be noted conspicuously and is effective if the existence of the restriction is
stated on the certificate and reference is made to a separate document creating
or describing the restriction.

      Section 4. The share register and all other original books and records of
the corporation may be kept at the registered office of the corporation or at
such other place or places within the United States as the Board of Directors
may determine.

                                  ARTICLE VII

                                  FISCAL YEAR

      The fiscal year of the corporation shall be fixed by resolution of the
Board of Directors.


                                      -11-


                                  ARTICLE VIII

                                 DISTRIBUTIONS

      The Board of Directors may, from time to time, declare and the corporation
may pay distributions on its outstanding shares in the manner and upon the terms
and conditions provided by statute, and subject to the provisions of its
Articles of Incorporation and these By-Laws.

                                   ARTICLE IX

                                 CORPORATE SEAL

      The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Minnesota". The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.

                                   ARTICLE X

                                WAIVER OF NOTICE

      Whenever any notice is required to be given to any Shareholder or Director
of the corporation under the provisions of these By-Laws or under the provisions
of the Articles of Incorporation or under the provisions of the Minnesota
Business Corporation Code, a waiver thereof in writing signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.

                                   ARTICLE XI

                                   AMENDMENTS

      These By-Laws may be altered, amended or repealed and new By-Laws may be
adopted by the Shareholders at any regular or special meeting.


                                      -12-

EX-3.15

                                                                    Exhibit 3.15

                           ARTICLES OF INCORPORATION
                                       OF
                        FARM FRESH FOODS OF NEVADA, INC.

      I, the undersigned, for the purpose of forming a corporation under and
pursuant to the provisions of Section 78 of the Nevada Revised Statutes, and any
amendments thereto, do hereby associate myself as a body corporate and do hereby
adopt the following Articles of Incorporation.

                                   ARTICLE I.
                                      NAME

      The name of this corporation shall be "Farm Fresh Foods of Nevada, Inc."
(the "Corporation").

                                  ARTICLE II.
                                REGISTERED AGENT

      The registered agent of the Corporation shall be The Corporation Trust
Company of Nevada, 6100 Neil Road, Suite 500, Reno, Nevada 89511.

                                  ARTICLE III.
                                 CAPITAL STOCK

      1. The aggregate number of shares of common capital stock that the
Corporation shall have the authority to issue shall be Ten Thousand (10,000)
shares with a par value of $0.01 per share. The shares shall be divisible into
classes and series, have the designations, voting rights and other rights and
preferences, and be subject to the restrictions that the board of directors may
from time to time establish, fix and determine, consistent with these Articles
of Incorporation.

      2. Shares of any class or series of the Corporation, including shares of
any class or series which are then outstanding, may be issued to the holders of
shares of another class or series of the Corporation, whether to effect a share
dividend or split, including a reserve share split, or otherwise, without
authorization, approval or vote of the holders of shares of any class or series
of the Corporation.

                                  ARTICLE IV.
                                   DIRECTORS

      1. The business of the Corporation shall be managed by or under the
direction of a board of directors, which may consist of only one (1) director
and may not consist of more than seven (7) directors. The director of the
Corporation need not be a shareholder of the Corporation. The Corporation's
Board of Directors, in its discretion, may elect honorary directors who shall
serve without voting power.



      2. The Corporation's first Board of Directors shall consist of two (2)
members, whose names and addresses are as follows:

                Gregg A. Ostrander      5353 Wayzata Boulevard, Suite 324
                                        Minneapolis, Minnesota 55416

                Jeffrey M. Shapiro      5353 Wayzata Boulevard, Suite 324
                                        Minneapolis, Minnesota 55416

      3. The Corporation's Board of Directors, by affirmative vote of a majority
vote thereof shall determine the number of directors of the Corporation.

      4. Directors of the Corporation shall serve for the term for which they
were appointed or elected and until their successors are elected and qualified.
If any vacancy occurs in the Corporation's Board of Directors, the remaining
directors, by the affirmative vote of a majority thereof, shall elect a director
or directors to fill the vacancy until the next regular meeting of the
Corporation's shareholders.

      5. The Corporation's directors shall have all of the powers conferred upon
directors of Minnesota corporations by the General Corporation Law of Nevada.

      6. An action required or permitted to be taken by the Corporation's Board
of Directors may be taken by written action signed by the number of directors
that would be required to take the same action at a meeting of the board at
which all directors were present except as to those matters which require
shareholder approval, in which case the written action must be signed by all
members of the Board of Directors.

                                   ARTICLE V.
                                     BYLAWS

      The power to adopt, amend and repeal Bylaws for the Corporation shall be
vested in the Corporation's Board of Directors, except to the extent otherwise
limited by the General Corporation Law of Nevada.

                                  ARTICLE VI.
                    LIMITATION ON LIABILITY/INDEMNIFICATION

      1. A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for (i) liability based on acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law; or (ii)
liability for the payment of distributions in violation of Section 78.300 of the
General Corporation Law of Nevada. If the General Corporation Law of Nevada
hereafter is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the Corporation, in
addition to the limitation on personal liability provided herein, shall be
limited to the fullest extent permitted by the amended General Corporation Law
of Nevada. Any repeal or modification of this Article by the shareholders of


                                      -2-


the Corporation shall be prospective only and shall not adversely affect any
limitation on the personal liability of a director of the Corporation existing
at the time of such repeal or modification.

      2. The Corporation shall indemnify any person who, in relation to or
because of such person's service to the Corporation in an official capacity, was
or is a party or is threatened to be made a party to any action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
an action by or in the right of the Corporation), to the fullest extent
permitted by the General Corporation Law of Nevada.

                                  ARTICLE VII.
                             AMENDMENT OF ARTICLES

      These Articles of Incorporation may be amended by the affirmative vote of
the holder or holders of the majority of the voting power of the common stock
present at a shareholders' meeting where said amendments are submitted to a
vote.

                                 ARTICLE VIII.
                                PRIVATE PROPERTY

      The private property of the shareholders of the Corporation shall not be
subject to the payment of corporate debts to any extent whatsoever.

                                  ARTICLE IX.
                                  INCORPORATOR

      The name and address of the incorporator is as follows:

                                Ruth M. Timm
                                Maun & Simon, PLC
                                2000 Midwest Plaza West
                                801 Nicollet Mall
                                Minneapolis, Minnesota 55402

      IN WITNESS WHEREOF, the undersigned has hereunto subscribed her hand this
__ day of October, 2000.


                                        ________________________________________
                                        Ruth M. Timm


                                      -3-

EX-3.16

                                                                    Exhibit 3.16

                                     BYLAWS
                                       OF
                        FARM FRESH FOODS OF NEVADA, INC.

                                   ARTICLE I
                            OFFICES, CORPORATE SEAL

      Section 1.01. Registered Office. The registered office of the corporation
in Nevada shall be that set forth in the articles of incorporation or in the
most recent amendment of the articles of incorporation or resolution of the
directors filed with the Secretary of State of the State of Nevada changing the
registered office.

      Section 1.02. Other Offices. The corporation may have such other offices,
within or without the State of Nevada, as the directors shall, from time to
time, determine.

      Section 1.03. Corporate Seal. The corporation shall have no seal.

                                   ARTICLE II
                            MEETINGS OF SHAREHOLDERS

      Section 2.01. Place and Time of Meetings. Except as provided otherwise by
the General Corporation Law of Nevada, meetings of the shareholders may be held
at any place, within or without the State of Nevada, as may from time to time be
designated by the directors and, in the absence of such designation, shall be
held at the registered office of the corporation in the State of Nevada. The
directors shall designate the time of day for each meeting and, in the absence
of such designation, every meeting of shareholders shall be held at four o'clock
p.m., Nevada time.

      Section 2.02. Regular Meetings.

            (a) A regular meeting of the shareholders may be held on such date
      as the Board of Directors may by resolution establish.

            (b) At a regular meeting, the shareholders, voting as provided in
      the articles of incorporation and these bylaws, shall elect qualified
      successors for directors who serve for an indefinite term or whose terms
      have expired and shall transact such other business as may properly come
      before them.

      Section 2.03. Special Meetings. Special meetings of the shareholders may
be held at any time and for any purpose and may be called by the chief executive
officer, the chief financial officer, two or more directors or by a shareholder
or shareholders holding 10% or more of the voting power of all shares entitled
to vote, except that a special meeting for the purpose of considering any action
to directly or indirectly facilitate or effect a business combination, must be
called by a shareholder or shareholder holding 25% or more of the voting power
of all shares entitled to vote. A shareholder or shareholders holding the
requisite percentage of the voting power of all shares entitled to vote may
demand a special meeting of the shareholders by written notice of demand given
to the chief executive officer or chief financial officer of the corporation and
containing the purposes of the meeting. Within 30 days after receipt of demand
by one of those officers, the Board of Directors shall cause a special meeting
of shareholders to be called



and held on notice no later than 90 days after receipt of the demand, at the
expense of the corporation. Special meetings shall be held on the date and at
the time and place fixed by the chief executive officer or the Board of
Directors, except that a special meeting called by or at the demand of a
shareholder or shareholders shall be held in the county where the principal
executive office is located. The business transacted at a special meeting shall
be limited to the purposes as stated in the notice of the meeting.

      Section 2.04. Quorum. Adjourned Meetings. The holders of a majority of the
shares entitled to vote at a meeting shall constitute a quorum for the
transaction of business at any regular or special meeting. In case a quorum
shall not be present at a meeting, the meeting may be adjourned, and notice
shall be given (a) by announcement at the time of adjournment of the date, time
and place of the adjourned meeting, or (b) by notice of such adjourned meeting,
setting out the date, time and place of the adjourned meeting, mailed to each
shareholder entitled to vote at a meeting, at least 3 days before the date of
such adjourned meeting. If a quorum is present, a meeting may be adjourned from
time to time without notice other than announcement at the time of adjournment
of the date, time and place of the adjourned meeting. At adjourned meetings at
which a quorum is present, any business may be transacted which might have been
transacted at the meeting as originally noticed. If a quorum is present when a
duly called or held meeting is convened, the shareholders present may continue
to transact business until adjournment, notwithstanding the withdrawal of enough
shareholders originally present to leave less than a quorum.

      Section 2.05. Voting. At each meeting of the shareholders every
shareholder having the right to vote shall be entitled to vote either in person
or by proxy. Each shareholder, unless the articles of incorporation or statutes
provide otherwise, shall have one vote for each share having voting power
registered in such shareholder's name on the books of the corporation. Jointly
owned shares may be voted by any joint owner unless the corporation receives
written notice from any one of them denying the authority of that person to vote
those shares. Upon the demand of any shareholder, the vote upon any question
before the meeting shall be by ballot. All questions shall be decided by the
greater of (1) a majority of the voting power of the shares present and entitled
to vote on that item of business, or (2) a majority of the number of shares
entitled to vote that would constitute a quorum for the transaction of business
at the meeting except if otherwise required by statute, the articles of
incorporation, or these bylaws.

      Section 2.06. Determination Date. The Board of Directors may fix a date,
not fewer than 10 nor more than 60 days, preceding the date of any meeting of
shareholders, as the date for the determination of the shareholders entitled to
notice of, and to vote at, such meeting, notwithstanding any transfer of shares
on the books of the corporation after any determination date so fixed. If the
Board of Directors fails to fix a date for determination of the shareholders
entitled to notice of, and to vote at, any meeting of shareholders, the
determination date shall be the 20th day preceding the date of such meeting.

      Section 2.07. Notice of Meetings. There shall be mailed to each
shareholder, shown by the books of the corporation to be a holder of record of
voting shares, at such holder's address as shown by the books of the
corporation, a notice setting out the date, time and place of each regular
meeting and each special meeting, except where the meeting is an adjourned
meeting and the date, time and place of the meeting were announced at the time
of adjournment, which notice


                                      -2-


shall be mailed at least five days prior thereto. Every notice of any special
meeting called pursuant to Section 2.03 hereof shall state the purpose or
purposes for which the meeting has been called, and the business transacted at
all special meetings shall be confined to the purposes stated in the notice. The
written notice of any meeting at which a plan of merger or exchange is to be
considered shall so state such as a purpose of the meeting. A copy or short
description of the plan of merger or exchange shall be included in or enclosed
with such notice.

      Section 2.08. Waiver of Notice. Notice of any regular or special meeting
may be waived by any shareholder either before, at or after such meeting, orally
or in a writing signed by such shareholder or a representative entitled to vote
the shares of such shareholder. A shareholder, by attendance at any meeting of
shareholders, shall be deemed to have waived notice of such meeting, except
where the shareholder objects at the beginning of the meeting to the transaction
of business because the meeting is not lawfully called or convened, or objects
before a vote on an item of business because the item may not lawfully be
considered at such meeting and does not participate in the consideration of the
item at that meeting.

                                  ARTICLE III
                                   DIRECTORS

      Section 3.01. General Powers. The business and affairs of the corporation
shall be managed by or under the authority of the Board of Directors, except as
otherwise permitted by statute.

      Section 3.02. Number. Qualifications and Term of Office. The size of the
Board of Directors shall be fixed by the Board of Directors within the limits
prescribed by the statute and the articles of incorporation. Directors shall be
natural persons, but need not be shareholders. Each of the directors shall hold
office until the regular meeting of shareholders next held after such director's
election and until such director's successor shall have been elected and shall
qualify, or until the earlier death, resignation, removal, or disqualification
of such director.

      Section 3.03. Board Meetings. Meetings of the Board of Directors may be
held from time to time at such time and place within or without the state of
Nevada as may be designated in the notice of such meeting.

      Section 3.04. Calling Meetings; Notice. Meetings of the Board of Directors
may be called by the chairman of the Board by giving at least twenty-four hours'
notice, or by any other director by giving at least five days' notice, of the
date, time and place thereof to each director, by mail, telephone, telegram or
in person. If the day or date, time and place of a meeting of the Board of
Directors have been announced at a previous meeting of the Board, no notice is
required. Notice of an adjourned meeting of the Board of Directors need not be
given other than by announcement at the meeting at which adjournment is taken.

      Section 3.05. Waiver of Notice. Notice of any meeting of the Board of
Directors may be waived by any director either before, at, or after such
meeting, orally or in a writing signed by such director. A director, by his or
her attendance at any meeting of the Board of Directors, shall be deemed to have
waived notice of such meeting, except where the director objects at the


                                      -3-


beginning of the meeting to the transaction of business because the meeting is
not lawfully called or convened and such objecting director does not participate
thereafter in the meeting.

      Section 3.06. Quorum. A majority of the directors holding office
immediately prior to a meeting of the Board of Directors shall constitute a
quorum for the transaction of business at such meeting.

      Section 3.07. Absent Directors. A director may give advance written
consent or opposition to a proposal to be acted on at a meeting of the Board of
Directors. If such director is not present at the meeting, consent or opposition
to a proposal does not constitute presence for purposes of determining the
existence of a quorum, but consent or opposition shall be counted as a vote in
favor of or against the proposal and shall be entered in the minutes or other
record of action at the meeting, if the proposal acted upon at the meeting is
substantially the same or has substantially the same effect as the proposal to
which the director has consented or objected.

      Section 3.08. Electronic Communications. Any or all directors may
participate in any meeting of the Board of Directors, or of any duly constituted
committee thereof, by any means of communication through which the directors may
simultaneously hear each other during such meeting. For the purposes of
establishing a quorum and taking any action at the meeting, such directors
participating pursuant to this Section 3.08 shall be deemed present in person at
the meeting; and the place of the meeting shall be the place of origination of
the conference telephone conversation or other comparable communication
technique, unless otherwise specified in the notice of such meeting.

      Section 3.09. Vacancies; Newly Created Directorships. Vacancies on the
Board of Directors of this corporation occurring by reason of death,
resignation, removal or disqualification shall be filled for the unexpired term
by the affirmative vote of a majority of the remaining directors of the Board
although less than a quorum; newly created directorships resulting from an
increase in the authorized number of directors by action of the Board of
Directors as permitted by Section 3.02 may be filled by the affirmative vote of
a majority vote of the directors serving at the time of such increase; and each
director elected pursuant to this Section 3.09 shall be a director until such
director's successor is elected by the shareholders at their next regular or
special meeting.

      Section 3.10. Removal. Any or all of the directors may be removed from
office at any time, with or without cause, by the affirmative vote of the
shareholders holding a majority of the shares entitled to vote at an election of
directors, except as otherwise provided by the General Corporation Law of
Nevada. A director named by the Board of Directors to fill a vacancy may be
removed from office at any time, with or without cause, by the affirmative vote
of the remaining directors if the shareholders have not elected directors in the
interim between the time of the appointment to fill such vacancy and the time of
the removal. In the event that the entire Board or any one or more directors be
so removed, new directors may be elected at the same meeting.

      Section 3.11. Committees. A resolution approved by the affirmative vote of
a majority of the Board of Directors may establish committees having the
authority of the Board in the management of the business of the corporation to
the extent provided in the resolution. A


                                      -4-


committee shall consist of one or more natural persons, who need not be
directors, appointed by affirmative vote of a majority of the directors present.
Committees are subject to the direction and control of, and vacancies in the
membership thereof shall be filled by, the Board of Directors, except as
provided by the General Corporation Law of Nevada.

      A majority of the members of the committee present at a meeting is a
quorum for the transaction of business, unless a larger or smaller proportion or
number is provided in a resolution approved by the affirmative vote of a
majority of the directors present.

      Section 3.12. Committee of Disinterested Persons. The Board may establish
a committee composed of two or more disinterested directors or other
disinterested persons to determine whether it is in the best interests of the
corporation to pursue a particular legal right or remedy of the corporation and
whether to cause the dismissal or discontinuance of a particular proceeding that
seeks to assert a right of remedy on behalf of the corporation. The committee,
once established, is not subject to the direction or control of, or termination
by, the Board. A vacancy on the committee may be filled by a majority vote of
the remaining committee members. The good faith determinations of the committee
are binding upon the corporation and its directors, officers and shareholders.
The committee terminates when it issues a written report of its determinations
to the Board.

      Section 3.13. Written Action. Any action which might be taken at a meeting
of the Board of Directors, or any duly constituted committee thereof, except for
those actions which must be approved by the shareholders, may be taken without a
meeting if done in writing and signed by the number of directors that would be
required to take the same action at a meeting of the Board at which all
directors were present, as permitted by the corporation's articles of
incorporation.

      Section 3.14. Compensation. Directors who are not salaried officers of
this corporation, shall receive such compensation as shall be determined, from
time to time, by resolution of the Board of Directors. The Board of Directors
may, by resolution, provide that all directors shall receive their expenses, if
any, of attendance at meetings of the Board of Directors or any committee
thereof. Nothing herein contained shall be construed to preclude any director
from serving this corporation in any other capacity and receiving proper
compensation therefor.

                                   ARTICLE IV
                                    OFFICERS

      Section 4.01. Number. The corporation shall have one or more natural
persons exercising the function of Chief Executive Officer and Chief Financial
Officer. The Board of Directors may elect or appoint such other officers or
agents as it deems necessary for the operation and management of the
corporation, with such rights, powers, duties and responsibilities as may be
determined by these bylaws, or the Board, including, without limitation, a
chairman of the Board, a president, one or more vice presidents, a treasurer and
a secretary. Any number of offices may be held by the same person.

      Section 4.02. Election. Term of Office and Qualifications. The Board of
Directors shall elect or appoint, by resolution approved by the affirmative vote
of a majority of the directors


                                      -5-


present, from within or without their number, the president, treasurer and such
other officers as may be deemed advisable, each of whom shall have the powers,
rights, duties, responsibilities, and terms of office provided for in these
bylaws or a resolution of the Board of Directors not inconsistent therewith. The
president and all other officers who may be directors shall continue to hold
office until the election and qualification of their successors, notwithstanding
an earlier termination of their directorship.

      Section 4.03. Removal and Vacancies. Any officer may be removed from
office by the affirmative vote of a majority of the Board of Directors at any
time, with or without cause. Such removal, however, shall be without prejudice
to the contract rights of the person so removed. If there be a vacancy in an
office of the corporation by reason of death, resignation, removal,
disqualification or otherwise, such vacancy shall be filled for the unexpired
term by the Board of Directors.

      Section 4.04. Chairman of the Board. The chairman of the Board, if one is
elected, shall preside at all meetings of the directors and shall have such
other duties as may be prescribed, from time to time, by the Board of Directors.

      Section 4.05. President. The president shall be the chief executive
officer and shall have general active management of the business of the
corporation. In the absence of the chairman of the Board, the president shall
preside at all meetings of the directors. The president shall see that all
orders and resolutions of the Board of Directors are carried into effect. The
president shall execute and deliver, in the name of the corporation, any deeds,
mortgages, bonds, contracts or other instruments pertaining to the business of
the corporation unless the authority to execute and deliver is required by law
to be exercised by another person or is expressly delegated by the articles or
bylaws or by the Board of Directors to some other officer or agent of the
corporation. The president shall maintain records of and, whenever necessary,
certify all proceedings of the Board of Directors and the shareholders, and in
general, shall perform all duties usually incident to the office of the
president, and shall have such other duties as may, from time to time, be
prescribed by the Board of Directors.

      Section 4.06. Vice President. Each vice president, if one or more is
elected, shall have such powers and shall perform such duties as prescribed by
the Board of Directors or by the president. In the event of the absence or
disability of the president, the vice presidents shall succeed to the
president's power and duties in the order designated by the Board of Directors.

      Section 4.07. Secretary. The secretary, if one is elected, shall be
secretary of and shall attend all meetings of the shareholders and Board of
Directors and shall record all proceedings of such meetings in the minute book
of the corporation, shall give or cause to be given proper notice of meetings of
shareholders and directors, and shall perform such other duties as may, from
time to time, be prescribed by the Board of Directors or by the president.

      Section 4.08. Treasurer. The treasurer shall be the chief financial
officer and shall keep accurate financial records for the corporation, and shall
deposit all moneys, drafts and checks in the name of, and to the credit of, the
corporation, in such banks and depositories as the Board of Directors shall,
from time to time, designate. The treasurer shall have power to endorse, or
caused to be endorsed, for deposit, all notes, checks and drafts received by the
corporation, and


                                      -6-


shall disburse the funds of the corporation, as ordered by the Board of
Directors, making proper vouchers therefor. The treasurer shall render to the
president and the directors, whenever requested, an account of all transactions
as treasurer and of the financial condition of the corporation, and shall
perform such other duties as may, from time to time, be prescribed by the Board
of Directors or by the president.

      Section 4.09. Compensation. The officers of the corporation shall receive
such compensation for their services as may be determined, from time to time, by
resolution of the Board of Directors.

                                   ARTICLE V
                           SHARES AND THEIR TRANSFER

      Section 5.01. Certificates for Shares. All shares of the corporation shall
be certificated shares. Every owner of shares of the corporation shall be
entitled to a certificate, to be in such form as shall be prescribed by the
Board of Directors, in accordance with the General Corporation Law of Nevada.
The certificates for such shares shall be numbered in the order in which they
shall be issued and shall be signed, in the name of the corporation, by the
president and by the secretary or an assistant secretary or by such officers as
the Board of Directors may designate. If the certificate is signed by a transfer
agent or registrar, such signatures of the corporate officers may be by
facsimile, if authorized by the Board of Directors. Every certificate
surrendered to the corporation for exchange or transfer shall be canceled, and
no new certificate or certificates shall be issued in exchange for any existing
certificate until such existing certificate shall have been so canceled, except
in cases provided for in Section 5.04.

      Section 5.02. Issuance of Shares. The Board of Directors is authorized to
cause to be issued shares of the corporation up to the full amount authorized by
the articles of incorporation in such amounts and representing such classes and
series, if any, as may be determined by the Board of Directors and as may be
permitted by law and the articles of incorporation. Shares may be issued for any
consideration, including, without limitation, in consideration of money or other
property, tangible or intangible, received or to be received by the corporation
under a written agreement, or of services rendered or to be rendered to the
corporation under a written agreement. At the time of approval of the issuance
of shares, the Board of Directors shall state, by resolution, its determination
of the fair value to the corporation in monetary terms of any consideration
other than cash for which shares are to be issued.

      Section 5.03. Transfer of Shares. Transfer of shares on the books of the
corporation may be authorized only by the shareholder named in the certificate,
or the shareholder's legal representative, or the shareholder's duly authorized
attorney-in-fact, and upon surrender of the certificate or the certificates for
such shares. The corporation may treat as the absolute owner of shares of the
corporation, the person or persons in whose name shares are registered on the
books of the corporation.

      Section 5.04. Loss of Certificates. Except as otherwise provided by the
General Corporation Law of Nevada, as amended, any shareholder claiming a
certificate for shares to be lost, stolen, or destroyed shall make an affidavit
of that fact in such form as the Board of Directors shall require and shall, if
the Board of Directors so requires, give the corporation a


                                      -7-


bond of indemnity in form, in an amount, and with one or more sureties
satisfactory to the Board of Directors, to indemnify the corporation against any
claim which may be made against it on account of the reissuance of such
certificate, whereupon a new certificate may be issued in the same tenor and for
the same number of shares as the one alleged to have been lost, stolen or
destroyed.

                                   ARTICLE VI
                           DISTRIBUTIONS, RECORD DATE

      Section 6.01. Distributions. Subject to the provisions of the articles of
incorporation, of these bylaws, and of law, the Board of Directors may authorize
and cause the corporation to make distributions whenever, and in such amounts or
forms as, in its opinion, are deemed advisable.

      Section 6.02. Record Date. Subject to any provisions of the articles of
incorporation, the Board of Directors may fix a date not exceeding 120 days
preceding the date fixed for the payment of any distribution as the record date
for the determination of the shareholders entitled to receive payment of the
distribution and, in such case, only shareholders of record on the date so fixed
shall be entitled to receive payment of such distribution notwithstanding any
transfer of shares on the books of the corporation after the record date.

                                  ARTICLE VII
                         BOOKS AND RECORDS, FISCAL YEAR

      Section 7.01. Share Register. The Board of Directors of the corporation
shall cause to be kept at its principal executive office, or at another place or
places within the United States determined by the Board:

            (1)   a share register not more than one year old, containing the
                  names and addresses of the shareholders and the number and
                  classes of shares held by each shareholder; and

            (2)   a record of the dates on which certificates or transaction
                  statements representing shares were issued.

      Section 7.02. Other Books and Records. The Board of Directors shall cause
to be kept at its principal executive office, or, if its principal executive
office is not in Nevada, shall make available at its Nevada registered office
within ten days after receipt by an officer of the corporation of a written
demand for them made by a shareholder or other person authorized by the General
Corporation Law of Nevada, originals or copies of:

            (1)   records of all proceedings of shareholders for the last three
                  years;

            (2)   records of all proceedings of the Board for the last three
                  years;

            (3)   its articles of incorporation and all amendments currently in
                  effect;

            (4)   its bylaws and all amendments currently in effect;


                                      -8-


            (5)   financial statements required by the General Corporation Law
                  of Nevada and the financial statements for the most recent
                  interim period prepared in the course of the operation of the
                  corporation for distribution to the shareholders or to a
                  governmental agency as a matter of public record;

            (6)   reports made to shareholders generally within the last three
                  years;

            (7)   a statement of the names and usual business addresses of its
                  directors and principal officers; and

            (8)   any shareholder voting or control agreements of which the
                  corporation is aware.

      Section 7.03. Fiscal Year. The fiscal year of the corporation shall be
determined by the Board of Directors.

                                  ARTICLE VIII
                         LOANS, GUARANTEES, SURETYSHIP

      The corporation may lend money to, guarantee an obligation of, become a
surety for, or otherwise financially assist a person if the transaction, or a
class of transactions to which the transaction belongs, is approved by the
affirmative vote of a majority of the directors present, and:

            (1)   is in the usual and regular course of business of the
                  corporation;

            (2)   is with, or for the benefit of, a related corporation, an
                  organization in which the corporation has a financial
                  interest, an organization with which the corporation has a
                  business relationship, or an organization to which the
                  corporation has the power to make donations;

            (3)   is with, or for the benefit of, an officer or other employee
                  of the corporation or a subsidiary, including an officer or
                  employee who is a director of the corporation or a subsidiary,
                  and may reasonably be expected, in the judgment of the Board,
                  to benefit the corporation; or

            (4)   has been approved by (a) the holders of two-thirds of the
                  voting power of the shares entitled to vote which are owned by
                  persons other than the interested person or persons, or (b)
                  the unanimous affirmative vote of the holders of all
                  outstanding shares whether or not entitled to vote.

Such loan, guarantee, surety contract or other financial assistance may be with
or without interest, and may be unsecured, or may be secured in the manner as a
majority of the directors present approve, including, without limitation, a
grant of or other security interest in shares of the corporation. Nothing in
this section shall be deemed to deny, limit or restrict the powers of guaranty,
surety or warranty of the corporation at common law or under a statute of the
state of Nevada.


                                      -9-


                                   ARTICLE IX
                       INDEMNIFICATION OF CERTAIN PERSONS

      Section 9.01. Indemnification. The corporation shall indemnify all
officers and directors of the corporation, for such expenses and liabilities, in
such manner, under such circumstances and to such extent as permitted by the
corporation's Articles of Incorporation and by the General Corporation Law of
Nevada, as now enacted or hereafter amended. Unless otherwise approved by the
Board of Directors, the corporation shall not indemnify any employee of the
corporation who is not otherwise entitled to indemnification pursuant to the
prior sentence of this Section 9.01.

      Section 9.02. Insurance. The corporation may purchase and maintain
insurance on behalf of any person in such person's official capacity against any
liability asserted against and incurred by such person in or arising from that
capacity, whether or not the corporation would otherwise be required to
indemnify the person against the liability.

                                   ARTICLE X
                                   AMENDMENTS

      These bylaws may be amended or altered by a vote of the majority of the
whole Board of Directors at any meeting. Such authority of the Board of
Directors is subject to the power of the shareholders, exercisable in the manner
provided in the General Corporation Law of Nevada, to adopt, amend, or repeal
bylaws adopted, amended, or repealed by the Board of Directors. The Board of
Directors shall not adopt, amend or repeal any bylaws fixing a quorum for
meetings of shareholders, prescribing procedures for removing directors or
filling vacancies in the Board of Directors, or fixing the number of directors
or their classifications, qualifications, or terms of office, except that the
Board of Directors may adopt or amend any bylaw to increase their number.

                                   ARTICLE XI
                        SECURITIES OF OTHER CORPORATIONS

      Section 11.01. Voting Securities Held by the Corporation. Unless otherwise
ordered by the Board of Directors, the president shall have full power and
authority on behalf of the corporation (a) to attend any meeting of security
holders of other corporations in which the corporation may hold securities and
to vote such securities on behalf of this corporation; (b) to execute any proxy
for such meeting on behalf of the corporation; or (c) to execute a written
action in lieu of a meeting of such other corporation on behalf of this
corporation. At such meeting, the president shall possess and may exercise any
and all rights and powers incident to the ownership of such securities that the
corporation possesses. The Board of Directors may, from time to time, grant such
power and authority to one or more other persons and may remove such power and
authority from the president or any other person or persons.

      Section 11.02. Purchase and Sale of Securities. Unless otherwise ordered
by the Board of Directors, the president shall have full power and authority on
behalf of the corporation to purchase, sell, transfer or encumber any and all
securities of any other corporation owned by the corporation, and may execute
and deliver such documents as may be necessary to effectuate such


                                      -10-


purchase, sale, transfer or encumbrance. The Board of Directors may, from time
to time, confer like powers upon any other person or persons.


                                      -11-

EX-3.17

                                                                    Exhibit 3.17

                      AMENDED ARTICLES OF INCORPORATION OF
                            KOHLER SPECIALTIES, INC.

      The undersigned, being all or the incorporators of Kohler Specialties,
Inc., a corporation under the Minnesota Business Corporation Act, hereby adopt
the following amended Articles of Incorporation to supersede the original
Articles of Incorporation filed in the office of the Secretary of State of the
State of Minnesota on August 24th, 1961, and the undersigned hereby certify that
none of the shares of Kohler Specialties, Inc. have been allotted:

                                   ARTICLE I

      The name of this corporation shall be KOHLER MIX SPECIALTIES, INC.

                                   ARTICLE II

      The purposes for which this corporation is formed and the general nature
of its business shall be to buy, sell, manufacture, process and distribute ice
cream and ice cream mixes, dairy products, frozen dessert products, beverages
and related products; to acquire, hold, lease, encumber, improve, convey or
otherwise dispose of real and personal property within or without the State of
Minnesota; to borrow and lend money on real estate and other security; to own,
buy, sell, lease, exchange and deal in any and all kinds of personal property;
to conduct business in the State of Minnesota and elsewhere; to draw, accept,
endorse, exchange, pledge, mortgage, discount, buy and sell promissory notes,
bonds, stocks, debentures, contracts, negotiable instruments, commercial paper
and other securities; and generally to do any and all other business germane or
incidental to the foregoing business,



and to do and perform any and all other acts or things convenient, necessary or
proper for the transaction and prosecution of the business of the corporation.

                                  ARTICLE III

      The corporate existence of this corporation shall be perpetual.

                                   ARTICLE IV

      The location and post office address of its registered office in this
state shall be 4O41 Highway 61, White Bear Lake, Minnesota.

                                   ARTICLE V

      The corporation shall be authorized to issue 2500 shares of no par value
stock.

                                   ARTICLE VI

      The corporation shall begin business with stated capital of ONE THOUSAND
DOLLARS.

                                  ARTICLE VII

      The names, post office addresses and terms of office of the persons who
shall constitute the first Board of Directors are as follows:

      Name                          Address
      ----                          -------

Francis N. Belland         3515 Highway 61,
                           White Bear Lake, Minnesota

Donald W. Kohler           1674 Birch Lake Road,
                           White Bear Lake, Minnesota

Walter F. Kohler           4625 Otter Lake Road,
                           White Bear Lake, Minnesota

Clifford N. Kohler         1694 Birch Lake Road,
                           White Bear Lake, Minnesota

      The said Board of Directors shall hold office until the first meeting of
the stockholders, and until their successors are


                                      -2-


elected and qualified.

                                  ARTICLE VIII

      The names and post office addresses of each of the incorporators are as
follows:

     Name                               Address
     ----                               -------

Richard E. Kyle            W-2162 First National Bank Bldg.,
                           St. Paul 1, Minnesota

Frank N. Graham            W-2162 First National Bank Bldg.,
                           St. Paul 1, Minnesota

A. A. Gerlach              W-2162 First National Bank Bldg.,
                           St. Paul 1, Minnesota

                                   ARTICLE IX

      Authority to make and alter by-laws, to accept or reject subscriptions for
shares, and to make allotment of shares is vested in the Board of Directors to
the full extent permitted by law.

      IN WITNESS WHEREOF the undersigned have hereunto set their hands this 13th
day of September, 1961.

   In Presence of:

                                        /s/ Richard E. Kyle
                                        ----------------------------------------
                                        Richard E. Kyle

/s/ Edythe Iverson
- ----------------------------------

                                        /s/ Frank N. Graham
                                        ----------------------------------------
                                        Frank N. Graham

/s/ Florence B. [Illegible]
- ----------------------------------

                                        /s/ A. A. Gerlach
                                        ----------------------------------------
                                        A. A. Gerlach

STATE OF MINNESOTA )
                   ) ss
COUNTY OF RAMSEY   )

      On this 13th day of September, 1961, before me personally appeared Richard
E. Kyle, Frank N. Graham and A. A. Gerlach, to me known to be the same persons
described in, and who executed the foregoing instrument, and they acknowledged
that they executed the same as their free act and deed.


                                        /s/ Edythe Iverson
                                        ----------------------------------------
                                        Notary Public, Ramsey County, Minn.
                                        My Commission Expires Aug. 26, 1967

[NOTARIAL SEAL OF MINNESOTA]                            EDYTHE IVERSON
                                             Notary Public, Ramsey County, Minn.
                                            My Commission Expires Aug. 26, 1967.


                                      -3-

EX-3.18

                                                                    Exhibit 3.18

                                   BY-LAWS OF

                          KOHLER MIX SPECIALTIES, INC.

                                     OFFICES

      Sec. 1. The registered office of the corporation shall be at 4041 Highway
61, White Bear Lake, Minnesota, subject to change by the board of directors as
provided in the Minnesota, Business Corporation Act. The corporation shall have
other offices at such places as the board of directors may from time to time
determine.

                                      SEAL

      Sec. 2. The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Minnesota". Said seal may be used by
causing it, or a facsimile thereof, to be impressed or affixed or reproduced or
otherwise.

                             SHAREHOLDERS' MEETINGS

      Sec. 3. All meetings of the shareholders shall be held at the registered
office of the corporation, except that any meeting may be held at any other
place within or without the State of Minnesota which is designated by the board
of directors, or by written consent of all the shareholders entitled to vote
thereat.

      Sec. 4. The shareholders shall hold a meeting each calendar year, known as
the annual meeting, at which they shall elect directors and may transact any
other business. No business with respect to which special notice is required
shall be transacted unless such notice shall have been given. The time of the
annual meeting in each calendar year shall be fixed by the board of directors.
When the annual meeting is not held, or the directors are not elected thereat,
directors may be elected at a special meeting held for that purpose and it shall
be the duty of the president, vice president or secretary, upon demand of any
shareholder entitled to vote, to call such special meeting.

      Sec. 5. Special meetings of the shareholders may be called for any purpose
or purposes, at any time by the president, by the board of directors or any two
or more members thereof, or, in the manner hereinafter provided, by one or more
shareholders holding not less than one-tenth of the voting power of the
shareholders. Upon request in writing by registered mail or delivered in person
to the president, vice president or secretary, by any person or persons entitled
to call a meeting of shareholders, it.



shall be the duty of such officer forthwith to cause notice to be given to the
shareholders entitled to vote, of a meeting to be held at such time as such
officer may fix not less than ten nor more than sixty days after the receipt of
such request. If such notice shall not be given within seven days after delivery
or the date of mailing of such request, the person or persons requesting the
meeting may fix the time of meeting and give notice in the manner provided by
law, or these by-laws.

      Sec. 6. If any meeting of the shareholders be adjourned to another time or
place, no notice as to such adjourned meeting need be given other than
announcement at the meeting at which such adjournment is taken.

      Sec. 7. Written notice of each meeting of shareholders stating the time
and place, and in case of a special meeting, the purpose, shall be given by the
secretary or other person charged with that duty to each shareholder entitled to
vote at such meeting. Such notice shall be mailed at least ten days prior to the
meeting to each such shareholder at his last known address as the same appears
upon the books of the corporation.

      Sec. 8. Notice of the time, place and purpose of any meeting of the
shareholders may be waived in writing by any shareholder. Such waiver may be
given before or after the meeting and shall be filed with the secretary, or
entered upon the records of the meeting.

      Sec. 9. The presence in person or by proxy of the holders of the majority
of shares entitled to vote at the meeting shall constitute a quorum for the
transaction of business. In the absence of a quorum, any meeting may be
adjourned from time to time. The shareholders present at a duly called or held
meeting at which a quorum is present may continue to transact business until
adjournment notwithstanding the withdrawal of enough shareholders to leave less
than a quorum.

                                  VOTING RIGHTS

      Sec. 10. Every shareholder of record of common stock, or his legal
representatives, at the date fixed for the determination of the persons entitled
to vote at a meeting of shareholders, or, if no date has been fixed, then at the
date of the meeting, shall be entitled at such meeting to one vote for each
share of common stock standing in his name on the books of the corporation.

      Sec. 11. The board of directors may fix a time not exceeding forty days
preceding the date of any meeting of shareholders,


                                       -2-


as a record date for the determination of the shareholders entitled to notice of
and to vote at such meeting, and in such case only shareholders of record on the
date so fixed, or their legal representatives, shall be entitled to notice of
and to vote at such meeting, notwithstanding any transfer of any shares on the
books of the corporation after any record date so fixed. The board of directors
may close the books of the corporation against transfers of shares during the
whole or any part of such period.

      Sec. 12. A shareholder may cast his vote in person or through proxy. The
appointment of a proxy shall be in writing, filed with the secretary at or
before the meeting. The authority of a proxy, if not coupled with an interest,
may be terminated at will. Unless otherwise provided in the appointment, the
proxy's authority shall cease eleven months after the appointment. A termination
of a proxy's authority by act of the shareholder shall be ineffective until
written notice of the termination has been given to the secretary. Unless
otherwise provided therein, an appointment filed with the secretary shall have
the effect of revoking all appointments of prior date.

      Sec. 13. If a shareholder shall appoint two or more persons to act as
proxies, and if the instrument shall not otherwise provide, then a majority of
such persons present at the meeting, or if only one shall be present then that
one, shall have and may exercise all of the powers conferred by such instrument
upon all of the persons so appointed; and if such proxies be equally divided as
to the right and manner of voting in any particular case, the vote shall be
divided equally among the proxies.

      Sec. 14. A person or persons holding shares in a representative or
fiduciary capacity may vote the same in person or by proxy. General or
discretionary power may be conferred on such proxy. Where shares are held
jointly by three or more representatives or fiduciaries, the will of the
majority of them shall control the manner of voting or the giving of a proxy,
unless the instrument or order appointing them otherwise directs.

      Sec. 15. A proxy's authority shall not be revoked by the death or
incapacity of the maker unless before the vote is cast or the authority is
exercised, written notice of such death or incapacity is given to the
corporation.

      Sec. 16. A transferee of pledged shares shall be regarded by the
corporation as the owner thereof unless the instrument of transfer discloses the
pledge. A person whose shares are transferred on the books of the corporation as
a disclosed pledge shall


                                      -3-


be entitled to vote unless in the instrument of transfer the pledgor shall have
expressly empowered the pledgee to vote thereon, in which case only the pledgee
or his proxy may represent such shares and vote thereon.

      Sec. 17. Any corporation owning shares in this corporation may vote the
same by its president or by proxy appointed by him unless some other person, by
resolution of its board of directors, shall be appointed to vote such shares in
which case such person shall be entitled to vote upon the production of a
certified copy of such resolution.

      Sec. 18. The corporation shall not vote any share of its own issue
belonging to it, nor shall any such shares be counted in calculating the total
voting power of all shareholders of such corporation at any given time.

      Sec. 19. Any action which may be taken at a meeting of the shareholders
may be taken without a meeting if authorized by a writing signed by all of the
holders of shares who would be entitled to a notice of a meeting for such
purpose. Whenever a certificate in respect of any such action is required to be
filed in the office of the Secretary of State, the officers signing the same
shall state therein that the action was effected in the manner aforesaid.

                                    DIRECTORS

      Sec. 20. The business of the corporation shall be managed by a board of
not less than three and not more than seven directors who need not be
shareholders and who shall be elected by the shareholders.

      Sec. 21. Subject to the foregoing limitation as to number of directors,
the shareholders shall at each annual meeting fix the number of directors for
the ensuing year and elect the number of directors so fixed, by majority vote,
to serve for a period of one year or until their successors have been elected
and qualified.

      Sec. 22. Vacancies in the board of directors shall be filled by the
remaining directors of the board, though less than a quorum, and each person so
elected shall be a director until his successor is elected by the shareholders
who may make such election at their next annual meeting or at any special
meeting duly called for that purpose.

      Sec. 23. All meetings of the board of directors shall be


                                      -4-


held at the registered office of the corporation except that any meeting may be
held at such place, whether in the State of Minnesota or elsewhere, as a
majority of the members of the board may from time to time appoint.

      Sec. 24. Notice shall be given to each director of the time and place of
each meeting of the board, in writing, personally, or by mail or telegram, at
least three days prior to the meeting, but any director may in writing, either
before or after the meeting, waive notice thereof; and without notice any
director by his attendance at and participation in the action taken at any
meeting, shall be deemed to have waived notice.

      Sec. 25. Meetings may be called by any member of the board by giving to
each of the other members written notice of the time and place of meeting,
mailed at least ten days before the time of meeting.

      Sec. 26. A majority of the board of directors shall be necessary to
constitute a quorum for the transaction of business. The acts of a majority of
the directors present at a meeting at which a quorum is present shall be the
acts of the board of directors.

      Sec. 27. Any action which might be taken at a meeting of the board of
directors may be taken without a meeting if done in writing, signed by all of
the directors.

      Sec. 28. The board of directors may, by unanimous affirmative action of
the entire board, designate two or more of their number to constitute an
executive committee, which, to the extent determined by unanimous affirmative
action of the entire board, shall have and exercise the authority of the board
in the management of the business of the corporation. Any such executive
committee shall act only in the interval between meetings of the board, and
shall be subject at all times to the control and direction of the board.

      Sec. 29. The entire board of directors or any individual director may be
removed from office, with or without cause, by a vote of shareholders holding
the majority of the shares entitled to vote at an election of directors. In case
the board or any one or more directors be so removed, new directors may be
elected at the same meeting.

      Sec. 30. The board of directors are authorized to issue shares of the
company to the full amount authorized by the


                                      -5-


Articles of Incorporation in such amounts and at such times and for such
consideration as may be determined by the board and may be permitted by law.

      Sec. 31. The board of directors may make and alter by-laws, subject to the
power of the shareholders to change or repeal such by-laws, provided however,
the board shall not make or alter any by-law fixing their number,
qualifications, classifications, or term of office.

      Sec. 32. In addition to the powers and authorities conferred by these
by-laws and the Articles of Incorporation, the board of directors may exercise
all such powers of the corporation, and do all such lawful acts and things as
are not by statute or by the Articles of Incorporation, or by these by-laws
directed or required to be exercised or done by the shareholders.

                                    OFFICERS

      Sec. 33. The board of directors shall elect a president, not more than two
vice presidents, a secretary and a treasurer, who shall constitute the officers
of the corporation, and the board may appoint such other officers and agents as
they may deem necessary. The president shall be a director but shall hold office
until his successor is elected notwithstanding an earlier termination of his
office as director. No one of the other officers need be a director but a vice
president who is not a director shall not succeed to the office of president.
Any two of the offices specifically named above, except those of president and
vice president may be held by the same person. Said officers shall be elected
annually by the directors as soon as practicable following the annual meeting of
shareholders, and shall hold office for one year following their election or
until their successors are chosen and qualify in their stead.

      Sec. 34. The duties of the officers shall be as follows:

      The president shall be the chief executive officer of the corporation,
shall preside at all meetings, shall have general management of the business,
affairs, property and interests of the corporation, shall make reports to the
board of directors and shareholders, shall execute all contracts and other
instruments on behalf of the corporation, and shall have the general powers and
duties of supervision and management usually vested in the office of the
president of a corporation.

      Any vice president may in the absence or disability of the


                                      -6-


president perform the duties and exercise the powers of the president and shall
perform such other duties as the board of directors shall prescribe.

      The secretary shall attend all meetings and record all votes and the
minutes of all proceedings in a book kept for that purpose, shall give or cause
to be given notice of all meetings, shall perform such other duties as may be
prescribed by the board of directors, shall keep in custody the seal of the
corporation and, when authorized by the board, affix the same to any instrument
requiring it, and shall perform all other duties incident to his office or
required by him to be performed by the board of directors.

      The treasurer shall have custody of the corporate funds and securities,
shall keep full and accurate books of account, shall deposit all monies and
other valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the board of directors, shall disburse the
funds of the corporation in such manner as may be ordered by the board, shall
render to the board of directors whenever they may require it an account of all
his transactions as treasurer and of the financial conditions of the
corporation, and shall perform all other duties incident to his office or
required by him to be performed by the board of directors.

      All of said officers shall also perform such duties in the management of
the business as may be determined by the board of directors from time to time.

      Sec. 35. Any officer may be removed by the board of directors, with or
without cause. Such removal, however, shall be without prejudice to the contract
rights of the person so removed.

      Sec. 36. The salaries of all officers and agents of the corporation shall
be fixed by the board of directors.

                             CERTIFICATES OF SHARES

      Sec. 37. The certificates of shares of the corporation shall be numbered
and shall be entered in the books of the corporation as they are issued. They
shall exhibit the holder's name, the number of shares, shall conform to legal
requirements, and shall be signed by the president or vice president, and the
secretary or treasurer.

      Sec. 38. Any shareholder claiming a certificate of share


                                      -7-


to be lost or destroyed shall make an affidavit or affirmation of that fact in
such form as the board of directors may require, and shall, if the directors so
require give the corporation a bond of indemnity in form and with one or more
sureties satisfactory to the board, in at least double the value of the stock
represented by said certificate, whereupon a new certificate may be issued of
the same tenor and for the same number of shares as the one alleged to have been
lost or destroyed.

                               TRANSFER OF SHARES

      Sec. 39. Transfers of shares shall be made on the books of the corporation
only by the person named in the certificate or by attorney lawfully constituted
in writing and upon surrender of the certificate therefor properly endorsed. The
corporation shall be entitled to treat the holder of record of any share or
shares of stock as the holder in fact thereof and accordingly shall not be bound
to recognize any equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by the laws of Minnesota or these
by-laws.

      Sec. 40. Dividends of the corporation, when earned, may be declared by the
board of directors, subject to the conditions and limitations imposed by the
statutes of Minnesota. Before payment of any dividend there may be set aside out
of the earned surplus of the corporation such sum or sums as the directors from
time to time in their absolute discretion deem expedient as a reserve to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for any other purpose which the directors shall
deem to be in the interest of the corporation.

                          RECORDS AT REGISTERED OFFICE

      Sec. 41. The corporation shall keep at its registered office the
following:

      1. A share register giving the names and addresses of the shareholders,
the number and class of shares, held by each, and the dates on which the
certificates therefor were issued.

      2. Records of all proceedings of shareholders and directors.

      3. By-laws and all amendments thereto.

      4. Reports made to shareholders or any of them within the


                                      -8-


next preceding three years.

      5. A statement, open to public inspection, of the names and post office
addresses of its principal officers.

                                      LOANS

      Sec. 42. The corporation shall not lend any of its assets to any officer
or director of the corporation, nor to any shareholder of the corporation on the
security of its shares. The corporation shall not take as security for any debt
a lien upon its shares unless such lien shall be taken to secure a debt
previously contracted.

                                   AMENDMENTS

      Sec. 43. In addition to and in limitation of the power of the board of
directors to make and alter by-laws, these by-laws may be changed or repealed by
a majority vote of the shareholders present and represented at any annual
meeting or at any special meeting called for that purpose.


                                      -9-

EX-3.19

                                                                    Exhibit 3.19

                                      FILING #0001940710 PG 01 OF 03 VOL B-00246
                                         FILED 01/29/1999 03:45 PH PAGE 02890
                                                SECRETARY OF THE STATE
                                          CONNECTICUT SECRETARY OF THE STATE

                          CERTIFICATE OF INCORPORATION
                                       OF
                             KOHLER MIX SPECIALTIES
                              OF CONNECTICUT, INC.

      I, the undersigned, for the purpose of forming a corporation under and
pursuant to the provisions of the Connecticut Business Corporation Act, and any
amendments thereto, do hereby associate myself as a body corporate and do hereby
adopt the following Articles of Incorporation.

                                   ARTICLE I.
                                      NAME

      The name of this corporation shall be "Kohler Mix Specialties of
Connecticut, Inc."

                                   ARTICLE II.
                                     PURPOSE

      This corporation shall have all the powers and purposes attached by the
Connecticut Business Corporation Act.

                                  ARTICLE III.
                                REGISTERED OFFICE

      The registered office of this corporation shall be: C T Corporation
System, One Commercial Plaza, Hartford, Connecticut 06103. By signing below, C T
Corporation System accepts appointment as the registered agent for the
corporation.

                                         C T CORPORATION SYSTEM


                                         By: /s/ Michelle R. Justesen
                                             -----------------------------------
                                         Its: Asst. Secy. Michelle R. Justesen
                                             -----------------------------------

                                   ARTICLE IV.
                                  CAPITAL STOCK

      The corporation shall have the authority to issue twenty thousand (20,000)
shares of capital stock, all of which shall be common stock par value $.01 per
share.

                                   ARTICLE V.
                                   DIRECTORS

      1. The business of this corporation shall be managed by or under the
direction of a board of directors consisting of not less than one (1) director.
Directors need not be shareholders of the corporation.



                                      FILING #0001940710 PG 02 OF 03 VOL B-00246
                                         FILED 01/29/1999 03:45 PM PAGE 02891
                                                SECRETARY OF THE STATE
                                          CONNECTICUT SECRETARY OF THE STATE

      2. The Board of Directors, by affirmative vote of a majority vote thereof,
shall determine the number of directors of the corporation.

      3. Directors shall serve for the term for which they were appointed or
elected and until their successors are elected and qualified. If any vacancy
occurs in the Board of Directors, the remaining directors, by the affirmative
vote of a majority thereof, shall elect a director or directors to fill the
vacancy until the next regular meeting of the shareholders.

      4. The directors shall have all of the powers conferred upon directors by
the Connecticut Business Corporation Act.

      5. The following persons shall constitute the members of the corporation's
first Board of Directors:

                               Gregg A. Ostrander
                               Jeffrey M. Shapiro

                                   ARTICLE VI.
                           CERTAIN SHAREHOLDER RIGHTS.

      Shareholders shall have no preemptive rights to purchase, subscribe for or
otherwise acquire any new or additional securities of the corporation. No
shareholder shall be entitled to cumulative voting rights.

                                  ARTICLE VII.
                                     BYLAWS

      The power to adopt, amend and repeal Bylaws for the corporation shall be
vested in the Board of Directors, except to the extent otherwise limited by the
Connecticut Business Corporation Act.

                                  ARTICLE VIII.
                     LIMITATION ON LIABILITY/INDEMNIFICATION

      1. A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages in excess of the
compensation received by the director for serving the corporation during the
year of the violation for breach of fiduciary duty as a director, except as
provided in Connecticut Statute ss. 33-636(b). If the Connecticut Business
Corporation Act hereafter is amended to authorize the further elimination or
limitation of the liability of directors, then the liability of a director of
the corporation, in addition to the limitation on personal liability provided
herein, shall be limited to the fullest extent permitted by the amended
Connecticut Business Corporation Act. Any repeal or modification of this Article
by the shareholders of the corporation shall be prospective only and shall not
adversely affect any limitation on the personal liability of a director of the
corporation existing at the time of such repeal or modification.


                                     - 2 -


                                FILING #0001940710 PG 03 OF 03 VOL B-00246 FILED
                                        01/29/1999 03:45 PM PAGE 02892
                                             SECRETARY OF THE STATE
                                      CONNECTICUT SECRETARY OF THE STATE

      2. The corporation shall indemnify any person who, in relation to or
because of such person's service to the corporation in an official capacity, was
or is a party or is threatened to be made a party to any action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
an action by or in the right of the corporation), to the full extent permitted
by the Connecticut Business Corporation Act.

                                   ARTICLE IX.

      The name and address of the incorporator is as follows:

                              Albert A. Woodward
                              Mann & Simon, PLC
                              2000 Midwest Plaza West
                              801 Nicollet Mall
                              Minneapolis, Minnesota 55402

      IN WITNESS WHEREOF, the undersigned has hereunto subscribed his hand this
19th day of January, 1999.


                                                  /s/ Albert A. Woodward
                                                  ------------------------------
                                                  Albert A. Woodward


                                     - 3 -

EX-3.20

                                                                    Exhibit 3.20

                                     BYLAWS
                                       OF
                             KOHLER MIX SPECIALTIES
                              OF CONNECTICUT, INC.

                                    ARTICLE I
                             OFFICES, CORPORATE SEAL

      Section 1.01. Registered Office. The registered office of the corporation
in Connecticut shall be that set forth in the certificate of incorporation or in
the most recent amendment of the certificate of incorporation or resolution of
the directors filed with the Secretary of State of the State of Connecticut
changing the registered office.

      Section 1.02. Other Offices. The corporation may have such other offices,
within or without the State of Connecticut, as the directors shall, from time to
time, determine.

      Section 1.03. Corporate Seal. The corporation shall have no seal.

                                   ARTICLE II
                            MEETINGS OF SHAREHOLDERS

      Section 2.01. Place and Time of Meetings. Except as provided otherwise by
the Connecticut Business Corporation Act, meetings of the shareholders may be
held at any place, within or without the State of Connecticut, as may from time
to time be designated by the directors and, in the absence of such designation,
shall be held at the registered office of the corporation in the State of
Connecticut. The directors shall designate the time of day for each meeting and,
in the absence of such designation, every meeting of shareholders shall be held
at four o'clock p.m., Connecticut time.

      Section 2.02. Regular Meetings.

            (a) A regular meeting of the shareholders may be held on such date
      as the Board of Directors may by resolution establish.

            (b) At a regular meeting, the shareholders, voting as provided in
      the certificate of incorporation and these bylaws, shall elect qualified
      successors for directors who serve for an indefinite term or whose terms
      have expired and shall transact such other business as may properly come
      before them.

      Section 2.03. Special Meetings. Special meetings of the shareholders may
be held at any time and for any purpose and may be called by the chief executive
officer, the chief financial officer, two or more directors or by a shareholder
or shareholders holding 10% or more of the voting power of all shares entitled
to vote. A shareholder or shareholders holding the requisite percentage of the
voting power of all shares entitled to vote may demand a special meeting of the
shareholders by written notice of demand given to the chief executive officer or
chief financial officer of the corporation and containing the purposes of the
meeting. Within 30 days after receipt of demand by one of those officers, the
Board of Directors shall cause a special meeting of shareholders to be called
and held on notice no later than 90 days after receipt of the demand,



at the expense of the corporation. Special meetings shall be held on the date
and at the time and place fixed by the chief executive officer or the Board of
Directors, except that a special meeting called by or at the demand of a
shareholder or shareholders shall be held in the county where the principal
executive office is located. The business transacted at a special meeting shall
be limited to the purposes as stated in the notice of the meeting.

      Section 2.04. Quorum Adjourned Meetings. The holders of a majority of the
shares entitled to vote at a meeting shall constitute a quorum for the
transaction of business at any regular or special meeting. In case a quorum
shall not be present at a meeting, the meeting may be adjourned, and notice
shall be given (a) by announcement at the time of adjournment of the date, time
and place of the adjourned meeting, or (b) by notice of such adjourned meeting,
setting out the date, time and place of the adjourned meeting, mailed to each
shareholder entitled to vote at a meeting, at least 3 days before the date of
such adjourned meeting. If a quorum is present, a meeting may be adjourned from
time to time without notice other than announcement at the time of adjournment
of the date, time and place of the adjourned meeting. At adjourned meetings at
which a quorum is present, any business may be transacted which might have been
transacted at the meeting as originally noticed. If a quorum is present when a
duly called or held meeting is convened, the shareholders present may continue
to transact business until adjournment, notwithstanding the withdrawal of enough
shareholders originally present to leave less than a quorum.

      Section 2.05. Voting. At each meeting of the shareholders every
shareholder having the right to vote shall be entitled to vote either in person
or by proxy. Each shareholder, unless the certificate of incorporation or
statutes provide otherwise, shall have one vote for each share having voting
power registered in such shareholder's name on the books of the corporation.
Jointly owned shares may be voted by any joint owner unless the corporation
receives written notice from any one of them denying the authority of that
person to vote those shares. Upon the demand of any shareholder, the vote upon
any question before the meeting shall be by ballot. All questions shall be
decided by the greater of (1) a majority of the voting power of the shares
present and entitled to vote on that item of business, or (2) a majority of the
number of shares entitled to vote that would constitute a quorum for the
transaction of business at the meeting except if otherwise required by statute,
the certificate of incorporation, or these bylaws.

      Section 2.06. Determination Date. The Board of Directors may fix a date,
not fewer than 10 nor more than 60 days, preceding the date of any meeting of
shareholders, as the date for the determination of the shareholders entitled to
notice of, and to vote at, such meeting, notwithstanding any transfer of shares
on the books of the corporation after any determination date so fixed. If the
Board of Directors fails to fix a date for determination of the shareholders
entitled to notice of, and to vote at, any meeting of shareholders, the
determination date shall be the 20th day preceding the date of such meeting.

      Section 2.07. Notice of Meetings. There shall be mailed to each
shareholder, shown by the books of the corporation to be a holder of record of
voting shares, at such holder's address as shown by the books of the
corporation, a notice setting out the date, time and place of each regular
meeting and each special meeting, except where the meeting is an adjourned
meeting and the date, time and place of the meeting were announced at the time
of adjournment, which notice shall be mailed at least five days prior thereto.
Every notice of any special meeting called


                                     - 2 -


pursuant to Section 2.03 hereof shall state the purpose or purposes for which
the meeting has been called, and the business transacted at all special meetings
shall be confined to the purposes stated in the notice. The written notice of
any meeting at which a plan of merger or exchange is to be considered shall so
state such as a purpose of the meeting. A copy or short description of the plan
of merger or exchange shall be included in or enclosed with such notice.

      Section 2.08. Waiver of Notice. Notice of any regular or special meeting
may be waived by any shareholder either before, at or after such meeting, orally
or in a writing signed by such shareholder or a representative entitled to vote
the shares of such shareholder. A shareholder, by attendance at any meeting of
shareholders, shall be deemed to have waived notice of such meeting, except
where the shareholder objects at the beginning of the meeting to the transaction
of business because the meeting is not lawfully called or convened, or objects
before a vote on an item of business because the item may not lawfully be
considered at such meeting and does not participate in the consideration of the
item at that meeting.

                                   ARTICLE III
                                    DIRECTORS

      Section 3.01. General Powers. The business and affairs of the corporation
shall be managed by or under the authority of the Board of Directors, except as
otherwise permitted by statute.

      Section 3.02. Number, Qualifications and Term of Office. The size of the
Board of Directors shall be fixed by the Board of Directors within the limits
prescribed by the statute and the certificate of incorporation. Directors shall
be natural persons, but need not be shareholders. Each of the directors shall
hold office until the regular meeting of shareholders next held after such
director's election and until such director's successor shall have been elected
and shall qualify, or until the earlier death, resignation, removal, or
disqualification of such director.

      Section 3.03. Board Meetings. Meetings of the Board of Directors may be
held from time to time at such time and place within or without the state of
Connecticut as may be designated in the notice of such meeting.

      Section 3.04. Calling Meetings; Notice. Meetings of the Board of Directors
may be called by the chairman of the Board by giving at least twenty-four hours'
notice, or by any other director by giving at least five days' notice, of the
date, time and place thereof to each director, by mail, telephone, telegram or
in person. If the day or date, time and place of a meeting of the Board of
Directors have been announced at a previous meeting of the Board, no notice is
required. Notice of an adjourned meeting of the Board of Directors need not be
given other than by announcement at the meeting at which adjournment is taken.

      Section 3.05. Waiver of Notice. Notice of any meeting of the Board of
Directors may be waived by any director either before, at, or after such
meeting, orally or in a writing signed by such director. A director, by his or
her attendance at any meeting of the Board of Directors, shall be deemed to have
waived notice of such meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting is
not lawfully called or convened and such objecting director does not participate
thereafter in the meeting.


                                     - 3 -


      Section 3.06. Quorum. A majority of the directors holding office
immediately prior to a meeting of the Board of Directors shall constitute a
quorum for the transaction of business at such meeting.

      Section 3.07. Vacancies; Newly Created Directorships. Vacancies on the
Board of Directors of this corporation occurring by reason of death,
resignation, removal or disqualification shall be filled for the unexpired term
by the affirmative vote of a majority of the remaining directors of the Board
although less than a quorum; newly created directorships resulting from an
increase in the authorized number of directors by action of the Board of
Directors as permitted by Section 3.02 may be filled by the affirmative vote of
a majority vote of the directors serving at the time of such increase; and each
director elected pursuant to this Section 3.09 shall be a director until such
director's successor is elected by the shareholders at their next regular or
special meeting.

      Section 3.8. Removal. Any or all of the directors may be removed from
office at any time, with or without cause, by the affirmative vote of the
shareholders holding a majority of the shares entitled to vote at an election of
directors, except as otherwise provided by the Connecticut Business Corporation
Act. A director named by the Board of Directors to fill a vacancy may be removed
from office at any time, with or without cause, by the affirmative vote of the
remaining directors if the shareholders have not elected directors in the
interim between the time of the appointment to fill such vacancy and the time of
the removal. In the event that the entire Board or any one or more directors be
so removed, new directors may be elected at the same meeting.

      Section 3.9. Committees. A resolution approved by the affirmative vote of
a majority of the Board of Directors may establish committees having the
authority of the Board in the management of the business of the corporation to
the extent provided in the resolution. A committee shall consist of one or more
natural persons, who need not be directors, appointed by affirmative vote of a
majority of the directors present. Committees are subject to the direction and
control of, and vacancies in the membership thereof shall be filled by, the
Board of Directors, except as provided by the Connecticut Business Corporation
Act.

      A majority of the members of the committee present at a meeting is a
quorum for the transaction of business, unless a larger or smaller proportion or
number is provided in a resolution approved by the affirmative vote of a
majority of the directors present.

      Section 3.10. Committee of Disinterested Persons. The Board may establish
a committee composed of two or more disinterested directors or other
disinterested persons to determine whether it is in the best interests of the
corporation to pursue a particular legal right or remedy of the corporation and
whether to cause the dismissal or discontinuance of a particular proceeding that
seeks to assert a right of remedy on behalf of the corporation. The committee,
once established, is not subject to the direction or control of, or termination
by, the Board. A vacancy on the committee may be filled by a majority vote of
the remaining committee members. The good faith determinations of the committee
are binding upon the corporation and its directors, officers and shareholders.
The committee terminates when it issues a written report of its determinations
to the Board.


                                     - 4 -


      Section 3.11. Written Action. Any action which might be taken at a meeting
of the Board of Directors, or any duly constituted committee thereof, except for
those actions which must be approved by the shareholders, may be taken without a
meeting if done in writing and signed by all directors of the corporation.

      Section 3.12. Compensation. Directors who are not salaried officers of
this corporation, shall receive such compensation as shall be determined, from
time to time, by resolution of the Board of Directors. The Board of Directors
may, by resolution, provide that all directors shall receive their expenses, if
any, of attendance at meetings of the Board of Directors or any committee
thereof. Nothing herein contained shall be construed to preclude any director
from serving this corporation in any other capacity and receiving proper
compensation therefor.

                                   ARTICLE IV
                                    OFFICERS

      Section 4.01. Number. The corporation shall have one or more natural
persons exercising the function of Chief Executive Officer and Chief Financial
Officer. The Board of Directors may elect or appoint such other officers or
agents as it deems necessary for the operation and management of the
corporation, with such rights, powers, duties and responsibilities as may be
determined by these bylaws, or the Board, including, without limitation, a
chairman of the Board, a president, one or more vice presidents, a treasurer and
a secretary. Any number of offices may be held by the same person.

      Section 4.02. Election, Term of Office and Qualification. The Board of
Directors shall elect or appoint, by resolution approved by the affirmative vote
of a majority of the directors present, from within or without their number, the
president, treasurer and such other officers as may be deemed advisable, each of
whom shall have the powers, rights, duties, responsibilities, and terms of
office provided for in these bylaws or a resolution of the Board of Directors
not inconsistent therewith. The president and all other officers who may be
directors shall continue to hold office until the election and qualification of
their successors, notwithstanding an earlier termination of their directorship.

      Section 4.03. Removal and Vacancies. Any officer may be removed from
office by the affirmative vote of a majority of the Board of Directors at any
time, with or without cause. Such removal, however, shall be without prejudice
to the contract rights of the person so removed. If there be a vacancy in an
office of the corporation by reason of death, resignation, removal,
disqualification or otherwise, such vacancy shall be filled for the unexpired
term by the Board of Directors.

      Section 4.04. Chairman of the Board. The chairman of the Board, if one is
elected, shall preside at all meetings of the directors and shall have such
other duties as may be prescribed, from time to time, by the Board of Directors.

      Section 4.05. President. The president shall be the chief executive
officer and shall have general active management of the business of the
corporation. In the absence of the chairman of the Board, the president shall
preside at all meetings of the directors. The president shall see that all
orders and resolutions of the Board of Directors are carried into effect The
president shall


                                     - 5 -


execute and deliver, in the name of the corporation, any deeds, mortgages,
bonds, contracts or other instruments pertaining to the business of the
corporation unless the authority to execute and deliver is required by law to be
exercised by another person or is expressly delegated by the articles or bylaws
or by the Board of Directors to some other officer or agent of the corporation.
The president shall maintain records of and, whenever necessary, certify all
proceedings of the Board of Directors and the shareholders, and in general,
shall perform all duties usually incident to the office of the president, and
shall have such other duties as may, from time to time, be prescribed by the
Board of Directors.

      Section 4.06. Vice President. Each vice president, if one or more is
elected, shall have such powers and shall perform such duties as prescribed by
the Board of Directors or by the president. In the event of the absence or
disability of the president, the vice presidents shall succeed to the
president's power and duties in the order designated by the Board of Directors.

      Section 4.07. Secretary. The secretary, if one is elected, shall be
secretary of and shall attend all meetings of the shareholders and Board of
Directors and shall record all proceedings of such meetings in the minute book
of the corporation, shall give or cause to be given proper notice of meetings of
shareholders and directors, and shall perform such other duties as may, from
time to time, be prescribed by the Board of Directors or by the president.

      Section 4.08. Treasurer. The treasurer shall be the chief financial
officer and shall keep accurate financial records for the corporation, and shall
deposit all moneys, drafts and checks in the name of, and to the credit of, the
corporation, in such banks and depositories as the Board of Directors shall,
from time to time, designate. The treasurer shall have power to endorse, or
caused to be endorsed, for deposit, all notes, checks and drafts received by the
corporation, and shall disburse the funds of the corporation, as ordered by the
Board of Directors, making proper vouchers therefor. The treasurer shall render
to the president and the directors, whenever requested, an account of all
transactions as treasurer and of the financial condition of the corporation, and
shall perform such other duties as may, from time to time, be prescribed by the
Board of Directors or by the president.

      Section 4.09. Compensation. The officers of the corporation shall receive
such compensation for their services as may be determined, from time to time, by
resolution of the Board of Directors.

                                    ARTICLE V
                            SHARES AND THEIR TRANSFER

      Section 5.01. Certificates for Shares. All shares of the corporation shall
be certificated shares. Every owner of shares of the corporation shall be
entitled to a certificate, to be in such form as shall be prescribed by the
Board of Directors. The certificates for such shares shall be numbered in the
order in which they shall be issued and shall be signed, in the name of the
corporation, by the president and by the secretary or an assistant secretary or
by such officers as the Board of Directors may designate. If the certificate is
signed by a transfer agent or registrar, such signatures of the corporate
officers may be by facsimile, if authorized by the Board of Directors. Every
certificate surrendered to the corporation for exchange or transfer shall be
canceled, and no new certificate or certificates shall be issued in exchange for
any existing


                                     - 6 -


certificate until such existing certificate shall have been so canceled, except
in cases provided for in Section 5.04.

      Section 5.02. Issuance of Shares. The Board of Directors is authorized to
cause to be issued shares of the corporation up to the full amount authorized by
the certificate of incorporation in such amounts and representing such classes
and series, if any, as may be determined by the Board of Directors and as may be
permitted by law and the certificate of incorporation. Shares may be issued for
any consideration, including, without limitation, in consideration of money or
other property, tangible or intangible, received or to be received by the
corporation under a written agreement, or of services rendered or to be rendered
to the corporation under a written agreement. At the time of approval of the
issuance of shares, the Board of Directors shall state, by resolution, its
determination of the fair value to the corporation in monetary terms of any
consideration other than cash for which shares are to be issued.

      Section 5.03. Transfer of Shares. Transfer of shares on the books of the
corporation may be authorized only by the shareholder named in the certificate,
or the shareholder's legal representative, or the shareholder's duly authorized
attorney-in-fact, and upon surrender of the certificate or the certificates for
such shares. The corporation may treat as the absolute owner of shares of the
corporation, the person or persons in whose name shares are registered on the
books of the corporation.

      Section 5.04. Loss of Certificates. Any shareholder claiming a certificate
for shares to be lost, stolen, or destroyed shall make an affidavit of that fact
in such form as the Board of Directors shall require and shall, if the Board of
Directors so requires, give the corporation a bond of indemnity in form, in an
amount, and with one or more sureties satisfactory to the Board of Directors, to
indemnify the corporation against any claim which may be made against it on
account of the reissuance of such certificate, whereupon a new certificate may
be issued in the same tenor and for the same number of shares as the one alleged
to have been lost, stolen or destroyed.

                                   ARTICLE VI
                           DISTRIBUTIONS, RECORD DATE

      Section 6.01. Distributions. Subject to the provisions of the certificate
of incorporation, of these bylaws, and of law, the Board of Directors may
authorize and cause the corporation to make distributions whenever, and in such
amounts or forms as, in its opinion, are deemed advisable.

      Section 6.02. Record Date. Subject to any provisions of the certificate of
incorporation, the Board of Directors may fix a date not exceeding 120 days
preceding the date fixed for the payment of any distribution as the record date
for the determination of the shareholders entitled to receive payment of the
distribution and, in such case, only shareholders of record on the date so fixed
shall be entitled to receive payment of such distribution notwithstanding any
transfer of shares on the books of the corporation after the record date.


                                     - 7 -


                                   ARTICLE VII
                         BOOKS AND RECORDS, FISCAL YEAR

      Section 7.01. Share Register. The Board of Directors of the corporation
shall cause to be kept at its principal executive office, or at another place or
places within the United States determined by the Board:

            (1)   a share register not more than one year old, containing the
                  names and addresses of the shareholders and the number and
                  classes of shares held by each shareholder; and

            (2)   a record of the dates on which certificates or transaction
                  statements representing shares were issued.

      Section 7.02. Other Books and Records. The Board of Directors shall cause
to be kept at its principal executive office, or, if its principal executive
office is not in Connecticut, shall make available at its Connecticut registered
office within five days after receipt by an officer of the corporation of a
written demand for them made by a shareholder or other person authorized by the
Connecticut Business Corporation Act, as amended, originals or copies of all
documents and records required to be so kept or made available by Connecticut
Statute ss.ss. 33-945 and 33-946.

      Section 7.03. Fiscal Year. The fiscal year of the corporation shall be
determined by the Board of Directors.

                                  ARTICLE VIII
                          LOANS, GUARANTEES, SURETYSHIP

      The corporation may lend money to, guarantee an obligation of, become a
surety for, or otherwise financially assist a person if the transaction, or a
class of transactions to which the transaction belongs, is approved by the
affirmative vote of a majority of the directors present, and:

            (1)   is in the usual and regular course of business of the
                  corporation;

            (2)   is with, or for the benefit of, a related corporation, an
                  organization in which the corporation has a financial
                  interest, an organization with which the corporation has a
                  business relationship, or an organization to which the
                  corporation has the power to make donations;

            (3)   is with, or for the benefit of, an officer or other employee
                  of the corporation or a subsidiary, including an officer or
                  employee who is a director of the corporation or a subsidiary,
                  and may reasonably be expected, in the judgment of the Board,
                  to benefit the corporation; or

            (4)   has been approved by (a) the holders of two-thirds of the
                  voting power of the shares entitled to vote which are owned by
                  persons other than the interested person or persons, or (b)
                  the unanimous affirmative vote of the holders of all
                  outstanding shares whether or not entitled to vote.


                                     - 8 -


Such loan, guarantee, surety contract or other financial assistance may be with
or without interest, and may be unsecured, or may be secured in the manner as a
majority of the directors present approve, including, without limitation, a
grant of or other security interest in shares of the corporation. Nothing in
this section shall be deemed to deny, limit or restrict the powers of guaranty,
surety or warranty of the corporation at common law or under a statute of the
state of Connecticut.

                                   ARTICLE IX
                       INDEMNIFICATION OF CERTAIN PERSONS

      Section 9.01. Indemnification. The corporation shall indemnify all
officers and directors of the corporation, for such expenses and liabilities, in
such manner, under such circumstances and to such extent as permitted by the
corporation's certificate of incorporation and by the Connecticut Business
Corporation Act, as now enacted or hereafter amended.

      Section 9.02. Insurance. The corporation may purchase and maintain
insurance on behalf of any person in such person's official capacity against any
liability asserted against and incurred by such person in or arising from that
capacity, whether or not the corporation would otherwise be required to
indemnify the person against the liability.

                                    ARTICLE X
                                   AMENDMENTS

      These bylaws may be amended or altered by a vote of the majority of the
whole Board of Directors at any meeting. Such authority of the Board of
Directors is subject to the power of the shareholders, exercisable in the manner
provided in the Connecticut Business Corporation Act, to adopt, amend, or repeal
bylaws adopted, amended, or repealed by the Board of Directors. The Board of
Directors shall not adopt, amend or repeal any bylaws fixing a quorum for
meetings of shareholders, prescribing procedures for removing directors or
filling vacancies in the Board of Directors, or fixing the number of directors
or their classifications, qualifications, or terms of office, except that the
Board of Directors may adopt or amend any bylaw to increase their number.

                                   ARTICLE XI
                        SECURITIES OF OTHER CORPORATIONS

      Section 11.01. Voting Securities Held by the Corporation. Unless otherwise
ordered by the Board of Directors, the president shall have full power and
authority on behalf of the corporation (a) to attend any meeting of security
holders of other corporations in which the corporation may hold securities and
to vote such securities on behalf of this corporation; (b) to execute any proxy
for such meeting on behalf of the corporation; or (c) to execute a written
action in lieu of a meeting of such other corporation on behalf of this
corporation. At such meeting, the president shall possess and may exercise any
and all rights and powers incident to the ownership of such securities that the
corporation possesses. The Board of Directors may, from time to time, grant such
power and authority to one or more other persons and may remove such power and
authority from the president or any other person or persons.


                                     - 9 -


      Section 11.02. Purchase and Sale of Securities. Unless otherwise ordered
by the Board of Directors, the president shall have full power and authority on
behalf of the corporation to purchase, sell, transfer or encumber any and all
securities of any other corporation owned by the corporation, and may execute
and deliver such documents as may be necessary to effectuate such purchase,
sale, transfer or encumbrance. The Board of Directors may, from time to time,
confer like powers upon any other person or persons.

      I, Jeffrey M. Shapiro, secretary of Kohler Mix Specialties of Connecticut,
Inc., hereby certify that the above Bylaws were adopted by the Board of
Directors of said corporation on the 30th day of January, 1999.


                                                   /s/ Jeffrey M. Shapiro
                                                   -----------------------------
                                                   Jeffrey M. Shapiro, Secretary


                                     - 10 -

EX-3.21

                                                                    Exhibit 3.21

                            ARTICLES OF INCORPORATION

                                       OF

                                MIDWEST MIX, INC.

            The undersigned, a natural person of full age, for the purpose of
forming a corporation under the provisions of Chapter 301 of Minnesota Statutes,
known as the Minnesota Business Corporation Act and laws amendatory thereof and
supplemental thereto, hereby adopts the following Articles of Incorporation.

                                    ARTICLE I

            The name of this corporation shall be MIDWEST MIX, INC.

                                   ARTICLE II

            The corporation shall have general business purposes.

                                   ARTICLE III

            In addition to the general powers now or hereafter granted and
permitted under the laws of Minnesota and all those powers which may be
necessary or proper to accomplish the objects and purposes set forth in ARTICLE
II of these Articles, this corporation shall have the following specific powers:

            (a) to acquire, hold, mortgage, pledge or dispose of the shares,
bonds, securities and other evidences of indebtedness of any domestic or foreign
corporation;



            (b) to engage and act as a partner, joint venturer or associate with
other corporations, firms, partnerships and individuals in any activity which it
itself might engage in, both within and without the United States;

            (c) to acquire, hold, use, sell, assign, lease, grant licenses in
respect to, mortgage or otherwise dispose of Letters Patent of the United States
or any foreign country, patent rights, licenses and privileges, copyrights,
trademarks and tradenames, relating to or useful in connection with any business
of the corporation.

                                   ARTICLE IV

            The duration of this corporation shall be perpetual.

                                    ARTICLE V

            The location and post office address of the registered office of
this corporation in Minnesota is 4041 Highway 61, White Bear Lake, Ramsey
County, Minnesota.

                                   ARTICLE VI

            The total authorized number of shares of all classes that this
corporation may issue is 2,500 shares, all of which shall be of no par value.
All of the shares so authorized shall be unclassified.


                                       -2-


                                   ARTICLE VII

            The amount of stated capital with which this corporation will begin
business shall be One Thousand ($1,000) Dollars.

                                  ARTICLE VIII

            The names, post office addresses and terms of office of the persons
who shall constitute the first Board of Directors are as follows:

Names                                          Post Office Address
- -----                                          -------------------

Richard E. Kyle                                W-2262 First National Bank Bldg.
                                               St. Paul, Minnesota 55101

Burt E. Swanson                                W-2262 First National Bank Bldg.
                                               St. Paul, Minnesota 55101

John R. Friedman                               W-2262 First National Bank Bldg.
                                               St. Paul, Minnesota 55101

            Said Board of Directors shall hold office until the first meeting of
the shareholders and until their successors are elected and qualify.

                                   ARTICLE IX

            The name and post office address of the Incorporator is John R.
Friedman, W-2262 First National Bank Building, Saint Paul, Minnesota, 55101.

                                    ARTICLE X

            There is hereby vested in the Board of Directors authority to the
full extent permitted by law:


                                       -3-


            (a) to grant rights and options in respect to shares.

            (b) to make allotments of shares.

            (c) to accept or reject subscriptions for shares.

            (d) to make and alter by-laws, the latter power being subject to the
power of the shareholders to change or repeal by-laws and to the restriction
that the Board, except the first Board of Directors, shall not make or alter any
by-law fixing the number, qualifications, classifications or term of office.


                                                    /s/ John R. Friedman
                                                    ----------------------------
                                                    John R. Friedman

STATE OF MINNESOTA    )
                      ) ss
COUNTY OF RAMSEY      )

            On this 5th day of March l968, before me, a Notary Public within and
for said county, personally appeared John R. Friedman, to me known to be the
person described in and who executed the foregoing instrument, and he
acknowledged that he executed the same as his free act and deed and for the uses
and purposes therein expressed.


                                                    /s/ June R. Wahlin
                                                    ----------------------------

                                                       JUNE R. WAHLIN,
                                             Notary Public, Ramsey County, Minn.
                                              My Commission Expires Jan. 7, 1969

                                                       JUNE R. WAHLIN,
                                             Notary Public, Ramsey County, Minn.
                                              My Commission Expires Jan. 7, 1969

- --------------------------------------------------------------------------------
                               STATE OF MINNESOTA

                               DEPARTMENT OF STATE

      I hereby certify that the within instrument was filed for record in this
office on the 7 day of March A.D. 1968, at 8 o'clock a.m. and was duly recorded
in Book V-29 of Incorporations, on page 370

                              /s/ Joseph L. Donovan
                                 Secretary of State
- --------------------------------------------------------------------------------

EX-3.22

                                                                    Exhibit 3.22

                                   BY-LAWS OF

                                MIDWEST-MIX, INC.

                                     OFFICES

      Sec. 1. The registered office of the corporation shall be at 4041 Highway
Number 61, White Bear Lake, Minnesota, subject to change by the Board of
Directors as provided in the Minnesota Business Corporation Act. The corporation
shall have other offices at such places as the Board of Directors may from time
to time determine.

                                      SEAL

      Sec. 2. The corporate seal shall be in the form affixed hereto.

                             SHAREHOLDERS' MEETINGS

      Sec. 3. All meetings of the shareholders shall be held at the registered
office of the corporation, except that any meeting may be held at any other
place within or without the State of Minnesota which is designated by the Board
of Directors, or by written consent of all the shareholders entitled to vote
thereat.

      Sec. 4. The shareholders shall hold a meeting each calendar year, known as
the annual meeting, at which they shall elect directors and may transact any
other business. No business with respect to which special notice is required
shall be transacted unless such notice shall have been given. The time of the
annual meeting in each calendar year shall be fixed by the Board of Directors.
When the annual meeting is not held, or the directors are not elected thereat,
directors may be elected at a special meeting held for that purpose and it shall
be the duty of the president, vice president, or secretary, upon demand of any
shareholder entitled to vote, to call such special meeting.



      Sec. 5. Special meetings of the shareholders may be called for any purpose
or purposes, at any time by the president, by the Board of Directors or any two
or more members thereof, or, in the manner hereinafter provided, by one or more
shareholders holding not less than one-tenth of the voting power of the
shareholders. Upon request in writing by registered mail or delivered in person
to the president, vice president or secretary, by any person or persons entitled
to call a meeting of shareholders, it shall be the duty of such officer
forthwith to cause notice to be given to the shareholders entitled to vote, of a
meeting to be held at such time as such officer may fix not less than ten nor
more than sixty days after the receipt of such request. If such notice shall not
be given within seven days after delivery or the date of mailing of such
request, the person or persons requesting the meeting may fix the time of
meeting and give notice in the manner provided by law, or these By-Laws. Unless
waived by all shareholders entitled to vote, business transacted at all special
meetings shall be confined to the purposes stated in the call.

      Sec. 6. If any meeting of the shareholders be adjourned to another time or
place, no notice as to such adjourned meeting need be given other than
announcement at the meeting at which such adjournment is taken.

      Sec. 7. Written notice of each meeting of shareholders stating the time
and place, and in case of a special meeting, the purpose, shall be given by the
secretary or other person charged with that duty to each shareholder entitled to
vote at such meeting. Such notice shall be mailed, postage prepaid, at least ten
days prior to the meeting to each such shareholder at his last known address as
the same appears upon the books of the corporation.

      Sec. 8. Notice of the time, place and purpose of any meeting of the
shareholders may be waived in writing by any shareholder. Such waiver may be
given before or after the meeting and shall be filed with the secretary, or
entered upon the records of the meeting.

      Sec. 9. The presence in person or by proxy of the holders of the majority
of shares entitled to vote at the meeting shall constitute a quorum for the
transaction of business. In the absence of a quorum, any meeting may be
adjourned from time to time. The shareholders present at a duly called or held
meeting at which a quorum is present may continue to transact business until
adjournment notwithstanding the withdrawal of enough shareholders to leave less
than a quorum.


                                      -2-


                                  VOTING RIGHTS

      Sec. 10. Every shareholder of record of common stock, or his legal
representatives, at the date fixed for the determination of the persons entitled
to vote at a meeting of shareholders, or, if no date has been fixed, then at the
date of the meeting, shall be entitled at such meeting to one vote for each
share of common stock standing in his name on the books of the corporation.

      Sec. 11. The Board of Directors may fix a time not exceeding forty days
preceding the date of any meeting of shareholders, as a record date for the
determination of the shareholders entitled to notice of and to vote at such
meeting, and in such case only shareholders of record on the date so fixed, or
their legal representatives, shall be entitled to notice of and to vote at such
meeting, notwithstanding any transfer of any shares on the books of the
corporation after any record date so fixed. The Board of Directors may close the
books of the corporation against transfers of shares during the whole or any
part of such period.

      Sec. 12. A shareholder may cast his vote in person or through proxy. The
appointment of a proxy shall be in writing, filed with the secretary at or
before the meeting. The authority of a proxy, if not coupled with an interest,
may be terminated at will. Unless otherwise provided in the appointment, the
proxy's authority shall cease eleven months after the appointment. A termination
of a proxy's authority by act of the shareholder shall be ineffective until
written notice of the termination has been given to the secretary. Unless
otherwise provided therein, an appointment filed with the secretary shall have
the effect of revoking all appointments of prior date.

      Sec. 13. If a shareholder shall appoint two or more persons to act as
proxies, and if the instrument shall not otherwise provide, then a majority of
such persons present at the meeting, or if only one shall be present then that
one, shall have and may exercise all of the powers conferred by such instrument
upon all of the persons so appointed; and if such proxies be equally divided as
to the right and manner of voting in any particular case, the vote shall be
divided equally among the proxies.

      Sec. l4. A person or persons holding shares in a representative or
fiduciary capacity may vote the same in person or by proxy. General or
discretionary power may be conferred on such proxy. Where shares are held
jointly by three or more


                                      -3-


representatives or fiduciaries, the will of the majority of them shall control
the manner of voting or the giving of a proxy, unless the instrument or order
appointing them otherwise directs.

      Sec. 15. A proxy's authority shall not be revoked by the death or
incapacity of the maker unless before the vote is cast or the authority is
exercised, written notice of such death or incapacity is given to the
corporation.

      Sec. 16. A transferee of pledged shares shall be regarded by the
corporation as the owner thereof unless the instrument of transfer discloses the
pledge. A person whose shares are transferred on the books of the corporation as
a disclosed pledge shall be entitled to vote unless in the instrument of
transfer the pledgor shall have expressly empowered the pledgee to vote thereon,
in which case only the pledgee or his proxy may represent such shares and vote
thereon.

      Sec. 17. Any corporation owning shares in this corporation may vote the
same by its president or by proxy appointed by him unless some other person, by
resolution of its Board of Directors, shall be appointed to vote such shares in
which case such person shall be entitled to vote upon the production of a
certified copy of such resolution.

      Sec. 18. The corporation shall not vote any share of its own issue
belonging to it, nor shall any such shares be counted in calculating the total
voting power of all shareholders of such corporation at any given time.

      Sec. 19. Any action which may be taken at a meeting of the shareholders
may be taken without a meeting if authorized by a writing signed by all of the
holders of shares who would be entitled to a notice of a meeting for such
purpose. Whenever a certificate in respect of any such action is required to be
filed in the office of the Secretary of State, the officers signing the same
shall state therein that the action was effected in the manner aforesaid.

                                    DIRECTORS

      Sec. 20. The property and business of the corporation shall be managed by
a Board of Directors of not less than three and not more than seven in number
who need not be shareholders and who shall be elected by the shareholders;
provided, however, that during such time as all of the shares of the corporation


                                      -4-


are owned beneficially and of record by either one or two shareholders, the
number of directors may be less than three but not less than the number of
shareholders.

      Sec. 21. Subject to the foregoing limitation as to number of directors,
the shareholders shall at each annual meeting fix the number of directors for
the ensuing year and elect the number of directors so fixed, by majority vote,
to serve for a period of one year or until their successors have been elected
and qualify.

      Sec. 22. Vacancies in the Board of Directors shall be filled by the
remaining directors of the board, though less than a quorum, and each person so
elected shall be a director until his successor is elected by the shareholders
who may make such election at their next annual meeting or at any special
meeting duly called for that purpose.

      Sec. 23. All meetings of the Board of Directors shall be held at the
registered office of the corporation except that any meeting may be held at such
place, whether in the State of Minnesota or elsewhere, as a majority of the
members of the board may from time to time appoint.

      Sec. 24. The annual meeting of the Board of Directors shall be held
immediately following each annual meeting of shareholders, which meeting shall
be for the purposes of organization, for the election of officers, and the
transaction of such other business as may be brought before it. No notice need
be given of the annual meeting so held.

      Sec. 25. Other meetings of the board may be called by the president, or if
he is absent or unable or refuses to act, by the vice president or any director,
at such time and place as may be determined upon. Such other meetings may also
be held periodically at such times and at such place as may be fixed from time
to time by the Board of Directors by resolution duly adopted.

      Sec. 26. Notice shall be given to each director of the time and place of
each meeting of the board, in writing, personally, or by mail or telegram, at
least three days prior to the meeting, but any director may in writing, either
before or after the meeting, waive notice thereof; and without notice any
director by his attendance at and participation in the action taken at any
meetings, shall be deemed to have waived notice.


                                      -5-


      Sec. 27. A majority of the Board of Directors shall be necessary to
constitute a quorum for the transaction of business. The acts of a majority of
the directors present at a meeting at which a quorum is present shall be the
acts of the Board of Directors.

      Sec. 28. Any action which might be taken at a meeting of the Board of
Directors may be taken without a meeting if done in writing, signed by all of
the directors.

      Sec. 29. The Board of Directors may, by unanimous affirmative action of
the entire board, designate two or more of their number to constitute an
executive committee, which, to the extent determined by unanimous affirmative
action by the entire board, shall have and exercise the authority of the board
in the management of the business of the corporation. Any such executive
committee shall act only in the interval between meetings of the board, and
shall be subject at all times to the control and direction of the board.

      Sec. 30. The entire Board of Directors or any individual director may be
removed from office, with or without cause, by a vote of shareholders holding
the majority of the shares entitled to vote at an election of directors. In case
the board or any one or more directors be so removed, new directors may be
elected at the same meeting.

      Sec. 31. The Board of Directors are authorized to issue shares of the
company to the full amount authorized by the Articles of Incorporation in such
amounts and at such times and for such consideration as may be determined by the
board by unanimous vote and may be permitted by law.

      Sec. 32. The Board of Directors may make and alter by-laws, subject to the
power of the shareholders to change or repeal such by-laws, provided however,
the board shall not make or alter any by-law fixing their number,
qualifications, classifications, or term of office.

      Sec. 33. In addition to the powers and authorities conferred by these
by-laws and the Articles of Incorporation, the Board of Directors may exercise
all such powers of the corporation, and do all such lawful acts and things as
are not by statute or by the Articles of Incorporation, or by these by-laws
directed or required to be exercised or done by the shareholders.


                                      -6-


                                    OFFICERS

      Sec. 34. The Board of Directors shall elect a president, not more than two
vice presidents, a secretary and a treasurer, who shall constitute the officers
of the corporation, and the board may appoint such other officers and agents as
it may deem necessary. The president shall be a director but shall hold office
until his successor is elected notwithstanding an earlier termination of his
office as director. No one of the other officers need be a director but a vice
president who is not a director shall not succeed to the office of president.
Any two of the offices specifically named above, except those of president and
vice president may be held by the same person. Said officers shall be elected
annually by the directors as soon as practicable following the annual meeting of
shareholders, and shall hold office for one year following their election or
until their successors are chosen and qualify.

      Sec. 35. The duties of the officers shall be as follows:

      The president shall be the chief executive officer of the corporation,
shall preside at all meetings, shall have general management of the business,
affairs, property and interests of the corporation, shall make reports to the
Board of Directors and shareholders, shall execute all contracts and other
instruments on behalf of the corporation, and shall have the general powers and
duties of supervision and management usually vested in the office of the
president of a corporation.

      Any vice president may in the absence or disability of the president
perform the duties and exercise the powers of the president and shall perform
such other duties as the Board of Directors shall prescribe.

      The secretary shall attend all meetings and record all votes and the
minutes of all proceedings in a book kept for that purpose, shall give or cause
to be given notice of all meetings, shall perform such other duties as may be
prescribed by the Board of Directors, shall keep in custody the seal of the
corporation and, when authorized by the board, affix the same to any instrument
requiring it, and shall perform all other duties incident to his office or
required by him to be performed by the Board of Directors.

      The treasurer shall have custody of the corporate funds and securities,
shall keep full and accurate books of account, shall deposit all monies and
other valuable effects in the


                                      -7-


name and to the credit of the corporation in such depositories as may be
designated by the Board of Directors, shall disburse the funds of the
corporation in such manner as may be ordered by the board, shall render to the
Board of Directors whenever they may require it an account of all his
transactions as treasurer and of the financial conditions of the corporation,
and shall perform all other duties incident to his office or required by him to
be performed by the Board of Directors.

      All of said officers shall also perform such duties in the management of
the business as may be determined by the Board of Directors from time to time.

      Sec. 36. Any officer may be removed by the Board of Directors, with or
without cause. Such removal, however, shall be without prejudice to the contract
rights of the person so removed.

      Sec. 37. The salaries of all officers and agents of the corporation shall
be fixed by the Board of Directors.

                             CERTIFICATES FOR SHARES

      Sec. 38. The certificates of shares of the corporation shall be numbered
and shall be entered in the books of the corporation as they are issued. They
shall exhibit the holder's name, the number of shares, shall conform to legal
requirements, and shall be signed by the president or vice president, and the
secretary or treasurer.

      Sec. 39. Any shareholder claiming a certificate of share to be lost or
destroyed shall make an affidavit or affirmation of that fact in such form as
the Board of Directors may require, and shall, if the directors so require, give
the corporation a bond of indemnity in form and with one or more sureties
satisfactory to the board, in at least double the value of the stock represented
by said certificate, whereupon a new certificate may be issued of the same tenor
and for the same number of shares as the one alleged to have been lost or
destroyed.

                               TRANSFER OF STOCKS

      Sec. 40. Transfers of shares shall be made on the books of the
corporation only by the person named in the certificate or by attorney lawfully
constituted in writing and upon surrender of the certificate therefor properly
endorsed. The corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and accordingly shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part


                                      -8-


of any other person, whether or not it shall have express or other notice
thereof, save as expressly provided by the laws of Minnesota or these By-Laws.

                                    DIVIDENDS

      Sec. 41. Dividends of the corporation, when earned, may be declared by
the Board of Directors, subject to the conditions and limitations imposed by the
statutes of Minnesota. Before payment of any dividend there may be set aside out
of the earned surplus of the corporation such sum or sums as the directors from
time to time in their absolute discretion deem expedient as a reserve to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for any other purpose which the directors shall
deem to be in the best interest of the corporation.

                          RECORDS AT REGISTERED OFFICE

      Sec. 42. The corporation shall keep at its registered office the
following:

      (a) A share register giving the names and addresses of the shareholders,
the number and class of shares held by each and the dates on which the
certificates therefor were issued.

      (b) Records of all proceedings of shareholders and directors.

      (c) By-Laws and all amendments thereto.

      (d) Reports made to shareholders or any of them within the next preceding
three years.

      (e) A statement, open to public inspection, of the names and postoffice
addresses of its principal officers.

                                      LOANS

      Sec. 43. The corporation shall not lend any of its assets to any officer
or director of the corporation, nor to any shareholder of the corporation on the
security of its shares. The corporation shall not take as security for any debt
a lien upon its shares unless such lien shall be taken to secure a debt
previously contracted.


                                      -9-


                                   AMENDMENTS

      Sec. 44. In addition to and in limitation of the power of the Board of
Directors to make and alter By-Laws, these By-Laws may be changed or repealed by
a majority vote of the shareholders present and represented at any annual
meeting or at any special meeting called for that purpose.

                               INDEMNIFICATION OF
                             DIRECTORS AND OFFICERS

      Sec. 45. (a) The corporation shall indemnify any person who is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(whether brought by or in the right of the corporation or otherwise) by reason
of his being or having been a director or officer of the corporation, or serving
or having served at the request of the corporation as a director or officer of
another corporation, against all expenses and liabilities, including attorneys'
fees, costs, fines, judgments and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The corporation shall not, however, indemnify any person with
respect to any claim, issue or matter brought by or in the right of the
corporation as to which he shall have been adjudged to be liable for negligence
or misconduct in the performance of his duty to the corporation unless the court
in which such action or suit is brought or a district court to which application
is made shall determine that in view of all the circumstances of the case,
indemnification of such person would not be contrary to law. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of guilty or nolo contendere or its equivalent, shall not, of
itself, create the presumption that the person did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

      (b) Every person referred to in subsection (a) of this by-law who has been
successful on the merits or otherwise in defense of any action, suit or
proceeding or in defense of any claim, issue or matter therein, shall be
indemnified as provided in subsection (a) as of right. Any other indemnification


                                      -10-


under subsection (a) (unless authorized by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification is proper because the person has met the applicable standard of
conduct set forth therein. Such determination shall be made by (i) the Board of
Directors acting by a quorum consisting of directors who were not parties to (or
have been wholly successful with respect to) such claim, action, suit or other
proceeding; (ii) independent legal counsel (who may be regular counsel of the
corporation) in a written opinion; or (iii) the stockholders.

      (c) The indemnification provided by this by-law shall not be deemed
exclusive of any other rights to which an officer or director may be entitled
under any agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office and shall continue as to a person who
has ceased to be a director or officer and shall inure to the benefit of the
heirs, executors and administrators of such a person.

      (d) The Board of Directors may authorize the purchase of insurance on
behalf of any person who is or was a director or officer of the corporation, or
is or was serving at the request of the corporation against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability.

      (e) If for any reason any provision of this by-law shall be determined to
be invalid, such determination shall not impair any other provision hereof and
all remaining provisions shall remain in force and effect.


                                      -11-


                            CERTIFICATE OF SECRETARY

I, the undersigned, do hereby certify:

      1. That I am the duly elected and acting Secretary of MIDWEST-MIX, INC., a
Minnesota corporation; and

      2. That the foregoing By-Laws, comprising 11 pages, constitute the
original By-Laws of said corporation as duly adopted at the first meeting of the
Board of Directors.

      IN WITNESS WHEREOF I have hereunto subscribed my name and affixed the seal
of said corporation this 14 day of March, 1968.


                                                          /s/ John R. Friedman
                                                        ------------------------
                                                              Secretary

(CORPORATE SEAL)

EX-3.23

                                                                  EXHIBIT 3.23

                            CERTIFICATE OF FORMATION

                                       OF

                               M-FOODS DAIRY, LLC

         This Certificate of Formation is being executed as of March 13, 2001
for the purpose of forming a limited liability company pursuant to the
Delaware Limited Liability Company Act, 6 Del. C. Sections 18-101, ET SEQ.

        The undersigned, being duly authorized to execute and file this
Certificate, does hereby certify as follows:

         1.       NAME. The name of the limited liability company is M-FOODS
DAIRY, LLC (the "Company").

         2.       REGISTERED OFFICE AND REGISTERED AGENT. The Company's
registered office in the State of Delaware is located at 1209 Orange Street,
in the City of Wilmington, County of New Castle, 19801. The registered agent
of the Company for service of process at such address is The Corporation
Trust Company.

         IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
of Formation as of the day and year first above written.




                                                    By: /s/ Michele N. Kochevar
                                                       -------------------------
                                                        Michele N. Kochevar,
                                                        An Authorized Person




   STATE OF DELAWARE
  SECRETARY OF  STATE
DIVISION OF CORPORATIONS
FILED 02:00 PM 03/13/2001
  010123890 - 3365091




                                STATE OF DELAWARE                         PAGE 1

                        OFFICE OF THE SECRETARY OF STATE

                       ----------------------------------

          I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF FORMATION OF "M-FOODS DAIRY TXCT, LLC", FILED IN THIS OFFICE
ON THE THIRD DAY OF APRIL, A.D. 2001, AT 4 O'CLOCK P.M.









                                              /s/ Harriet Smith Windsor
                            [SEAL]     -----------------------------------------
                                       HARRIET SMITH WINDSOR, SECRETARY OF STATE


3376817    8100                               AUTHENTICATION: 1061909

010163458                                              DATE: 04-03-01

EX-3.24

                                                                    Exhibit 3.24

                                                                [EXECUTION COPY]

================================================================================

                      ------------------------------------

                               M-FOODS DAIRY, LLC

                      A Delaware Limited Liability Company

                      ------------------------------------

                       LIMITED LIABILITY COMPANY AGREEMENT

                           Dated as of April 10, 2001

THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT
BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT
EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND
COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH
HEREIN.

================================================================================



                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I ...............................................................    1
     DEFINITIONS ........................................................    1
          SECTION 1.1   Definitions .....................................    1
          SECTION 1.2   Terms Generally .................................   12

ARTICLE II ..............................................................   12
     GENERAL PROVISIONS .................................................   12
          SECTION 2.1   Formation .......................................   12
          SECTION 2.2   Name ............................................   12
          SECTION 2.3   Term ............................................   12
          SECTION 2.4   Purpose .........................................   12
          SECTION 2.5   Powers ..........................................   12
          SECTION 2.6   Foreign Qualification ...........................   13
          SECTION 2.7   Registered Office; Registered Agent;
                         Principal Office; Other Offices ................   13
          SECTION 2.8   No State-Law Partnership ........................   13

ARTICLE III .............................................................   14
     MANAGEMENT .........................................................   14
          SECTION 3.1   The Management Committee; Delegation of
                         Authority and Duties ...........................   14
          SECTION 3.2   Establishment of Management Committee ...........   15
          SECTION 3.3   Management Committee Meetings ...................   16
          SECTION 3.4   Chairman ........................................   17
          SECTION 3.5   Approval or Ratification of Acts or Contracts ...   17
          SECTION 3.6   Action by Written Consent or Telephone Conference   17
          SECTION 3.7   Officers ........................................   17
          SECTION 3.8   Management Matters ..............................   19
          SECTION 3.9   Liability of Unitholders ........................   20
          SECTION 3.10  Indemnification .................................   21

ARTICLE IV ..............................................................   22
     CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS ..................   22
          SECTION 4.1   Capital Contributions ...........................   22
          SECTION 4.2   Capital Accounts ................................   22
          SECTION 4.3   Allocations of Net Income and Net Loss ..........   22
          SECTION 4.4   Distributions ...................................   26
          SECTION 4.5   Security Interest and Right of Set-Off ..........   29



ARTICLE V ...............................................................   29
     WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP
       INTERESTS; ADMISSION OF NEW MEMBERS ..............................   29
          SECTION 5.1   Unitholder Withdrawal ...........................   29
          SECTION 5.2   Dissolution .....................................   29
          SECTION 5.3   Transfer by Unitholders .........................   30
          SECTION 5.4   Admission or Substitution of New Members ........   31
          SECTION 5.5   Compliance with Law .............................   31

ARTICLE VI ..............................................................   31
     REPORTS TO MEMBERS; TAX MATTERS ....................................   31
          SECTION 6.1   Books of Account ................................   31
          SECTION 6.2   Reports .........................................   32
          SECTION 6.3   Fiscal Year .....................................   32
          SECTION 6.4   Certain Tax Matters .............................   32

ARTICLE VII .............................................................   34
     MISCELLANEOUS ......................................................   34
          SECTION 7.1   Schedules .......................................   34
          SECTION 7.2   Governing Law ...................................   34
          SECTION 7.3   Successors and Assigns ..........................   34
          SECTION 7.4   Confidentiality .................................   34
          SECTION 7.5   Amendments ......................................   34
          SECTION 7.6   Notices .........................................   35
          SECTION 7.7   Counterparts ....................................   35
          SECTION 7.8   Power of Attorney ...............................   35
          SECTION 7.9   Entire Agreement ................................   36
          SECTION 7.10  Section Titles ..................................   36


                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                               M-FOODS DAIRY, LLC
                      A Delaware Limited Liability Company

            THIS LIMITED LIABILITY COMPANY AGREEMENT of M-Foods Dairy, LLC,
dated and effective as of April 10, 2001 (this "Agreement"), is adopted,
executed and agreed to, for good and valuable consideration, by the Persons
listed on Schedule A attached hereto as of the date hereof upon their execution
of this Agreement, and each other Person who at any time becomes a Member in
accordance with the terms of this Agreement and the Act. Any reference in this
Agreement to any Member shall include such Member's Successors in Interest to
the extent such Successors in Interest have become Substitute Members in
accordance with the provisions of this Agreement.

            NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto, each intending to be legally
bound, agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

            SECTION 1.1 Definitions.

            Unless the context otherwise requires, the following terms shall
have the following meanings for purposes of this Agreement:

            "Act" means the Delaware Limited Liability Company Act, Title 6,
ss.ss. 18-101, et seq, as it may be amended from time to time.

            "Additional Member" means any Person that has been admitted to the
Company as a Member pursuant to Section 5.4 by virtue of having received its
Membership Interest from the Company and not from any other Member or Assignee.

            "Adjusted Capital Account Deficit" means, with respect to any
Unitholder, the deficit balance, if any, in such Unitholder's Capital Account as
of the end of the relevant fiscal year, after giving effect to the following
adjustments:

                        (i) credit to such Capital Account any amounts that such
            Unitholder is obligated to restore pursuant to this Agreement or is
            deemed to be obligated to restore pursuant to Regulations Section
            1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of
            Regulations Sections 1.704-2(i)(5) and 1.704-2(g)(1); and

                        (ii) debit to such Capital Account the items described
            in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).


            The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted and applied by the Management
Committee consistently therewith.

            "Affiliate" when used with reference to another Person means any
Person (other than the Company), directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control with, such
other Person. In addition, Affiliates of a Member shall include all partners,
officers, employees and former partners, officers or employees of, all
consultants or advisors to, and all other Persons who directly or indirectly
receive compensation from, such Member.

            "Assignee" means any transferee to which a Member or another
Assignee has transferred its interest in the Company in accordance with the
terms of this Agreement, but who is not a Member.

            "Bankruptcy" means, with respect to any Person, the occurrence of
any of the following events: (i) the filing of an application by such Person
for, or a consent to, the appointment of a trustee or custodian of his assets;
(ii) the filing by such Person of a voluntary petition in Bankruptcy or the
seeking of relief under Title 11 of the United States Code, as now constituted
or hereafter amended, or the filing of a pleading in any court of record
admitting in writing his inability to pay his debts as they become due; (iii)
the failure of such Person to pay his debts as such debts become due; (iv) the
making by such Person of a general assignment for the benefit of creditors; (v)
the filing by such Person of an answer admitting the material allegations of, or
his consenting to, or defaulting in answering, a Bankruptcy petition filed
against him in any Bankruptcy proceeding or petition seeking relief under Title
11 of the United States Code, as now constituted or as hereafter amended; or
(vi) the entry of an order, judgment or decree by any court of competent
jurisdiction adjudicating such Person a bankrupt or insolvent or for relief in
respect of such Person or appointing a trustee or custodian of his assets and
the continuance of such order, judgment or decree unstayed and in effect for a
period of 60 consecutive days.

            "Capital Account" means, with respect to any Unitholder, the account
maintained for such Unitholder in accordance with the following provisions:

                  (a) To each Unitholder's Capital Account there shall be added
      such Unitholder's Capital Contributions, such Unitholder's allocable share
      of Net Income and any items in the nature of income or gain which are
      specially allocated to such Unitholder pursuant to Section 4.3(c) hereof,
      and the amount of any Company liabilities assumed by such Unitholder or
      which are secured by any property distributed to such Unitholder.

                  (b) To each Unitholder's Capital Account there shall be
      subtracted the amount of cash and the Gross Asset Value of any property
      distributed to such Unitholder pursuant to any provision of this
      Agreement, such Unitholder's allocable share of Net Losses


                                       2


      and any items in the nature of expenses or losses which are specially
      allocated to such Unitholder pursuant to Section 4.3(c) hereof, and the
      amount of any liabilities of such Unitholder assumed by the Company or
      which are secured by any property contributed by such Unitholder to the
      Company.

                  (c) In the event any interest in the Company is transferred in
      accordance with the terms of this Agreement, the transferee shall succeed
      to the Capital Account of the transferor to the extent it relates to the
      transferred interest.

                  (d) In determining the amount of any liability for purposes of
      subparagraphs (a) and (b) hereof and Section 4.3(b) hereof, there shall be
      taken into account Code Section 752(c) and any other applicable provisions
      of the Code and Regulations.

                  (e) The foregoing provisions and the other provisions of this
      Agreement relating to the maintenance of Capital Accounts are intended to
      comply with Code Section 704(b) and the Regulations promulgated
      thereunder, and shall be interpreted and applied by the Management
      Committee in a manner consistent with such Regulations.

            "Capital Contribution" means, with respect to any Unitholder, the
amount of cash and the initial Gross Asset Value of any property (other than
money) contributed from time to time to the Company by such Unitholder (it being
understood that the Gross Asset Value with respect to property in respect of a
Unitholder's Initial Capital Contribution shall initially be as set forth on
Schedule A attached hereto; provided that the Gross Asset Value of such Initial
Capital Contribution and the number of Preferred Units, Class A Units and Class
B Units may be adjusted on or before the date sixty days from the date hereof to
reflect the fair market value of such Unitholder's Initial Capital Contribution
as determined by an independent appraisal performed by a party chosen by the
Representatives).

            "Certificate" has the meaning set forth in Section 2.1.

            "Class A Unit" means the Class A Units of the Company.

            "Class B Unit" means the Class B Units of the Company.

            "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute. Any reference herein to a particular
provision of the Code shall mean, where appropriate, the corresponding provision
in any successor statute.

            "Common Units" means, collectively, the Class A Units and the Class
B Units of the Company.

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


                                       3


            "Company Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(d).

            "control" when used with reference to any Person means the power to
direct the management or policies of such Person, directly or indirectly, by or
through stock or other equity ownership, agency or otherwise, or pursuant to or
in connection with an agreement, arrangement or other understanding (written or
oral); and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.

            "Depreciation" means, for each fiscal year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization or other cost
recovery deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year is
zero, Depreciation shall be calculated with reference to such beginning Gross
Asset Value using any reasonable method selected by the Management Committee.

            "Distributable Assets" means, with respect to any fiscal period, all
cash receipts (including from any operating, investing, and financing
activities) and (if distribution thereof is determined to be necessary by a
majority of the Management Committee) other assets of the Company from any and
all sources, reduced by operating cash expenses, contributions of capital to
subsidiaries or Affiliates of the Company and payments (if any) required to be
made in connection with any loan to the Company and any reserve for
contingencies or escrow required, in the good faith judgment of the Management
Committee, in connection therewith.

            "Economic Interest" means a Member's or Assignee's share of the
Company's net profits, net losses and distributions pursuant to this Agreement
and the Act, but shall not include any right to participate in the management or
affairs of the Company, including the right to vote in the election of
Representatives, vote on, consent to or otherwise participate in any decision of
the Members or Representatives, or any right to receive information concerning
the business and affairs of the Company, in each case except as expressly
otherwise provided in this Agreement or required by the Act.

            "Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

                  (a) The initial Gross Asset Value of any asset contributed by
      a Unitholder to the Company shall be the gross fair market value of such
      asset on the date of the contribution; provided that with respect to the
      Initial Capital Contributions such determination of gross fair market
      value shall remain subject to adjustment made within sixty


                                       4


      (60) days after the date hereof as determined by an independent appraiser
      chosen by the Representatives:

                  (b) The Gross Asset Values of all Company assets shall be
      adjusted to equal their respective gross fair market values, as determined
      by the Management Committee, as of the following times:

                        (i) the acquisition of an additional interest in the
            Company after the date hereof by a new or existing Unitholder in
            exchange for more than a de minimis Capital Contribution, if the
            Management Committee reasonably determines that such adjustment is
            necessary or appropriate to reflect the relative Economic Interests
            of the Unitholders in the Company;

                        (ii) the distribution by the Company to a Unitholder of
            more than a de minimis amount of Company property as consideration
            for an interest in the Company, if the Management Committee
            reasonably determines that such adjustment is necessary or
            appropriate to reflect the relative Economic Interests of the
            Unitholders in the Company;

                        (iii) the liquidation of the Company within the meaning
            of Regulations Section 1.704-1(b)(2)(ii)(g); and

                        (iv) such other times as the Management Committee shall
            reasonably determine necessary or advisable in order to comply with
            Regulations Sections 1.704-1(b) and 1.704-2.

                  (c) The Gross Asset Value of any Company asset distributed to
      a Unitholder shall be the gross fair market value of such asset on the
      date of distribution, as reasonably determined by the Management Committee
      taking into account the following proviso; provided that, in the case of
      such assets which are securities, the fair market value thereof shall be
      reduced (a) if and to the extent that a block sale of all of such
      securities is reasonably likely, in the good faith judgment of a
      registered broker-dealer affiliated with a reputable, nationally
      recognized brokerage house, to depress the trading price of such
      securities, (b) if and to the extent appropriate, in the good faith
      judgment of the Management Committee, due to illiquidity of such
      securities and (c) for any sales or other commissions reasonably likely to
      be incurred or applied in a sale of such securities.

                  (d) The Gross Asset Values of Company assets shall be
      increased (or decreased) to reflect any adjustments to the adjusted basis
      of such assets pursuant to Code Section 734(b) or Code Section 743(b), but
      only to the extent that such adjustments are taken into account in
      determining Capital Accounts pursuant to Regulations Section
      1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not
      be adjusted pursuant to this subparagraph (d) to the extent that the
      Management Committee determines


                                       5


      that an adjustment pursuant to subparagraph (b) of this definition of
      Gross Asset Value is necessary or appropriate in connection with a
      transaction that would otherwise result in an adjustment pursuant to this
      subparagraph (d).

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

            "Initial Capital Contribution" has the meaning set forth in Section
4.1.

            "Management Committee" means the Management Committee established
pursuant to Section 3.2.

            "Member" means Holdings and Kohler Mix Specialties, Inc., a
Minnesota corporation, and each other Person who is hereafter admitted as a
Member in accordance with the terms of this Agreement and the Act. The Members
shall constitute the "members" (as that term is defined in the Act) of the
Company. Except as otherwise set forth herein or in the Act, the Members shall
constitute a single class or group of members of the Company for all purposes of
the Act and this Agreement.

            "Member Minimum Gain" means minimum gain attributable to Member
Nonrecourse Debt determined in accordance with Regulations Section 1.704-2(i).

            "Member Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

            "Member Nonrecourse Deduction" has the meaning set forth in
Regulations Section 1.704-2(i)(2).

            "Membership Interest" means, with respect to each Member, such
Member's Economic Interest and rights as a Member.

            "MFI" means Michael Foods, Inc., a Minnesota corporation.

            "Net Income" or "Net Loss" means for each fiscal year of the
Company, an amount equal to the Company's taxable income or loss for such fiscal
year, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:

                  (a) Any income of the Company that is exempt from federal
      income tax and not otherwise taken into account in computing Net Income or
      Net Loss pursuant to this definition of Net Income or Net Loss shall be
      added to such taxable income or loss;


                                       6


                  (b) Any expenditures of the Company described in Code Section
      705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant
      to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
      account in computing Net Income or Net Loss pursuant to this definition of
      Net Income or Net Loss shall be subtracted from such taxable income or
      loss;

                  (c) In the event the Gross Asset Value of any Company asset is
      adjusted pursuant to subparagraph (b) or (c) of the definition of Gross
      Asset Value, the amount of such adjustment shall be taken into account as
      gain (if the adjustment increases the Gross Asset Value of the asset) or
      loss (if the adjustment decreases the Gross Asset Value of the asset) from
      the disposition of such asset for purposes of computing Net Income or Net
      Loss;

                  (d) Gain or loss resulting from any disposition of property
      with respect to which gain or loss is recognized for federal income tax
      purposes shall be computed by reference to the Gross Asset Value of the
      property disposed of, notwithstanding that the adjusted tax basis of such
      property differs from its Gross Asset Value;

                  (e) In lieu of the depreciation, amortization, and other cost
      recovery deductions taken into account in computing such taxable income or
      loss, Depreciation shall be taken into account for such fiscal year;

                  (f) To the extent an adjustment to the adjusted tax basis of
      any Company asset pursuant to Code Section 734(b) or 743(b) is required
      pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into
      account in determining Capital Accounts as a result of a distribution
      other than in liquidation of a Unitholder's interest in the Company, the
      amount of such adjustment shall be treated as an item of gain (if the
      adjustment increases the basis of the asset) or loss (if the adjustment
      decreases the basis of the asset) from the disposition of the asset and
      shall be taken into account for purposes of computing Net Income or Net
      Loss; and

                  (g) Notwithstanding any other provision of this definition of
      Net Income or Net Loss, any items which are specially allocated pursuant
      to Section 4.3(c) hereof shall not be taken into account in computing Net
      Income or Net Loss. The amounts of the items of Company income, gain,
      loss, or deduction available to be specially allocated pursuant to Section
      4.3(c) hereof shall be determined by applying rules analogous to those set
      forth in this definition of Net Income or Net Loss.

            "Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b).

            "Officer" means each Person designated as an officer of the Company
pursuant to and in accordance with the provisions of Section 3.7, subject to any
resolution of the Management Committee appointing such Person as an officer or
relating to such appointment.


                                       7


            "Preferred Unit" means a Unit representing a fractional part of the
interest of a Unitholder in Net Income, Net Losses and distributions and having
the rights and obligations specified with respect to the Preferred Units in this
Agreement.

            "Preferred Return" with respect to each holder of Preferred Units
means (A) during the period ending on the earlier of (1) a Sale of the Company
or (2) the second anniversary of the date hereof, the greater of (i) 100% of the
Net Income of the Company, excluding Net Income earned in connection with a Sale
of the Company and (ii) an amount, accrued on a daily basis and, beginning July
1, 2001, compounded quarterly on January 1, April 1, July 1 and October 1 of
each year, from the day on which such Unitholder makes a Capital Contribution in
respect of Preferred Units through the date of distribution equal to 10% per
annum of the excess, if any, of (z) such Unitholder's aggregate Capital
Contribution in respect of Preferred Units plus the aggregate amount compounded
pursuant to this definition through the end of the previous quarter on each day
during such period over (y) the aggregate amount of all distributions made on or
prior to such day to such Unitholder in respect of Preferred Units, and (B)
following the earlier of (1) a Sale of the Company or (2) the second anniversary
of the date hereof, an amount, accrued on a daily basis and, beginning July 1,
2001, compounded quarterly on April 1, July 1, October 1 and January 1 of each
year, from the day on which such Unitholder makes a Capital Contribution in
respect of Preferred Units through the date of distribution equal to 10% per
annum of the excess, if any, of (z) such Unitholder's aggregate Capital
Contribution in respect of Preferred Units plus the aggregate amount compounded
pursuant to this definition through the end of the previous quarter on each day
during such period over (y) the aggregate amount of all distributions made on or
prior to such day to such Unitholder in respect of Preferred Units. For purposes
of computing the Preferred Return, each Capital Contribution shall be treated as
having been made on the last day of the calendar month in which such Capital
Contribution is received by the Company (except for the Initial Capital
Contribution, which shall be deemed to have been made on the date hereof), and
distributions shall be deemed to have been made on the last day of the month in
which they are made.

            "Proceeding" has the meaning set forth in Section 3.11.

            "Regulations" means the Income Tax Regulations, including temporary
Regulations, promulgated under the Code, as such Regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

            "Regulatory Allocations" has the meaning set forth in Section 4.3(c)
of this Agreement.

            "Representative" has the meaning set forth in Section 3.2(a) of this
Agreement.

            "Required Interest" means a majority of the Preferred Units and the
Class A Units voting as a single class.


                                       8


            "Sale of the Company" means the consummation of a transaction,
whether in a single transaction or in a series of related transactions that are
consummated contemporaneously (or consummated pursuant to contemporaneous
agreements), with any other Person or group of related Persons on an
arm's-length basis, pursuant to which such party or parties (a) acquire,
directly or indirectly, (whether by merger, Unit purchase, recapitalization,
reorganization, redemption, issuance of Units or otherwise) more than 50% of the
Common Units or (b) acquire assets constituting all or substantially all of the
assets of the Company on a consolidated basis; provided, however, that in no
event shall a Sale of the Company be deemed to include any transaction effected
for the purpose of changing, directly or indirectly, the form of organization or
the organizational structure of the Company.

            "Substitute Member" means any Person that has been admitted to the
Company as a Member pursuant to Section 5.4 by virtue of such Person receiving
all or a portion of a Membership Interest from a Member or its Assignee and not
from the Company.

            "Successor in Interest" means any (i) trustee, custodian, receiver
or other Person acting in any Bankruptcy or reorganization proceeding with
respect to; (ii) assignee for the benefit of the creditors of; (iii) trustee or
receiver, or current or former officer, director or partner, or other fiduciary
acting for or with respect to the dissolution, liquidation or termination of; or
(iv) other executor, administrator, committee, legal representative or other
successor or assign of, any Unitholder, whether by operation of law or
otherwise.

            "Tax Matters Member" has the meaning set forth in Section 6.4(b).

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

            "TXCT LLC Agreement" means that certain Limited Liability Company
Agreement of M-Foods Dairy TXCT, LLC, dated as of the date hereof.

            "TXCT Preferred Units" means the units representing fractional parts
of the interest of certain unitholders in Net Income, Net Losses and
distributions and having the rights and obligations in TXCT specified with
respect to the preferred units as such term is defined in the TXCT LLC
Agreement.

            "TXCT Preferred Return" of the TXCT Preferred Units means, as of any
date, an amount equal to the aggregate "Preferred Return" (as such term is
defined in the TXCT LLC Agreement) accrued on all TXCT Preferred Units for all
periods prior to such date (including partial periods).

            "TXCT Preferred Capital" of the TXCT Preferred Units means, as of
any date, the aggregate "Capital Contributions" (as such term is defined in the
TXCT LLC Agreement) made or deemed to be made in exchange for all TXCT Preferred
Units.


                                       9


            "Unit" means the Preferred Units, Class A Units and Class B Units.

            "Unitholder" means a Member or Assignee who holds an Economic
Interest in Preferred, Class A or Class B Units.

            "Unpaid Preferred Return" with respect to each holder of Preferred
Units means the excess, if any, of (i) such Unitholder's Preferred Return as of
the date of any such determination over (ii) the aggregate amount of all
distributions made to such Unitholder pursuant to or in accordance with Section
4.4(a)(ii).

            "Unreturned Preferred Capital" with respect to each Unitholder means
the excess, if any, of (i) such Unitholder's aggregate Capital Contributions in
respect of Preferred Units over (ii) the aggregate amount of all distributions
made to such Unitholder pursuant to or in accordance with Section 4.4(a)(i).

            SECTION 1.2 Terms Generally. The definitions in Section 1.1 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The term "person" or "Person" includes
individuals, partnerships (whether general or limited), joint ventures,
corporations, limited liability companies, trusts, estates, custodians,
nominees, governments (or agencies or political subdivisions thereof) and other
associations, entities or groups (as defined in the Securities Exchange Act of
1934, as amended). The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." All terms herein that
relate to accounting matters shall be interpreted in accordance with generally
accepted accounting principles from time to time in effect. All references to
"Sections" and "Articles" shall refer to Sections and Articles of this Agreement
unless otherwise specified. The words "hereof" and "herein" and similar terms
shall relate to this Agreement.

                                   ARTICLE II
                               GENERAL PROVISIONS

            SECTION 2.1 Formation. The Company has been organized as a Delaware
limited liability company by the execution and filing of a Certificate of
Formation (the "Certificate") by Holdings, as an initial Member, under and
pursuant to the Act. The rights, powers, duties, obligations and liabilities of
the Members shall be determined pursuant to the Act and this Agreement. To the
extent that the rights, powers, duties, obligations and liabilities of any
Member are different by reason of any provision of this Agreement than they
would be in the absence of such provision, this Agreement shall, to the extent
permitted by the Act, control.

            SECTION 2.2 Name. The name of the Company is "M-Foods Dairy, LLC,"
and all Company business shall be conducted in that name or in such other names
that comply with applicable law as the Management Committee may select from time
to time.


                                       10


            SECTION 2.3 Term. The term of the Company commenced on the date the
Certificate was filed with the office of the Secretary of State of the State of
Delaware and shall continue in existence perpetually until termination or
dissolution in accordance with the provisions of Section 5.2.

            SECTION 2.4 Purpose. The nature of the business or purposes to be
conducted or promoted by the Company is to engage in any lawful act or activity
for which limited liability companies may be organized under the Act.
Notwithstanding anything herein to the contrary, nothing set forth herein shall
be construed as authorizing the Company to possess any purpose or power, or to
do any act or thing, forbidden by law to a limited liability company organized
under the laws of the State of Delaware.

            SECTION 2.5 Powers.

                  (a) Subject to the provisions of this Agreement and the
      agreements contemplated hereby, the Company shall have the power and
      authority to take any and all actions necessary, appropriate, proper,
      advisable, convenient or incidental to or for the furtherance of the
      purposes set forth in Section 2.4, including the power:

                        (i) to conduct its business, carry on its operations and
            have and exercise the powers granted to a limited liability company
            by Act in any state, territory, district or possession of the United
            States, or in any foreign country that may be necessary, convenient
            or incidental to the accomplishment of the purpose of the Company;

                        (ii) to acquire by purchase, lease, contribution of
            property or otherwise, own, hold, operate, maintain, finance,
            refinance, improve, lease, sell, convey, mortgage, transfer,
            demolish or dispose of any real or personal property that may be
            necessary, convenient or incidental to the accomplishment of the
            purpose of the Company;

                        (iii) to enter into, perform and carry out contracts of
            any kind, including contracts with any Unitholder or any Affiliate
            thereof, or any agent of the Company necessary to, in connection
            with, convenient to or incidental to the accomplishment of the
            purpose of the Company;

                        (iv) to purchase, take, receive, subscribe for or
            otherwise acquire, own, hold, vote, use, employ, sell, mortgage,
            lend, pledge or otherwise dispose of, and otherwise use and deal in
            and with, shares or other interests in or obligations of domestic or
            foreign corporations, associations, general or limited partnerships
            (including, without limitation, the power to be admitted as a
            partner thereof and to exercise the rights and perform the duties
            created thereby), trusts, limited liability companies (including,
            without limitation, the power to be admitted


                                       11


            as a unitholder or appointed as a manager thereof and to exercise
            the rights and perform the duties created thereby) or individuals or
            direct or indirect obligations of the United States or of any
            government, state, territory, governmental district or municipality
            or of any instrumentality of any of them;

                        (v) to lend money for any proper purpose, to invest and
            reinvest its funds and to take and hold real and personal property
            for the payment of funds so loaned or invested;

                        (vi) to sue and be sued, complain and defend, and
            participate in administrative or other proceedings in its name;

                        (vii) to appoint employees and agents of the Company and
            define their duties and fix their compensation;

                        (viii) to indemnify any Person in accordance with the
            Act and to obtain any and all types of insurance;

                        (ix) to cease its activities and cancel its Certificate;

                        (x) to negotiate, enter into, renegotiate, extend,
            renew, terminate, modify, amend, waive, execute, acknowledge or take
            any other action with respect to any lease, contract or security
            agreement in respect of any assets of the Company;

                        (xi) to borrow money and issue evidences of indebtedness
            and guaranty indebtedness (whether of the Company or any of its
            Affiliates (including, but not limited to, MFI)), and to secure the
            same by a mortgage, pledge or other lien on the assets of the
            Company;

                        (xii) to pay, collect, compromise, litigate, arbitrate
            or otherwise adjust or settle any and all other claims or demands of
            or against the Company or to hold such proceeds against the payment
            of contingent liabilities; and

                        (xiii) to make, execute, acknowledge and file any and
            all documents or instruments necessary, convenient or incidental to
            the accomplishment of the purpose of the Company.

                  (b) Company Action. Subject to the provisions of this
      Agreement and except as prohibited by applicable law (i) the Company may,
      with the approval of the Management Committee, enter into and perform any
      and all documents, agreements and instruments contemplated thereby, all
      without any further act, vote or approval of any


                                       12


      Member and (ii) the Management Committee may authorize any Person
      (including any Member or Officer) to enter into and perform any document
      on behalf of the Company.

                  (c) Merger. Subject to the provisions of this Agreement, the
      Company may, with the approval of the Management Committee and without the
      need for any further act, vote or approval of any Member, merge with, or
      consolidate into, another limited liability company (organized under the
      laws of Delaware or any other state), a corporation (organized under the
      laws of Delaware or any other state) or other business entity (as defined
      in Section 18-209(a) of the Act), regardless of whether the Company is the
      survivor of such merger or consolidation.

            SECTION 2.6 Foreign Qualification. Prior to the Company's conducting
business in any jurisdiction other than Delaware, the Management Committee shall
cause the Company to comply, to the extent procedures are available and those
matters are reasonably within the control of the Officers, with all requirements
necessary to qualify the Company as a foreign limited liability company in that
jurisdiction.

            SECTION 2.7 Registered Office; Registered Agent; Principal Office;
Other Offices. The registered office of the Company required by the Act to be
maintained in the State of Delaware shall be the office of the initial
registered agent named in the Certificate or such other office (which need not
be a place of business of the Company) as the Management Committee may designate
from time to time in the manner provided by law. The registered agent of the
Company in the State of Delaware shall be the initial registered agent named in
the Certificate or such other Person or Persons as the Management Committee may
designate from time to time in the manner provided by law. The principal office
of the Company shall be at such place as the Management Committee may designate
from time to time, which need not be in the State of Delaware, and the Company
shall maintain records at such place. The Company may have such other offices as
the Management Committee may designate from time to time.

            SECTION 2.8 No State-Law Partnership. The Unitholders intend that
the Company shall not be a partnership (including a limited partnership) or
joint venture, and that no Unitholder, Representative or Officer shall be a
partner or joint venturer of any other Unitholder, Representative or Officer by
virtue of this Agreement, for any purposes other than as set forth in the last
sentence of this Section 2.8, and this Agreement shall not be construed to the
contrary. The Unitholders intend that the Company shall be treated as a
partnership for federal and, if applicable, state or local income tax purposes,
and each Unitholder and the Company shall file all tax returns and shall
otherwise take all tax and financial reporting positions in a manner consistent
with such treatment.

                                   ARTICLE III
                                   MANAGEMENT

            SECTION 3.1 The Management Committee; Delegation of Authority and
Duties.


                                       13


                  (a) Members and Management Committee. The Members shall
      possess all rights and powers as provided in the Act and otherwise by law.
      Except as otherwise expressly provided for herein, the Members hereby
      consent to the exercise by the Management Committee of all such powers and
      rights conferred on them by the Act with respect to the management and
      control of the Company. Notwithstanding the foregoing and except as
      explicitly set forth in this Agreement, if a vote, consent or approval of
      the Members is required by the Act or other applicable law with respect to
      any act to be taken by the Company or matter considered by the Management
      Committee, each Member agrees that it shall be deemed to have consented to
      or approved such act or voted on such matter in accordance with a vote of
      the Management Committee on such act or matter. No Member, in its capacity
      as a Member, shall have any power to act for, sign for or do any act that
      would bind the Company. The Members, acting through the Management
      Committee, shall devote such time and effort to the affairs of the Company
      as they may deem appropriate for the oversight of the management and
      affairs of the Company. Each Member acknowledges and agrees that no Member
      shall, in its capacity as a Member, be bound to devote all of such
      Member's business time to the affairs of the Company, and that each Member
      and such Member's Affiliates do and will continue to engage for such
      Member's own account and for the account of others in other business
      ventures.

                  (b) Delegation by Management Committee. The Management
      Committee shall have the power and authority to delegate to one or more
      other Persons the Management Committee's rights and powers to manage and
      control the business and affairs of the Company, including to delegate to
      agents and employees of a Member, a Representative or the Company
      (including Officers), and to delegate by a management agreement or another
      agreement with, or otherwise to, other Persons. The Management Committee
      may authorize any Person (including, without limitation, any Member,
      Officer or Representative) to enter into and perform under any document on
      behalf of the Company.

                  (c) Committees. The Management Committee may, from time to
      time, designate one or more committees, each of which shall be comprised
      of at least two Representatives. Any such committee, to the extent
      provided in the enabling resolution and until dissolved by the Management
      Committee, shall have and may exercise any or all of the authority of the
      Management Committee. At every meeting of any such committee, the presence
      of a majority of all the representatives thereof shall constitute a
      quorum, and the affirmative vote of a majority of the representatives
      present shall be necessary for the adoption of any resolution. The
      Management Committee may dissolve any committee at any time, unless
      otherwise provided in the Certificate or this Agreement.

                  (d) Voting Rights. The holders of all Units shall be entitled
      to notice of all Unitholder meetings in accordance with this Agreement,
      and except as otherwise required by law, the holders of the Preferred
      Units and the Class A Units shall be entitled to vote on all matters
      submitted to the Unitholders for a vote with each Preferred Unit and each


                                       14


      Class A Unit entitled to one vote. Except as otherwise required by this
      Agreement or by law, the holders of Class B Units shall not be entitled to
      a vote on matters submitted to the Unitholders for a vote.

            SECTION 3.2 Establishment of Management Committee.

                  (a) Representatives. There shall be established a Management
      Committee composed of two (2) persons ("Representatives"). Thereafter, the
      number of Representatives shall be established from time to time by
      resolution of the Management Committee. The Representatives shall be
      elected from time to time by the holders of the Required Interest present
      in person or represented by proxy at any meeting of Unitholders. Each
      Representative shall remain in office until his or her death, resignation
      or removal, and in the event of death, resignation or removal of a
      Representative, the party or parties, as applicable, which designated such
      Representative shall fill the vacancy created.

                  (b) Duties. The Representatives, in the performance of their
      duties, shall owe to the Company and the Members duties of loyalty and due
      care of the type owed by the directors of a corporation to such
      corporation and its stockholders under the laws of the State of Delaware.

                  (c) Absence. A Representative may, in isolated instances
      arising from exigent circumstances, designate a Person to act as his or
      her substitute and in his or her place at any meeting of the Management
      Committee. Such Person shall have all power of the absent Representative,
      and references herein to a "Representative" at a meeting shall be deemed
      to include his or her substitute. Notwithstanding anything in this
      Agreement to the contrary, Representatives shall not be deemed to be
      "members" or "managers" (as such terms are defined in the Act) of the
      Company.

                  (d) No Individual Authority. No Representative has the
      authority or power to act for or on behalf of the Company, to do any act
      that would be binding on the Company or to make any expenditures or incur
      any obligations on behalf of the Company or authorize any of the
      foregoing, other than acts that are expressly authorized by the Management
      Committee.

            SECTION 3.3 Management Committee Meetings.

                  (a) Quorum. A majority of the total number of Representatives
      shall constitute a quorum for the transaction of business of the
      Management Committee and, except as otherwise provided in this Agreement,
      the act of a majority of the Representatives present at a meeting of the
      Management Committee at which a quorum is present shall be the act of the
      Management Committee. A Representative who is present at a meeting of the
      Management Committee at which action on any matter is taken shall be
      presumed to have assented to the action unless his dissent shall be
      entered in the minutes of the meeting or


                                       15


      unless he shall file his written dissent to such action with the Person
      acting as secretary of the meeting before the adjournment thereof or shall
      deliver such dissent to the Company immediately after the adjournment of
      the meeting. Such right to dissent shall not apply to a Representative who
      voted in favor of such action.

                  (b) Place, Waiver of Notice. Meetings of the Management
      Committee may be held at such place or places as shall be determined from
      time to time by resolution of the Management Committee. At all meetings of
      the Management Committee, business shall be transacted in such order as
      shall from time to time be determined by resolution of the Management
      Committee. Attendance of a Representative at a meeting shall constitute a
      waiver of notice of such meeting, except where a Representative attends a
      meeting for the express purpose of objecting to the transaction of any
      business on the ground that the meeting is not lawfully called or
      convened.

                  (c) Regular Meetings. Regular meetings of the Management
      Committee shall be held at such times and places as shall be designated
      from time to time by resolution of the Management Committee. Notice of
      such meetings shall not be required.

                  (d) Special Meetings. Special meetings of the Management
      Committee may be called on at least 24 hours notice to each Representative
      by any Representative. Such notice need not state the purpose or purposes
      of, nor the business to be transacted at, such meeting, except as may
      otherwise be required by law or provided for in this Agreement.

                  (e) Notice. Notice of any special meeting of the Management
      Committee or other committee may be given personally, by mail, facsimile,
      courier or other means and, if other than personally, shall be deemed
      given when written notice is delivered to the office of the Representative
      at the address of the Representative in the books and records of the
      Company.

            SECTION 3.4 Chairman. The Management Committee shall designate a
Representative to serve as chairman. The chairman shall preside at all meetings
of the Management Committee. If the chairman is absent at any meeting of the
Management Committee, a majority of the Representatives present shall designate
another Representative to serve as interim chairman for that meeting. The
chairman shall have no authority or power to act for or on behalf of the
Company, to do any act that would be binding on the Company or to make any
expenditure or incur any obligations on behalf of the Company or authorize any
of the foregoing. The chairman shall initially be Gregg A. Ostrander and shall
continue to be Mr. Ostrander during the period during which he is the Chief
Executive Officer of MFI.

            SECTION 3.5 Approval or Ratification of Acts or Contracts. Any act
or contract that shall be approved or be ratified by the Management Committee
shall be as valid and as binding


                                       16


upon the Company and upon all the Members (in their capacity as Members) as if
it shall have been approved or ratified by every Member of the Company.

            SECTION 3.6 Action by Written Consent or Telephone Conference. Any
action permitted or required by the Act, the Certificate or this Agreement to be
taken at a meeting of the Management Committee or any committee designated by
the Management Committee may be taken without a meeting if a consent in writing,
setting forth the action to be taken, is signed by a majority of the
Representatives or representatives of such other committee, as the case may be.
Such consent shall have the same force and effect as a vote at a meeting and may
be stated as such in any document or instrument filed with the Secretary of
State of the State of Delaware, and the execution of such consent shall
constitute attendance or presence in person at a meeting of the Management
Committee or any such other committee, as the case may be. Subject to the
requirements of this Agreement for notice of meetings, the Representatives, or
representatives of any other committee designated by the Management Committee,
may participate in and hold a meeting of the Management Committee or any such
other committee, as the case may be, by means of a conference telephone or
similar communications equipment by means of which all Persons participating in
the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person at such meeting, except where a
Person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

            SECTION 3.7 Officers.

                  (a) Designation and Appointment. The Management Committee may,
      from time to time, employ and retain Persons as may be necessary or
      appropriate for the conduct of the Company's business (subject to the
      supervision and control of the Management Committee), including employees,
      agents and other Persons (any of whom may be a Member or Representative)
      who may be designated as Officers of the Company, with titles including
      "chief executive officer," "chairman," "president," "vice president,"
      "treasurer," "secretary," "general manager," "director" and "chief
      financial officer," as and to the extent authorized by the Management
      Committee. Any number of offices may be held by the same Person. In its
      discretion, the Management Committee may choose not to fill any office for
      any period as it may deem advisable. Officers need not be residents of the
      State of Delaware or Members. Any Officers so designated shall have such
      authority and perform such duties as the Management Committee may, from
      time to time, delegate to them. The Management Committee may assign titles
      to particular Officers. Each Officer shall hold office until his successor
      shall be duly designated and shall qualify or until his death or until he
      shall resign or shall have been removed in the manner hereinafter
      provided. The salaries or other compensation, if any, of the Officers of
      the Company shall be fixed from time to time by the Management Committee.

                  (b) Resignation/Removal. Any Officer may resign as such at any
      time. Such resignation shall be made in writing and shall take effect at
      the time specified


                                       17


      therein, or if no time is specified, at the time of its receipt by the
      Management Committee. The acceptance of a resignation shall not be
      necessary to make it effective, unless expressly so provided in the
      resignation. Any Officer may be removed as such, either with or without
      cause at any time by the Management Committee. Designation of an Officer
      shall not of itself create any contractual or employment rights.

                  (c) Duties of Officers Generally. The Officers, in the
      performance of their duties as such, shall owe to the Company duties of
      loyalty and due care of the type owed by the officers of a corporation to
      such corporation and its stockholders under the laws of the State of
      Delaware.

                  (d) Chief Executive Officer. Subject to the powers of the
      Management Committee, the chief executive officer of the Company shall be
      in general and active charge of the entire business and affairs of the
      Company, and shall be its chief policy making officer. The chief executive
      officer shall initially be James D. Clarkson.

                  (e) President. The president shall, subject to the powers of
      the Management Committee and chief executive officer, have general and
      active management of the business of the Company; and shall see that all
      orders and resolutions of the Management Committee are carried into
      effect. The president shall have such other powers and perform such other
      duties as may be prescribed by the chief executive officer or the
      Management Committee. The president shall initially be James D. Clarkson.

                  (f) Chief Financial Officer. The chief financial officer shall
      keep and maintain, or cause to be kept and maintained, adequate and
      correct books and records of accounts of the properties and business
      transactions of the Company, including accounts of its assets,
      liabilities, receipts, disbursements, gains, losses and capital. The chief
      financial officer shall have the custody of the funds and securities of
      the Company, and shall keep full and accurate accounts of receipts and
      disbursements in books belonging to the Company, and shall deposit all
      moneys and other valuable effects in the name and to the credit of the
      Company in such depositories as may be designated by the Management
      Committee. The chief financial officer shall have such other powers and
      perform such other duties as may from time to time be prescribed by the
      chief executive officer or the Management Committee. The chief financial
      officer shall initially be Max Hoffmann.

                  (g) Vice President(s). The vice president(s) shall perform
      such duties and have such other powers as the chief executive officer or
      the Management Committee may from time to time prescribe. The
      vice-presidents initially shall be J. Christopher Henderson and James P.
      Kelley.

                  (h) Secretary.


                                       18


                        (i) The secretary shall attend all meetings of the
            Management Committee, and shall record all the proceedings of the
            meetings in a book to be kept for that purpose, and shall perform
            like duties for the standing committees of the Management Committee
            when required. The secretary shall initially be Jeffrey M. Shapiro.

                        (ii) The secretary shall keep all documents described in
            Article VI and such other documents as may be required under the
            Act. The secretary shall perform such other duties and have such
            other authority as may be prescribed elsewhere in this Agreement or
            from time to time by the chief executive officer or the Management
            Committee. The secretary shall have the general duties, powers and
            responsibilities of a secretary of a corporation.

                        (iii) If the Management Committee chooses to appoint an
            assistant secretary or assistant secretaries, the assistant
            secretaries, in the order of their seniority, in the absence,
            disability or inability to act of the secretary, shall perform the
            duties and exercise the powers of the secretary, and shall perform
            such other duties as the chief executive officer or the Management
            Committee may from time to time prescribe.

            SECTION 3.8 Management Matters.

                  (a) Existence and Good Standing. The Management Committee may
      take all action which may be necessary or appropriate (i) for the
      continuation of the Company's valid existence as a limited liability
      company under the laws of the State of Delaware (and of each other
      jurisdiction in which such existence is necessary to enable the Company to
      conduct the business in which it is engaged) and (ii) for the maintenance,
      preservation and operation of the business of the Company in accordance
      with the provisions of this Agreement and applicable laws and regulations.
      The Management Committee may file or cause to be filed for recordation in
      the office of the appropriate authorities of the State of Delaware, and in
      the proper office or offices in each other jurisdiction in which the
      Company is formed or qualified, such certificates (including certificates
      of limited liability companies and fictitious name certificates) and other
      documents as are required by the applicable statutes, rules or regulations
      of any such jurisdiction or as are required to reflect the identity of the
      Members and the amounts of their respective capital contributions.

                  (b) Investment Company Act. The Management Committee shall use
      its best efforts to assure that the Company shall not be subject to
      registration as an investment company pursuant to the Investment Company
      Act of 1940, as amended.


                                       19


            SECTION 3.9 Liability of Unitholders.

                  (a) No Personal Liability. Except as otherwise required by
      applicable law and as expressly set forth in this Agreement, no Unitholder
      shall have any personal liability whatsoever in such Person's capacity as
      a Unitholder, whether to the Company, to any of the other Unitholders, to
      the creditors of the Company or to any other third party, for the debts,
      liabilities, commitments or any other obligations of the Company or for
      any losses of the Company. Each Unitholder shall be liable only to make
      such Unitholder's Initial Capital Contribution to the Company, if
      applicable, and the other payments provided expressly herein.

                  (b) Return of Distributions. In accordance with the Act and
      the laws of the State of Delaware, a member of a limited liability company
      may, under certain circumstances, be required to return amounts previously
      distributed to such member. It is the intent of the Members that no
      distribution to any Member pursuant to Article V hereof shall be deemed a
      return of money or other property paid or distributed in violation of the
      Act. The payment of any such money or distribution of any such property to
      a Member shall be deemed to be a compromise within the meaning of the Act,
      and the Member receiving any such money or property shall not be required
      to return to any Person any such money or property. However, if any court
      of competent jurisdiction holds that, notwithstanding the provisions of
      this Agreement, any Member is obligated to make any such payment, such
      obligation shall be the obligation of such Member and not of any
      Representative or other Member.

            SECTION 3.10 Indemnification. Subject to the limitations and
conditions provided in this Section 3.10, each Person who was or is made a party
or is threatened to be made a party to or is involved in any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or arbitrative (hereinafter a "Proceeding"), or any appeal in such a Proceeding
or any inquiry or investigation that could lead to such a Proceeding, by reason
of the fact that he, she, or it, or a Person of which he, she or it is the legal
representative, is or was a Unitholder, Officer or Representative shall be
indemnified by the Company to the fullest extent permitted by applicable law, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to provide
broader indemnification rights than said law permitted the Company to provide
prior to such amendment) against all judgments, penalties (including excise and
similar taxes and punitive damages), fines, settlements and reasonable expenses
(including reasonable attorneys' fees and expenses) actually incurred by such
Person in connection with such Proceeding, appeal, inquiry or investigation if
such Person acted in Good Faith, and indemnification under this Section 3.10
shall continue as to a Person who has ceased to serve in the capacity which
initially entitled such Person to indemnity hereunder. The rights granted
pursuant to this Section 3.10 shall be deemed contract rights, and no amendment,
modification or repeal of this Section 3.10 shall have the effect of limiting or
denying any such rights with respect to actions taken or Proceedings, appeals,
inquiries or investigations arising prior to any amendment, modification or
repeal. It is expressly acknowledged that the indemnification provided


                                       20


in this Section 3.10 could involve indemnification for negligence or under
theories of strict liability. "Good Faith" shall mean a Person having acted in
good faith and in a manner such Person reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to a criminal
proceeding, having had no reasonable cause to believe such Person's conduct was
unlawful.

                                   ARTICLE IV
                CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS

            SECTION 4.1 Capital Contributions. The Members listed on Schedule A
hereto have made initial Capital Contributions to the Company in the amounts and
of the type set forth in Exhibit I hereto (with respect to each Member, an
"Initial Capital Contribution"). Holdings' Initial Capital Contribution shall be
adjusted upward or downward (and Holdings shall make an additional Capital
Contribution or receive a partial return of its Initial Capital Contribution) in
the proportion that the aggregate Capital Contribution of the other members is
adjusted pursuant to the provision contained in the definition of Capital
Contribution.

            SECTION 4.2 Capital Accounts.

                  (a) Creation. There shall be established for each Unitholder
      on the books of the Company a Capital Account which shall be increased or
      decreased in the manner set forth in this Agreement.

                  (b) Negative Balance. A Unitholder shall not have any
      obligation to the Company or to any other Unitholder to restore any
      negative balance in the Capital Account of such Unitholder.

            SECTION 4.3 Allocations of Net Income and Net Loss.

                  (a) Timing and Amount of Allocations of Net Income and Net
      Loss. Net Income and Net Loss of the Company shall be determined and
      allocated with respect to each fiscal year of the Company as of the end of
      each such year or as circumstances otherwise require or allow. Subject to
      the other provisions of this Section 4.3, an allocation to a Unitholder of
      a share of Net Income or Net Loss shall be treated as an allocation of the
      same share of each item of income, gain, loss or deduction that is taken
      into account in computing Net Income or Net Loss.

                  (b) General Allocations.

                        (i) Net Income and Net Loss. After giving effect to the
            special allocations provided in Sections 4.3(c) and 4.3(d), and
            except as provided in Section 4.3(f), all Net Income and Net Loss of
            the Company for a fiscal year shall be allocated to the Unitholders
            as follows:


                                       21


                              (A) first, Net Income will be allocated to the
                  Unitholders having deficit balances in their Capital Accounts
                  (computed after giving effect to all contributions,
                  distributions, allocations and other Capital Account
                  adjustments for all taxable years (other than the items
                  comprising the Net Income or Net Loss of the Company being
                  allocated to the Unitholders for the current fiscal year),
                  after adding back each Unitholder's share of Company Minimum
                  Gain and Member Minimum Gain as provided in Regulations
                  Sections 1.704-2(g) and 1.704-2(i)(5)), to the extent of, and
                  in proportion to, those deficits, unless satisfied by
                  allocations under Section 4.3(c) hereof; and

                              (B) second, Net Income and Net Loss not allocated
                  under Section 4.3(b)(i)(A) will be allocated so as to cause
                  the credit balance in each Unitholder's Capital Account
                  (computed in the same manner as provided parenthetically in
                  Section 4.3(b)(i)(A) hereof) to equal, as nearly as possible,
                  the amount such Unitholder would receive if the Company sold
                  all of its assets for the Gross Asset Value of each such asset
                  and distributed the proceeds thereof (after satisfaction of
                  any liabilities of the Company) in accordance with the
                  provisions of Section 4.4 hereof (and assuming that TXCT
                  simultaneously sold all of its assets for the Gross Asset
                  Value (as such term is defined in the TXCT LLC Agreement) of
                  each such asset and distributed the proceeds thereof (after
                  satisfaction of any liabilities of TXCT) in accordance with
                  the provisions of Section 4.4 of the TXCT LLC Agreement).

                  (c) Additional Allocation Provisions. Notwithstanding the
      foregoing provisions of this Section 4.3:

                        (i) (A) If there is a net decrease in Company Minimum
            Gain or Member Minimum Gain during any fiscal year, the Unitholders
            shall be allocated items of Company income and gain for such fiscal
            year (and, if necessary, for subsequent fiscal years) in accordance
            with Regulations Section 1.704-2(f) or 1.704-2(i)(4), as applicable.
            It is intended that this Section 4.3(c)(i)(A) qualify and be
            construed as a "minimum gain chargeback" and a "chargeback of
            partner nonrecourse debt minimum gain" within the meaning of such
            Regulations, which shall be controlling in the event of a conflict
            between such Regulations and this Section 4.3(c)(i)(A).

                              (B) Any Nonrecourse Deductions for any fiscal year
                  shall be specially allocated to the holders of Common Units in
                  accordance with the number of Common Units held by each such
                  Unitholder. Any Member Nonrecourse Deductions for any fiscal
                  year shall be specially allocated to the Unitholder(s) who
                  bears the economic risk of loss with respect to the Member


                                       22


                  Nonrecourse Debt to which such Member Nonrecourse Deductions
                  are attributable, in accordance with Regulations Section
                  1.704-2(i).

                              (C) If any Unitholder unexpectedly receives an
                  adjustment, allocation or distribution described in
                  Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6),
                  items of Company income and gain shall be allocated, in
                  accordance with Regulations Section 1.704-1(b)(2)(ii) (d), to
                  the Unitholder in an amount and manner sufficient to
                  eliminate, to the extent by such Regulations, the Adjusted
                  Capital Account Deficit of the Unitholder as quickly as
                  possible. It is intended that this Section 4.3(c)(i)(C)
                  qualify and be construed as a "qualified income offset" within
                  the meaning of Regulations 1.704-1(b)(2)(ii)(d), which shall
                  be controlling in the event of a conflict between such
                  Regulations and this Section 4.3(c)(i)(C).

                              (D) The allocations set forth in Sections
                  4.3(c)(i)(A), (B) and (C) (the "Regulatory Allocations") are
                  intended to comply with certain regulatory requirements,
                  including the requirements of Regulations Sections 1.704-1(b)
                  and 1.704-2. Notwithstanding the provisions of Section 4.3(b),
                  the Regulatory Allocations shall be taken into account in
                  allocating other items of income, gain, loss and deduction
                  among the Unitholders so that, to the extent possible, the net
                  amount of such allocations of other items and the Regulatory
                  Allocations to each Unitholder shall be equal to the net
                  amount that would have been allocated to each such Unitholder
                  if the Regulatory Allocations had not occurred.

                        (ii) For any fiscal year during which a Unitholder's
            interest in the Company is assigned by such Unitholder, the portion
            of the Net Income and Net Loss of the Company that is allocable in
            respect of such Unitholder's interest shall be apportioned between
            the assignor and the assignee of such Unitholder's interest using
            any permissible method under Code Section 706 and the Regulations
            thereunder, as determined by the Management Committee.

                        (iii) In the event that any amount claimed by the
            Company to constitute a deductible expense in any fiscal year is
            treated for federal income tax purposes as a distribution made to a
            Unitholder in its capacity as a partner of the Company and not a
            payment to a Unitholder not acting in its capacity as a partner
            under Code Section 707(a), then the Unitholder who is deemed to have
            received such distribution shall first be allocated an amount of
            Company gross income equal to such payment, its Capital Account
            shall be reduced to reflect the distribution, and for purposes of
            Section 4.3, Net Income and Net Loss shall be determined after
            making the allocation required by this Section 4.3(c)(iii).


                                       23


                        (iv) In the event that any amount claimed by the Company
            to constitute a distribution made to a Unitholder in its capacity as
            a partner of the Company is treated for federal income tax purposes
            as a deductible expense of the Company for a payment to a Unitholder
            not acting in its capacity as a partner of the Company, then the
            Unitholder who is deemed to have received such payment shall first
            be allocated the Company expense item attributable to such payment,
            its Capital Account shall be reduced to reflect the allocation, and
            for purposes of Section 4.3, Net Income and Net Loss shall be
            determined after making the allocation required by this Section
            4.3(c)(iv).

                  (d) Required Tax Allocations. All items of income, gain, loss,
      deduction and credit for federal income tax purposes shall be allocated to
      each Unitholder in the same manner as the Net Income or Net Loss (and each
      item of income, gain, loss and deduction related thereto) that is
      allocated to such Unitholder pursuant to Section 4.3(a), (b) and (c) to
      which such tax items relate. Notwithstanding the foregoing provisions of
      this Section 4.3, income, gain, loss, deduction, and credits with respect
      to property contributed to the Company by a Unitholder shall be allocated
      among the Unitholders for federal and state income tax purposes pursuant
      to Regulations promulgated under Section 704(c) of the Code, so as to take
      account of the variation, if any, between the adjusted basis for federal
      income tax purposes of the property to the Company and its initial Gross
      Asset Value at the time of contribution. In the event the Gross Asset
      Value of any Company asset is adjusted pursuant to subparagraph (b), (c),
      or (d) of the definition of Gross Asset Value, subsequent allocations of
      income, gain, loss, deduction, and credits with respect to such asset
      shall take account of the variation, if any, between the adjusted basis of
      such asset for federal income tax purposes and its Gross Asset Value in
      the same manner as under Code Section 704(c) and the applicable
      Regulations consistent with the requirements of Treasury Regulation
      Section 1.704-1(b)(2)(iv)(g). Allocations pursuant to this Section 4.3(d)
      are solely for purposes of federal, state and local income taxes and shall
      not affect, or in any way be taken into account in computing, any
      Unitholder's Capital Account or share of Net Income, Net Loss, other tax
      items or distributions pursuant to any provision of this Agreement.

                  (e) Unitholders' Tax Reporting. The Unitholders acknowledge
      and are aware of the income tax consequences of the allocations made by
      this Section 4.3 and, except as may otherwise be required by applicable
      law or regulatory requirements, hereby agree to be bound by the provisions
      of Section 4.3 in reporting their shares of Company income, gain, loss,
      deductions, and credits for federal, state and local income tax purposes.

                  (f) Withholding. Each Unitholder hereby authorizes the Company
      to withhold and to pay over any taxes payable by the Company or any of its
      Affiliates as a result of the participation by such Unitholder (or any
      Assignee of, or Successor in Interest to, such Unitholder) in the Company.
      If and to the extent that the Company shall be required to withhold any
      taxes, such Unitholder shall be deemed for all purposes of this Agreement
      to have received a payment from the Company as of the time such
      withholding is required to


                                       24


      be paid, which payment shall be deemed to be a distribution to such
      Unitholder under Section 4.4(a) or Section 5.2 to the extent that the
      Unitholder is entitled to receive a distribution and shall be taken into
      account in determining the amount of future distributions to such
      Unitholder. To the extent that the aggregate of such payments to a
      Unitholder for any period exceeds the distributions to which such
      Unitholder is entitled for such period, the amount of such excess shall be
      considered a demand loan from the Company to such Unitholder, with
      interest at an interest rate of 9% compounded annually, which interest
      shall be treated as an item of Company income until discharged by such
      Unitholder by repayment, which may be made in the sole discretion of the
      Management Committee out of distributions to which such Unitholder would
      otherwise be subsequently entitled. The withholdings referred to in this
      Section 4.3 shall be made at the maximum applicable statutory rate under
      applicable tax law unless the Management Committee receives documentation,
      satisfactory to the Management Committee, to the effect that a lower rate
      is applicable, or that no withholding is applicable.

            SECTION 4.4 Distributions.

                  (a) Priority. Distributable Assets will be distributed (or set
      aside for the benefit of the applicable Unitholder in the discretion of
      the Management Committee) as soon as reasonably practicable after such
      Distributable Assets become available to the Company, subject to Section
      4.4(b) as follows:

                        (i) First, 100% of the Distributable Assets shall be
            distributed to the Unitholders holding Preferred Units pro rata in
            accordance with each such Unitholder's Unreturned Preferred Capital
            until each such Unitholder's Unreturned Preferred Capital has been
            reduced to zero;

                        (ii) Second, after the required distributions pursuant
            to subparagraph (i) above, 100% of the Distributable Assets shall be
            distributed to the holders of Preferred Units, pro rata in
            accordance with the aggregate amount of such Unitholders' Unpaid
            Preferred Return until each such Unitholder's Unpaid Preferred
            Return has been reduced to zero;

                        (iii) Third, after the required distributions pursuant
            to subparagraphs (i) and (ii) above, 100% of the Distributable
            Assets shall be distributed to the holders of Preferred Units (in
            the proportion that the number of Preferred Units held by each such
            Unitholder bears to the aggregate number of all outstanding
            Preferred Units), in an amount equal to the excess, if any, of (A)
            the sum of the TXCT Preferred Capital and the TXCT Preferred Return,
            over (B) the sum of all prior distributions made by the Company
            pursuant to this Section 4.4(a)(iii) and all prior distributions
            made by TXCT pursuant to Sections 4.4(a)(i) and (ii) of the TXCT LLC
            Agreement;


                                       25


                        (iv) Fourth, after the required distributions pursuant
            to subparagraphs (i) through (iii) above, 100% of the Distributable
            Assets shall be distributed to the holders of the Common Units all
            remaining amounts in the proportion that the number of Common Units
            held by each such Unitholder bears to the aggregate number of all
            outstanding Common Units.

      provided that, if the Distributable Assets being distributed consist of
      more than one kind of asset, all Distributable Assets consisting of cash
      must be distributed before any other kind of asset is distributed.

            Notwithstanding any of the foregoing, upon the event of a
      distribution of cash or property by TXCT, the Company shall calculate
      under Section 4.4(a)(i)-(iv) above the amount that would have been
      distributed to each Unitholder holding Preferred Units had all
      distributions been made immediately following such distribution by TXCT.
      In the event that, according to such calculation, it is determined that
      the Unitholders holding Preferred Units have received distributions of
      Distributable Assets in an amount greater than the amount to which such
      Unitholders would have been entitled had all distributions of
      Distributable Assets made by the Company been calculated immediately after
      such distribution by TXCT according to Section 4.4(a)(i)-(iv), such
      Unitholders shall be obligated to return all amounts in excess of the
      amount to which such Unitholders would have been entitled under such
      calculation made according to Section 4.4(a)(i)-(iv).

                  (b) Tax Distributions. Subject to the Act and to any
      restrictions contained in any agreement to which the Company is bound, no
      later than the tenth day of each March, June, September and December, the
      Company shall, to the extent of available cash, make a tax distribution to
      each Unitholder in an amount equal to the excess of (i) the product of (A)
      the cumulative taxable income, attributable to the Unitholder's investment
      as reported on the Unitholder's Schedule K-1 allocated by the Company to
      the Unitholder, in excess of the federal taxable loss carryforward
      deduction (assuming that such carryforward was not applied against any
      non-Company income of such Unitholder) to the extent that such loss carry
      forward deduction would be available to offset such taxable income of a
      Unitholder from its investment in the Company and (B) the combined maximum
      federal, state and local marginal income tax rate (taking into account the
      deductibility of state and local taxes and adjusted appropriately for
      varying rates) applicable to any member of M-Foods Dairy Holdings, LLC, a
      Delaware limited liability company, over (ii) all prior distributions
      pursuant to this Section 4.4. All distributions made to a Unitholder
      pursuant to this Section 4.4(b) on account of the taxable income allocated
      to such Unitholder shall be treated as advance distributions under Section
      4.4(a) or Section 5.2 and shall be taken into account in determining the
      amount of future distributions to such Unitholder.

            SECTION 4.5 Security Interest and Right of Set-Off. As security for
any withholding tax or other liability or obligation to which the Company may be
subject as a result of any act or status of any Unitholder, or to which the
Company may become subject with respect to the interest


                                       26


of any Unitholder, the Company shall have (and each Unitholder hereby grants to
the Company) a security interest in all Distributable Assets distributable to
such Unitholder to the extent of the amount of such withholding tax or other
liability or obligation. The Company shall have a right of setoff against such
distributions of Distributable Assets in the amount of such withholding tax or
other liability or obligation, subject to the proviso in the first sentence of
Section 4.3(f). The Company may withhold distributions or portions thereof if it
is required to do so by the Code or any other provision of federal, state or
local tax or other law. Any amount withheld pursuant to the Code or any other
provision of federal, state or local tax or other law with respect to any
distribution to a Unitholder shall be treated as an amount distributed to such
Unitholder for all purposes under this Agreement.

                                    ARTICLE V
           WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS;
                            ADMISSION OF NEW MEMBERS

            SECTION 5.1 Unitholder Withdrawal. No Unitholder shall have the
power or right to withdraw or otherwise resign or be expelled from the Company
prior to the dissolution and winding up of the Company except pursuant to a
transfer permitted under this Agreement of all of such Unitholder's Units to an
Assignee. Notwithstanding anything to the contrary contained in the Act, in no
event shall any Unitholder be deemed to have withdrawn from the Company or cease
to be a Unitholder upon the occurrence of any of the events specified in this
Agreement, or any events similar thereto, unless the Unitholder, after the
occurrence of any such event, indicates in a written instrument that the
Unitholder has so withdrawn.

            SECTION 5.2 Dissolution.

                  (a) Events. The Company shall be dissolved and its affairs
      shall be wound up on the first to occur of the following:

                        (i) the written consent of the Members holding a
            majority of the outstanding Class A Units, along with the written
            consent of the Members holding a majority of the outstanding Class B
            Units;

                        (ii) the entry of a decree of judicial dissolution of
            the Company under Section 18-802 of the Act; and

                        (iii) upon the liquidation, dissolution or winding up of
            the Company.

Except as provided in this Agreement, the death, retirement, resignation,
expulsion, incapacity, bankruptcy or dissolution of a Member, or the occurrence
of any other event that terminates the continued membership of a Member in the
Company, shall not cause a dissolution of the Company, and the Company shall
continue in existence subject to the terms and conditions of this Agreement.


                                       27


                  (b) Actions Upon Dissolution. When the Company is dissolved,
      the business and property of the Company shall be wound up and liquidated
      by the Management Committee or, in the event of the unavailability of the
      Management Committee, such Member or other liquidating trustee as shall be
      named by the Management Committee.

                  (c) Priority. Within 120 calendar days after the effective
      date of dissolution of the Company, whether by expiration of its full term
      or otherwise, the assets of the Company shall be distributed in the
      following manner and order:

                        (i) All debts and obligations of the Company, if any,
            shall first be paid, discharged or provided for by adequate
            reserves; and

                        (ii) The balance shall be distributed to the Unitholders
            in accordance with Section 4.4.

                  (d) Cancellation of Certificate. On completion of the
      distribution of Company assets as provided herein, the Company is
      terminated, and shall file a certificate of cancellation with the
      Secretary of State of the State of Delaware, cancel any other filings made
      and take such other actions as may be necessary to terminate the Company.

            SECTION 5.3 No Transfers by Unitholders. Unless otherwise stated
herein, there shall be no transfers of Units by Unitholders (other than a pledge
of Units pursuant to that certain Pledge Agreement dated as of the date hereof
by and among the parties thereto), and any transfer or attempted transfer of
Units in violation of any provision of this Agreement shall be void, and the
Company shall not record such transfer on its books or treat any purported
transferee of such Units as the owner of such Units for any purpose.

            SECTION 5.4 Admission or Substitution of New Members.

                  (a) Admission. The Management Committee shall have the right,
      subject to Section 5.3, to admit as a Substitute Member or an Additional
      Member, any Person who acquires an interest in the Company, or any part
      thereof, from a Member or from the Company. Concurrently with the
      admission of a Substitute Member or an Additional Member, the Management
      Committee shall forthwith cause any necessary papers to be filed and
      recorded and notice to be given wherever and to the extent required
      showing the substitution of a transferee as a Substitute Member in place
      of the transferring Member, or the admission of an Additional Member, all
      at the expense, including payment of any professional and filing fees
      incurred, of the Substitute Member or the Additional Member.

                  (b) Conditions. The admission of any Person as a Substitute or
      Additional Member shall be conditioned upon (i) such Person's written
      acceptance and adoption of all the terms and provisions of this Agreement,
      either by (X) execution and delivery of a counterpart signature page to
      this Agreement countersigned by a Representative on behalf


                                       28


      of the Company or (Y) any other writing evidencing the intent of such
      Person to become a Substitute Member or Additional Member and such writing
      is accepted by the Management Committee on behalf of the Company and (ii)
      (at the request of the Management Committee) such Person's execution and
      delivery of a counterpart to the Securityholders Agreement.

            SECTION 5.5 Compliance with Law. Notwithstanding any provision
hereof to the contrary, no sale or other disposition of an interest in the
Company may be made except in compliance with all federal, state and other
applicable laws, including federal and state securities laws.

                                   ARTICLE VI
                         REPORTS TO MEMBERS; TAX MATTERS

            SECTION 6.1 Books of Account. Appropriate books of account shall be
kept by the Management Committee, in accordance with generally accepted
accounting principles, at the principal place of business of the Company, and
each Member shall have access to all books, records and accounts of the Company
and the right to make copies thereof for any purpose reasonably related to the
Member's interest as a member of the Company, in each case, under such
conditions and restrictions as the Management Committee may reasonably
prescribe.

            SECTION 6.2 Reports.

                  (a) Financial Statements. As promptly as practicable after the
      close of each fiscal year of the Company, the Management Committee shall
      cause an examination of the financial statements of the Company as of the
      end of each such fiscal year to be made in accordance with generally
      accepted auditing standards as in effect on the date thereof, by a firm of
      certified public accountants selected by the Management Committee. Within
      90 days after the close of each fiscal year, a copy of the financial
      statements of the Company, including the report of such certified public
      accountants, shall be furnished to each Unitholder and shall include, as
      of the end of such fiscal year:

                        (i) a statement prepared by the Company setting forth
            the balance of each Unitholder's Capital Account and the amount of
            that Unitholder's allocable share of the Company's items of Net
            Income or Net Loss and deduction, capital gain and loss or credit
            for such year for each of its Economic Interests; and

                        (ii) a balance sheet, a statement of income and expense
            and a statement of changes in cash flows of the Company for that
            fiscal year.

      In addition, the Unitholders shall be supplied with all other Company
      information necessary to enable each Unitholder to prepare its federal,
      state and local income tax returns.


                                       29


                  (b) Determinations. All determinations, valuations and other
      matters of judgment required to be made for accounting purposes under this
      Agreement shall be made by the Management Committee and shall be
      conclusive and binding on all Unitholders, their Successors in Interest
      and any other Person, and to the fullest extent permitted by law, no such
      Person shall have the right to an accounting or an appraisal of the assets
      of the Company or any successor thereto.

            SECTION 6.3 Fiscal Year. The fiscal year of the Company shall end on
December 31st of each calendar year unless otherwise determined by the
Management Committee in accordance with Section 706 of the Code.

            SECTION 6.4 Certain Tax Matters.

                  (a) Preparation of Returns. The Management Committee shall
      cause to be prepared all federal, state and local tax returns of the
      Company for each year for which such returns are required to be filed and
      shall cause such returns to be timely filed. The Management Committee
      shall determine the appropriate treatment of each item of income, gain,
      loss, deduction and credit of the Company and the accounting methods and
      conventions under the tax laws of the United States, the several states
      and other relevant jurisdictions as to the treatment of any such item or
      any other method or procedure related to the preparation of such tax
      returns. The Management Committee may cause the Company to make or refrain
      from making any and all elections permitted by such tax laws. Each
      Unitholder agrees that it shall not, except as otherwise required by
      applicable law or regulatory requirements, (i) treat, on its individual
      income tax returns, any item of income, gain, loss, deduction or credit
      relating to its interest in the Company in a manner inconsistent with the
      treatment of such item by the Company as reflected on the Form K-1 or
      other information statement furnished by the Company to such Unitholder
      for use in preparing its income tax returns or (ii) file any claim for
      refund relating to any such item based on, or which would result in, such
      inconsistent treatment. In respect of an income tax audit of any tax
      return of the Company, the filing of any amended return or claim for
      refund in connection with any item of income, gain, loss, deduction or
      credit reflected on any tax return of the Company, or any administrative
      or judicial proceedings arising out of or in connection with any such
      audit, amended return, claim for refund or denial of such claim, (A) the
      Tax Matters Member (as defined below) shall be authorized to act for, and
      its decision shall be final and binding upon, the Company and all
      Unitholders except to the extent a Unitholder shall properly elect to be
      excluded from such proceeding pursuant to the Code, (B) all expenses
      incurred by the Tax Matters Member in connection therewith (including
      attorneys', accountants' and other experts' fees and disbursements) shall
      be expenses of, and payable by, the Company, (C) no Unitholder shall have
      the right to (1) participate in the audit of any Company tax return, (2)
      file any amended return or claim for refund in connection with any item of
      income, gain, loss, deduction or credit (other than items which are not
      partnership items within the meaning of Section 6231(a)(4) of the Code or
      which cease to be partnership items under Section 6231(b) of the Code)
      reflected on any tax return of the Company, (3) participate in


                                       30


      any administrative or judicial proceedings conducted by the Company or the
      Tax Matters Member arising out of or in connection with any such audit,
      amended return, claim for refund or denial of such claim, or (4) appeal,
      challenge or otherwise protest any adverse findings in any such audit
      conducted by the Company or the Tax Matters Member or with respect to any
      such amended return or claim for refund filed by the Company or the Tax
      Matters Member or in any such administrative or judicial proceedings
      conducted by the Company or the Tax Matters Member, and (D) the Tax
      Matters Member shall keep the Unitholders reasonably apprised of the
      status of any such proceeding. Notwithstanding the previous sentence, if a
      petition for a readjustment to any partnership item included in a final
      partnership administrative adjustment is filed with a District Court or
      the Court of Claims and the IRS has elected to assess income tax against a
      Member with respect to that final partnership administrative adjustments
      (rather than suspending assessments until the District Court or Court of
      Claims proceedings become final), such Member shall be permitted to file a
      claim for refund within such period of time to avoid application of any
      statute of limitation provisions which would otherwise prevent the Member
      from having any claim based on the final outcome of that review..

                  (b) Tax Matters Member. The Company and each Member hereby
      designate Midwest Mix, Inc., a Minnesota corporation, as the "tax matters
      partner" for purposes of Section 6231(a)(7) of the Code (the "Tax Matters
      Member").

                  (c) Certain Filings. Upon the sale of Company assets or a
      liquidation of the Company, Unitholders shall provide the Management
      Committee with certain tax filings as requested by the Management
      Committee.

                                   ARTICLE VII
                                  MISCELLANEOUS

            SECTION 7.1 Schedules. Without in any way limiting the provisions of
Section 6.2, a Representative may from time to time execute on behalf of the
Company and deliver to the Unitholders schedules which set forth the then
current Capital Account balances of each Unitholder and any other matters deemed
appropriate by the Management Committee or required by applicable law. Such
schedules shall be for information purposes only and shall not be deemed to be
part of this Agreement for any purpose whatsoever.

            SECTION 7.2 Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY
CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE
CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the event
of a direct conflict between the provisions of this Agreement and any provision
of the Certificate or any mandatory provision of the Act, the applicable
provision of the Certificate or the Act shall control. If any provision of this
Agreement or the application thereof to any Person or circumstance is held
invalid or unenforceable to any


                                       31


extent, the remainder of this Agreement and the application of that provision to
other Persons or circumstances is not affected thereby and that provision shall
be enforced to the greatest extent permitted by law.

            SECTION 7.3 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
Successors in Interest; provided that no Person claiming by, through or under a
Member (whether as such Member's Successor in Interest or otherwise), as
distinct from such Member itself, shall have any rights as, or in respect to, a
Member (including the right to approve or vote on any matter or to notice
thereof).

            SECTION 7.4 Confidentiality. By executing this Agreement, for three
years from the receipt thereof, each Member expressly agrees to maintain the
confidentiality of, and not to disclose to any Person other than the Company,
another Member or a Person designated by the Company or any of their respective
financial planners, accountants, attorneys or other advisors, any information
relating to the business, financial structure, financial position or financial
results, clients or affairs of the Company that shall not be generally known to
the public, except as otherwise required by law or by any regulatory or
self-regulatory organization having jurisdiction and except in the case of any
Member who is employed by any entity controlled by the Company in the ordinary
course of its duties.

            SECTION 7.5 Amendments. This Agreement may not be modified or
amended without the written consent of the Members to the fullest extent
allowable under Delaware Law.

            SECTION 7.6 Notices. Whenever notice is required or permitted by
this Agreement to be given, such notice shall be in writing and shall be given
to any Unitholder at its address or telecopy number shown in the Company's books
and records, or, if given to the Company, at the following address:

            c/o Vestar Capital Partners
            245 Park Avenue
            41st Floor
            New York, New York 10167
            Attention: General Counsel
            Telecopy: (212) 808-4922


                                       32


            with a copy to:

            Michael Foods, Inc.
            5353 Wayzata Boulevard, Suite 324
            Minneapolis, MN 55416
            Attn: John D. Reedy
            Telecopy: (952) 546-3711

            and a copy to:

            Kirkland & Ellis
            200 East Randolph
            Chicago, IL 60601
            Attention: Stephen L. Ritchie, Esq.
            Telecopy: (312) 861-2200

Each proper notice shall be effective upon any of the following: (i) personal
delivery to the recipient, (ii) when telecopied to the recipient (with hard copy
sent to the recipient by reputable overnight courier service that same day or
the next business day (charges prepaid)), (iii) one business day after being
sent to the recipient by reputable overnight courier service (charges prepaid),
or (iv) two business days after being deposited in the mails (first class or
airmail postage prepaid).

            SECTION 7.7 Counterparts. This Agreement may be executed in any
number of counterparts (including by means of telecopied signature pages), all
of which together shall constitute a single instrument.

            SECTION 7.8 Power of Attorney. Each Member hereby irrevocably
appoints each Representative as such Member's true and lawful representative and
attorney-in-fact, each acting alone, in such Member's name, place and stead, (i)
to make, execute, sign and file all instruments, documents and certificates
which, from time to time, may be required to set forth any amendment to this
Agreement or which may be required by this Agreement or by the laws of the
United States of America, the State of Delaware or any other state in which the
Company shall determine to do business, or any political subdivision or agency
thereof and (ii) to execute, implement and continue the valid and subsisting
existence of the Company or to qualify and continue the Company as a foreign
limited liability company in all jurisdictions in which the Company may conduct
business. The chief executive officer, as representative and attorney-in-fact,
however, shall not have any rights, powers or authority to amend or modify this
Agreement when acting in such capacity, except as expressly provided herein.
Such power of attorney is coupled with an interest and shall survive and
continue in full force and effect notwithstanding the subsequent withdrawal from
the Company of any Member for any reason and shall survive and shall not be
affected by the disability or incapacity of such Member.


                                       33


            SECTION 7.9 Entire Agreement. This Agreement amends, restates and
supersedes in its entirety the Original Agreement. This Agreement and the other
documents and agreements referred to herein or entered into concurrently
herewith embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein; provided that, such other
agreements and documents shall not be deemed to be a part of, a modification of
or an amendment to this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

            SECTION 7.10 Section Titles. Section titles and headings are for
descriptive purposes only and shall not control or alter the meaning of this
Agreement as set forth in the text hereof.


                                       34


            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.

                                     M-FOODS DAIRY HOLDINGS, LLC

                                     By: __________________________
                                     Name: ________________________
                                     Its: _________________________


                                     KOHLER MIX SPECIALTIES, INC.

                                     By: __________________________
                                     Name: ________________________
                                     Its: _________________________

         [End of Signature Page to Limited Liability Company Agreement]



                                   Schedule A

- --------------------------------------------------------------------------------
Name and Address of Member         Preferred Units  Class A Units  Class B Units
- --------------------------------------------------------------------------------
M-Foods Dairy Holdings, LLC        0                0              950
c/o Vestar Capital Partners
1225 Seventeenth St., Suite 1660
Denver, CO 80202
- --------------------------------------------------------------------------------
Kohler Mix Specialties, Inc.       22,171.08        50             0
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416
- --------------------------------------------------------------------------------


                                    Exhibit I

EX-3.25

                                                                   EXHIBIT 3.25

                            CERTIFICATE OF FORMATION

                                       OF

                             M-FOODS DAIRY TXCT, LLC

         This Certificate of Formation is being executed as of April 3, 2001
for the purpose of forming a limited liability company pursuant to the
Delaware Limited Liability Company Act, 6 Del. C. Sections 18-101, ET SEQ.

         The undersigned, being duly authorized to execute and file this
Certificate, does hereby certify as follows:

         1.     NAME. The name of the limited liability company is M-FOODS
DAIRY TXCT, LLC (the "Company").

         2.     REGISTERED OFFICE AND REGISTERED AGENT. The Company's
registered office in the State of Delaware is located at 1209 Orange Street,
in the City of Wilmington, County of New Castle, 19801. The registered agent
of the Company for service of process at such address is The Corporation
Trust Company.

         IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate of Formation as of the day and year first above written.




                                                    By: /s/ Michele N. Kochevar
                                                       -------------------------
                                                        Michele N. Kochevar,
                                                        An Authorized Person

EX-3.26

                                                                    Exhibit 3.26

                                                                [EXECUTION COPY]
================================================================================

                      ------------------------------------

                             M-FOODS DAIRY TXCT, LLC

                      A Delaware Limited Liability Company

                      ------------------------------------

                       LIMITED LIABILITY COMPANY AGREEMENT

                           Dated as of April 10, 2001

THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT
BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT
EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND
COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH
HEREIN.

================================================================================



                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I .................................................................    1
      DEFINITIONS .........................................................    1
               SECTION 1.1      Definitions ...............................    1
               SECTION 1.2      Terms Generally ...........................   12

ARTICLE II ................................................................   12
      GENERAL PROVISIONS ..................................................   12
               SECTION 2.1      Formation .................................   12
               SECTION 2.2      Name ......................................   12
               SECTION 2.3      Term ......................................   12
               SECTION 2.4      Purpose ...................................   12
               SECTION 2.5      Powers ....................................   12
               SECTION 2.6      Foreign Qualification .....................   13
               SECTION 2.7      Registered Office; Registered Agent;
                                Principal Office; Other Offices ...........   13
               SECTION 2.8      No State-Law Partnership ..................   13

ARTICLE III ...............................................................   14
      MANAGEMENT ..........................................................   14
               SECTION 3.1      The Management Committee; Delegation of
                                Authority and Duties ......................   14
               SECTION 3.2      Establishment of Management Committee .....   15
               SECTION 3.3      Management Committee Meetings .............   16
               SECTION 3.4      Chairman ..................................   17
               SECTION 3.5      Approval or Ratification of Acts or
                                Contracts .................................   17
               SECTION 3.6      Action by Written Consent or Telephone
                                Conference ................................   17
               SECTION 3.7      Officers ..................................   17
               SECTION 3.8      Management Matters ........................   19
               SECTION 3.9      Liability of Unitholders ..................   20
               SECTION 3.10     Indemnification ...........................   21

ARTICLE IV ................................................................   22
      CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS ...................   22
               SECTION 4.1      Capital Contributions .....................   22
               SECTION 4.2      Capital Accounts ..........................   22
               SECTION 4.3      Allocations of Net Income and Net Loss ....   22
               SECTION 4.4      Distributions .............................   26
               SECTION 4.5      Security Interest and Right of Set-Off ....   29



ARTICLE V .................................................................   29
      WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP
      INTERESTS; ADMISSION OF NEW MEMBERS .................................   29
               SECTION 5.1      Unitholder Withdrawal .....................   29
               SECTION 5.2      Dissolution ...............................   29
               SECTION 5.3      Transfer by Unitholders ...................   30
               SECTION 5.4      Admission or Substitution of New Members ..   31
               SECTION 5.5      Compliance with Law .......................   31

ARTICLE VI ................................................................   31
      REPORTS TO MEMBERS; TAX MATTERS .....................................   31
               SECTION 6.1      Books of Account ..........................   31
               SECTION 6.2      Reports ...................................   32
               SECTION 6.3      Fiscal Year ...............................   32
               SECTION 6.4      Certain Tax Matters .......................   32

ARTICLE VII ...............................................................   34
      MISCELLANEOUS .......................................................   34
               SECTION 7.1      Schedules .................................   34
               SECTION 7.2      Governing Law .............................   34
               SECTION 7.3      Successors and Assigns ....................   34
               SECTION 7.4      Confidentiality ...........................   34
               SECTION 7.5      Amendments ................................   34
               SECTION 7.6      Notices ...................................   35
               SECTION 7.7      Counterparts ..............................   35
               SECTION 7.8      Power of Attorney .........................   35
               SECTION 7.9      Entire Agreement ..........................   36
               SECTION 7.10     Section Titles ............................   36



                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                             M-FOODS DAIRYTXCT, LLC
                      A Delaware Limited Liability Company

            THIS LIMITED LIABILITY COMPANY AGREEMENT of M-Foods Dairy TXCT, LLC,
dated and effective as of April 10, 2001 (this "Agreement"), is adopted,
executed and agreed to, for good and valuable consideration, by the Persons
listed on Schedule A attached hereto as of the date hereof upon their execution
of this Agreement, and each other Person who at any time becomes a Member in
accordance with the terms of this Agreement and the Act. Any reference in this
Agreement to any Member shall include such Member's Successors in Interest to
the extent such Successors in Interest have become Substitute Members in
accordance with the provisions of this Agreement.

            NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto, each intending to be legally
bound, agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

            SECTION 1.1 Definitions.

            Unless the context otherwise requires, the following terms shall
have the following meanings for purposes of this Agreement:

            "Act" means the Delaware Limited Liability Company Act, Title 6,
ss.ss. 18-101, et seq, as it may be amended from time to time.

            "Additional Member" means any Person that has been admitted to the
Company as a Member pursuant to Section 5.4 by virtue of having received its
Membership Interest from the Company and not from any other Member or Assignee.

            "Adjusted Capital Account Deficit" means, with respect to any
Unitholder, the deficit balance, if any, in such Unitholder's Capital Account as
of the end of the relevant fiscal year, after giving effect to the following
adjustments:

                        (i) credit to such Capital Account any amounts that such
            Unitholder is obligated to restore pursuant to this Agreement or is
            deemed to be obligated to restore pursuant to Regulations Section
            1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of
            Regulations Sections 1.704-2(i)(5) and 1.704-2(g)(1); and

                        (ii) debit to such Capital Account the items described
            in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).



            The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted and applied by the Management
Committee consistently therewith.

            "Affiliate" when used with reference to another Person means any
Person (other than the Company), directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control with, such
other Person. In addition, Affiliates of a Member shall include all partners,
officers, employees and former partners, officers or employees of, all
consultants or advisors to, and all other Persons who directly or indirectly
receive compensation from, such Member.

            "Assignee" means any transferee to which a Member or another
Assignee has transferred its interest in the Company in accordance with the
terms of this Agreement, but who is not a Member.

            "Bankruptcy" means, with respect to any Person, the occurrence of
any of the following events: (i) the filing of an application by such Person
for, or a consent to, the appointment of a trustee or custodian of his assets;
(ii) the filing by such Person of a voluntary petition in Bankruptcy or the
seeking of relief under Title 11 of the United States Code, as now constituted
or hereafter amended, or the filing of a pleading in any court of record
admitting in writing his inability to pay his debts as they become due; (iii)
the failure of such Person to pay his debts as such debts become due; (iv) the
making by such Person of a general assignment for the benefit of creditors; (v)
the filing by such Person of an answer admitting the material allegations of, or
his consenting to, or defaulting in answering, a Bankruptcy petition filed
against him in any Bankruptcy proceeding or petition seeking relief under Title
11 of the United States Code, as now constituted or as hereafter amended; or
(vi) the entry of an order, judgment or decree by any court of competent
jurisdiction adjudicating such Person a bankrupt or insolvent or for relief in
respect of such Person or appointing a trustee or custodian of his assets and
the continuance of such order, judgment or decree unstayed and in effect for a
period of 60 consecutive days.

            "Capital Account" means, with respect to any Unitholder, the account
maintained for such Unitholder in accordance with the following provisions:

                  (a) To each Unitholder's Capital Account there shall be added
      such Unitholder's Capital Contributions, such Unitholder's allocable share
      of Net Income and any items in the nature of income or gain which are
      specially allocated to such Unitholder pursuant to Section 4.3(c) hereof,
      and the amount of any Company liabilities assumed by such Unitholder or
      which are secured by any property distributed to such Unitholder.

                  (b) To each Unitholder's Capital Account there shall be
      subtracted the amount of cash and the Gross Asset Value of any property
      distributed to such Unitholder pursuant to any provision of this
      Agreement, such Unitholder's allocable share of Net Losses


                                       2


      and any items in the nature of expenses or losses which are specially
      allocated to such Unitholder pursuant to Section 4.3(c) hereof, and the
      amount of any liabilities of such Unitholder assumed by the Company or
      which are secured by any property contributed by such Unitholder to the
      Company.

                  (c) In the event any interest in the Company is transferred in
      accordance with the terms of this Agreement, the transferee shall succeed
      to the Capital Account of the transferor to the extent it relates to the
      transferred interest.

                  (d) In determining the amount of any liability for purposes of
      subparagraphs (a) and (b) hereof and Section 4.3(b) hereof, there shall be
      taken into account Code Section 752(c) and any other applicable provisions
      of the Code and Regulations.

                  (e) The foregoing provisions and the other provisions of this
      Agreement relating to the maintenance of Capital Accounts are intended to
      comply with Code Section 704(b) and the Regulations promulgated
      thereunder, and shall be interpreted and applied by the Management
      Committee in a manner consistent with such Regulations.

            "Capital Contribution" means, with respect to any Unitholder, the
amount of cash and the initial Gross Asset Value of any property (other than
money) contributed from time to time to the Company by such Unitholder (it being
understood that the Gross Asset Value with respect to property in respect of a
Unitholder's Initial Capital Contribution shall initially be as set forth on
Schedule A attached hereto; provided that the Gross Asset Value of such Initial
Capital Contribution and the number of Preferred Units, Class A Units and Class
B Units may be adjusted on or before the date sixty days from the date hereof to
reflect the fair market value of such Unitholder's Initial Capital Contribution
as determined by an independent appraisal performed by a party chosen by the
Representatives).

            "Certificate" has the meaning set forth in Section 2.1.

            "Class A Unit" means the Class A Units of the Company.

            "Class B Unit" means the Class B Units of the Company.

            "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute. Any reference herein to a particular
provision of the Code shall mean, where appropriate, the corresponding provision
in any successor statute.

            "Common Units" means, collectively, the Class A Units and the Class
B Units of the Company.

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


                                       3


            "Company Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(d).

            "control" when used with reference to any Person means the power to
direct the management or policies of such Person, directly or indirectly, by or
through stock or other equity ownership, agency or otherwise, or pursuant to or
in connection with an agreement, arrangement or other understanding (written or
oral); and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.

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

            "Dairy LLC Agreement" means that certain Limited Liability Company
Agreement of M-Foods Dairy, LLC, dated as of the date hereof.

            "Dairy Preferred Units" means the units representing fractional
parts of the interest of certain unitholders in Net Income, Net Losses and
distributions and having the rights and obligations in Dairy specified with
respect to the preferred units as such term is defined in the Dairy LLC
Agreement.

            "Dairy Preferred Return" of the Dairy Preferred Units means, as of
any date, an amount equal to the aggregate "Preferred Return" (as such term is
defined in the Dairy LLC Agreement) accrued on all Dairy Preferred Units for all
periods prior to such date (including partial periods).

            "Dairy Preferred Capital" of the Dairy Preferred Units means, as of
any date, the aggregate "Capital Contributions" (as such term is defined in the
Dairy LLC Agreement) made or deemed to be made in exchange for all Dairy
Preferred Units.

            "Depreciation" means, for each fiscal year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization or other cost
recovery deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year is
zero, Depreciation shall be calculated with reference to such beginning Gross
Asset Value using any reasonable method selected by the Management Committee.

            "Distributable Assets" means, with respect to any fiscal period, all
cash receipts (including from any operating, investing, and financing
activities) and (if distribution thereof is determined to be necessary by a
majority of the Management Committee) other assets of the Company from any and
all sources, reduced by operating cash expenses, contributions of capital to


                                       4


subsidiaries or Affiliates of the Company and payments (if any) required to be
made in connection with any loan to the Company and any reserve for
contingencies or escrow required, in the good faith judgment of the Management
Committee, in connection therewith.

            "Economic Interest" means a Member's or Assignee's share of the
Company's net profits, net losses and distributions pursuant to this Agreement
and the Act, but shall not include any right to participate in the management or
affairs of the Company, including the right to vote in the election of
Representatives, vote on, consent to or otherwise participate in any decision of
the Members or Representatives, or any right to receive information concerning
the business and affairs of the Company, in each case except as expressly
otherwise provided in this Agreement or required by the Act.

            "Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

                  (a) The initial Gross Asset Value of any asset contributed by
      a Unitholder to the Company shall be the gross fair market value of such
      asset on the date of the contribution; provided that with respect to the
      Initial Capital Contributions such determination of gross fair market
      value shall remain subject to adjustment made within sixty (60) days after
      the date hereof as determined by an independent appraiser chosen by the
      Representatives:

                  (b) The Gross Asset Values of all Company assets shall be
      adjusted to equal their respective gross fair market values, as determined
      by the Management Committee, as of the following times:

                        (i) the acquisition of an additional interest in the
            Company after the date hereof by a new or existing Unitholder in
            exchange for more than a de minimis Capital Contribution, if the
            Management Committee reasonably determines that such adjustment is
            necessary or appropriate to reflect the relative Economic Interests
            of the Unitholders in the Company;

                        (ii) the distribution by the Company to a Unitholder of
            more than a de minimis amount of Company property as consideration
            for an interest in the Company, if the Management Committee
            reasonably determines that such adjustment is necessary or
            appropriate to reflect the relative Economic Interests of the
            Unitholders in the Company;

                        (iii) the liquidation of the Company within the meaning
            of Regulations Section 1.704-1(b)(2)(ii)(g); and


                                       5


                        (iv) such other times as the Management Committee shall
            reasonably determine necessary or advisable in order to comply with
            Regulations Sections 1.704-1(b) and 1.704-2.

                  (c) The Gross Asset Value of any Company asset distributed to
      a Unitholder shall be the gross fair market value of such asset on the
      date of distribution, as reasonably determined by the Management Committee
      taking into account the following proviso; provided that, in the case of
      such assets which are securities, the fair market value thereof shall be
      reduced (a) if and to the extent that a block sale of all of such
      securities is reasonably likely, in the good faith judgment of a
      registered broker-dealer affiliated with a reputable, nationally
      recognized brokerage house, to depress the trading price of such
      securities, (b) if and to the extent appropriate, in the good faith
      judgment of the Management Committee, due to illiquidity of such
      securities and (c) for any sales or other commissions reasonably likely to
      be incurred or applied in a sale of such securities.

                  (d) The Gross Asset Values of Company assets shall be
      increased (or decreased) to reflect any adjustments to the adjusted basis
      of such assets pursuant to Code Section 734(b) or Code Section 743(b), but
      only to the extent that such adjustments are taken into account in
      determining Capital Accounts pursuant to Regulations Section
      1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not
      be adjusted pursuant to this subparagraph (d) to the extent that the
      Management Committee determines that an adjustment pursuant to
      subparagraph (b) of this definition of Gross Asset Value is necessary or
      appropriate in connection with a transaction that would otherwise result
      in an adjustment pursuant to this subparagraph (d).

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

            "Initial Capital Contribution" has the meaning set forth in Section
4.1.

            "Management Committee" means the Management Committee established
pursuant to Section 3.2.

            "Member" means Holdings, Kohler Mix Specialties of Connecticut,
Inc., a Connecticut corporation, Midwest Mix, Inc., a Minnesota corporation, and
each other Person who is hereafter admitted as a Member in accordance with the
terms of this Agreement and the Act. The Members shall constitute the "members"
(as that term is defined in the Act) of the Company. Except as otherwise set
forth herein or in the Act, the Members shall constitute a single class or group
of members of the Company for all purposes of the Act and this Agreement.

            "Member Minimum Gain" means minimum gain attributable to Member
Nonrecourse Debt determined in accordance with Regulations Section 1.704-2(i).


                                       6


            "Member Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

            "Member Nonrecourse Deduction" has the meaning set forth in
Regulations Section 1.704-2(i)(2).

            "Membership Interest" means, with respect to each Member, such
Member's Economic Interest and rights as a Member.

            "MFI" means Michael Foods, Inc., a Minnesota corporation.

            "Net Income" or "Net Loss" means for each fiscal year of the
Company, an amount equal to the Company's taxable income or loss for such fiscal
year, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:

                  (a) Any income of the Company that is exempt from federal
      income tax and not otherwise taken into account in computing Net Income or
      Net Loss pursuant to this definition of Net Income or Net Loss shall be
      added to such taxable income or loss;

                  (b) Any expenditures of the Company described in Code Section
      705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant
      to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
      account in computing Net Income or Net Loss pursuant to this definition of
      Net Income or Net Loss shall be subtracted from such taxable income or
      loss;

                  (c) In the event the Gross Asset Value of any Company asset is
      adjusted pursuant to subparagraph (b) or (c) of the definition of Gross
      Asset Value, the amount of such adjustment shall be taken into account as
      gain (if the adjustment increases the Gross Asset Value of the asset) or
      loss (if the adjustment decreases the Gross Asset Value of the asset) from
      the disposition of such asset for purposes of computing Net Income or Net
      Loss;

                  (d) Gain or loss resulting from any disposition of property
      with respect to which gain or loss is recognized for federal income tax
      purposes shall be computed by reference to the Gross Asset Value of the
      property disposed of, notwithstanding that the adjusted tax basis of such
      property differs from its Gross Asset Value;

                  (e) In lieu of the depreciation, amortization, and other cost
      recovery deductions taken into account in computing such taxable income or
      loss, Depreciation shall be taken into account for such fiscal year;


                                       7


                  (f) To the extent an adjustment to the adjusted tax basis of
      any Company asset pursuant to Code Section 734(b) or 743(b) is required
      pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into
      account in determining Capital Accounts as a result of a distribution
      other than in liquidation of a Unitholder's interest in the Company, the
      amount of such adjustment shall be treated as an item of gain (if the
      adjustment increases the basis of the asset) or loss (if the adjustment
      decreases the basis of the asset) from the disposition of the asset and
      shall be taken into account for purposes of computing Net Income or Net
      Loss; and

                  (g) Notwithstanding any other provision of this definition of
      Net Income or Net Loss, any items which are specially allocated pursuant
      to Section 4.3(c) hereof shall not be taken into account in computing Net
      Income or Net Loss. The amounts of the items of Company income, gain,
      loss, or deduction available to be specially allocated pursuant to Section
      4.3(c) hereof shall be determined by applying rules analogous to those set
      forth in this definition of Net Income or Net Loss.

            "Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b).

            "Officer" means each Person designated as an officer of the Company
pursuant to and in accordance with the provisions of Section 3.7, subject to any
resolution of the Management Committee appointing such Person as an officer or
relating to such appointment.

            "Preferred Unit" means a Unit representing a fractional part of the
interest of a Unitholder in Net Income, Net Losses and distributions and having
the rights and obligations specified with respect to the Preferred Units in this
Agreement.

            "Preferred Return" with respect to each holder of Preferred Units
means (A) during the period ending on the earlier of (1) a Sale of the Company
or (2) the second anniversary of the date hereof, the greater of (i) 100% of the
Net Income of the Company, excluding Net Income earned in connection with a Sale
of the Company and (ii) an amount, accrued on a daily basis and, beginning July
1, 2001, compounded quarterly on January 1, April 1, July 1 and October 1 of
each year, from the day on which such Unitholder makes a Capital Contribution in
respect of Preferred Units through the date of distribution equal to 10% per
annum of the excess, if any, of (z) such Unitholder's aggregate Capital
Contribution in respect of Preferred Units plus the aggregate amount compounded
pursuant to this definition through the end of the previous quarter on each day
during such period over (y) the aggregate amount of all distributions made on or
prior to such day to such Unitholder in respect of Preferred Units, and (B)
following the earlier of (1) a Sale of the Company or (2) the second anniversary
of the date hereof, an amount, accrued on a daily basis and, beginning July 1,
2001, compounded quarterly on April 1, July 1, October 1 and January 1 of each
year, from the day on which such Unitholder makes a Capital Contribution in
respect of Preferred Units through the date of distribution equal to 10% per
annum of the excess, if any, of (z) such Unitholder's aggregate Capital
Contribution in respect of Preferred Units plus the aggregate amount compounded


                                       8


pursuant to this definition through the end of the previous quarter on each day
during such period over (y) the aggregate amount of all distributions made on or
prior to such day to such Unitholder in respect of Preferred Units. For purposes
of computing the Preferred Return, each Capital Contribution shall be treated as
having been made on the last day of the calendar month in which such Capital
Contribution is received by the Company (except for the Initial Capital
Contribution, which shall be deemed to have been made on the date hereof), and
distributions shall be deemed to have been made on the last day of the month in
which they are made.

            "Proceeding" has the meaning set forth in Section 3.11.

            "Regulations" means the Income Tax Regulations, including temporary
Regulations, promulgated under the Code, as such Regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

            "Regulatory Allocations" has the meaning set forth in Section 4.3(c)
of this Agreement.

            "Representative" has the meaning set forth in Section 3.2(a) of this
Agreement.

            "Required Interest" means a majority of the Preferred Units and the
Class A Units voting as a single class.

            "Sale of the Company" means the consummation of a transaction,
whether in a single transaction or in a series of related transactions that are
consummated contemporaneously (or consummated pursuant to contemporaneous
agreements), with any other Person or group of related Persons on an
arm's-length basis, pursuant to which such party or parties (a) acquire,
directly or indirectly, (whether by merger, Unit purchase, recapitalization,
reorganization, redemption, issuance of Units or otherwise) more than 50% of the
Common Units or (b) acquire assets constituting all or substantially all of the
assets of the Company on a consolidated basis; provided, however, that in no
event shall a Sale of the Company be deemed to include any transaction effected
for the purpose of changing, directly or indirectly, the form of organization or
the organizational structure of the Company.

            "Substitute Member" means any Person that has been admitted to the
Company as a Member pursuant to Section 5.4 by virtue of such Person receiving
all or a portion of a Membership Interest from a Member or its Assignee and not
from the Company.

            "Successor in Interest" means any (i) trustee, custodian, receiver
or other Person acting in any Bankruptcy or reorganization proceeding with
respect to; (ii) assignee for the benefit of the creditors of; (iii) trustee or
receiver, or current or former officer, director or partner, or other fiduciary
acting for or with respect to the dissolution, liquidation or termination of; or
(iv) other executor, administrator, committee, legal representative or other
successor or assign of, any Unitholder, whether by operation of law or
otherwise.


                                       9


            "Tax Matters Member" has the meaning set forth in Section 6.4(b).

            "Unit" means the Preferred Units, Class A Units and Class B Units.

            "Unitholder" means a Member or Assignee who holds an Economic
Interest in Preferred, Class A or Class B Units.

            "Unpaid Preferred Return" with respect to each holder of Preferred
Units means the excess, if any, of (i) such Unitholder's Preferred Return as of
the date of any such determination over (ii) the aggregate amount of all
distributions made to such Unitholder pursuant to or in accordance with Section
4.4(a)(ii).

            "Unreturned Preferred Capital" with respect to each Unitholder means
the excess, if any, of (i) such Unitholder's aggregate Capital Contributions in
respect of Preferred Units over (ii) the aggregate amount of all distributions
made to such Unitholder pursuant to or in accordance with Section 4.4(a)(i).

            SECTION 1.2 Terms Generally. The definitions in Section 1.1 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The term "person" or "Person" includes
individuals, partnerships (whether general or limited), joint ventures,
corporations, limited liability companies, trusts, estates, custodians,
nominees, governments (or agencies or political subdivisions thereof) and other
associations, entities or groups (as defined in the Securities Exchange Act of
1934, as amended). The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." All terms herein that
relate to accounting matters shall be interpreted in accordance with generally
accepted accounting principles from time to time in effect. All references to
"Sections" and "Articles" shall refer to Sections and Articles of this Agreement
unless otherwise specified. The words "hereof" and "herein" and similar terms
shall relate to this Agreement.

                                   ARTICLE II
                               GENERAL PROVISIONS

            SECTION 2.1 Formation. The Company has been organized as a Delaware
limited liability company by the execution and filing of a Certificate of
Formation (the "Certificate") by Holdings, as an initial Member, under and
pursuant to the Act. The rights, powers, duties, obligations and liabilities of
the Members shall be determined pursuant to the Act and this Agreement. To the
extent that the rights, powers, duties, obligations and liabilities of any
Member are different by reason of any provision of this Agreement than they
would be in the absence of such provision, this Agreement shall, to the extent
permitted by the Act, control.


                                       10


            SECTION 2.2 Name. The name of the Company is "M-Foods Dairy TXCT,
LLC," and all Company business shall be conducted in that name or in such other
names that comply with applicable law as the Management Committee may select
from time to time.

            SECTION 2.3 Term. The term of the Company commenced on the date the
Certificate was filed with the office of the Secretary of State of the State of
Delaware and shall continue in existence perpetually until termination or
dissolution in accordance with the provisions of Section 5.2.

            SECTION 2.4 Purpose. The nature of the business or purposes to be
conducted or promoted by the Company is to engage in any lawful act or activity
for which limited liability companies may be organized under the Act.
Notwithstanding anything herein to the contrary, nothing set forth herein shall
be construed as authorizing the Company to possess any purpose or power, or to
do any act or thing, forbidden by law to a limited liability company organized
under the laws of the State of Delaware.

            SECTION 2.5 Powers.

                  (a) Subject to the provisions of this Agreement and the
      agreements contemplated hereby, the Company shall have the power and
      authority to take any and all actions necessary, appropriate, proper,
      advisable, convenient or incidental to or for the furtherance of the
      purposes set forth in Section 2.4, including the power:

                        (i) to conduct its business, carry on its operations and
            have and exercise the powers granted to a limited liability company
            by Act in any state, territory, district or possession of the United
            States, or in any foreign country that may be necessary, convenient
            or incidental to the accomplishment of the purpose of the Company;

                        (ii) to acquire by purchase, lease, contribution of
            property or otherwise, own, hold, operate, maintain, finance,
            refinance, improve, lease, sell, convey, mortgage, transfer,
            demolish or dispose of any real or personal property that may be
            necessary, convenient or incidental to the accomplishment of the
            purpose of the Company;

                        (iii) to enter into, perform and carry out contracts of
            any kind, including contracts with any Unitholder or any Affiliate
            thereof, or any agent of the Company necessary to, in connection
            with, convenient to or incidental to the accomplishment of the
            purpose of the Company;

                        (iv) to purchase, take, receive, subscribe for or
            otherwise acquire, own, hold, vote, use, employ, sell, mortgage,
            lend, pledge or otherwise dispose of, and otherwise use and deal in
            and with, shares or other interests in or


                                       11


            obligations of domestic or foreign corporations, associations,
            general or limited partnerships (including, without limitation, the
            power to be admitted as a partner thereof and to exercise the rights
            and perform the duties created thereby), trusts, limited liability
            companies (including, without limitation, the power to be admitted
            as a unitholder or appointed as a manager thereof and to exercise
            the rights and perform the duties created thereby) or individuals or
            direct or indirect obligations of the United States or of any
            government, state, territory, governmental district or municipality
            or of any instrumentality of any of them;

                        (v) to lend money for any proper purpose, to invest and
            reinvest its funds and to take and hold real and personal property
            for the payment of funds so loaned or invested;

                        (vi) to sue and be sued, complain and defend, and
            participate in administrative or other proceedings in its name;

                        (vii) to appoint employees and agents of the Company and
            define their duties and fix their compensation;

                        (viii) to indemnify any Person in accordance with the
            Act and to obtain any and all types of insurance;

                        (ix) to cease its activities and cancel its Certificate;

                        (x) to negotiate, enter into, renegotiate, extend,
            renew, terminate, modify, amend, waive, execute, acknowledge or take
            any other action with respect to any lease, contract or security
            agreement in respect of any assets of the Company;

                        (xi) to borrow money and issue evidences of indebtedness
            and guaranty indebtedness (whether of the Company or any of its
            Affiliates (including, but not limited to, MFI)), and to secure the
            same by a mortgage, pledge or other lien on the assets of the
            Company;

                        (xii) to pay, collect, compromise, litigate, arbitrate
            or otherwise adjust or settle any and all other claims or demands of
            or against the Company or to hold such proceeds against the payment
            of contingent liabilities; and

                        (xiii) to make, execute, acknowledge and file any and
            all documents or instruments necessary, convenient or incidental to
            the accomplishment of the purpose of the Company.


                                       12


                  (b) Company Action. Subject to the provisions of this
      Agreement and except as prohibited by applicable law (i) the Company may,
      with the approval of the Management Committee, enter into and perform any
      and all documents, agreements and instruments contemplated thereby, all
      without any further act, vote or approval of any Member and (ii) the
      Management Committee may authorize any Person (including any Member or
      Officer) to enter into and perform any document on behalf of the Company.

                  (c) Merger. Subject to the provisions of this Agreement, the
      Company may, with the approval of the Management Committee and without the
      need for any further act, vote or approval of any Member, merge with, or
      consolidate into, another limited liability company (organized under the
      laws of Delaware or any other state), a corporation (organized under the
      laws of Delaware or any other state) or other business entity (as defined
      in Section 18-209(a) of the Act), regardless of whether the Company is the
      survivor of such merger or consolidation.

            SECTION 2.6 Foreign Qualification. Prior to the Company's conducting
business in any jurisdiction other than Delaware, the Management Committee shall
cause the Company to comply, to the extent procedures are available and those
matters are reasonably within the control of the Officers, with all requirements
necessary to qualify the Company as a foreign limited liability company in that
jurisdiction.

            SECTION 2.7 Registered Office; Registered Agent; Principal Office;
Other Offices. The registered office of the Company required by the Act to be
maintained in the State of Delaware shall be the office of the initial
registered agent named in the Certificate or such other office (which need not
be a place of business of the Company) as the Management Committee may designate
from time to time in the manner provided by law. The registered agent of the
Company in the State of Delaware shall be the initial registered agent named in
the Certificate or such other Person or Persons as the Management Committee may
designate from time to time in the manner provided by law. The principal office
of the Company shall be at such place as the Management Committee may designate
from time to time, which need not be in the State of Delaware, and the Company
shall maintain records at such place. The Company may have such other offices as
the Management Committee may designate from time to time.

            SECTION 2.8 No State-Law Partnership. The Unitholders intend that
the Company shall not be a partnership (including a limited partnership) or
joint venture, and that no Unitholder, Representative or Officer shall be a
partner or joint venturer of any other Unitholder, Representative or Officer by
virtue of this Agreement, for any purposes other than as set forth in the last
sentence of this Section 2.8, and this Agreement shall not be construed to the
contrary. The Unitholders intend that the Company shall be treated as a
partnership for federal and, if applicable, state or local income tax purposes,
and each Unitholder and the Company shall file all tax returns and shall
otherwise take all tax and financial reporting positions in a manner consistent
with such treatment.


                                       13


                                   ARTICLE III
                                   MANAGEMENT

            SECTION 3.1 The Management Committee; Delegation of Authority and
Duties.

                  (a) Members and Management Committee. The Members shall
      possess all rights and powers as provided in the Act and otherwise by law.
      Except as otherwise expressly provided for herein, the Members hereby
      consent to the exercise by the Management Committee of all such powers and
      rights conferred on them by the Act with respect to the management and
      control of the Company. Notwithstanding the foregoing and except as
      explicitly set forth in this Agreement, if a vote, consent or approval of
      the Members is required by the Act or other applicable law with respect to
      any act to be taken by the Company or matter considered by the Management
      Committee, each Member agrees that it shall be deemed to have consented to
      or approved such act or voted on such matter in accordance with a vote of
      the Management Committee on such act or matter. No Member, in its capacity
      as a Member, shall have any power to act for, sign for or do any act that
      would bind the Company. The Members, acting through the Management
      Committee, shall devote such time and effort to the affairs of the Company
      as they may deem appropriate for the oversight of the management and
      affairs of the Company. Each Member acknowledges and agrees that no Member
      shall, in its capacity as a Member, be bound to devote all of such
      Member's business time to the affairs of the Company, and that each Member
      and such Member's Affiliates do and will continue to engage for such
      Member's own account and for the account of others in other business
      ventures.

                  (b) Delegation by Management Committee. The Management
      Committee shall have the power and authority to delegate to one or more
      other Persons the Management Committee's rights and powers to manage and
      control the business and affairs of the Company, including to delegate to
      agents and employees of a Member, a Representative or the Company
      (including Officers), and to delegate by a management agreement or another
      agreement with, or otherwise to, other Persons. The Management Committee
      may authorize any Person (including, without limitation, any Member,
      Officer or Representative) to enter into and perform under any document on
      behalf of the Company.

                  (c) Committees. The Management Committee may, from time to
      time, designate one or more committees, each of which shall be comprised
      of at least two Representatives. Any such committee, to the extent
      provided in the enabling resolution and until dissolved by the Management
      Committee, shall have and may exercise any or all of the authority of the
      Management Committee. At every meeting of any such committee, the presence
      of a majority of all the representatives thereof shall constitute a
      quorum, and the affirmative vote of a majority of the representatives
      present shall be necessary for the adoption of any resolution. The
      Management Committee may dissolve any committee at any time, unless
      otherwise provided in the Certificate or this Agreement.


                                       14


                  (d) Voting Rights. The holders of all Units shall be entitled
      to notice of all Unitholder meetings in accordance with this Agreement,
      and except as otherwise required by law, the holders of the Preferred
      Units and the Class A Units shall be entitled to vote on all matters
      submitted to the Unitholders for a vote with each Preferred Unit and each
      Class A Unit entitled to one vote. Except as otherwise required by this
      Agreement or by law, the holders of Class B Units shall not be entitled to
      a vote on matters submitted to the Unitholders for a vote.

            SECTION 3.2 Establishment of Management Committee.

                  (a) Representatives. There shall be established a Management
      Committee composed of two (2) persons ("Representatives"). Thereafter, the
      number of Representatives shall be established from time to time by
      resolution of the Management Committee. The Representatives shall be
      elected from time to time by the holders of the Required Interest present
      in person or represented by proxy at any meeting of Unitholders. Each
      Representative shall remain in office until his or her death, resignation
      or removal, and in the event of death, resignation or removal of a
      Representative, the party or parties, as applicable, which designated such
      Representative shall fill the vacancy created.

                  (b) Duties. The Representatives, in the performance of their
      duties, shall owe to the Company and the Members duties of loyalty and due
      care of the type owed by the directors of a corporation to such
      corporation and its stockholders under the laws of the State of Delaware.

                  (c) Absence. A Representative may, in isolated instances
      arising from exigent circumstances, designate a Person to act as his or
      her substitute and in his or her place at any meeting of the Management
      Committee. Such Person shall have all power of the absent Representative,
      and references herein to a "Representative" at a meeting shall be deemed
      to include his or her substitute. Notwithstanding anything in this
      Agreement to the contrary, Representatives shall not be deemed to be
      "members" or "managers" (as such terms are defined in the Act) of the
      Company.

                  (d) No Individual Authority. No Representative has the
      authority or power to act for or on behalf of the Company, to do any act
      that would be binding on the Company or to make any expenditures or incur
      any obligations on behalf of the Company or authorize any of the
      foregoing, other than acts that are expressly authorized by the Management
      Committee.

            SECTION 3.3 Management Committee Meetings.

                  (a) Quorum. A majority of the total number of Representatives
      shall constitute a quorum for the transaction of business of the
      Management Committee and, except as otherwise provided in this Agreement,
      the act of a majority of the Representatives


                                       15


      present at a meeting of the Management Committee at which a quorum is
      present shall be the act of the Management Committee. A Representative who
      is present at a meeting of the Management Committee at which action on any
      matter is taken shall be presumed to have assented to the action unless
      his dissent shall be entered in the minutes of the meeting or unless he
      shall file his written dissent to such action with the Person acting as
      secretary of the meeting before the adjournment thereof or shall deliver
      such dissent to the Company immediately after the adjournment of the
      meeting. Such right to dissent shall not apply to a Representative who
      voted in favor of such action.

                  (b) Place, Waiver of Notice. Meetings of the Management
      Committee may be held at such place or places as shall be determined from
      time to time by resolution of the Management Committee. At all meetings of
      the Management Committee, business shall be transacted in such order as
      shall from time to time be determined by resolution of the Management
      Committee. Attendance of a Representative at a meeting shall constitute a
      waiver of notice of such meeting, except where a Representative attends a
      meeting for the express purpose of objecting to the transaction of any
      business on the ground that the meeting is not lawfully called or
      convened.

                  (c) Regular Meetings. Regular meetings of the Management
      Committee shall be held at such times and places as shall be designated
      from time to time by resolution of the Management Committee. Notice of
      such meetings shall not be required.

                  (d) Special Meetings. Special meetings of the Management
      Committee may be called on at least 24 hours notice to each Representative
      by any Representative. Such notice need not state the purpose or purposes
      of, nor the business to be transacted at, such meeting, except as may
      otherwise be required by law or provided for in this Agreement.

                  (e) Notice. Notice of any special meeting of the Management
      Committee or other committee may be given personally, by mail, facsimile,
      courier or other means and, if other than personally, shall be deemed
      given when written notice is delivered to the office of the Representative
      at the address of the Representative in the books and records of the
      Company.

            SECTION 3.4 Chairman. The Management Committee shall designate a
Representative to serve as chairman. The chairman shall preside at all meetings
of the Management Committee. If the chairman is absent at any meeting of the
Management Committee, a majority of the Representatives present shall designate
another Representative to serve as interim chairman for that meeting. The
chairman shall have no authority or power to act for or on behalf of the
Company, to do any act that would be binding on the Company or to make any
expenditure or incur any obligations on behalf of the Company or authorize any
of the foregoing. The chairman shall initially be Gregg A. Ostrander and shall
continue to be Mr. Ostrander during the period during which he is the Chief
Executive Officer of MFI.


                                       16


            SECTION 3.5 Approval or Ratification of Acts or Contracts. Any act
or contract that shall be approved or be ratified by the Management Committee
shall be as valid and as binding upon the Company and upon all the Members (in
their capacity as Members) as if it shall have been approved or ratified by
every Member of the Company.

            SECTION 3.6 Action by Written Consent or Telephone Conference. Any
action permitted or required by the Act, the Certificate or this Agreement to be
taken at a meeting of the Management Committee or any committee designated by
the Management Committee may be taken without a meeting if a consent in writing,
setting forth the action to be taken, is signed by a majority of the
Representatives or representatives of such other committee, as the case may be.
Such consent shall have the same force and effect as a vote at a meeting and may
be stated as such in any document or instrument filed with the Secretary of
State of the State of Delaware, and the execution of such consent shall
constitute attendance or presence in person at a meeting of the Management
Committee or any such other committee, as the case may be. Subject to the
requirements of this Agreement for notice of meetings, the Representatives, or
representatives of any other committee designated by the Management Committee,
may participate in and hold a meeting of the Management Committee or any such
other committee, as the case may be, by means of a conference telephone or
similar communications equipment by means of which all Persons participating in
the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person at such meeting, except where a
Person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

            SECTION 3.7 Officers.

                  (a) Designation and Appointment. The Management Committee may,
      from time to time, employ and retain Persons as may be necessary or
      appropriate for the conduct of the Company's business (subject to the
      supervision and control of the Management Committee), including employees,
      agents and other Persons (any of whom may be a Member or Representative)
      who may be designated as Officers of the Company, with titles including
      "chief executive officer," "chairman," "president," "vice president,"
      "treasurer," "secretary," "general manager," "director" and "chief
      financial officer," as and to the extent authorized by the Management
      Committee. Any number of offices may be held by the same Person. In its
      discretion, the Management Committee may choose not to fill any office for
      any period as it may deem advisable. Officers need not be residents of the
      State of Delaware or Members. Any Officers so designated shall have such
      authority and perform such duties as the Management Committee may, from
      time to time, delegate to them. The Management Committee may assign titles
      to particular Officers. Each Officer shall hold office until his successor
      shall be duly designated and shall qualify or until his death or until he
      shall resign or shall have been removed in the manner hereinafter
      provided. The salaries or other compensation, if any, of the Officers of
      the Company shall be fixed from time to time by the Management Committee.


                                       17


                  (b) Resignation/Removal. Any Officer may resign as such at any
      time. Such resignation shall be made in writing and shall take effect at
      the time specified therein, or if no time is specified, at the time of its
      receipt by the Management Committee. The acceptance of a resignation shall
      not be necessary to make it effective, unless expressly so provided in the
      resignation. Any Officer may be removed as such, either with or without
      cause at any time by the Management Committee. Designation of an Officer
      shall not of itself create any contractual or employment rights.

                  (c) Duties of Officers Generally. The Officers, in the
      performance of their duties as such, shall owe to the Company duties of
      loyalty and due care of the type owed by the officers of a corporation to
      such corporation and its stockholders under the laws of the State of
      Delaware.

                  (d) Chief Executive Officer. Subject to the powers of the
      Management Committee, the chief executive officer of the Company shall be
      in general and active charge of the entire business and affairs of the
      Company, and shall be its chief policy making officer. The chief executive
      officer shall initially be James D. Clarkson.

                  (e) President. The president shall, subject to the powers of
      the Management Committee and chief executive officer, have general and
      active management of the business of the Company; and shall see that all
      orders and resolutions of the Management Committee are carried into
      effect. The president shall have such other powers and perform such other
      duties as may be prescribed by the chief executive officer or the
      Management Committee. The president shall initially be James D. Clarkson.

                  (f) Chief Financial Officer. The chief financial officer shall
      keep and maintain, or cause to be kept and maintained, adequate and
      correct books and records of accounts of the properties and business
      transactions of the Company, including accounts of its assets,
      liabilities, receipts, disbursements, gains, losses and capital. The chief
      financial officer shall have the custody of the funds and securities of
      the Company, and shall keep full and accurate accounts of receipts and
      disbursements in books belonging to the Company, and shall deposit all
      moneys and other valuable effects in the name and to the credit of the
      Company in such depositories as may be designated by the Management
      Committee. The chief financial officer shall have such other powers and
      perform such other duties as may from time to time be prescribed by the
      chief executive officer or the Management Committee. The chief financial
      officer shall initially be Max Hoffmann.

                  (g) Vice President(s). The vice president(s) shall perform
      such duties and have such other powers as the chief executive officer or
      the Management Committee may from time to time prescribe. The
      vice-presidents initially shall be J. Christopher Henderson and James P.
      Kelley.


                                       18


                  (h) Secretary.

                        (i) The secretary shall attend all meetings of the
            Management Committee, and shall record all the proceedings of the
            meetings in a book to be kept for that purpose, and shall perform
            like duties for the standing committees of the Management Committee
            when required. The secretary shall initially be Jeffrey M. Shapiro.

                        (ii)The secretary shall keep all documents described in
            Article VI and such other documents as may be required under the
            Act. The secretary shall perform such other duties and have such
            other authority as may be prescribed elsewhere in this Agreement or
            from time to time by the chief executive officer or the Management
            Committee. The secretary shall have the general duties, powers and
            responsibilities of a secretary of a corporation.

                        (iii) If the Management Committee chooses to appoint an
            assistant secretary or assistant secretaries, the assistant
            secretaries, in the order of their seniority, in the absence,
            disability or inability to act of the secretary, shall perform the
            duties and exercise the powers of the secretary, and shall perform
            such other duties as the chief executive officer or the Management
            Committee may from time to time prescribe.

            SECTION 3.8 Management Matters.

                  (a) Existence and Good Standing. The Management Committee may
      take all action which may be necessary or appropriate (i) for the
      continuation of the Company's valid existence as a limited liability
      company under the laws of the State of Delaware (and of each other
      jurisdiction in which such existence is necessary to enable the Company to
      conduct the business in which it is engaged) and (ii) for the maintenance,
      preservation and operation of the business of the Company in accordance
      with the provisions of this Agreement and applicable laws and regulations.
      The Management Committee may file or cause to be filed for recordation in
      the office of the appropriate authorities of the State of Delaware, and in
      the proper office or offices in each other jurisdiction in which the
      Company is formed or qualified, such certificates (including certificates
      of limited liability companies and fictitious name certificates) and other
      documents as are required by the applicable statutes, rules or regulations
      of any such jurisdiction or as are required to reflect the identity of the
      Members and the amounts of their respective capital contributions.

                  (b) Investment Company Act. The Management Committee shall use
      its best efforts to assure that the Company shall not be subject to
      registration as an investment company pursuant to the Investment Company
      Act of 1940, as amended.


                                       19


            SECTION 3.9 Liability of Unitholders.

                  (a) No Personal Liability. Except as otherwise required by
      applicable law and as expressly set forth in this Agreement, no Unitholder
      shall have any personal liability whatsoever in such Person's capacity as
      a Unitholder, whether to the Company, to any of the other Unitholders, to
      the creditors of the Company or to any other third party, for the debts,
      liabilities, commitments or any other obligations of the Company or for
      any losses of the Company. Each Unitholder shall be liable only to make
      such Unitholder's Initial Capital Contribution to the Company, if
      applicable, and the other payments provided expressly herein.

                  (b) Return of Distributions. In accordance with the Act and
      the laws of the State of Delaware, a member of a limited liability company
      may, under certain circumstances, be required to return amounts previously
      distributed to such member. It is the intent of the Members that no
      distribution to any Member pursuant to Article V hereof shall be deemed a
      return of money or other property paid or distributed in violation of the
      Act. The payment of any such money or distribution of any such property to
      a Member shall be deemed to be a compromise within the meaning of the Act,
      and the Member receiving any such money or property shall not be required
      to return to any Person any such money or property. However, if any court
      of competent jurisdiction holds that, notwithstanding the provisions of
      this Agreement, any Member is obligated to make any such payment, such
      obligation shall be the obligation of such Member and not of any
      Representative or other Member.

            SECTION 3.10 Indemnification. Subject to the limitations and
conditions provided in this Section 3.10, each Person who was or is made a party
or is threatened to be made a party to or is involved in any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or arbitrative (hereinafter a "Proceeding"), or any appeal in such a Proceeding
or any inquiry or investigation that could lead to such a Proceeding, by reason
of the fact that he, she, or it, or a Person of which he, she or it is the legal
representative, is or was a Unitholder, Officer or Representative shall be
indemnified by the Company to the fullest extent permitted by applicable law, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Company to provide
broader indemnification rights than said law permitted the Company to provide
prior to such amendment) against all judgments, penalties (including excise and
similar taxes and punitive damages), fines, settlements and reasonable expenses
(including reasonable attorneys' fees and expenses) actually incurred by such
Person in connection with such Proceeding, appeal, inquiry or investigation if
such Person acted in Good Faith, and indemnification under this Section 3.10
shall continue as to a Person who has ceased to serve in the capacity which
initially entitled such Person to indemnity hereunder. The rights granted
pursuant to this Section 3.10 shall be deemed contract rights, and no amendment,
modification or repeal of this Section 3.10 shall have the effect of limiting or
denying any such rights with respect to actions taken or Proceedings, appeals,
inquiries or investigations arising prior to any amendment, modification or
repeal. It is expressly acknowledged that the indemnification provided


                                       20


in this Section 3.10 could involve indemnification for negligence or under
theories of strict liability. "Good Faith" shall mean a Person having acted in
good faith and in a manner such Person reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to a criminal
proceeding, having had no reasonable cause to believe such Person's conduct was
unlawful.

                                   ARTICLE IV
                CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS

            SECTION 4.1 Capital Contributions. The Members listed on Schedule A
hereto have made initial Capital Contributions to the Company in the amounts and
of the type set forth in Exhibit I hereto (with respect to each Member, an
"Initial Capital Contribution"). Holdings' Initial Capital Contribution shall be
adjusted upward or downward (and Holdings shall make an additional Capital
Contribution or receive a partial return of its Initial Capital Contribution) in
the proportion that the aggregate Capital Contribution of the other members is
adjusted pursuant to the provision contained in the definition of Capital
Contribution.

            SECTION 4.2 Capital Accounts.

                  (a) Creation. There shall be established for each Unitholder
      on the books of the Company a Capital Account which shall be increased or
      decreased in the manner set forth in this Agreement.

                  (b) Negative Balance. A Unitholder shall not have any
      obligation to the Company or to any other Unitholder to restore any
      negative balance in the Capital Account of such Unitholder.

            SECTION 4.3 Allocations of Net Income and Net Loss.

                  (a) Timing and Amount of Allocations of Net Income and Net
      Loss. Net Income and Net Loss of the Company shall be determined and
      allocated with respect to each fiscal year of the Company as of the end of
      each such year or as circumstances otherwise require or allow. Subject to
      the other provisions of this Section 4.3, an allocation to a Unitholder of
      a share of Net Income or Net Loss shall be treated as an allocation of the
      same share of each item of income, gain, loss or deduction that is taken
      into account in computing Net Income or Net Loss.

                  (b) General Allocations.

                        (i) Net Income and Net Loss. After giving effect to the
            special allocations provided in Sections 4.3(c) and 4.3(d), and
            except as provided in Section 4.3(f), all Net Income and Net Loss of
            the Company for a fiscal year shall be allocated to the Unitholders
            as follows:


                                       21


                              (A) first, Net Income will be allocated to the
                  Unitholders having deficit balances in their Capital Accounts
                  (computed after giving effect to all contributions,
                  distributions, allocations and other Capital Account
                  adjustments for all taxable years (other than the items
                  comprising the Net Income or Net Loss of the Company being
                  allocated to the Unitholders for the current fiscal year),
                  after adding back each Unitholder's share of Company Minimum
                  Gain and Member Minimum Gain as provided in Regulations
                  Sections 1.704-2(g) and 1.704-2(i)(5)), to the extent of, and
                  in proportion to, those deficits, unless satisfied by
                  allocations under Section 4.3(c) hereof; and

                              (B) second, Net Income and Net Loss not allocated
                  under Section 4.3(b)(i)(A) will be allocated so as to cause
                  the credit balance in each Unitholder's Capital Account
                  (computed in the same manner as provided parenthetically in
                  Section 4.3(b)(i)(A) hereof) to equal, as nearly as possible,
                  the amount such Unitholder would receive if the Company sold
                  all of its assets for the Gross Asset Value of each such asset
                  and distributed the proceeds thereof (after satisfaction of
                  any liabilities of the Company) in accordance with the
                  provisions of Section 4.4 hereof (and assuming that Dairy
                  simultaneously sold all of its assets for the Gross Asset
                  Value (as such term is defined in the Dairy LLC Agreement) of
                  each such asset and distributed the proceeds thereof (after
                  satisfaction of any liabilities of Dairy) in accordance with
                  the provisions of Section 4.4 of the Dairy LLC Agreement).

                  (c) Additional Allocation Provisions. Notwithstanding the
      foregoing provisions of this Section 4.3:

                        (i)

                              (A) If there is a net decrease in Company Minimum
                  Gain or Member Minimum Gain during any fiscal year, the
                  Unitholders shall be allocated items of Company income and
                  gain for such fiscal year (and, if necessary, for subsequent
                  fiscal years) in accordance with Regulations Section
                  1.704-2(f) or 1.704-2(i)(4), as applicable. It is intended
                  that this Section 4.3(c)(i)(A) qualify and be construed as a
                  "minimum gain chargeback" and a "chargeback of partner
                  nonrecourse debt minimum gain" within the meaning of such
                  Regulations, which shall be controlling in the event of a
                  conflict between such Regulations and this Section
                  4.3(c)(i)(A).

                              (B) Any Nonrecourse Deductions for any fiscal year
                  shall be specially allocated to the holders of Common Units in
                  accordance with the number of Common Units held by each such
                  Unitholder. Any Member Nonrecourse Deductions for any fiscal
                  year shall be specially allocated to the Unitholder(s) who
                  bears the economic risk of loss with respect to the Member


                                       22


                  Nonrecourse Debt to which such Member Nonrecourse Deductions
                  are attributable, in accordance with Regulations Section
                  1.704-2(i).

                              (C) If any Unitholder unexpectedly receives an
                  adjustment, allocation or distribution described in
                  Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6),
                  items of Company income and gain shall be allocated, in
                  accordance with Regulations Section 1.704-1(b)(2)(ii) (d), to
                  the Unitholder in an amount and manner sufficient to
                  eliminate, to the extent by such Regulations, the Adjusted
                  Capital Account Deficit of the Unitholder as quickly as
                  possible. It is intended that this Section 4.3(c)(i)(C)
                  qualify and be construed as a "qualified income offset" within
                  the meaning of Regulations 1.704-1(b)(2)(ii)(d), which shall
                  be controlling in the event of a conflict between such
                  Regulations and this Section 4.3(c)(i)(C).

                              (D) The allocations set forth in Sections
                  4.3(c)(i)(A), (B) and (C) (the "Regulatory Allocations") are
                  intended to comply with certain regulatory requirements,
                  including the requirements of Regulations Sections 1.704-1(b)
                  and 1.704-2. Notwithstanding the provisions of Section 4.3(b),
                  the Regulatory Allocations shall be taken into account in
                  allocating other items of income, gain, loss and deduction
                  among the Unitholders so that, to the extent possible, the net
                  amount of such allocations of other items and the Regulatory
                  Allocations to each Unitholder shall be equal to the net
                  amount that would have been allocated to each such Unitholder
                  if the Regulatory Allocations had not occurred.

                        (ii) For any fiscal year during which a Unitholder's
            interest in the Company is assigned by such Unitholder, the portion
            of the Net Income and Net Loss of the Company that is allocable in
            respect of such Unitholder's interest shall be apportioned between
            the assignor and the assignee of such Unitholder's interest using
            any permissible method under Code Section 706 and the Regulations
            thereunder, as determined by the Management Committee.

                        (iii) In the event that any amount claimed by the
            Company to constitute a deductible expense in any fiscal year is
            treated for federal income tax purposes as a distribution made to a
            Unitholder in its capacity as a partner of the Company and not a
            payment to a Unitholder not acting in its capacity as a partner
            under Code Section 707(a), then the Unitholder who is deemed to have
            received such distribution shall first be allocated an amount of
            Company gross income equal to such payment, its Capital Account
            shall be reduced to reflect the distribution, and for purposes of
            Section 4.3, Net Income and Net Loss shall be determined after
            making the allocation required by this Section 4.3(c)(iii).


                                       23


                        (iv) In the event that any amount claimed by the Company
            to constitute a distribution made to a Unitholder in its capacity as
            a partner of the Company is treated for federal income tax purposes
            as a deductible expense of the Company for a payment to a Unitholder
            not acting in its capacity as a partner of the Company, then the
            Unitholder who is deemed to have received such payment shall first
            be allocated the Company expense item attributable to such payment,
            its Capital Account shall be reduced to reflect the allocation, and
            for purposes of Section 4.3, Net Income and Net Loss shall be
            determined after making the allocation required by this Section
            4.3(c)(iv).

                  (d) Required Tax Allocations. All items of income, gain, loss,
      deduction and credit for federal income tax purposes shall be allocated to
      each Unitholder in the same manner as the Net Income or Net Loss (and each
      item of income, gain, loss and deduction related thereto) that is
      allocated to such Unitholder pursuant to Section 4.3(a), (b) and (c) to
      which such tax items relate. Notwithstanding the foregoing provisions of
      this Section 4.3, income, gain, loss, deduction, and credits with respect
      to property contributed to the Company by a Unitholder shall be allocated
      among the Unitholders for federal and state income tax purposes pursuant
      to Regulations promulgated under Section 704(c) of the Code, so as to take
      account of the variation, if any, between the adjusted basis for federal
      income tax purposes of the property to the Company and its initial Gross
      Asset Value at the time of contribution. In the event the Gross Asset
      Value of any Company asset is adjusted pursuant to subparagraph (b), (c),
      or (d) of the definition of Gross Asset Value, subsequent allocations of
      income, gain, loss, deduction, and credits with respect to such asset
      shall take account of the variation, if any, between the adjusted basis of
      such asset for federal income tax purposes and its Gross Asset Value in
      the same manner as under Code Section 704(c) and the applicable
      Regulations consistent with the requirements of Treasury Regulation
      Section 1.704-1(b)(2)(iv)(g). Allocations pursuant to this Section 4.3(d)
      are solely for purposes of federal, state and local income taxes and shall
      not affect, or in any way be taken into account in computing, any
      Unitholder's Capital Account or share of Net Income, Net Loss, other tax
      items or distributions pursuant to any provision of this Agreement.

                  (e) Unitholders' Tax Reporting. The Unitholders acknowledge
      and are aware of the income tax consequences of the allocations made by
      this Section 4.3 and, except as may otherwise be required by applicable
      law or regulatory requirements, hereby agree to be bound by the provisions
      of Section 4.3 in reporting their shares of Company income, gain, loss,
      deductions, and credits for federal, state and local income tax purposes.

                  (f) Withholding. Each Unitholder hereby authorizes the Company
      to withhold and to pay over any taxes payable by the Company or any of its
      Affiliates as a result of the participation by such Unitholder (or any
      Assignee of, or Successor in Interest to, such Unitholder) in the Company.
      If and to the extent that the Company shall be required to withhold any
      taxes, such Unitholder shall be deemed for all purposes of this Agreement
      to have received a payment from the Company as of the time such
      withholding is required to


                                       24


      be paid, which payment shall be deemed to be a distribution to such
      Unitholder under Section 4.4(a) or Section 5.2 to the extent that the
      Unitholder is entitled to receive a distribution and shall be taken into
      account in determining the amount of future distributions to such
      Unitholder. To the extent that the aggregate of such payments to a
      Unitholder for any period exceeds the distributions to which such
      Unitholder is entitled for such period, the amount of such excess shall be
      considered a demand loan from the Company to such Unitholder, with
      interest at an interest rate of 9% compounded annually, which interest
      shall be treated as an item of Company income until discharged by such
      Unitholder by repayment, which may be made in the sole discretion of the
      Management Committee out of distributions to which such Unitholder would
      otherwise be subsequently entitled. The withholdings referred to in this
      Section 4.3 shall be made at the maximum applicable statutory rate under
      applicable tax law unless the Management Committee receives documentation,
      satisfactory to the Management Committee, to the effect that a lower rate
      is applicable, or that no withholding is applicable.

            SECTION 4.4 Distributions.

                  (a) Priority. Distributable Assets will be distributed (or set
      aside for the benefit of the applicable Unitholder in the discretion of
      the Management Committee) as soon as reasonably practicable after such
      Distributable Assets become available to the Company, subject to Section
      4.4(b) as follows:

                        (i) First, 100% of the Distributable Assets shall be
            distributed to the Unitholders holding Preferred Units pro rata in
            accordance with each such Unitholder's Unreturned Preferred Capital
            until each such Unitholder's Unreturned Preferred Capital has been
            reduced to zero;

                        (ii) Second, after the required distributions pursuant
            to subparagraph (i) above, 100% of the Distributable Assets shall be
            distributed to the holders of Preferred Units, pro rata in
            accordance with the aggregate amount of such Unitholders' Unpaid
            Preferred Return until each such Unitholder's Unpaid Preferred
            Return has been reduced to zero;

                        (iii) Third, after the required distributions pursuant
            to subparagraphs (i) and (ii) above, 100% of the Distributable
            Assets shall be distributed to the holders of Preferred Units (in
            the proportion that the number of Preferred Units held by each such
            Unitholder bears to the aggregate number of all outstanding
            Preferred Units), in an amount equal to the excess, if any, of (A)
            the sum of the Dairy Preferred Capital and the Dairy Preferred
            Return, over (B) the sum of all prior distributions made by the
            Company pursuant to this Section 4.4(a)(iii) and all prior
            distributions made by Dairy pursuant to Sections 4.4(a)(i) and (ii)
            of the Dairy LLC Agreement;


                                       25


                        (iv) Fourth, after the required distributions pursuant
            to subparagraphs (i) through (iii) above, 100% of the Distributable
            Assets shall be distributed to the holders of the Common Units all
            remaining amounts in the proportion that the number of Common Units
            held by each such Unitholder bears to the aggregate number of all
            outstanding Common Units.

      provided that, if the Distributable Assets being distributed consist of
      more than one kind of asset, all Distributable Assets consisting of cash
      must be distributed before any other kind of asset is distributed.

            Notwithstanding any of the foregoing, upon the event of a
      distribution of cash or property by Dairy, the Company shall calculate
      under Section 4.4(a)(i)-(iv) above the amount that would have been
      distributed to each Unitholder holding Preferred Units had all
      distributions been made immediately following such distribution by Dairy.
      In the event that, according to such calculation, it is determined that
      the Unitholders holding Preferred Units have received distributions of
      Distributable Assets in an amount greater than the amount to which such
      Unitholders would have been entitled had all distributions of
      Distributable Assets made by the Company been calculated immediately after
      such distribution by Dairy according to Section 4.4(a)(i)-(iv), such
      Unitholders shall be obligated to return all amounts in excess of the
      amount to which such Unitholders would have been entitled under such
      calculation made according to Section 4.4(a)(i)-(iv).

                  (b) Tax Distributions. Subject to the Act and to any
      restrictions contained in any agreement to which the Company is bound, no
      later than the tenth day of each March, June, September and December, the
      Company shall, to the extent of available cash, make a tax distribution to
      each Unitholder in an amount equal to the excess of (i) the product of (A)
      the cumulative taxable income, attributable to the Unitholder's investment
      as reported on the Unitholder's Schedule K-1 allocated by the Company to
      the Unitholder, in excess of the federal taxable loss carryforward
      deduction (assuming that such carryforward was not applied against any
      non-Company income of such Unitholder) to the extent that such loss carry
      forward deduction would be available to offset such taxable income of a
      Unitholder from its investment in the Company and (B) the combined maximum
      federal, state and local marginal income tax rate (taking into account the
      deductibility of state and local taxes and adjusted appropriately for
      varying rates) applicable to any member of M-Foods Dairy Holdings, LLC, a
      Delaware limited liability company, over (ii) all prior distributions
      pursuant to this Section 4.4. All distributions made to a Unitholder
      pursuant to this Section 4.4(b) on account of the taxable income allocated
      to such Unitholder shall be treated as advance distributions under Section
      4.4(a) or Section 5.2 and shall be taken into account in determining the
      amount of future distributions to such Unitholder.

            SECTION 4.5 Security Interest and Right of Set-Off. As security for
any withholding tax or other liability or obligation to which the Company may be
subject as a result of any act or status of any Unitholder, or to which the
Company may become subject with respect to the interest


                                       26


of any Unitholder, the Company shall have (and each Unitholder hereby grants to
the Company) a security interest in all Distributable Assets distributable to
such Unitholder to the extent of the amount of such withholding tax or other
liability or obligation. The Company shall have a right of setoff against such
distributions of Distributable Assets in the amount of such withholding tax or
other liability or obligation, subject to the proviso in the first sentence of
Section 4.3(f). The Company may withhold distributions or portions thereof if it
is required to do so by the Code or any other provision of federal, state or
local tax or other law. Any amount withheld pursuant to the Code or any other
provision of federal, state or local tax or other law with respect to any
distribution to a Unitholder shall be treated as an amount distributed to such
Unitholder for all purposes under this Agreement.

                                    ARTICLE V
           WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS;
                            ADMISSION OF NEW MEMBERS

            SECTION 5.1 Unitholder Withdrawal. No Unitholder shall have the
power or right to withdraw or otherwise resign or be expelled from the Company
prior to the dissolution and winding up of the Company except pursuant to a
transfer permitted under this Agreement of all of such Unitholder's Units to an
Assignee. Notwithstanding anything to the contrary contained in the Act, in no
event shall any Unitholder be deemed to have withdrawn from the Company or cease
to be a Unitholder upon the occurrence of any of the events specified in this
Agreement, or any events similar thereto, unless the Unitholder, after the
occurrence of any such event, indicates in a written instrument that the
Unitholder has so withdrawn.

            SECTION 5.2 Dissolution.

                  (a) Events. The Company shall be dissolved and its affairs
      shall be wound up on the first to occur of the following:

                        (i) the written consent of the Members holding a
            majority of the outstanding Class A Units, along with the written
            consent of the Members holding a majority of the outstanding Class B
            Units;

                        (ii) the entry of a decree of judicial dissolution of
            the Company under Section 18-802 of the Act; and

                        (iii) upon the liquidation, dissolution or winding up of
            the Company.

Except as provided in this Agreement, the death, retirement, resignation,
expulsion, incapacity, bankruptcy or dissolution of a Member, or the occurrence
of any other event that terminates the continued membership of a Member in the
Company, shall not cause a dissolution of the Company, and the Company shall
continue in existence subject to the terms and conditions of this Agreement.


                                       27


                  (b) Actions Upon Dissolution. When the Company is dissolved,
      the business and property of the Company shall be wound up and liquidated
      by the Management Committee or, in the event of the unavailability of the
      Management Committee, such Member or other liquidating trustee as shall be
      named by the Management Committee.

                  (c) Priority. Within 120 calendar days after the effective
      date of dissolution of the Company, whether by expiration of its full term
      or otherwise, the assets of the Company shall be distributed in the
      following manner and order:

                        (i) All debts and obligations of the Company, if any,
            shall first be paid, discharged or provided for by adequate
            reserves; and

                        (ii) The balance shall be distributed to the Unitholders
            in accordance with Section 4.4.

                  (d) Cancellation of Certificate. On completion of the
      distribution of Company assets as provided herein, the Company is
      terminated, and shall file a certificate of cancellation with the
      Secretary of State of the State of Delaware, cancel any other filings made
      and take such other actions as may be necessary to terminate the Company.

            SECTION 5.3 No Transfers by Unitholders. Unless otherwise stated
herein, there shall be no transfers of Units by Unitholders (other than a pledge
of such Units pursuant to that certain Pledge Agreement dated as of the date
hereof by and among the parties thereto), and any transfer or attempted transfer
of Units in violation of any provision of this Agreement shall be void, and the
Company shall not record such transfer on its books or treat any purported
transferee of such Units as the owner of such Units for any purpose.

            SECTION 5.4 Admission or Substitution of New Members.

                  (a) Admission. The Management Committee shall have the right,
      subject to Section 5.3, to admit as a Substitute Member or an Additional
      Member, any Person who acquires an interest in the Company, or any part
      thereof, from a Member or from the Company. Concurrently with the
      admission of a Substitute Member or an Additional Member, the Management
      Committee shall forthwith cause any necessary papers to be filed and
      recorded and notice to be given wherever and to the extent required
      showing the substitution of a transferee as a Substitute Member in place
      of the transferring Member, or the admission of an Additional Member, all
      at the expense, including payment of any professional and filing fees
      incurred, of the Substitute Member or the Additional Member.

                  (b) Conditions. The admission of any Person as a Substitute or
      Additional Member shall be conditioned upon (i) such Person's written
      acceptance and adoption of all the terms and provisions of this Agreement,
      either by (X) execution and delivery of a counterpart signature page to
      this Agreement countersigned by a Representative on behalf


                                       28


      of the Company or (Y) any other writing evidencing the intent of such
      Person to become a Substitute Member or Additional Member and such writing
      is accepted by the Management Committee on behalf of the Company and (ii)
      (at the request of the Management Committee) such Person's execution and
      delivery of a counterpart to the Securityholders Agreement.

            SECTION 5.5 Compliance with Law. Notwithstanding any provision
hereof to the contrary, no sale or other disposition of an interest in the
Company may be made except in compliance with all federal, state and other
applicable laws, including federal and state securities laws.

                                   ARTICLE VI
                         REPORTS TO MEMBERS; TAX MATTERS

            SECTION 6.1 Books of Account. Appropriate books of account shall be
kept by the Management Committee, in accordance with generally accepted
accounting principles, at the principal place of business of the Company, and
each Member shall have access to all books, records and accounts of the Company
and the right to make copies thereof for any purpose reasonably related to the
Member's interest as a member of the Company, in each case, under such
conditions and restrictions as the Management Committee may reasonably
prescribe.

            SECTION 6.2 Reports.

                  (a) Financial Statements. As promptly as practicable after the
      close of each fiscal year of the Company, the Management Committee shall
      cause an examination of the financial statements of the Company as of the
      end of each such fiscal year to be made in accordance with generally
      accepted auditing standards as in effect on the date thereof, by a firm of
      certified public accountants selected by the Management Committee. Within
      90 days after the close of each fiscal year, a copy of the financial
      statements of the Company, including the report of such certified public
      accountants, shall be furnished to each Unitholder and shall include, as
      of the end of such fiscal year:

                        (i) a statement prepared by the Company setting forth
            the balance of each Unitholder's Capital Account and the amount of
            that Unitholder's allocable share of the Company's items of Net
            Income or Net Loss and deduction, capital gain and loss or credit
            for such year for each of its Economic Interests; and

                        (ii) a balance sheet, a statement of income and expense
            and a statement of changes in cash flows of the Company for that
            fiscal year.

      In addition, the Unitholders shall be supplied with all other Company
      information necessary to enable each Unitholder to prepare its federal,
      state and local income tax returns.


                                       29


                  (b) Determinations. All determinations, valuations and other
      matters of judgment required to be made for accounting purposes under this
      Agreement shall be made by the Management Committee and shall be
      conclusive and binding on all Unitholders, their Successors in Interest
      and any other Person, and to the fullest extent permitted by law, no such
      Person shall have the right to an accounting or an appraisal of the assets
      of the Company or any successor thereto.

            SECTION 6.3 Fiscal Year. The fiscal year of the Company shall end on
December 31st of each calendar year unless otherwise determined by the
Management Committee in accordance with Section 706 of the Code.

            SECTION 6.4 Certain Tax Matters.

                  (a) Preparation of Returns. The Management Committee shall
      cause to be prepared all federal, state and local tax returns of the
      Company for each year for which such returns are required to be filed and
      shall cause such returns to be timely filed. The Management Committee
      shall determine the appropriate treatment of each item of income, gain,
      loss, deduction and credit of the Company and the accounting methods and
      conventions under the tax laws of the United States, the several states
      and other relevant jurisdictions as to the treatment of any such item or
      any other method or procedure related to the preparation of such tax
      returns. The Management Committee may cause the Company to make or refrain
      from making any and all elections permitted by such tax laws. Each
      Unitholder agrees that it shall not, except as otherwise required by
      applicable law or regulatory requirements, (i) treat, on its individual
      income tax returns, any item of income, gain, loss, deduction or credit
      relating to its interest in the Company in a manner inconsistent with the
      treatment of such item by the Company as reflected on the Form K-1 or
      other information statement furnished by the Company to such Unitholder
      for use in preparing its income tax returns or (ii) file any claim for
      refund relating to any such item based on, or which would result in, such
      inconsistent treatment. In respect of an income tax audit of any tax
      return of the Company, the filing of any amended return or claim for
      refund in connection with any item of income, gain, loss, deduction or
      credit reflected on any tax return of the Company, or any administrative
      or judicial proceedings arising out of or in connection with any such
      audit, amended return, claim for refund or denial of such claim, (A) the
      Tax Matters Member (as defined below) shall be authorized to act for, and
      its decision shall be final and binding upon, the Company and all
      Unitholders except to the extent a Unitholder shall properly elect to be
      excluded from such proceeding pursuant to the Code, (B) all expenses
      incurred by the Tax Matters Member in connection therewith (including
      attorneys', accountants' and other experts' fees and disbursements) shall
      be expenses of, and payable by, the Company, (C) no Unitholder shall have
      the right to (1) participate in the audit of any Company tax return, (2)
      file any amended return or claim for refund in connection with any item of
      income, gain, loss, deduction or credit (other than items which are not
      partnership items within the meaning of Section 6231(a)(4) of the Code or
      which cease to be partnership items under Section 6231(b) of the Code)
      reflected on any tax return of the Company, (3) participate in


                                       30


      any administrative or judicial proceedings conducted by the Company or the
      Tax Matters Member arising out of or in connection with any such audit,
      amended return, claim for refund or denial of such claim, or (4) appeal,
      challenge or otherwise protest any adverse findings in any such audit
      conducted by the Company or the Tax Matters Member or with respect to any
      such amended return or claim for refund filed by the Company or the Tax
      Matters Member or in any such administrative or judicial proceedings
      conducted by the Company or the Tax Matters Member, and (D) the Tax
      Matters Member shall keep the Unitholders reasonably apprised of the
      status of any such proceeding. Notwithstanding the previous sentence, if a
      petition for a readjustment to any partnership item included in a final
      partnership administrative adjustment is filed with a District Court or
      the Court of Claims and the IRS has elected to assess income tax against a
      Member with respect to that final partnership administrative adjustments
      (rather than suspending assessments until the District Court or Court of
      Claims proceedings become final), such Member shall be permitted to file a
      claim for refund within such period of time to avoid application of any
      statute of limitation provisions which would otherwise prevent the Member
      from having any claim based on the final outcome of that review..

                  (b) Tax Matters Member. The Company and each Member hereby
      designate Midwest Mix, Inc., a Minnesota corporation, as the "tax matters
      partner" for purposes of Section 6231(a)(7) of the Code (the "Tax Matters
      Member").

                  (c) Certain Filings. Upon the sale of Company assets or a
      liquidation of the Company, Unitholders shall provide the Management
      Committee with certain tax filings as requested by the Management
      Committee.

                                   ARTICLE VII
                                  MISCELLANEOUS

            SECTION 7.1 Schedules. Without in any way limiting the provisions of
Section 6.2, a Representative may from time to time execute on behalf of the
Company and deliver to the Unitholders schedules which set forth the then
current Capital Account balances of each Unitholder and any other matters deemed
appropriate by the Management Committee or required by applicable law. Such
schedules shall be for information purposes only and shall not be deemed to be
part of this Agreement for any purpose whatsoever.

            SECTION 7.2 Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY
CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE
CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the event
of a direct conflict between the provisions of this Agreement and any provision
of the Certificate or any mandatory provision of the Act, the applicable
provision of the Certificate or the Act shall control. If any provision of this
Agreement or the application thereof to any Person or circumstance is held
invalid or unenforceable to any


                                       31


extent, the remainder of this Agreement and the application of that provision to
other Persons or circumstances is not affected thereby and that provision shall
be enforced to the greatest extent permitted by law.

            SECTION 7.3 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
Successors in Interest; provided that no Person claiming by, through or under a
Member (whether as such Member's Successor in Interest or otherwise), as
distinct from such Member itself, shall have any rights as, or in respect to, a
Member (including the right to approve or vote on any matter or to notice
thereof).

            SECTION 7.4 Confidentiality. By executing this Agreement, for three
years from the receipt thereof, each Member expressly agrees to maintain the
confidentiality of, and not to disclose to any Person other than the Company,
another Member or a Person designated by the Company or any of their respective
financial planners, accountants, attorneys or other advisors, any information
relating to the business, financial structure, financial position or financial
results, clients or affairs of the Company that shall not be generally known to
the public, except as otherwise required by law or by any regulatory or
self-regulatory organization having jurisdiction and except in the case of any
Member who is employed by any entity controlled by the Company in the ordinary
course of its duties.

            SECTION 7.5 Amendments. This Agreement may not be modified or
amended without the written consent of the Members to the fullest extent
allowable under Delaware Law.

            SECTION 7.6 Notices. Whenever notice is required or permitted by
this Agreement to be given, such notice shall be in writing and shall be given
to any Unitholder at its address or telecopy number shown in the Company's books
and records, or, if given to the Company, at the following address:

            c/o Vestar Capital Partners
            245 Park Avenue
            41st Floor
            New York, New York 10167
            Attention:  General Counsel
            Telecopy: (212) 808-4922


                                       32


            with a copy to:

            Michael Foods, Inc.
            5353 Wayzata Boulevard, Suite 324
            Minneapolis, MN 55416
            Attn: John D. Reedy
            Telecopy: (952) 546-3711

            and a copy to:

            Kirkland & Ellis
            200 East Randolph
            Chicago, IL 60601
            Attention: Stephen L. Ritchie, Esq.
            Telecopy: (312) 861-2200

Each proper notice shall be effective upon any of the following: (i) personal
delivery to the recipient, (ii) when telecopied to the recipient (with hard copy
sent to the recipient by reputable overnight courier service that same day or
the next business day (charges prepaid)), (iii) one business day after being
sent to the recipient by reputable overnight courier service (charges prepaid),
or (iv) two business days after being deposited in the mails (first class or
airmail postage prepaid).

            SECTION 7.7 Counterparts. This Agreement may be executed in any
number of counterparts (including by means of telecopied signature pages), all
of which together shall constitute a single instrument.

            SECTION 7.8 Power of Attorney. Each Member hereby irrevocably
appoints each Representative as such Member's true and lawful representative and
attorney-in-fact, each acting alone, in such Member's name, place and stead, (i)
to make, execute, sign and file all instruments, documents and certificates
which, from time to time, may be required to set forth any amendment to this
Agreement or which may be required by this Agreement or by the laws of the
United States of America, the State of Delaware or any other state in which the
Company shall determine to do business, or any political subdivision or agency
thereof and (ii) to execute, implement and continue the valid and subsisting
existence of the Company or to qualify and continue the Company as a foreign
limited liability company in all jurisdictions in which the Company may conduct
business. The chief executive officer, as representative and attorney-in-fact,
however, shall not have any rights, powers or authority to amend or modify this
Agreement when acting in such capacity, except as expressly provided herein.
Such power of attorney is coupled with an interest and shall survive and
continue in full force and effect notwithstanding the subsequent withdrawal from
the Company of any Member for any reason and shall survive and shall not be
affected by the disability or incapacity of such Member.


                                       33


            SECTION 7.9 Entire Agreement. This Agreement amends, restates and
supersedes in its entirety the Original Agreement. This Agreement and the other
documents and agreements referred to herein or entered into concurrently
herewith embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein; provided that, such other
agreements and documents shall not be deemed to be a part of, a modification of
or an amendment to this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

            SECTION 7.10 Section Titles. Section titles and headings are for
descriptive purposes only and shall not control or alter the meaning of this
Agreement as set forth in the text hereof.


                                       34


            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.

                                        M-FOODS DAIRY HOLDINGS, LLC

                                        By: _____________________________
                                        Name: ___________________________
                                        Its: ____________________________


                                        KOHLER MIX SPECIALTIES OF
                                        CONNECTICUT, INC.

                                        By: _____________________________
                                        Name: ___________________________
                                        Its: ____________________________


                                        MIDWEST MIX, INC.

                                        By: _____________________________
                                        Name: ___________________________
                                        Its: ____________________________

         [End of Signature Page to Limited Liability Company Agreement]



                                   Schedule A

- --------------------------------------------------------------------------------
Name and Address of Member         Preferred Units  Class A Units  Class B Units
- --------------------------------------------------------------------------------
M-Foods Dairy Holdings, LLC        0                0              50
c/o Vestar Capital Partners
1225 Seventeenth St., Suite 1660
Denver, CO 80202
- --------------------------------------------------------------------------------
Kohler Mix Specialties of          7,151.96         25             0
Connecticut, Inc.
c/o Kohler Mix Specialties, Inc.
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416
- --------------------------------------------------------------------------------
Midwest Mix, Inc.                  7,151.96         25             0
c/o Kohler Mix Specialties, Inc.
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416
- --------------------------------------------------------------------------------


                                    Exhibit I

EX-3.27

                                                                   EXHIBIT 3.27

                            ARTICLES OF INCORPORATION

                                       OF

                          MILTON G. WALDBAUM COMPANY

         KNOW ALL MEN BY THESE PRESENTS, That we, the undersigned, have
associated ourselves together for the purpose of establishing a corporation
under the laws of the State of Nebraska, and for that purpose do hereby adopt
these Articles of Incorporation:

                                   ARTICLE I.

         The name of this corporation shall be MILTON G. WALDBAUM COMPANY.

                                   ARTICLE II.

         The principal office and place of business of this corporation is to be
located in the City of Wakefield, County of Dixon and State of Nebraska. The
name of the resident agent in charge of this corporation is Daniel W. Gardner,
whose address is Wakefield, Nebraska.

                                  ARTICLE III.

         The nature of the business and the objects and purposes to be
transacted, promoted and carried on by this corporation are:

         (a) To buy, sell and deal in eggs and poultry of all kinds; and deal
in, at wholesale or retail, eggs, poultry and all kinds of farm produce; to
process such poultry and eggs and farm produce to a condition appropriate for
market.

         (b) To manufacture, process, buy, sell, import, export, distribute and
generally deal in food and cereal products and materials of all classes and
description whether in the form and condition originally produced or processed
in any manner for market.

         (c) To acquire, own, hold, lease or hire and operate motor vehicles for
transporting property, both property of its own and property of others, as a
carrier for compensa-



tion over and upon the public highways of the States of the United States,
Mexico and Canada; to arrange for transportation by other carriers either by
motor vehicle, rail, or otherwise; to own, control, lease and operate offices,
garages and terminal yards in connection with said business; to do all acts and
things necessary, convenient, expedient or incident to carrying out the purposes
of operating a motor truck line, engaging in the business of a broker, and
engaging in the business of preparing property so that it may be moved by this
corporation in its transportation activities or by other transportation
agencies. It is further within the purposes and powers of this corporation to
transport or arrange for the transportation of property of all types.

         (d) To buy, acquire, hold, manage, handle, improve, develop, rent,
lease, sub-lease, mortgage, sell, improve and convey any and all kinds of
real estate wherever situated; to buy, acquire, hold, mortgage, sell,
transfer, assign and dispose of leasehold interests, contracts and options
for the purchase, leasing, sale and exchange of real estate and any interest
in real estate, assignments of rent, real estate mortgages and liens and any
and every kind of right, interest and estate in and contract with respect to
real property wherever situated; to build, construct, alter, rent, lease,
operate and handle generally, buildings and other structures on real
property; to maintain and operate warehouses for the storage and deposit of
goods and merchandise of all kinds and description and conduct all business
pertaining thereto; to purchase or otherwise acquire, hold, sell, transfer and
dispose of stocks, bonds and other securities, evidences of indebtedness and
obligations of every kind and nature; to buy, handle, sell and dispose of any
and all kinds of merchandise and other personal property incidental to or
convenient in carrying on the business of the corporation; and generally to
do all other lawful acts and things necessary or incidental to or convenient
in the carrying on of the business of the corporation or some part thereof.
The corporation shall also have power to act as agent or broker for others in
doing any of the acts or things and in transacting any of the business herein
referred to.

         (e) To conduct and carry on a general warehousing business; to maintain
and keep storage warehouses for the storage and deposit of goods and merchandise
of all kinds and descriptions and conduct all business appertaining


                                      2


thereto including the making of advances on goods stored and deposited with
it; to receive for safekeeping or storage, goods, wares, merchandise and
property of all kinds; to insure or cause to be insured for the owner or
owners thereof against all loss by fire or water whether in transit or in
storage; to issue receipts or certificates for goods, wares, merchandise or
property on the premises or under the control of said corporation at the time
of issuing such receipt or certificate, whether the property evidenced by
such receipts is the property of this corporation or the property of any
other person, firm or corporation.

         (f) To enter into, make and perform contracts of every kind,
character and description, with any person, firm, association, corporation,
municipality, county, state, body politic or government or any division or
dependency thereof and to make any guaranty respecting stocks, dividends,
securities, indebtedness, interest, contracts or other obligations.

         (g) To borrow or raise monies for any of the purposes of the
corporation and from time to time without limit as to amount, to draw, make,
accept, endorse, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable or nonnegotiable
instruments or evidences of indebtedness, and to secure the payment of any
thereof and of the interest thereon by mortgage upon or pledge, conveyance or
assignment in trust of the whole or any part of the real and personal
property of the corporation, whether at the time owned or thereafter
acquired, and to sell, pledge, or otherwise dispose of such promissory notes,
drafts, bills of exchange, warrants, bonds, debentures and other instruments
or evidences of indebtedness, whether negotiable or nonnegotiable, for its
corporate purposes.

         (h) To purchase, hold, sell and transfer the shares of its own
capital stock, provided, it shall not use its funds or property for the
purchase of its own shares of capital stock when such use would cause any
impairment of its capital, except as otherwise permitted by law, and
provided, further, that shares of its own capital stock belonging to it shall
not be voted upon, directly or indirectly, and shall not be entitled to the
declaration of any dividends thereon.

                                      3


         (i) To purchase, subscribe for or otherwise acquire, own, hold, use,
sell, assign, transfer, mortgage, pledge, exchange or otherwise dispose of
shares of stock, bonds, debentures, notes, evidences of indebtedness and
other securities, contracts or obligations and to pay therefor in whole or in
part in cash or by exchanging therefor other property, including stocks,
bonds, debentures, notes or other evidences of indebtedness or obligations,
and to receive, collect and dispose of the interest, dividends and income
arising from such property and to possess and exercise in respect thereof all
the rights, powers and privileges of ownership, including all voting rights
on any stocks.

         (j) To enter into, make and perform contracts of every kind,
character and description with any person, firm, association, corporation,
municipality, county, state, body politic or government or any division or
dependency thereof.

         (k) To have one or more offices in any of the states, districts,
territories or colonies of the United States and in any foreign countries;
subject to the laws of such state, district, territory, colony or country.

         (l) Without in any manner limiting any of the objects and powers of
this corporation it is further provided that this corporation shall have the
power to do any and all acts and things which may be necessary or convenient
for the purpose of obtaining or furthering any of its objects and shall have
all the powers which natural persons could do and exercise and which now or
hereafter may be authorized by law.

                                   ARTICLE IV.

         The names and places of residence of each of the incorporators of
this corporation are as follows:

         G. Steinert, 737 Omaha National Bank Building, Omaha, Nebraska

         R. Cohen., 737 Omaha National Bank Building, Omaha, Nebraska

                                   ARTICLE V.

         This corporation is to have perpetual existence.

                                      4


                                  ARTICLE VI.

         The private property of the stockholders of this corporation shall
not be subject to the payment of corporate debts to any extent whatsoever.

                                  ARTICLE VII.

         The minimum amount of capital with which this corporation shall
commence business is One Thousand ($1,000.00) Dollars.

                                 ARTICLE VIII.

         The total number of shares of stock which this corporation shall
have authority to issue shall be one thousand (1,000) shares, all of one
class, and of the par value of One Hundred Dollars ($100.00) each, all of
which when issued shall be fully paid and non-assessable.

                                  ARTICLE IX.

         In furtherance and not in limitation of the general powers conferred
by the laws of the State of Nebraska, the Board of Directors is expressly
authorized to set apart out of any funds of the corporation available for
dividends, a reserve for any proper purpose and to abolish any such reserve
in the manner in which it was created.

         IN WITNESS WHEREOF, we have hereunto set our hands this _______ day
of May, 1959.



                                                 /s/ G. Steinert
                                                --------------------------------
                                                G. Steinert



                                                 /s/ R. Cohen
                                                --------------------------------
                                                R. Cohen




                                      5



STATE OF NEBRASKA   )
                    )  SS
COUNTY OF DOUGLAS   )

         On this 29 day of May, 1959, personally appeared before me, a Notary
Public in and for said County, G. Steinert and R. Cohen, all of the parties and
signers of the foregoing Articles of Incorporation, known to me to be such,
and they acknowledged the said Articles of Incorporation to be their
voluntary act and deed.

         WITNESS my hand and notarial seal the date last aforesaid.




[SEAL]                                           /s/ Paul F. Good
                                                --------------------------------
                                                Notary Public


My Commission expires: July 9, 1963




                                      6




                             THE WAKEFIELD REPUBLICAN

                               WAKEFIELD, NEBRASKA

                                Monsky, Grodinsky,
                             Good & Cohen, Attorneys
                            737 Omaha Nat'l. Bank Bldg.

                                    NOTICE OF
                                   INCORPORATION

      Notice is hereby given of the incorporation by the undersigned of a
corporation under the laws of the State of Nebraska. The name of the
corporation is Milton G. Waldbaum Company. The principal place of business of
said corporation is in Wakefield, Dixon County, Nebraska. The general nature
of the business to be transacted by the corporation is to buy, sell and deal
in eggs and poultry and other farm produce of all kinds; to manufacture,
process, buy, sell and deal in food and cereal products and materials; to do
a general transportation business, including motor truck transportation of
property of its own and others; to purchase, acquire, own, hold, lease,
manage and otherwise deal in and with real and personal property of every
kind, character and description; to construct and erect and to improve, alter
and repair buildings or other structures; to enter into, make and perform
contracts of every kind and nature; to make any guaranty respecting stocks,
securities, indebtedness, contracts and other obligations; to borrow money
and to issue evidences of indebtedness therefor, and to pledge or otherwise
encumber by mortgage or otherwise, all or any part of the corporate property
as security therefor; to buy, handle, sell and dispose of any and all kinds
of merchandise and other personal property; to conduct a general warehousing
business; to maintain and keep storage warehouses for the storage and deposit
of goods, wares and merchandise of all kinds and description; to issue
receipts or certificates for goods, wares, merchandise or property on the
premises; to purchase, hold, sell and transfer the shares of its own capital
stock, provided it shall not impair its capital by such purchases, except as
other [ILLEGIBLE]


                        AFFIDAVIT OF PUBLICATION

                                ------

                        THE STATE OF NEBRASKA)
                                             )ss
                             Dixon County    )

I, [ILLEGIBLE], of said County, being first duly sworn, do depose and say that I
am Publisher of The Wakefield Republican, which is a legal paper, printed part
and wholly published in its office in Wakefield, Dixon county, Nebraska for more
than 52 consecutive weeks prior to the first publication of the annexed notice
and the present time; that said newspaper now has and during all of said time
had a bona fide circulation of more than 300 copies weekly within said Dixon
County, and that the notice hereto attached has been published in the above
named publication for 3 consecutive weeks, namely:

   July 2, 1959


   July 9, 1959


   July 16, 1959


          , 19

          , 19

/S/ [ILLEGIBLE]
- ---------------------------

- ---------------------------
Subscribed and sworn to before me this 16th day of July, 1959

/S/   [ILLEGIBLE]
- ----------------------------
       Notary Public


Printer's Fee $36.05

Affidavit ---------

TOTAL        $-----



[ILLEGIBLE] directly or indirectly; to purchase or otherwise acquire and to
own and hold shares of stock in other corporations; to have one or more
offices in any of the states or territories of the United States and in any
foreign countries; to do any and all acts and things which may be necessary
or convenient for the purpose of furthering its objects; and to exercise all
of the powers conferred by the laws of Nebraska upon corporations; and to do
any and all things hereinbefore set forth to the same extent that natural
persons could do. The amount of capital stock authorized is $100,000.00
divided into 1000 shares of the par value of $100.00 per share, all of one
class, each of which shares when issued shall be fully paid and
nonassessable. The minimum amount of capital with which the corporation shall
commence business is $1000.00. The time of the commencement of the
corporation was June 1, 1959, and the corporation is to have perpetual
existence. The affairs of the corporation are to be conducted by a Board of
Directors and by officers, consisting of a President, Vice-President,
Secretary and Treasurer and such other officers as may be determined by the
Board of Directors.

           G. Steinert


           R. Cohen


(Publ. July 2, 9, 16, 1959)



                                                          MAY 24  1985 32031

                                                        STATE OF NEBRASKA  )
                              ARTICLES OF AMENDMENT     SECRETARY'S OFFICE ) SS
                                                        Received and filed for
                                       OF               record and recorded on
                                                        film roll 85-11 at
                           MILTON G. WALDBAUM COMPANY   page 1275
                                                        /s/ Allen J. Beermann
                                                        ------------------------
                                                              Secretary of State
                                                        By [ILLEGIBLE] Pd. 69.00
                                                          ----------------------

                                    ARTICLE I

                                      NAME

         The name of the Corporation is Milton G. Waldbaum Company.

                                   ARTICLE II

                                   AMENDMENTS

         The Articles of Incorporation are amended by revoking the current
Article VIII and adopting the following in substitution thereof:

                                  ARTICLE VIII

         The Corporation shall have authority to issue a total of 1,184,600
shares of Capital Stock of which 12,000 shares shall be of one class
designated as Voting Common Stock which shall have a par value of Ten Cents
($.10) per share; and of which 1,000 shares shall be of one class designated
as Nonvoting Common Stock which shall have a par value of Ten Cents ($.10)
per share; and of which 585,800 shares shall be of one class designated as
Noncumulative Voting Preferred Stock which shall have a par value of Ten
Cents ($.10) per share; and of which 585,800 shares shall be of one class
designated as Noncumulative Nonvoting Preferred Stock which shall have a par
value of Ten Cents ($.10) per share.



         The preferences, limitations and relative rights of the classes of
Voting Common, Nonvoting Common, Noncumulative Voting Preferred and
Noncumulative Nonvoting Preferred Stock are as follows:

         (1) The Voting Common Stock and Nonvoting Common Stock shall be the
same in all respects except as to voting power. The Noncumulative Voting
Preferred Stock and Noncumulative Nonvoting Preferred Stock shall be the same
in all respects except as to voting power and shall for purposes of
subsections (2) and (3) of this Article VIII be referred to as the "Preferred
Stocks".

         (2) (a) From and after the date on which shares of the Preferred
Stocks are issued, the holders thereof shall be entitled to receive annual
cash dividends at the rate of $.50 per share, per fiscal year of the
Corporation.

         (b) Dividends on shares of the Preferred Stocks shall be computed
from the first day of the month next following the date of their issuance and
shall be payable on the fifteenth day of each June thereafter (the "Dividend
Dates") or upon such more frequent schedule as the Board of Directors may
from time to time direct.

         (c) The holders of shares of the Preferred Stocks shall not be
entitled to any other dividends, whether in cash, property or stock.

                                      -2-



         (d) Payment of dividends on shares of the Preferred Stocks shall be
paid before any dividend or other distribution may be declared, paid upon or
set apart for the Voting Common Stock or Nonvoting Common Stock or any other
shares of Capital Stock now or hereafter authorized or issued by the
Corporation.

         (f) Dividends on the shares of the Preferred Stocks shall not be
cumulative and shall be payable only out of earnings or assets of the
Corporation legally available for the payment of dividends and only as and
when declared by the Board of Directors.

         (3) The shares of the Preferred Stocks shall be preferred over any
other class or series of the Corporation's Capital Stock as to assets, and, in
the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the holders of the Preferred Stocks shall be entitled
to receive, out of the assets of the Corporation available for distribution
to its stockholders (whether from capital or surplus), an amount equal to
$5.00 for each share of the Preferred Stocks held by such shareholder, before
any distribution of the assets shall be made to the holders of the Voting
Common Stock or Nonvoting Common Stock or to the holders of any other shares
of Capital Stock now or hereafter authorized or issued by the Corporation.
Upon payment of

                                      -3-



the preferential amounts specified in the preceding sentence, the holder of
the Preferred Stocks shall not be entitled to any other or futher
distribution. If, upon voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the entire assets of the Corporation available
for distribution to its shareholders shall be insufficient to permit payment
in full to the holders of the Preferred Stocks of the preferential amounts
aforesaid, then the entire assets of the Corporation available for
distribution to its shareholders shall be distributed ratably among the
holders of the Preferred Stocks according to the amounts which they
respectively would be entitled to receive if such assets were sufficient to
permit the payment in full of said preferential amounts. A consolidation or
merger of the Corporation with or into any other corporation shall not be
deemed to constitute a liquidation, dissolution or winding up of the
Corporation within the meaning of this paragraph (3).

         (4) Each holder of Noncumulative Voting Preferred Stock shall be
entitled to one vote for each one share of Noncumulative Voting Preferred
Stock held by him at all elections of directors of the Corporation, and in
respect to all of the matters as to which the vote or consent of stockholders
of the Corporation shall be required to be

                                      -4-




taken, voting together as a single class with the holders of the Voting
Common Stock and any other classes of Capital Stock or series thereof
entitled to vote on any such matter. No change in any of the rights or
preferences of the Noncumulative Voting Preferred Stock, so as to affect
adversely the holder thereof, shall be made without first obtaining the
approval of the holders of a majority of the total number of outstanding
shares of the Noncumulative Voting Preferred Stock voting separately as one
class. Holders of Noncumulative Nonvoting Preferred Stock shall have no
voting rights with respect to such Noncumulative Nonvoting Preferred Stock,
except as may be otherwise expressly provided by statute.

         (5) Each holder of Voting Common Stock shall be entitled to one vote
for each one share of Voting Common Stock held by him at all elections of
directors of the Corporation, and in respect to all of the matters as to
which the vote or consent of stockholders of the Corporation shall be
required to be taken, voting together as a single class with the holders of
the Noncumulative Voting Preferred Stock and any other classes of Capital
Stock or series thereof entitled to vote on any such matter. No change in any
of the rights or preferences of the Voting Common Stock, so as to affect
adversely the holder

                                      -5-



thereof, shall be made without first obtaining the approval of the holders
of a majority of the total number of outstanding shares of the Voting Common
Stock voting separately as one class. Holders of Nonvoting Common Stock shall
have no voting rights with respect to such Nonvoting Common Stock, except as
may be otherwise expressly provided by statute.

         (6) When these Articles of Amendment become effective, all of the
presently authorized one hundred dollar ($100) par value Common Stock of the
Corporation will be cancelled and all of the issued and outstanding shares of
one hundred dollar ($100) par value Common Stock of the Corporation will be
exchanged for 12,000 shares of Voting Common Stock, 585,800 shares of
Noncumulative Voting Preferred Stock and 585,800 shares of Noncumulative
Nonvoting Preferred Stock.

                                   ARTICLE III

                             ADOPTION OF AMENDMENTS

         The foregoing amendments were adopted by written consents of all of
the directors and shareholders of the Corporation as of May 31, 1984,
pursuant to Sections 21-2028 and 21-2057 of the Nebraska Business Corporation
Act.


                                      -6-



                                   ARTICLE IV

                               MANNER OF EXCHANGE

         The foregoing amendments were adopted by the Corporation in
connection with its Plan of Recapitalization (the "Plan"). Pursuant to the
Plan, the Board of Directors offered to exchange the newly authorized shares
for the issued and outstanding shares of one hundred dollar ($100) par value
Common Stock. All of the holders of the issued and outstanding shares of one
hundred dollar ($100) par value Common Stock have accepted the offer of
exchange and deposited their certificates representing the issued and
outstanding shares of Common Stock with the officers of the Corporation.
Pursuant to the Plan, when these Articles of Amendment become effective, said
certificates will be cancelled and the newly authorized shares will be issued
pursuant to the terms of the offer of exchange.

         DATED this 31st day of May, 1984.


                                             By /s/ Daniel W. Gardner
                                               ---------------------------------
                                               Daniel W. Gardner, President



Attest:

By /s/ Milton G. Waldbaum
  ----------------------------
  Milton G. Waldbaum, Assistant
    Secretary



                                      -7-

EX-3.29

                                                                    Exhibit 3.29

                           ARTICLES OF INCORPORATION
                                       OF
                          PAPETTI'S ACQUISITION, INC.

      The undersigned incorporator, being a natural person 18 years of age or
older, in order to form a corporate entity under Minnesota Statutes, Chapter
302A, hereby adopts the following Articles of Incorporation:

                                   ARTICLE I.

      Name: The name of this corporation shall be Papetti's Acquisition, Inc.

                                  ARTICLE II.

      Duration: The duration of the corporation shall be perpetual.

                                  ARTICLE III.

      Purpose: The purpose or purposes for which this corporation is formed
shall be for general business purposes.

                                  ARTICLE IV.

      Registered Office: The address of the corporation's registered office is
324 Park National Bank Building, 5353 Wayzata Boulevard, Minneapolis, MN 55416.

                                   ARTICLE V.

      Capital Stock: The authorized capital stock of the corporation shall
consist of 10,000 shares, each of which shall have a par value of $.01.

      The sale of stock of this corporation by any shareholder may be restricted
in the Bylaws or in any contract between two or more shareholders to the extent
that said stock may be required by such Bylaws or contract to be offered first
to the corporation or to other shareholders at a price to be fixed in accordance
with such Bylaws or contract; provided, however, that no such restrictions shall
be valid unless stated upon the stock certificate.

      Each holder of record of common stock shall be entitled to one vote per
share of common stock standing in his or her name on the books of the
corporation. No shareholder entitled to vote shall have or exercise the right to
accumulate his or her votes in electing directors, and there shall be no
cumulative voting for any purpose whatsoever.

      The Board of Directors shall have the authority to establish by resolution
more than one class or series of shares, either preferred or common, and to fix
the relative rights, restrictions



and preferences of any such different classes or series and the authority to
convert shares of a class or series to another class or series and to effectuate
share dividends, splits or conversion of the corporation's outstanding shares.

      The Board of Directors shall have the authority to issue rights to convert
any of the corporation's securities into shares of stock of any class or
classes, the authority to issue options to purchase or subscribe for shares of
stock of any class or classes and the authority to issue share purchase or
subscription warrants or any other evidence of such option rights which set
forth the terms, provisions and conditions thereof, including the price or
prices at which such shares may be subscribed for or purchased. Such options,
warrants and rights may be transferable or nontransferable and separable or
inseparable from other securities of the corporation. The Board of Directors is
authorized to fix the terms, provisions and conditions of such options, warrants
and rights, including the conversion basis or bases and the option price or
prices at which shares may be subscribed for or purchased.

                                  ARTICLE VI.

      Preemptive Rights Denied: No holder of stock of this corporation shall
have any preferential, preemptive or other rights of subscription to any shares
of any class or series of stock of this corporation allotted or sold or to be
allotted or sold and now or hereafter authorized, or to any obligations or
securities convertible into any class or series of stock of this corporation or
any right of subscription to any part thereof.

                                  ARTICLE VII.

      Written Action by Board: An action required or permitted to be taken by
the Board of Directors of the corporation may be taken by written action signed
by the number of directors that would be required to take the same action at a
meeting of the Board at which all directors are present, except that on an
action which requires shareholder approval the written action must be signed by
all the directors.

                                 ARTICLE VIII.

      Nonliability of Directors for Certain Actions: To the full extent that the
Minnesota Statutes, Chapter 302A, as it exists on the date hereof or may
hereafter be amended, permits the limitation or elimination of the liability of
directors, a director of this corporation shall not be liable to the corporation
or its shareholders for monetary damages for breach of fiduciary duty as a
director. Any amendment to or repeal of this Article VIII shall not adversely
affect any right or protection of a director of the corporation for or with
respect to any acts or omission of such director occurring prior to such
amendment or repeal.


                                      -2-


                                  ARTICLE IX.

      Indemnification: Directors and officers of the corporation and any person
serving or who has served as a director or officer of any other corporation or
entity at the request or direction of the Corporation shall be entitled to be
indemnified by the corporation to the full extent permitted by the Minnesota
Business Corporation Act or any successor statute and the Corporation shall have
the power to obtain insurance against any liability arising under this
provision.

                                   ARTICLE X.

      Bylaws: The power to adopt, amend or repeal Bylaws shall be vested in the
Board of Directors of the corporation, except to the extent otherwise limited by
the Minnesota Business Corporation Act.

                                  ARTICLE XI.

      Directors: The Board of Directors of this corporation shall consist of
such number of directors as shall be fixed in the manner provided in the Bylaws
of this corporation. Each director shall continue in office for the term for
which he or she was named or elected and until his or her successor is elected
and qualified.

      The Board of Directors of this corporation shall have full power and
authority to make and adopt Bylaws for the government of this corporation and
its affairs as it may deem advisable and necessary and as shall not be
inconsistent with the provisions of these Articles of Incorporation and to amend
or alter such Bylaws from time to time; provided, however, that the authority to
make and alter such Bylaws vested hereby in said board shall be subject to the
power and right of the shareholders to change or repeal such Bylaws.

      The names and addresses of the first Board of Directors is as follows:

      Gregg A. Ostrander
      President and Chief Executive Officer
      324 National Bank Building
      5353 Wayzata Boulevard
      Minneapolis, MN 55416

      Jeffrey M. Shapiro
      Chief Financial Officer and Secretary
      324 National Bank Building
      5353 Wayzata Boulevard
      Minneapolis, MN 55416

                                  ARTICLE XII.


                                      -3-


      Amendment: These Articles of Incorporation may be amended by the
affirmative vote of the holder or holders of the majority of the voting power of
the common stock present at a shareholders' meeting wherein said amendments are
submitted to a vote.

                                 ARTICLE XIII.

      Incorporator: The name and address of the incorporator is:

                Lisa A. Smith
                2000 Midwest Plaza Building West
                801 Nicollet Mall
                Minneapolis, MN 55402

      IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of January,
1997.


                                        /s/ Lisa A. Smith
                                        ----------------------------------------
                                        Lisa A. Smith

STATE OF MINNESOTA )
                   ) ss.
COUNTY OF HENNEPIN )

      The foregoing instrument was acknowledged before me this 13th day of
January, 1997 by LISA A. SMITH.


                                        /s/ Tammy R. Hahn
                                        ----------------------------------------
                                        Notary Public

                                      ------------------------------------------
                                      [SEAL] TAMMY R. HAHN
                                             NOTARY PUBLIC - MINNESOTA
                                             HENNEPIN COUNTY
                                             My Commission Expires Jan. 31, 2000
                                      ------------------------------------------

                                                              STATE OF MINNESOTA
                                                             DEPARTMENT OF STATE
                                                                    FILED
                                                                 JAN 13 1997

                                                                 [ILLEGIBLE]
                                                              Secretary of State


                                      -4-

EX-3.30

                                                                  Exhibit 3.30

                                   BY-LAWS OF

                       PAPETTI ELECTROHEATING CORPORATION

                                    ARTICLE I

                                     OFFICES

      1. Registered Office and Agent. The registered office of the Corporation
in the State of New Jersey is at 277 North Broad Street, Elizabeth, New Jersey
07208.

      The registered agent of the Corporation at such office is Martin B.
O'Connor, II, Esq.

      2. Principal Place of Business. The principal place of business of the
Corporation is One Papetti Plaza, Elizabeth, New Jersey 07206.

      3. Other Places of Business. Branch or subordinate places of business or
offices may be established at any time by the Board at any place or places where
the Corporation is qualified to do business.

                                   ARTICLE II

                                  SHAREHOLDERS

      1. Annual Meeting. The annual meeting of shareholders shall be held upon
not less than ten (10) nor more than sixty (60) days written notice of the time,
place and purposes of the meeting at 10:00 a.m. on the 5th day of the month


                                       1


of November of each year at the Corporation's principal place of business, or at
such other time and place as shall be specified in the notice of meeting, in
order to elect directors and transact such other business as shall come before
the meeting. If that date is a legal holiday, the meeting shall be held at the
same hour on the next succeeding business day.

      2. Special Meetings. A special meeting of shareholders may be called for
any purpose by the president or the Board. A special meeting shall be held upon
not less than ten (10) nor more than sixty (60) days written notice of the time,
place and purposes of the meeting.

      3. Action Without Meeting. The shareholders may act without a meeting if,
prior or subsequent to such action, each shareholder who would have been
entitled to vote upon such action shall consent in writing to such action. Such
written consent or consents shall be filed in the minute book. However, owners
of nonvoting shares, if any must either consent or be notified in accordance
with N.J.S.A. l4A:5-6 in the case of mergers, consolidations or sales of
substantially all assets.

      4. Quorum. The presence at a meeting in person or by proxy of the holders
of shares entitled to cast a majority of the votes shall constitute a quorum.


                                       2


                                   ARTICLE III

                               BOARD OF DIRECTORS

      1. Number and Term of Office. The Board shall consist of three (3) or more
members. Each director shall be elected by the shareholders at each annual
meeting and shall hold office until the next annual meeting of shareholders and
until that director's successor shall have been elected and qualified.

      2. Regular Meetings. A regular meeting of the Board shall be held without
notice immediately following and at the same place as the annual shareholders'
meeting for the purposes of electing officers and conducting such other business
as may come before the meeting. The Board, by resolution, may provide for
additional regular meetings which may be held without notice, except as to
members not present at the time of the adoption of the resolution.

      3. Special Meetings. A special meeting of the Board may be called at such
time by the president or by the directors for any purpose. Such meeting shall be
held upon two (2) days notice if given orally (either by telephone or in person)
or by telegraph, or upon seven (7) days notice if given by depositing the notice
in the United States mails, postage prepaid. Such notice shall specify the time
and place of the meeting.

      4. Action Without Meeting. The Board may act without


                                       3


a meeting if, prior or subsequent to such action, each member of the Board shall
consent in writing to such action. Such written consent or consents shall be
filed in the minute book.

      5. Quorum. A majority of the entire Board shall constitute a quorum for
the transaction of business.

      6. Vacancies in Board of Directors. Any vacancy in the Board, or a vacancy
caused by an increase in the number of directors, may be filled by the
affirmative vote of a majority of the remaining directors, even though less than
a quorum of the Board, or by a sole remaining director.

                                   ARTICLE IV

                                WAIVERS OF NOTICE

      Any notice required by these by-laws, by the certificate of incorporation,
or by the New Jersey Business Corporation Act may be waived in writing by any
person entitled to notice. The waiver or waivers may be executed either before
or after the event with respect to which notice is waived. Each director or
shareholder attending a meeting without protesting the lack of proper notice
prior to its conclusion shall be deemed conclusively to have waived notice of
the meeting.


                                       4


                                    ARTICLE V

                                    OFFICERS

      1. Election. At its regular meeting following the annual meeting of
shareholders, the Board shall elect a president, a treasurer, and a secretary;
and it may elect such other officers, including one or more vice presidents, as
it shall deem necessary. One person may hold two or more offices.

      2. Duties and Authority of President. The president shall be chief
executive officer of the Corporation. Subject only to the authority of the
Board, he shall have general charge and supervision over, and responsibility
for, the business and affairs of the Corporation. Unless otherwise directed by
the Board, all other officers shall be subject to the authority and supervision
of the president. The president may enter into and execute in the name of the
Corporation contracts and other instruments in the regular course of business or
contracts or other instruments not in the regular course of business which are
authorized, either generally or specifically, by the Board. He shall have the
general powers and duties of management usually vested in the office of
president of a corporation.

      3. Duties and Authority of Vice President. The vice president shall
perform such duties and have such authority as from time to time may be
delegated to him by the president or by


                                       5


the Board. In the absence of the president, or in the event of his death,
inability or refusal to act, the vice president shall perform the duties and be
vested with the authority of the president.

      4. Duties and Authority of Treasurer. The treasurer shall have the custody
of the funds and securities of the Corporation and shall keep or cause to be
kept regular books of account for the Corporation. The treasurer shall perform
such other duties and possess such other powers as are incident to that office
or as shall be assigned by the president or the Board.

      5. Duties and Authority of Secretary. The secretary shall cause notices of
all meetings to be served as prescribed in these by-laws and shall keep or cause
to be kept the minutes of all meetings of the shareholders and the Board. The
secretary shall have charge of the seal of the Corporation. The secretary shall
perform such other duties and possess such other powers as are incident to that
office or as are assigned by the president or the Board.

                                   ARTICLE VI

                AMENDMENTS TO AND EFFECT OF BY-LAWS; FISCAL YEAR

      1. Force and Effect of By-Laws. These by-laws are subject to the
provisions of the New Jersey Business Corporation


                                       6


Act and the Corporation's certificate of incorporation, as the same may be
amended from time to time. If any provision in these by-laws is inconsistent
with a provision in that Act or the certificate of incorporation, the provision
of that Act or the certificate of incorporation shall govern.

      2. Construction. Wherever in these by-laws references are made to more
than one (1) incorporator, director or shareholder, they shall, if this is a
sole incorporator, director or shareholder corporation, be construed to mean the
solitary person; and all provisions dealing with the quantum of majorities or
quorums shall be deemed to mean the action by the one person constituting the
Corporation.

      3. Amendments to By-Laws. These by-laws may be altered, amended or
repealed by the shareholders or the Board. Any by-law adopted, amended or
repealed by the shareholders may be amended or repealed by the Board, unless the
resolution of the shareholders adopting such by-law expressly reserves to the
shareholders the right to amend or repeal it.

      4. Fiscal Year. The fiscal year of the Corporation shall begin on the
first day of January of each year.


                                       7

EX-3.31

                                                                    Exhibit 3.31

                                                               FILED
                                                          [ILLEGIBLE] 1993

                                                           DANIEL J. DALTON
                                                          Secretary of State

0310963

                          CERTIFICATE OF INCORPORATION

                                       OF

                       PAPETITI ELECTRO-HEATING CORPORATION

To:   The Secretary of State
      State of New Jersey

            Pursuant to the provisions of the New Jersey Business Corporation
Act, the undersigned, being a natural person of at least 18 years of age and
acting as the incorporator of the corporation hereby being organized thereunder,
certifies that:

            FIRST: The name of the corporation (hereinafter called the
"corporation") is PAPETTI ELECTROHEATING CORPORATION

            SECOND: The corporation may engage in any activity within the
purposes for which corporations may be organized under the New Jersey Business
Corporation Act.

            THIRD: The aggregate number of shares which the corporation shall
have the authority to issue is 2,500, all of which are without par value, and
all of which are of the same class.

            FOURTH: The address of the initial registered office of the
corporation within the State of New Jersey is 277 North Broad Street, Elizabeth,
New Jersey 07208; and the name of the initial registered agent at such address
is Martin B. O'Connor II, Esq.

            FIFTH: The number of directors constituting the first Board of
Directors of the corporation is one; and the name and the address of the person
who is to serve as the first director of the corporation is as follows:

      NAME                                     ADDRESS:
      ----                                     -------

Arthur J. Papetti                       1 Papetti Plaza
                                        Elizabeth, New Jersey 07206



            SIXTH: The name and address of the incorporator is as follows:

      NAME                                     ADDRESS:
      ----                                     -------

Denise H. Walter                     Prentice Hall
                                     830 Bear Tavern Road
                                     West Trenton, New Jersey 08628

            SEVENTH: For the management of the business and for the conduct of
the affairs of the corporation, and in further definition, limitation, and
regulation of the powers of the corporation and of its directors and of its
shareholders or any class thereof, as the case may be, it is further provided:

            1. The management of the business and the conduct of the affairs of
      the corporation, including the election of the Chairman of the Board of
      Directors, if any, the President, the Treasurer, the Secretary, and other
      principal officers of the corporation, shall be vested in its Board of
      Directors.

            2. The Board of Directors shall have the power to remove directors
      for cause and to suspend directors pending a final determination that
      cause exists for removal.

            3. The corporation shall, to the fullest extent permitted by Section
      14A:3-5 of the New Jersey Business Corporation Act, as the same may be
      amended and supplemented, indemnify any and all corporate agents whom it
      shall have power to indemnify under said section from and against any and
      all of the expenses, liabilities, or other matters referred to in or
      covered by said Section, and the indemnification provided for herein shall
      not be deemed exclusive of any other rights to which those indemnified may
      be entitled under any By-Law agreement, vote of shareholders, or
      otherwise, and shall continue as to a person who has ceased to be a
      corporate agent and shall inure to the benefit of the heirs, executors,
      administrators, and personal representatives of such a corporate agent.
      The term "corporate agent" as used herein shall have the meaning
      attributed to it by Sections 14A:3-5 and 14A:5-21 of the New Jersey
      Business Corporation Act and by any other applicable provision of law.


            4. The personal liability of the directors of the corporation is
      hereby eliminated to the fullest extent permitted by subsection 14A:2-7 of
      the New Jersey Business Corporation Act, as the same may be amended and
      supplemented.

            EIGHTH: The shareholders shall not have preemptive tights.

            NINTH: The duration of the corporation is to be perpetual.

Signed on November 5, 1993

                                        /s/ Denise H. Walter
                                        ----------------------------------------
                                                  Denise H. Walter, Incorporator

EX-3.32

                                                                    Exhibit 3.32

                                     BYLAWS
                                       OF
                           PAPETTI'S ACQUISITION, INC.

                                    ARTICLE I

                           Offices, Corporate Seal and
                          Shareholder Control Agreement

      Section 1.01. Registered and Other Offices. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of Incorporation
or statement of the Board of Directors filed with the Secretary of State of
Minnesota changing the registered office in the manner prescribed by law. The
corporation may have such other offices, within or without the State of
Minnesota, as the Board of Directors shall, from time to time, determine.

      Section 1.02. Corporate Seal. If so directed by the Board of Directors by
resolution, the corporation may use a corporate seal. The failure to use such
seal, however, shall not affect the validity of any documents executed on behalf
of the corporation. The seal need only include the word "seal", but it may also
include, at the discretion of the Board of Directors, such additional wording as
is permitted by law.

      Section 1.03. Shareholder Voting Agreement. In the event of any conflict
or inconsistency between these Bylaws, or any amendment thereto, and any
shareholder voting agreement, whenever adopted, such shareholder voting
agreement shall govern.

                                   ARTICLE II

                            Meetings of Shareholders

      Section 2.01. Time and Place of Meetings. Regular or special meetings of
the shareholders, if any, shall be held on the date and at the time and place
fixed by the Chief Executive Officer, the Chairman of the Board, or the Board of
Directors, except that a regular or special meeting called by, or at the demand
of a shareholder or shareholders, pursuant to Minnesota Statutes, Section
302A.431, Subd. 2, shall be held in the county where the principal executive
office is located.

      Section 2.02. Regular Meetings. At any regular meeting of the shareholders
there shall be an election of qualified successors for directors who serve for
an indefinite term or whose terms have expired or are due to expire within six
months after the date of the meeting. Any business appropriate for action by the
shareholders may be transacted at a regular meeting. No meeting shall be
considered a regular meeting unless specifically designated as such in the
notice of meeting or unless all the shareholders are present in person or by
proxy and none of them objects to such designation. Regular meetings may be held
no more frequently than once per year.


      Section 2.03 Demand by Shareholders. Regular or special meetings may be
demanded by a shareholder or shareholders, pursuant to the provisions of
Minnesota Statutes, Sections 302A.431, Subd. 2, and 302A.433, Subd. 2,
respectively. If a regular meeting of shareholders has not been held during the
immediately preceding 15 months, a shareholder or shareholders holding three
percent or more of the voting power of all shares entitled to vote may demand a
regular meeting of shareholders by written notice of demand given to the Chief
Executive Officer or the Chief Financial Officer of the corporation. A
shareholder or shareholders holding ten percent or more of the voting power of
all shares entitled to vote may demand a special meeting of shareholders by
written notice of demand given to the Chief Executive Officer or Chief Financial
Officer of the corporation and containing the purposes of the meeting. Within 30
days after receipt of the demand by one of those officers, the board shall cause
a special meeting of shareholders to be called and held on notice no later than
90 days after receipt of the demand, all at the expense of the corporation. If
the Board of Directors fails to cause a special meeting to be called and held as
required by this section, the shareholder or shareholders making the demand may
call the meeting by giving notice as required by Minnesota Statutes, Section
302A.435, all at the expense of the corporation. The business transacted at a
special meeting is limited to the purposes stated in the notice of the meeting.
Any business transacted at a special meeting that is not included in those
stated purposes is voidable by or on behalf of the corporation, unless all of
the shareholders have waived notice of the meeting in accordance with Minnesota
Statutes, Section 302A.435.

      Section 2.04. Quorum; Adjourned Meetings. The holders of a majority of the
voting power of the shares entitled to vote at a meeting constitute a quorum for
the transaction of business at such a meeting. Notwithstanding the preceding
sentence, if an action is required to be taken by the holders of a particular
series of Common Stock voting as a series, then the holders of a majority of the
voting power of the shares of such series entitled to vote at a meeting
constitute a quorum for the transaction of such business. Holders may be present
at a meeting either in person or by proxy. If a quorum is present when a duly
called or held meeting is convened, the shareholders present may continue to
transact business until adjournment, even though withdrawal of shareholders
originally present leaves less than the proportion or number otherwise required
for a quorum. In case a quorum shall not be present in person or by proxy at a
meeting, those present in person or by proxy may adjourn to such day as they
shall, by majority vote, agree upon, and a notice of such adjournment shall be
mailed to each shareholder entitled to vote a least five days before such
adjourned meeting. If a quorum is present in person or by proxy, a meeting may
be adjourned from time to time without notice, other than announcement at the
meeting. At adjourned meetings at which a quorum is present in person or by
proxy, any business may be transacted at the meeting as originally noticed.

      Section 2.05. Voting. At each meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote either in person
or by proxy. Unless otherwise provided by the Articles of Incorporation or a
shareholder voting agreement adopted pursuant to Minnesota Statutes, Section
302A.455, each shareholder shall have one vote for each share


                                      -2-


held. Upon demand of any shareholder, the vote upon any question before the
meeting shall be by ballot.

      Section 2.06. Notice of Meetings. Notice of all meetings of shareholders
shall be given to every holder of voting shares, except where the meeting is an
adjourned meeting and the date, time and place of the meeting were announced at
the time of adjournment. The notice shall be given at least 14, but not more
than 60 days before the date of the meeting, except that written notice of a
meeting at which an agreement of merger is to be considered shall be given to
all shareholders, whether entitled to vote or not, at least 14 days prior
thereto. Every notice of any special meeting shall state the purpose or purposes
for which the meeting has been called, and the business transacted at all
special meetings shall be confined to the purpose stated in the call, unless all
of the shareholders are present in person or by proxy and none of them objects
to consideration of a particular item of business.

      Section 2.07. Waiver of Notice. A shareholder may waive notice of any
meeting of shareholders. A waiver of notice by a shareholder entitled to notice
is effective whether given before, at or after the meeting and whether given in
writing, orally or by attendance.

      Section 2.08. Authorization Without a Meeting. Any action required or
permitted to be taken at a meeting of the shareholders may be taken without a
meeting as authorized by law.

      Section 2.09. Record Date. The Board of Directors may fix a time, not
exceeding 60 days preceding the date of any meeting of shareholders, as a record
date for the determination of the shareholders entitled to notice of and to vote
at such meeting, notwithstanding any transfer of shares on the books of the
corporation after any record date so fixed. The Board of Directors may close the
books of the corporation against the transfer of shares during the whole or any
part of such period. If the Board of Directors fails to fix a record date for
the determination of the shareholders entitled to notice of and to vote at any
meeting of the shareholders, the record date shall be the twentieth day
preceding the date of such meeting.

                                   ARTICLE III

                                    Directors

      Section 3.01. General. The business and affairs of the corporation shall
be managed by or shall be under the direction of the Board of Directors.

      Section 3.02. Number, Qualifications and Term of Office. The number of
directors shall consist of not less than three, except that in cases where all
of the shares of the corporation are owned beneficially and of record by less
than three persons, the number of directors may be less than three but not less
than the number of shareholders. The number of directors to be elected from time
to time shall be established by the Board of Directors. Directors need not be
shareholders. Each of the directors shall hold office until the regular meeting
of the


                                      -3-


shareholders next held after his election, until his successor shall have been
elected and shall qualify, or until he shall resign or shall have been removed.

      Section 3.03 Board Meetings; Place and Notice. Meetings of the Board of
Directors may be held from time to time at any place within or without the State
of Minnesota that the Board of Directors may designate. In the absence of
designation by the Board of Directors, Board meetings shall be held at the
principal executive office of the corporation, except as may be otherwise
unanimously agreed orally or in writing or by attendance. Special or regular
meetings of the Board of Directors may be called by the Chairman of the Board,
the Chief Executive Officer, or the Chief Financial Officer, upon not less than
48 hours notice. Any director may call a Board meeting by giving not less than
five business days notice to all directors of the date and time of the meeting.
The notice need not state the purpose of the meeting. Notice may be given by
mail, telephone, telegram, or in person. If the meeting schedule is adopted by
the Board of Directors, or if the date and time of a Board meeting has been
announced at a previous meeting, no notice is required.

      Section 3.04. Waiver of Notice. A director may waive notice of a meeting
of the Board. A waiver of notice by a director is effective, whether given
before, at or after the meeting and whether given in writing, orally or by
attendance.

      Section 3.05. Authorization Without a Meeting. Any action required or
permitted to be taken at a board meeting may be taken without a meeting as
authorized by law.

      Section 3.06. Quorum. A majority of directors currently holding office
shall constitute a quorum for the transaction of business.

      Section 3.07. Committees. The Board of Directors may, by resolution,
establish one or more committees in the manner provided by law. Such committees
shall have the power and authority granted to them by the Board of Directors in
such resolution, subject to any limitation imposed by law. Except for the
Executive Committee, committee members need not be directors. The corporation
may have an Executive Committee which shall have such power and authority as the
Board of Directors may specify in a resolution, said committee to consist of not
less than three nor more than five persons, one of whom shall be the Chief
Executive Officer of the corporation who shall serve as its Chairman, unless
said Committee determines otherwise by resolution.

      Section 3.08. Absent Directors. A director may give advance written
consent or opposition to a proposal to be acted on at a Board meeting. If the
director is not present at the meeting, consent or opposition to a proposal does
not constitute presence for purposes of determining the existence of a quorum,
but consent or opposition shall be counted as a vote in favor of, or against,
the proposal and shall be entered in the minutes or other record of action of
the meeting if the proposal acted on at the meeting is substantially the same or
has substantially the same effect as the proposal which the director has
consented or objected.


                                      -4-


      Section 3.09. Vacancies. In the event of the death, resignation or removal
of a director, the vacancy created thereby shall be filled by a director
selected by a majority of the remaining directors.

                                   ARTICLE IV

                                    Officers

      Section 4.01. Number. The officers of the corporation shall consist of a
Chief Executive Officer and a Chief Financial Officer. The Chief Executive
Officer shall preside at all meetings of the shareholders and shall have such
other duties as may be prescribed from time to time by the Board of Directors.
The Board of Directors may from time to time elect a Chairman who shall preside
at all meetings of the Board of Directors. The Chief Executive Officer shall
also see that all orders and resolutions of the Board of Directors are carried
into effect. The Chief Executive Officer and Chief Financial Officer shall have
such other duties as are prescribed by statute. The Board of Directors may elect
or appoint any other officers it deems necessary for the operation and
management of the corporation, each of whom shall have the powers, rights,
duties, responsibilities and terms of office determined by the Board of
Directors from time to time. Any number of offices or functions of those offices
may be held or exercised by the same person. If specific persons have not been
elected as President or Secretary, the Chief Executive Officer may execute
instruments or documents in those capacities. If a specific person has not been
elected to office of Treasurer, the Chief Financial Officer of the corporation
may sign instruments or documents in that capacity.

      Section 4.02. President. The President, if one shall be elected, shall
have such powers and shall perform such duties as may be specified in the Bylaws
or prescribed by the Board of Directors or by the Chairman of the Board or by
the Chief Executive Officer.

      Section 4.03. Vice Presidents. Each Vice President, if one or more are
elected, shall have such powers and shall perform such duties as may be
specified in the Bylaws or prescribed by the Board of Directors or by the
Chairman of the Board or by the Chief Executive Officer. In the event of the
absence or disability of the Chief Executive Officer, Vice Presidents shall
succeed to his power and duties in the order designated by the Board of
Directors.

      Section 4.04. Secretary. The Secretary, if one shall be elected, shall be
secretary of and shall attend all meetings of the shareholders and Board of
Directors and shall record all proceedings of such meetings in the minute book
of the corporation. He shall give proper notice of meetings of shareholders and
directors. He shall perform such other duties as may, from time to time, by
prescribed by the Board of Directors, by the Chairman of the Board, or by the
Chief Executive Officer.

      Section 4.05. Election and Term of Office. The Board of Directors shall
from time to time elect a Chairman of the Board of Directors, Chief Executive
Officer and Chief Financial


                                      -5-


Officer and any other officers or agents the Board of Directors deems necessary.
Such officers shall hold office until they are removed or their successors are
elected and qualified.

      Section 4.06. Delegation of Authority. An officer elected or appointed by
the Board of Directors may delegate some or all of the duties or powers of his
office to other persons, provided that such delegation is in writing.

      Section 4.07. Compensation of Officers. An officer shall be entitled only
to such compensation as shall be established by written contract or agreement
duly approved by or on behalf of the corporation, or established or approved by
resolution of the Board of Directors. Against such written contract, agreement
or resolution of the Board of Directors, no officer shall have a cause of action
against the corporation to recover any amount due or alleged to be due as
compensation for services in his capacity as an officer of the corporation.

                                    ARTICLE V

                            Shares and Their Transfer

      Section 5.01. Certificates for Shares. Every shareholder of the
corporation shall be entitled to a certificate, to be in such form as prescribed
by law and adopted by the Board of Directors, certifying the number of shares of
the corporation owned by him. The certificates shall be numbered in the order in
which they are issued and shall be signed by the Chief Executive Officer and
Secretary, if one shall be elected, of the corporation; provided, however, that
when the certificate is signed by a transfer agent or registrar, the signatures
of any of such officer upon the certificate may be facsimiles, engraved or
printed thereon, if authorized by the Board of Directors. Such certificates
shall also have typed or printed thereon such legend as may be required by any
shareholder control agreement. Every certificate surrendered to the corporation
for exchange or transfer shall be canceled, and no new certificate or
certificates shall be issued in exchange for any existing certificate until such
existing certificate shall have been so canceled.

      Section 5.02. Transfer of Shares. Transfer of shares on the books of the
corporation may be authorized only by the shareholder named in the certificate,
or the shareholder's legal representative, or the shareholder's duly authorized
attorney in fact, and upon surrender of the certificate or the certificates for
such shares. The corporation may treat, as the absolute owner of shares of the
corporation, the person or persons in whose name or names the shares are
registered on the books of the corporation.

      Section 5.03. Lost Certificates. Any shareholder claiming that a
certificate for shares has been lost, destroyed or stolen shall make an
affidavit of that fact in such form as the Board of Directors shall require and
shall, if the Board of Directors so requires, give the corporation a sufficient
indemnity bond, in form, in an amount, and with one or more sureties
satisfactory to the Board of Directors, to indemnify the corporation against any
claims which may be made against it on account of the reissue of such
certificate. A new certificate shall then be issued to


                                      -6-


said shareholder for the same number of shares as the one alleged to have been
destroyed, lost or stolen.

                                   ARTICLE VI

                                 Indemnification

      Section 6.01. Indemnification. The corporation shall indemnify, in
accordance with the terms and conditions of Minnesota Statutes, Section
302A.521, the following persons: (a) officers and former officers; (b) directors
and former directors; (c) members and former members of committees appointed; or
designated by the Board of Directors; and (d) employees and former employees of
the corporation. The corporation shall not be obligated to indemnify any other
person or entity, except to the extent such obligation shall be specifically
approved by resolution of the Board of Directors.

                                   ARTICLE VII

                                  Miscellaneous

      Section 7.01. Gender References. All references in these Bylaws to a party
in the masculine shall include the feminine and neuter.

      Section 7.02. Plurals. All references in the plural shall, where
appropriate, include the singular and all references in the singular shall,
where appropriate, include the plural.

                                  CERTIFICATION

      I, Jeffrey M. Shapiro, do hereby certify that I am the duly elected,
qualified or acting Secretary of Papetti's Acquisition, Inc., a corporation
organized under the laws of the State of Minnesota, and that the foregoing is a
true and correct copy of the Bylaws adopted by the Board of Directors of said
corporation effective as of Jan 14, 1997.


                                        /s/ Jeffrey M. Shapiro
                                        ----------------------------------------
                                        Jeffrey M. Shapiro, Secretary


                                      -7-

EX-3.33

                                                                    Exhibit 3.33

                            ARTICLES OF INCORPORATION
                                       OF
                               CASA TRUCKING, INC.

      The undersigned incorporator, being a natural person 18 years of age or
older, in order to form a corporate entity under Minnesota Statutes, Chapter
302A, hereby adopts the following Articles of Incorporation:

                                   ARTICLE I.

      Name: The name of this corporation shall be Casa Trucking, Inc.

                                   ARTICLE II.

      Duration: The duration of the corporation shall be perpetual.

                                  ARTICLE III.

      Purpose: The purpose or purposes for which this corporation is formed
shall be for general business purposes.

                                   ARTICLE IV.

      Registered Office: The address of the corporation's registered office is
324 Park National Bank Building, 5353 Wayzata Boulevard, Minneapolis, MN 55416.

                                   ARTICLE V.

      Capital Stock: The authorized capital stock of the corporation shall
consist of 10,000 shares, each of which shall have a par value of $.01.

      The sale of stock of this corporation by any shareholder may be restricted
in the Bylaws or in any contract between two or more shareholders to the extent
that said stock may be required by such Bylaws or contract to be offered first
to the corporation or to other shareholders at a price to be fixed in accordance
with such Bylaws or contract; provided, however, that no such restrictions shall
be valid unless stated upon the stock certificate.

      Each holder of record of common stock shall be entitled to one vote per
share of common stock standing in his or her name on the books of the
corporation. No shareholder entitled to vote shall have or exercise the right to
accumulate his or her votes in electing directors, and there shall be no
cumulative voting for any purpose whatsoever.

      The Board of Directors shall have the authority to establish by resolution
more than one class or series of shares, either preferred or common, and to fix
the relative rights, restrictions


and preferences of any such different classes or series and the authority to
convert shares of a class or series to another class or series and to effectuate
share dividends, splits or conversion of the corporation's outstanding shares.

      The Board of Directors shall have the authority to issue rights to convert
any of the corporation's securities into shares of stock of any class or
classes, the authority to issue options to purchase or subscribe for shares of
stock of any class or classes and the authority to issue share purchase or
subscription warrants or any other evidence of such option rights which set
forth the terms, provisions and conditions thereof, including the price or
prices at which such shares may be subscribed for or purchased. Such options,
warrants and rights may be transferable or nontransferable and separable or
inseparable from other securities of the corporation. The Board of Directors is
authorized to fix the terms, provisions and conditions of such options, warrants
and rights, including the conversion basis or bases and the option price or
prices at which shares may be subscribed for or purchased.

                                   ARTICLE VI.

      Preemptive Rights Denied: No holder of stock of this corporation shall
have any preferential, preemptive or other rights of subscription to any shares
of any class or series of stock of this corporation allotted or sold or to be
allotted or sold and now or hereafter authorized, or to any obligations or
securities convertible into any class or series of stock of this corporation or
any right of subscription to any part thereof.

                                  ARTICLE VII.

      Written Anion by Board: An action required or permitted to be taken by the
Board of Directors of the corporation may be taken by written action signed by
the number of directors that would be required to take the same action at a
meeting of the Board at which all directors are present, except that on an
action which requires shareholder approval the written action must be signed by
all the directors.

                                  ARTICLE VIII.

      Nonliability of Directors for Certain Actions: To the full extent that the
Minnesota Statutes, Chapter 302A, as it exists on the date hereof or may
hereafter be amended, permits the limitation or elimination of the liability of
directors, a director of this corporation shall not be liable to the corporation
or its shareholders for monetary damages for breach of fiduciary duty as a
director. Any amendment to or repeal of this Article VIII shall not adversely
affect any right or protection of a director of the corporation for or with
respect to any acts or omission of such director occurring prior to such
amendment or repeal.


                                      -2-


                                   ARTICLE IX.

      Indemnification: Directors and officers of the corporation and any person
serving or who has served as a director or officer of any other corporation or
entity at the request or direction of the Corporation shall be entitled to be
indemnified by the corporation to the full extent permitted by the Minnesota
Business Corporation Act or any successor statute and the Corporation shall have
the power to obtain insurance against any liability arising under this
provision.

                                   ARTICLE X.

      Bylaws: The power to adopt, amend or repeal Bylaws shall be vested in the
Board of Directors of the corporation, except to the extent otherwise limited by
the Minnesota Business Corporation Act.

                                   ARTICLE XI.

      Directors: The Board of Directors of this corporation shall consist of
such number of directors as shall be fixed in the manner provided in the Bylaws
of this corporation. Each director shall continue in office for the term for
which he or she was named or elected and until his or her successor is elected
and qualified.

      The Board of Directors of this corporation shall have full power and
authority to make and adopt Bylaws for the government of this corporation and
its affairs as it may deem advisable and necessary and as shall not be
inconsistent with the provisions of these Articles of Incorporation and to amend
or alter such Bylaws from time to time; provided, however, that the authority to
make and alter such Bylaws vested hereby in said board shall be subject to the
power and right of the shareholders to change or repeal such Bylaws.

      The names and addresses of the first Board of Directors is as follows:

      Gregg A. Ostrander
      President and Chief Executive Officer
      324 National Bank Building
      5353 Wayzata Boulevard
      Minneapolis, MN 55416

      Jeffrey M. Shapiro
      Chief Financial Officer and Secretary
      324 National Bank Building
      5353 Wayzata Boulevard
      Minneapolis, MN 55416


                                      -3-


                                  ARTICLE XII.

      Amendment: These Articles of Incorporation may be amended by the
affirmative vote of the holder or holders of the majority of the voting power of
the common stock present at a shareholders' meeting wherein said amendments are
submitted to a vote.

                                  ARTICLE XIII.

      Incorporator: The name and address of the incorporator is:

                         Lisa A. Smith
                         2000 Midwest Plaza Building West
                         801 Nicollet Mall
                         Minneapolis, MN 55402

      IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of February,
1997.


                                        /s/ Lisa A. Smith
                                        ----------------------------------------
                                        Lisa A. Smith

STATE OF MINNESOTA      )
                        ) ss.
COUNTY OF HENNEPIN      )

      The foregoing instrument was acknowledged before me this 11th day of
February, 1997 by LISA A. SMITH.


                                        /s/ Linda K. Sullivan
                                        ----------------------------------------
                                        Notary Public

2/07/97,LAS,62035_1M                    [SEAL]     LINDA K. SULLIVAN
                                                NOTARY PUBLIC- MINNESOTA
                                                     RAMSEY COUNTY
                                      My Commission Expires Jan. 31, [ILLEGIBLE]

                                                  STATE OF MINNESOTA
                                                  DEPARTMENT OF STATE
                                                         FILED
                                                     FEB 11 1997
                                                  Joan Anderson Growe
                                                   Secretary of State


                                      -4-


                       SECRETARY'S CERTIFICATE/INCUMBENCY

      The undersigned, being the duly elected Secretary of Casa Trucking, Inc.
(the "Corporation"), does hereby certify as follows:

      1. The undersigned has requisite knowledge of the affairs of the
Corporation to make the certifications provided herein and has performed all
required diligence to make such certifications.

      2. Such certification are provided as an inducement to First Union
Commercial Corporation or an affiliate or related party to enter into one or
more leases, financings, credit facilities other transactions (the
"Transaction") with the Corporation.

      3. The persons listed below are the duly elected officers of the
Corporation serving in the capacity indication as of the date of this
Certificate and have continually served in such capacity through the date of the
closing of the Transaction for which this Certificate is being furnished, and I
have witnessed each officer's execution of this Certificate.

           Name                 Signature                       Title
           ----                 ---------                       -----

Gregg A. Ostrander      /s/ Gregg A. Ostrander          C.E.O. / President
- -------------------     -------------------------       ------------------------
Jeffrey M. Shapiro      /s/ Jeffrey M. Shapiro          V.P. / Secretary
- -------------------     -------------------------       ------------------------
John D. Reedy           /s/ John D. Reedy               Chief Financial Officer
- -------------------     -------------------------       ------------------------

      4. Such officers have full power and authority to execute and deliver any
and all documents (the "Transaction Documents") required to be executed and
delivered by the Corporation in respect of the Transaction, the Transaction and
the Transaction Documents have been duly authorized by the Corporation and upon
execution and delivery of the Transaction Documents by any above-named officer,
such Transaction Documents will be valid, binding and enforceable against the
Corporation.

      IN WITNESS WHEREOF, the undersigned officer has executed this Certificate
under seal as of the 31st day of October, 1997.

                                        CASA TRUCKING, INC.


                                        By: /s/ Jeffrey M. Shapiro (Seal) N/A
                                           -------------------------------------
                                        Name: Jeffrey M. Shapiro
                                             -----------------------------------
                                        Title: Secretary
                                              ----------------------------------


================================================================================

                               State of Minnesota

                               ------------------
                               SECRETARY OF STATE
                               ------------------

                          CERTIFICATE OF INCORPORATION

      I, Joan Anderson Growe, Secretary of State of Minnesota, do certify that:
Articles of Incorporation, duly signed and acknowledged under oath, have been
filed on this date in the Office of the Secretary of State, for the
incorporation of the following corporation, under and in accordance with the
provisions of the chapter of Minnesota Statutes listed below.

      This corporation is now legally organized under the laws of Minnesota.

      Corporate Name: Casa Trucking, Inc.

      Corporate Charter Number: 9N-524

      Chapter Formed Under: 302A

      This certificate has been issued on 02/11/1997.


[SEAL]                                  /s/ Joan Anderson Growe
                                        ----------------------------------------
                                                             Secretary of State.

================================================================================

EX-3.34

                                                                    Exhibit 3.34

                                     BYLAWS
                                       OF
                               CASA TRUCKING, INC.

                                    ARTICLE I

                           Offices, Corporate Seal and
                         Shareholder Control Agreement


      Section 1.01. Registered and Other Offices. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of Incorporation
or statement of the Board of Directors filed with the Secretary of State of
Minnesota changing the registered office in the manner prescribed by law. The
corporation may have such other offices, within or without the State of
Minnesota, as the Board of Directors shall, from time to time, determine.

      Section 1.02. Corporate Seal. If so directed by the Board of Directors by
resolution, the corporation may use a corporate seal. The failure to use such
seal, however, shall not affect the validity of any documents executed on behalf
of the corporation. The seal need only include the word "seal", but it may also
include, at the discretion of the Board of Directors, such additional wording as
is permitted by law.

      Section 1.03. Shareholder Voting Agreement. In the event of any conflict
or inconsistency between these Bylaws, or any amendment thereto, and any
shareholder voting agreement, whenever adopted, such shareholder voting
agreement shall govern.

                                   ARTICLE II

                            Meetings of Shareholders

      Section 2.01. Time and Place of Meetings. Regular or special meetings of
the shareholders, if any, shall be held on the date and at the time and place
fixed by the Chief Executive Officer, the Chairman of the Board, or the Board of
Directors, except that a regular or special meeting called by, or at the demand
of a shareholder or shareholders, pursuant to Minnesota Statutes, Section
302A.431, Subd. 2, shall be held in the county where the principal executive
office is located.

      Section 2.02. Regular Meetings. At any regular meeting of the shareholders
there shall be an election of qualified successors for directors who serve for
an indefinite term or whose terms have expired or are due to expire within six
months after the date of the meeting. Any business appropriate for action by the
shareholders may be transacted at a regular meeting. No meeting shall be
considered a regular meeting unless specifically designated as such in the
notice of meeting or unless all the shareholders are present in person or by
proxy and none of them objects to such designation. Regular meetings may be held
no more frequently than once per year.


      Section 2.03. Demand by Shareholders. Regular or special meetings may be
demanded by a shareholder or shareholders, pursuant to the provisions of
Minnesota Statutes, Sections 302A.431, Subd. 2, and 302A.433, Subd. 2,
respectively. If a regular meeting of shareholders has not been held during the
immediately preceding 15 months, a shareholder or shareholders holding three
percent or more of the voting power of all shares entitled to vote may demand a
regular meeting of shareholders by written notice of demand given to the Chief
Executive Officer or the Chief Financial Officer of the corporation. A
shareholder or shareholders holding ten percent or more of the voting power of
all shares entitled to vote may demand a special meeting of shareholders by
written notice of demand given to the Chief Executive Officer or Chief Financial
Officer of the corporation and containing the purposes of the meeting. Within 30
days after receipt of the demand by one of those officers, the board shall cause
a special meeting of shareholders to be called and held on notice no later than
90 days after receipt of the demand, all at the expense of the corporation. If
the Board of Directors fails to cause a special meeting to be called and held as
required by this section, the shareholder or shareholders making the demand may
call the meeting by giving notice as required by Minnesota Statutes, Section
302A.435, all at the expense of the corporation. The business transacted at a
special meeting is limited to the purposes stated in the notice of the meeting.
Any business transacted at a special meeting that is not included in those
stated purposes is voidable by or on behalf of the corporation, unless all of
the shareholders have waived notice of the meeting in accordance with Minnesota
Statutes, Section 302A.435.

      Section 2.04. Quorum; Adjourned Meetings. The holders of a majority of the
voting power of the shares entitled to vote at a meeting constitute a quorum for
the transaction of business at such a meeting. Notwithstanding the preceding
sentence, if an action is required to be taken by the holders of a particular
series of Common Stock voting as a series, then the holders of a majority of the
voting power of the shares of such series entitled to vote at a meeting
constitute a quorum for the transaction of such business. Holders may be present
at a meeting either in person or by proxy. If a quorum is present when a duly
called or held meeting is convened, the shareholders present may continue to
transact business until adjournment, even though withdrawal of shareholders
originally present leaves less than the proportion or number otherwise required
for a quorum. In case a quorum shall not be present in person or by proxy at a
meeting, those present in person or by proxy may adjourn to such day as they
shall, by majority vote, agree upon, and a notice of such adjournment shall be
mailed to each shareholder entitled to vote a least five days before such
adjourned meeting. If a quorum is present in person or by proxy, a meeting may
be adjourned from time to time without notice, other than announcement at the
meeting. At adjourned meetings at which a quorum is present in person or by
proxy, any business may be transacted at the meeting as originally noticed.

      Section 2.05. Voting. At each meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote either in person
or by proxy. Unless otherwise provided by the Articles of Incorporation or a
shareholder voting agreement adopted pursuant to Minnesota Statutes, Section
302A.455, each shareholder shall have one vote for each share


                                      -2-


held. Upon demand of any shareholder, the vote upon any question before the
meeting shall be by ballot.

      Section 2.05. Notice of Meetings. Notice of all meetings of shareholders
shall be given to every holder of voting shares, except where the meeting is an
adjourned meeting and the date, time and place of the meeting were announced at
the time of adjournment. The notice shall be given at least 14, but not more
than 60 days before the date of the meeting, except that written notice of a
meeting at which an agreement of merger is to be considered shall be given to
all shareholders, whether entitled to vote or not, at least 14 days prior
thereto. Every notice of any special meeting shall state the purpose or purposes
for which the meeting has been called, and the business transacted at all
special meetings shall be confined to the purpose stated in the call, unless all
of the shareholders are present in person or by proxy and none of them objects
to consideration of a particular item of business.

      Section 2.06. Notice of Meetings. A shareholder may waive notice of any
meeting of shareholders. A waiver of notice by a shareholder entitled to notice
is effective whether given before, at or after the meeting and whether given in
writing, orally or by attendance.

      Section 2.07. Waiver of Notice. Authorization Without a Meeting. Any
action required or permitted to be taken at a meeting of the shareholders may be
taken without a meeting as authorized by law.

      Section 2.08. Record Date. The Board of Directors may fix a time, not
exceeding 60 days preceding the date of any meeting of shareholders, as a record
date for the determination of the shareholders entitled to notice of and to vote
at such meeting, notwithstanding any transfer of shares on the books of the
corporation after any record date so fixed. The Board of Directors may close the
books of the corporation against the transfer of shares during the whole or any
part of such period. If the Board of Directors fails to fix a record date for
the determination of the shareholders entitled to notice of and to vote at any
meeting of the shareholders, the record date shall be the twentieth day
preceding the date of such meeting.

                                   ARTICLE III

      Section 3.01. The business and affairs of the corporation shall be managed
by or shall be under the direction of the Board of Directors.

      Section 3.02. Number. Qualifications and Term of Office. The number of
directors shall consist of not less than three, except that in cases where all
of the shares of the corporation are owned beneficially and of record by less
than three persons, the number of directors may be less than three but not less
than the number of shareholders. The number of directors to be elected from time
to time shall be established by the Board of Directors. Directors need not be
shareholders. Each of the directors shall hold office until the regular meeting
of the


                                      -3-


shareholders next held after his election, until his, successor shall have been
elected and shall qualify, or until he shall resign or shall have been removed.

      Section 3.03. Board Meetings; Place and Notice. Meetings of the Board of
Directors may be held from time to time at any place within or without the State
of Minnesota that the Board of Directors may designate. In the absence of
designation by the Board of Directors, Board meetings shall be held at the
principal executive office of the corporation, except as may be otherwise
unanimously agreed orally or in writing or by attendance. Special or regular
meetings of the Board of Directors may be called by the Chairman of the Board,
the Chief Executive Officer, or the Chief Financial Officer, upon not less than
48 hours notice. Any director may call a Board meeting by giving not less than
five business days notice to all directors of the date and time of the meeting.
The notice need not state the purpose of the meeting. Notice may be given by
mail, telephone, telegram, or in person. If the meeting schedule is adopted by
the Board of Directors, or if the date and time of a Board meeting has been
announced at a previous meeting, no notice is required.

      Section 3.04. Waiver of Notice. A director may waive notice of a meeting
of the Board. A waiver of notice by a director is effective, whether given
before, at or after the meeting and whether given in writing, orally or by
attendance.

      Section 3.05. Authorization Without a Meeting. Any action required or
permitted to be taken at a board meeting may be taken without a meeting as
authorized by law.

      Section 3.06. Quorum. A majority of directors currently holding office
shall constitute a quorum for the transaction of business.

      Section 3.07. Committees. The Board of Directors may, by resolution,
establish one or more committees in the manner provided by law. Such committees
shall have the power and authority granted to them by the Board of Directors in
such resolution, subject to any limitation imposed by law. Except for the
Executive Committee, committee members need not be directors. The corporation
may have an Executive Committee which shall have such power and authority as the
Board of Directors may specify in a resolution, said committee to consist of not
less than three nor more than five persons, one of whom shall be the Chief
Executive Officer of the corporation who shall serve as its Chairman, unless
said Committee determines otherwise by resolution.

      Section 3.08. Absent Directors. A director may give advance written
consent or opposition to a proposal to be acted on at a Board meeting. If the
director is not present at the meeting, consent or opposition to a proposal does
not constitute presence for purposes of determining the existence of a quorum,
but consent or opposition shall be counted as a vote in favor of, or against,
the proposal and shall be entered in the minutes or other record of action of
the meeting if the proposal acted on at the meeting is substantially the same or
has substantially the same effect as the proposal which the director has
consented or objected.


                                      -4-


      Section 3.09. Vacancies. In the event of the death, resignation or removal
of a director, the vacancy created thereby shall be filled by a director
selected by a majority of the remaining directors.

                                   ARTICLE IV

                                    Officers

      Section 4.01. Number. The officers of the corporation shall consist of a
Chief Executive Officer and a Chief Financial Officer. The Chief Executive
Officer shall preside at all meetings of the shareholders and shall have such
other duties as may be prescribed from time to time by the Board of Directors.
The Board of Directors may from time to time elect a Chairman who shall preside
at all meetings of the Board of Directors. The Chief Executive Officer shall
also see that all orders and resolutions of the Board of Directors are carried
into effect. The Chief Executive Officer and Chief Financial Officer shall have
such other duties as are prescribed by statute. The Board of Directors may elect
or appoint any other officers it deems necessary for the operation and
management of the corporation, each of whom shall have the powers, rights,
duties, responsibilities and terms of office determined by the Board of
Directors from time to time. Any number of offices or functions of those offices
may be held or exercised by the same person. If specific persons have not been
elected as President or Secretary, the Chief Executive Officer may execute
instruments or documents in those capacities. If a specific person has not been
elected to office of Treasurer, the Chief Financial Officer of the corporation
may sign instruments or documents in that capacity.

      Section 4.02. President. The President, if one shall be elected, shall
have such powers and shall perform such duties as may be specified in the Bylaws
or prescribed by the Board of Directors or by the Chairman of the Board or by
the Chief Executive Officer.

      Section 4.03. Vice Presidents. Each Vice President, if one or more are
elected, shall have such powers and shall perform such duties as may be
specified in the Bylaws or prescribed by the Board of Directors or by the
Chairman of the Board or by the Chief Executive Officer. In the event of the
absence or disability of the Chief Executive Officer, Vice Presidents shall
succeed to his power and duties in the order designated by the Board of
Directors.

      Section 4.04. Secretary. The Secretary, if one shall be elected, shall be
secretary of and shall attend all meetings of the shareholders and Board of
Directors and shall record all proceedings of such meetings in the minute book
of the corporation. He shall give proper notice of meetings of shareholders and
directors. He shall perform such other duties as may, from time to time, by
prescribed by the Board of Directors, by the Chairman of the Board, or by the
Chief Executive Officer.

      Section 4.05. Election and Term of Office. The Board of Directors shall
from time to time elect a Chairman of the Board of Directors, Chief Executive
Officer and Chief Financial


                                      -5-


Officer and any other officers or agents the Board of Directors deems necessary.
Such officers shall hold office until they are removed or their successors are
elected and qualified.

      Section 4.06. Delegation of Authority. An officer elected or appointed by
the Board of Directors may delegate some or all of the duties or powers of his
office to other persons, provided that such delegation is in writing.

      Section 4.07. Compensation of Officers. An officer shall be entitled only
to such compensation as shall be established by written contract or agreement
duly approved by or on behalf of the corporation, or established or approved by
resolution of the Board of Directors. Against such written contract, agreement
or resolution of the Board of Directors, no officer shall have a cause of action
against the corporation to recover any amount due or alleged to be due as
compensation for services in his capacity as an officer of the corporation.

                                    ARTICLE V

                            Shares and Their Transfer

      Section 5.01. Certificates for Shares. Every shareholder of the
corporation shall be entitled to a certificate, to be in such form as prescribed
by law and adopted by the Board of Directors, certifying the number of shares of
the corporation owned by him. The certificates shall be numbered in the order in
which they are issued and shall be signed by the Chief Executive Officer and
Secretary, if one shall be elected, of the corporation; provided, however, that
when the certificate is signed by a transfer agent or registrar, the signatures
of any of such officer upon the certificate may be facsimiles, engraved or
printed thereon, if authorized by the Board of Directors. Such certificates
shall also have typed or printed thereon such legend as may be required by any
shareholder control agreement. Every certificate surrendered to the corporation
for exchange or transfer shall be canceled, and no new certificate or
certificates shall be issued in exchange for any existing certificate until such
existing certificate shall have been so canceled.

      Section 5.02. Transfer of Shares. Transfer of shares on the books of the
corporation may be authorized only by the shareholder named in the certificate,
or the shareholder's legal representative, or the shareholder's duly authorized
attorney in fact, and upon surrender of the certificate or the certificates for
such shares. The corporation may treat, as the absolute owner of shares of the
corporation, the person or persons in whose name or names the shares are
registered on the books of the corporation.

      Section 5.03. Lost Certificates. Any shareholder claiming that a
certificate for shares has been lost, destroyed or stolen shall make an
affidavit of that fact in such form as the Board of Directors shall require and
shall, if the Board of Directors so requires, give the corporation a sufficient
indemnity bond, in form, in an amount, and with one or more sureties
satisfactory to the Board of Directors, to indemnify the corporation against any
claims which may be made against it on account of the reissue of such
certificate. A new certificate shall then be issued to


                                      -6-


said shareholder for the same number of shares as the one alleged to have been
destroyed, lost or stolen.

                                   ARTICLE VI

      Section 6.01. Indemnification. The corporation shall indemnify, in
accordance with the terms and conditions of Minnesota Statutes, Section
302A.521, the following persons: (a) officers and former officers; (b) directors
and former directors; (c) members and former members of committees appointed; or
designated by the Board of Directors; and (d) employees and former employees of
the corporation. The corporation shall not be obligated to indemnify any other
person or entity, except to the extent such obligation shall be specifically
approved by resolution of the Board of Directors.

                                   ARTICLE VII

      Section 7.01. Gender References. All references in these Bylaws to a party
in the masculine shall include the feminine and neuter.

      Section 7.02. Plurals. All references in the plural shall, where
appropriate, include the singular and all references in the singular shall,
where appropriate, include the plural.

                                  CERTIFICATION

      I, Jeffrey M. Shapiro, do hereby certify that I am the duly elected,
qualified or acting Secretary of Casa Trucking, Inc., a corporation organized
under the laws of the State of Minnesota, and that the foregoing is a true and
correct copy of the Bylaws adopted by the Board of Directors of said corporation
effective as of__________________, 1997.


                                        /s/ Jeffrey M.
                                        ----------------------------------------
                                        Jeffrey M. Shapiro, Secretary


                                       -7-

EX-4.1

                                                                     Exhibit 4.1

                                                                  EXECUTION COPY

                         Michael Foods Acquisition Corp.

                                     - and -

                               Michael Foods, Inc.

                                  $200,000,000

               11 3/4% Senior Subordinated Notes due April 1, 2011

                               Purchase Agreement

                              dated March 16, 2001

                         Banc of America Securities LLC

                            Bear, Stearns & Co. Inc.



                                Table of Contents

                                                                            Page
                                                                            ----

Section 1.     Representations and Warranties..................................3
        (a)    No Registration Required........................................3
        (b)    No Integration of Offerings or General Solicitation.............3
        (c)    Eligibility for Resale Under Rule 144A..........................4
        (d)    The Offering Memorandum.........................................4
        (e)    The Purchase Agreement..........................................4
        (f)    The Registration Rights Agreement...............................5
        (g)    The DTC Letter of Representations...............................5
        (h)    Authorization of the Securities and the Exchange Securities.....5
        (i)    Authorization of the Indenture..................................6
        (j)    Authorization of the Supplemental Indenture.....................6
        (k)    Authorization of the Pledge Agreement...........................6
        (l)    Security Interest...............................................7
        (m)    Descriptions in the Offering Memorandum.........................7
        (n)    No Material Adverse Change......................................7
        (o)    Independent Accountants.........................................7
        (p)    Preparation of the Financial Statements.........................8
        (q)    Incorporation and Good Standing of Acquisition and the
               Company and its Subsidiaries....................................8
        (r)    Capitalization and Other Capital Stock Matters..................8
        (s)    Non-Contravention of Instruments; No Further
               Authorizations or Approvals Required............................9
        (t)    No Material Actions or Proceedings.............................10
        (u)    Intellectual Property Rights...................................11
        (v)    All Necessary Permits, Etc. ...................................11
        (w)    Title to Properties............................................11
        (x)    Material Agreements............................................11
        (y)    Tax Law Compliance.............................................12
        (z)    Company Not an "Investment Company"............................12
        (aa)   Insurance......................................................12
        (bb)   No Price Stabilization or Manipulation.........................12
        (cc)   Solvency.......................................................13
        (dd)   No Unlawful Contributions or Other Payments....................13
        (ee)   Company's Accounting System....................................13
        (ff)   Compliance with Environmental Laws.............................13
        (gg)   ERISA Compliance...............................................14
        (hh)   Regulation S Compliance........................................15
        (ii)   Taxes; Fees....................................................15
        (jj)   No Labor Disputes..............................................15
        (kk)   Merger.........................................................15
        (ll)   Senior Credit Facility.........................................15
        (mm)   Repayment of Existing Debt.....................................15
        (nn)   No Operations..................................................16


                                       i


Section 2.     Purchase, Sale and Delivery of the Securities..................16
        (a)    The Securities.................................................16
        (b)    The Closing Date...............................................16
        (c)    Delivery of the Notes..........................................16
        (d)    Delivery of Offering Memorandum to the Initial Purchasers......17
        (e)    Initial Purchasers as Qualified Institutional Buyer............17

Section 3.     Additional Covenants...........................................17
        (a)    Initial Purchasers' Review of Proposed
               Amendments and Supplements.....................................17
        (b)    Amendments and Supplements to the Offering Memorandum
               and Other Securities Act Matters...............................17
        (c)    Copies of the Offering Memorandum..............................18
        (d)    Blue Sky Compliance............................................18
        (e)    Use of Proceeds................................................18
        (f)    Depositary.....................................................18
        (g)    Additional Issuer Information..................................18
        (h)    Future Agreement Not to Offer or Sell Additional Securities....19
        (i)    Future Reports to the Initial Purchasers.......................19
        (j)    No Integration.................................................19
        (k)    Legended Securities............................................20
        (l)    PORTAL.........................................................20
        (m)    Rating of Securities...........................................20
        (n)    Collateral.....................................................20

Section 4.     Payment of Expenses............................................20

Section 5.     Conditions of the Obligations of the Initial Purchasers........21
        (a)    Accountants' Comfort Letter....................................21
        (b)    No Material Adverse Change or Ratings Agency Change............21
        (c)    Opinion of Counsel for Acquisition.............................21
        (d)    Opinion of Counsel for the Company.............................21
        (e)    Opinion of Counsel for the Initial Purchasers..................22
        (f)    Officers' Certificate..........................................22
        (g)    Bring-down Comfort Letters.....................................22
        (h)    PORTAL Listing.................................................22
        (i)    Registration Rights Agreement..................................22
        (j)    Deposit of Collateral..........................................22
        (k)    Depositary.....................................................23
        (l)    Pledge Agreement...............................................23
        (m)    Agreement with Vestar and the Collateral Agent.................23
        (n)    Additional Documents...........................................23

Section 6.     Reimbursement of Initial Purchasers' Expenses..................23

Section 7.     Offer, Sale and Resale Procedures..............................23
        (a)    Offers and Sales Only to Qualified Institutional Buyers
               and Non-U.S. Persons...........................................23


                                       ii


        (b)    No General Solicitation........................................24
        (c)    Restrictions on Transfer.......................................24

Section 8.     Indemnification................................................25
        (a)    Indemnification of the Initial Purchasers......................25
        (b)    Indemnification of Acquisition, the Company and
               their Directors and Officers...................................26
        (c)    Notifications and Other Indemnification Procedures.............27
        (d)    Settlements....................................................27

Section 9.     Contribution...................................................28

Section 10.    Termination of this Agreement..................................29

Section 11.    Representations and Indemnities to Survive Delivery............29

Section 12.    Notices........................................................30

Section 13.    Successors.....................................................31

Section 14.    Partial Unenforceability.......................................31

Section 15.    Governing Law; Consent to Jurisdiction.........................31
        (a)    Governing Law Provisions.......................................31
        (b)    Consent to Jurisdiction........................................31

Section 16.    Default of One or More of the Several Initial Purchasers.......32

Section 17.    General Provisions.............................................32

Section 18.    Liability of the Company Prior to the Merger...................33

SCHEDULE A       -    Guarantors

SCHEDULE B       -    Initial Purchasers

SCHEDULE C       -    Material Agreements

SCHEDULE D       -    Domestic Subsidiaries of Michael Foods, Inc.

EXHIBIT A        -    Form of Registration Rights Agreement

EXHIBIT B        -    Form of Pledge Agreement

EXHIBIT C        -    Form of Opinion of Counsel for Acquisition

EXHIBIT D        -    Form of Opinion of Counsel to the Company


                                      iii


ANNEX 1          -    Terms and Conditions of Offers and Sales


                                       iv


                               Purchase Agreement

                                                                  March 16, 2001

BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
   as Initial Purchasers
c/o BANC OF AMERICA
9 West 57th Street, 47th Floor New
York, NY 10019

Ladies and Gentlemen:

            Introductory. Michael Foods Acquisition Corp., a Minnesota
corporation ("Acquisition"), proposes to issue and sell to Banc of America
Securities LLC and Bear, Stearns & Co. Inc. (the "Initial Purchasers"), acting
severally and not jointly, the respective amounts set forth in such Schedule B
of a $200,000,000 aggregate principal amount of Acquisition's 11 3/4% Senior
Subordinated Notes due April 1, 2011 (the "Notes").

            The Notes will be issued pursuant to an indenture, dated as of March
27, 2001 (the "Indenture"), between Acquisition and BNY Midwest Trust Company,
as trustee (the "Trustee"). Notes issued in book-entry form will be issued in
the name of The Depository Trust Company (the "Depositary") or its nominee
pursuant to a letter of representations, to be dated as of the Closing Date (as
defined in Section 2) to be entered into in connection with the purchase and
sale of the Securities (the "DTC Letter of Representations"), among Acquisition,
the Trustee and the Depositary.

            As described in the Offering Memorandum (as defined below), the
Notes are being sold as part of the financing that will be used to consummate
the acquisition of Michael Foods, Inc., a Minnesota corporation (the "Company")
pursuant to an Agreement and Plan of Merger dated as of December 21, 2000, as
amended on March 6, 2001 (the "Merger Agreement") among the Company, M-Foods
Holdings, Inc. and Acquisition, pursuant to which Acquisition will merge with
and into the Company (the "Merger"), and the Company will be the surviving
corporation and a wholly owned subsidiary of M-Foods Holdings, Inc. M-Foods
Holdings, Inc. is a corporation owned by M-Foods Investors, LLC, which, at the
consummation of the Merger, will be owned by affiliates of Vestar Capital
Partners IV, L.P. ("Vestar") and Goldner Hawn Johnson & Morrison Incorporated,
certain members of the Company's senior management and existing stockholders.
The Merger is subject to the approval of a majority of the shareholders of the
Company.



            All the proceeds from the issuance of the Notes will be delivered to
and held by BNY Midwest Trust Company, as collateral agent (the "Collateral
Agent"), pursuant to a collateral pledge and security agreement, dated March 27,
2001 (the "Pledge Agreement"). In connection with the consummation of the Merger
and the satisfaction of certain conditions set forth in the Pledge Agreement,
the Collateral Agent will release the Collateral (as defined in the Pledge
Agreement) to or upon the order of Acquisition. In the event the Merger is not
consummated prior to May 31, 2001, Acquisition will be required to redeem the
Notes in accordance with their terms.

            As a result of the Merger, all of Acquisition's obligations under
this Agreement, the Registration Rights Agreement (defined below), the Indenture
and the Notes will, by operation of law, become obligations of the Company. In
connection with the release of the Collateral in connection with the
consummation of the Merger and after consummation of the Merger, the Trustee,
the Company and the Guarantors will enter into a supplemental indenture (the
"Supplemental Indenture"), a form of which is included as an attachment to the
Indenture, whereby the obligations of Acquisition under the Notes and the
Indenture will become obligations of the Company and guaranteed by the
Guarantors (as defined below).

            The payment of principal of, premium and Liquidated Damages (as
defined in the Indenture), if any, and interest on the Notes and the Exchange
Notes (as defined below) will, upon consummation of the Merger, become fully and
unconditionally guaranteed on a senior subordinated and unsecured basis, jointly
and severally by (i) each of the Company's domestic subsidiaries listed in
Schedule A attached hereto, and (ii) any subsidiary of the Company formed or
acquired after the Closing Date that executes an additional guarantee in
accordance with the terms of the Indenture, and respective successors and
assigns of the subsidiaries of the Company referred to in (i) and (ii) above
(collectively, the "Guarantors"), pursuant to their guarantees (the
"Guarantees"). The Notes and the Guarantees attached thereto are herein
collectively referred to as the "Securities"; and the Exchange Notes and the
Guarantees attached thereto are herein collectively referred to as the "Exchange
Securities."

            The holders of the Notes will be entitled to the benefits of a
registration rights agreement, to be dated as of March 27, 2001 (the
"Registration Rights Agreement"), among Acquisition (and, after the Merger, the
Company) and the Initial Purchasers, substantially in the form of Exhibit A
attached hereto, pursuant to which Acquisition (and, after the Merger, the
Company) agrees to file, within 90 days of the Closing Date, a registration
statement with the Securities and Exchange Commission (the "Commission")
registering the Exchange Securities under the Securities Act of 1933, as amended
(the "Securities Act," which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder).

            Acquisition and the Company understand that the Initial Purchasers
propose to make an offering of the Securities on the terms and in the manner set
forth herein and in the Offering Memorandum (as defined below) and agree that
the Initial Purchasers may resell, subject to the conditions set forth herein,
all or a portion of the Securities to purchasers (the "Subsequent Purchasers")
at any time after the date of this Agreement. The Securities are to be offered
and sold to or through the Initial Purchasers without being registered with the
Commission under the Securities Act, in reliance upon exemptions therefrom. The
terms of the Securities and the Indenture will require that investors that
acquire Securities expressly agree


                                       2


that Securities may only be resold or otherwise transferred, after the date
hereof, if such Securities are registered for sale under the Securities Act or
if an exemption from the registration requirements of the Securities Act is
available (including the exemptions afforded by Rule 144A under the Securities
Act ("Rule 144A") or Regulation S under the Securities Act ("Regulation S")).

            Acquisition, with the assistance of the Company, has prepared and
delivered to the Initial Purchasers copies of a preliminary offering memorandum,
dated March 2, 2001 (the "Preliminary Offering Memorandum"), and has prepared
and will deliver to the Initial Purchasers, copies of the Offering Memorandum
(defined below), describing the terms of the Securities, each for use by the
Initial Purchasers in connection with their solicitation of offers to purchase
the Securities. As used herein, the "Offering Memorandum" shall mean, with
respect to any date or time referred to in this Agreement, the offering
memorandum, dated March 16, 2001, including amendments or supplements thereto,
in the most recent form that has been prepared and delivered by Acquisition,
with the assistance of the Company, to the Initial Purchasers in connection with
their solicitation of offers to purchase Securities. Further, any reference to
the Preliminary Offering Memorandum or the Offering Memorandum shall be deemed
to refer to and include any Additional Issuer Information (as defined in Section
3(g)) furnished by Acquisition or the Company prior to the completion of the
distribution of the Securities.

            All references in this Agreement to financial statements and other
information which is "contained," "included" or "stated" in the Offering
Memorandum (or other references of like import) shall be deemed to mean and
include all such financial statements and other information which are
incorporated by reference in the Offering Memorandum.

            Each of Acquisition and the Company hereby confirms its respective
agreement with the Initial Purchasers as follows:

            Section 1. Representations and Warranties. Acquisition and the
Company hereby severally and not jointly represent, warrant and covenant to each
Initial Purchaser as follows:

            (a) No Registration Required. Subject to compliance by the Initial
      Purchasers with the representations and warranties set forth in Section
      2(e) hereof and with the procedures set forth in Section 7 hereof, it is
      not necessary in connection with the offer, sale and delivery of the
      Securities to the Initial Purchasers and to each Subsequent Purchaser in
      the manner contemplated by this Agreement and the Offering Memorandum to
      register the Securities under the Securities Act or, until such time as
      the Exchange Securities are issued pursuant to an effective registration
      statement, to qualify the Indenture under the Trust Indenture Act of 1939
      (the "Trust Indenture Act," which term, as used herein, includes the rules
      and regulations of the Commission promulgated thereunder).

            (b) No Integration of Offerings or General Solicitation. None of
      Acquisition, the Company or any Guarantor has, directly or indirectly,
      solicited any offer to buy or


                                       3


      offered to sell, and none of them will, directly or indirectly, solicit
      any offer to buy or offer to sell, in the United States or to any United
      States citizen or resident, any security which is or would be integrated
      with the sale of the Securities in a manner that would require the
      Securities to be registered under the Securities Act. None of Acquisition,
      the Company, the Guarantors, their respective affiliates (as such term is
      defined in Rule 501(b) under the Securities Act (each, an "Affiliate")) or
      any person acting on their behalf (other than the Initial Purchasers, as
      to whom neither Acquisition, the Company nor any Guarantor makes any
      representation or warranty) has engaged or will engage, in connection with
      the offering of the Securities, in any form of general solicitation or
      general advertising within the meaning of Rule 502(c) under the Securities
      Act. With respect to those Securities sold in reliance upon Regulation S,
      (i) none of Acquisition, the Company, the Guarantors, their Affiliates or
      any person acting on their behalf (other than the Initial Purchasers, as
      to whom neither Acquisition, the Company nor any Guarantor makes any
      representation or warranty) has engaged or will engage in any directed
      selling efforts within the meaning of Regulation S and (ii) each of
      Acquisition, the Company, the Guarantors and their Affiliates and any
      person acting on their behalf (other than the Initial Purchasers, as to
      whom neither the Company nor any Guarantor makes any representation or
      warranty) has complied and will comply with the offering restrictions set
      forth in Regulation S.

            (c) Eligibility for Resale Under Rule 144A. The Securities are
      eligible for resale pursuant to Rule 144A and will not be, at the Closing
      Date, of the same class as securities listed on a national securities
      exchange registered under Section 6 of the Securities Exchange Act of
      1934, as amended (the "Exchange Act," which term, as used herein, includes
      the rules and regulations of the Commission promulgated thereunder) or
      quoted in a U.S. automated interdealer quotation system.

            (d) The Offering Memorandum. The Offering Memorandum does not, and
      at the Closing Date will not, include an untrue statement of a material
      fact or omit to state a material fact necessary in order to make the
      statements therein, in the light of the circumstances under which they
      were made, not misleading; provided that this representation, warranty and
      agreement shall not apply to statements in or omissions from the Offering
      Memorandum made in reliance upon and in conformity with information
      furnished to Acquisition or the Company, as the case may be, in writing by
      the Initial Purchasers expressly for use in the Offering Memorandum. Each
      of the Preliminary Offering Memorandum and the Offering Memorandum, as of
      its date, contains all the information specified in, and meeting the
      requirements of Rule 144A(d)(4). None of Acquisition, the Company or any
      Guarantor has distributed and none of them will distribute, prior to the
      later of the Closing Date and the completion of the Initial Purchasers'
      distribution of the Securities, any offering material in connection with
      the offering and sale of the Securities other than the Preliminary
      Offering Memorandum, the Offering Memorandum or as agreed upon by the
      Initial Purchasers.

            (e) The Purchase Agreement. This Agreement has been duly authorized,
      executed and delivered by, and (assuming the due authorization, execution
      and delivery thereof by the Initial Purchasers) is a valid and binding
      agreement of, Acquisition and the Company, enforceable in accordance with
      its terms, except as rights to indemnification

                                       4


      and contribution hereunder may be limited by applicable law and except as
      the enforcement hereof may be limited by bankruptcy, insolvency,
      reorganization, moratorium or other similar laws relating to or affecting
      the rights and remedies of creditors or by general equitable principles.

            (f) The Registration Rights Agreement. At the Closing Date, the
      Registration Rights Agreement will have been duly authorized, executed and
      delivered by, and (assuming the due authorization, execution and delivery
      thereof by the other parties thereto) will be a valid and binding
      agreement of, Acquisition (and, after the Merger, the Company),
      enforceable in accordance with its terms, except as to rights to
      indemnification and contribution thereunder may be limited by applicable
      law and, except as the enforcement thereof may be limited by bankruptcy,
      insolvency, reorganization, moratorium or other similar laws relating to
      or affecting the rights and remedies of creditors or by general equitable
      principles. Pursuant to the Registration Rights Agreement, Acquisition
      (and, after the Merger, the Company) will agree to file with the
      Commission, under the circumstances set forth therein, (i) a registration
      statement under the Securities Act relating to another series of debt
      securities of Acquisition (and, after the Merger, the Company) with terms
      substantially identical to the Notes (the "Exchange Notes") to be offered
      in exchange for the Notes (the "Exchange Offer") and (ii) to the extent
      required by the Registration Rights Agreement, a shelf registration
      statement pursuant to Rule 415 of the Securities Act relating to the
      resale by certain holders of the Notes, and in each case, to use its
      reasonable best efforts to cause such registration statements to be
      declared effective.

            (g) The DTC Letter of Representations. At the Closing Date, the DTC
      Letter of Representations will have been duly authorized, executed and
      delivered by, and (assuming the due authorization, execution and delivery
      thereof by the other parties thereto) will be a valid and binding
      agreement of, Acquisition (and, after the Merger, the Company),
      enforceable in accordance with its terms except as the enforcement thereof
      may be limited by bankruptcy, insolvency, reorganization, moratorium or
      other similar laws relating to or affecting the rights and remedies of
      creditors or by general equitable principles.

            (h) Authorization of the Securities and the Exchange Securities. (i)
      The Notes to be purchased by the Initial Purchasers from Acquisition are
      in the form contemplated by the Indenture, have been duly authorized for
      issuance and sale pursuant to this Agreement and the Indenture and, at the
      Closing Date, will have been duly executed by Acquisition and, when
      authenticated in the manner provided for in the Indenture and delivered
      against payment of the purchase price therefor, will constitute


                                       5


      valid and binding agreements of Acquisition (and after the Merger, the
      Company), enforceable in accordance with their terms, except as the
      enforcement thereof may be limited by bankruptcy, insolvency,
      reorganization, moratorium or other similar laws relating to or affecting
      the rights and remedies of creditors or by general equitable principles
      and will be entitled to the benefits of the Indenture; (ii) prior to their
      issuance, the Exchange Notes will have been duly and validly authorized
      for issuance by the Company, and when issued and authenticated in
      accordance with the terms of the Indenture, the Supplemental Indenture,
      the Registration Rights Agreement and the Exchange Offer, will constitute
      valid and binding obligations of the Company, enforceable against the
      Company in accordance with their terms, except as the enforcement thereof
      may be limited by bankruptcy, insolvency, reorganization, moratorium, or
      similar laws relating to or affecting enforcement of the rights and
      remedies of creditors or by general principles of equity and will be
      entitled to the benefits of the Indenture; (iii) the Guarantees of the
      Notes will be in the form contemplated by the Supplemental Indenture, will
      have been, prior to their issuance, duly authorized for issuance and sale
      pursuant to this Agreement and the Supplemental Indenture and, at the time
      of the consummation of the Merger, will have been duly executed by each of
      the Guarantors and, when the Guarantees have been authenticated in the
      manner provided for in the Supplemental Indenture and delivered, will
      constitute valid and binding agreements of the Guarantors, enforceable in
      accordance with their terms, except as the enforcement thereof may be
      limited by bankruptcy, insolvency, reorganization, moratorium or other
      similar laws relating to or affecting the rights and remedies of creditors
      or by general equitable principles and will be entitled to the benefits of
      the Indenture; and (iv) prior to their issuance, the Guarantees of the
      Exchange Notes will be in the form contemplated by the Supplemental
      Indenture and will have been duly and validly authorized for issuance and
      sale pursuant to the Supplemental Indenture and, at the time of the
      consummation of the Merger, when issued and authenticated in accordance
      with the terms of the Indenture and the Supplemental Indenture, will
      constitute valid and binding agreements of the Guarantors, enforceable in
      accordance with their terms, except as the enforcement thereof may be
      limited by bankruptcy, insolvency, reorganization, moratorium or other
      similar laws relating to or affecting the rights and remedies of creditors
      or by general equitable principles and will be entitled to the benefits of
      the Indenture and the Supplemental Indenture.

            (i) Authorization of the Indenture. The Indenture has been duly
      authorized by Acquisition and, at the Closing Date, will have been duly
      executed and delivered by Acquisition and (assuming due authorization,
      execution and delivery by other parties thereto) will constitute a valid
      and binding agreement of Acquisition (and, after the Merger, the Company),
      enforceable against Acquisition (and, after the Merger, the Company) in
      accordance with its terms, except as the enforcement thereof may be
      limited by bankruptcy, insolvency, reorganization, moratorium or other
      similar laws relating to or affecting the rights and remedies of creditors
      or by general equitable principles.

            (j) Authorization of the Supplemental Indenture. Prior to the
      consummation of the Merger, the Supplemental Indenture will be duly
      authorized by the Company and the Guarantors and, upon consummation of the
      Merger, will have been duly executed and delivered by the Company and the
      Guarantors and (assuming due authorization, execution and delivery by
      other parties thereto) will constitute a valid and binding agreement of
      the Company and the Guarantors, enforceable against the Company and the
      Guarantors in accordance with its terms, except as the enforcement thereof
      may be limited by bankruptcy, insolvency, reorganization, moratorium or
      other similar laws relating to or affecting the rights and remedies of
      creditors or by general equitable principles.

            (k) Authorization of the Pledge Agreement. The Pledge Agreement has
      been duly authorized by Acquisition and, at the Closing Date, will have
      been duly executed


                                       6


      and delivered by Acquisition and (assuming due authorization, execution
      and delivery by other parties thereto) will constitute a valid and binding
      agreement of Acquisition (and, after the Merger, the Company), enforceable
      against Acquisition (and, after the Merger, the Company) in accordance
      with its terms, except as the enforcement thereof may be limited by
      bankruptcy, insolvency, reorganization, moratorium or other similar laws
      relating to or affecting the rights and remedies of creditors or by
      general equitable principles.

            (l) Security Interest. As of the Closing Date, all actions necessary
      to perfect and protect the security interest in the Collateral (as defined
      in the Pledge Agreement) created under the Pledge Agreement have been duly
      made or taken and will be in full force and effect, and the Pledge
      Agreement creates in favor of the Trustee and the holders of the Notes,
      together with such actions, a perfected first priority security interest
      in the Collateral, enforceable as against all creditors of Acquisition
      (and any persons purporting to purchase any of the Collateral from
      Acquisition).

            (m) Descriptions in the Offering Memorandum. The Notes, the
      Guarantees of the Notes, the Indenture and the Pledge Agreement conforms,
      or will conform, in all material respects to the respective statements
      relating thereto contained in the Offering Memorandum. The Exchange
      Securities and the Guarantees of the Exchange Securities will conform in
      all material respects to the respective statements relating thereto
      contained in the Offering Memorandum and the Registration Statement at the
      time such Registration Statement becomes effective.

            (n) No Material Adverse Change. Except as otherwise disclosed in the
      Offering Memorandum, subsequent to the respective dates as of which
      information is given in the Offering Memorandum: (i) there has been no
      material adverse change or any development that could reasonably be
      expected to result in a material adverse change, in the condition,
      financial or otherwise, or in the earnings, business, operations or
      prospects, of Acquisition or the Company and its subsidiaries considered
      as one entity; (ii) any development that could result in a material delay
      of the consummation of the Merger or result in the termination of the
      Merger Agreement (any such change or development referred to in clauses
      (i) and (ii) above is called a "Material Adverse Change"); (iii)
      Acquisition and the Company and its subsidiaries considered as one entity
      have not incurred any material liability or obligation, indirect, direct
      or contingent, not in the ordinary course of business nor entered into any
      material transaction or agreement not in the ordinary course of business,
      except in connection with the Merger and related transactions; and (iv)
      there has been no dividend or distribution of any kind declared, paid or
      made by Acquisition, the Company or any of its subsidiaries on any class
      of capital stock (except for dividends paid by a subsidiary of the Company
      to the Company or to another subsidiary of the Company) or repurchase or
      redemption by Acquisition, the Company or any of its subsidiaries of any
      class of capital stock.

            (o) Independent Accountants. Grant Thornton LLP (the "Independent
      Accountants"), who have expressed their opinion with respect to the
      financial statements (which term as used in this Agreement includes the
      related notes thereto) included in the


                                       7


      Offering Memorandum are independent public or certified public accountants
      with respect to the Company within the meaning of Regulation S-X under the
      Exchange Act.

            (p) Preparation of the Financial Statements. The consolidated
      financial statements of the Company, together with the related notes,
      included in the Offering Memorandum present fairly the consolidated
      financial position of the Company and its subsidiaries as of and at the
      dates indicated and the results of their operations and cash flows for the
      periods specified. The financial statements included in the Offering
      Memorandum comply as to form with the applicable requirements of the
      Securities Act. Such financial statements have been prepared in conformity
      with generally accepted accounting principles as applied in the United
      States applied on a consistent basis throughout the periods involved,
      except as may be expressly stated in the related notes thereto. The
      financial data with respect to the Company and its subsidiaries set forth
      in the Offering Memorandum under the captions "Offering Memorandum
      Summary--Summary Historical and Condensed Consolidated Pro Forma Financial
      Data," "Unaudited Pro Forma Condensed Consolidated Financial Statements"
      and "Selected Historical Financial Data" fairly present the historical
      financial information set forth therein on a basis consistent with that of
      the audited and unaudited financial statements contained in the Offering
      Memorandum. The unaudited pro forma financial data of the Company and its
      subsidiaries, and the related notes thereto included in the Offering
      Memorandum present fairly the information contained therein, have been
      prepared in accordance with the Commission's rules and guidelines with
      respect to pro forma financial statements and have been properly presented
      on the bases described therein, and the assumptions used in the
      preparation thereof are believed to be reasonable and the adjustments used
      therein are appropriate to give effect to the transactions and
      circumstances referred to therein.

            (q) Incorporation and Good Standing of Acquisition and the Company
      and its Subsidiaries. Each of Acquisition, the Company and the
      subsidiaries of the Company has been duly organized and is validly
      existing as a corporation, limited partnership or cooperative, as the case
      may be, in good standing under the laws of the jurisdiction of its
      organization and has the power and authority to own, lease and operate its
      properties and to conduct its business as described in the Offering
      Memorandum and to enter into and/or perform its obligations, as the case
      may be, under each of this Agreement, the Indenture, the Registration
      Rights Agreement, the DTC Letter of Representations, the Pledge Agreement,
      the Securities and the Exchange Securities to which it is a party. Each of
      Acquisition, the Company and each of its subsidiaries is duly qualified as
      a foreign corporation, limited partnership or cooperative, as the case may
      be, to transact business and is in good standing in each jurisdiction in
      which such qualification is required, whether by reason of the ownership
      or leasing of property or the conduct of business, except for such
      jurisdictions where the failure to so qualify or to be in good standing
      would not, individually or in the aggregate, result in a Material Adverse
      Change.

            (r) Capitalization and Other Capital Stock Matters. At December 31,
      2000, on a consolidated basis, after giving pro forma effect to (i) the
      issuance and sale of the Securities pursuant hereto, (ii) the consummation
      of the Merger, the funding of the senior credit facility to be entered
      into by the Company upon consummation of the Merger (the


                                       8


      "Senior Credit Facility"), the sale of units of M-Foods Investors, LLC and
      the repayment of certain of the existing debt of the Company, as described
      in the Offering Memorandum and (iii) the application of the proceeds from
      the issuance and sale of the Securities and the funding of the Senior
      Credit Facility, in the manner described under the caption "Use of
      Proceeds" in the Offering Memorandum, the Company would have an authorized
      and outstanding capitalization as set forth in the Offering Memorandum
      under the caption "Capitalization" under the heading "Pro Forma." All of
      the outstanding shares of capital stock of Acquisition and the Company
      have been, and in the case of the Company after consummation of the Merger
      will continue to be, duly authorized and validly issued, are fully paid
      and nonassessable. None of the outstanding shares of capital stock of
      Acquisition were, or in the case of the Company after the consummation of
      the Merger will be, issued in violation of any preemptive rights, rights
      of first refusal or other similar rights to subscribe for or purchase
      securities of Acquisition or the Company, as the case may be. There are no
      authorized or outstanding options, warrants, preemptive rights, rights of
      first refusal or other rights to purchase, or equity or debt securities
      convertible into or exchangeable or exercisable for, any capital stock of
      Acquisition or the Company or any of the subsidiaries of the Company,
      other than those described in the Offering Memorandum. The description of
      the Company's stock option, stock bonus, stock purchase and other stock
      plans or arrangements, and the options or other rights granted thereunder,
      set forth in the Offering Memorandum accurately and fairly describes such
      plans, arrangements, options and rights. As of the date hereof, all of the
      issued and outstanding capital stock of Acquisition has been duly
      authorized and validly issued, is fully paid and nonassessable and is
      owned directly by M-Foods Holdings, Inc., free and clear of any security
      interest, mortgage, pledge, lien, encumbrance or claim and, following the
      Merger, except as described in the Offering Memorandum, all of the issued
      and outstanding capital stock of the Company will have been duly
      authorized and validly issued, fully paid and nonassessable and will be
      owned directly by M-Foods Holdings, Inc., free and clear of any security
      interest, mortgage, pledge, lien, encumbrance or claim. In addition, all
      of the issued and outstanding capital stock of each subsidiary, except as
      described in the Offering Memorandum, has been duly authorized and validly
      issued, is fully paid and nonassessable and is owned by the Company,
      directly or through subsidiaries, free and clear of any security interest,
      mortgage, pledge, lien, encumbrance or claim. The only domestic
      subsidiaries of the Company are those subsidiaries listed in Schedule D
      hereto.

            (s) Non-Contravention of Instruments; No Further Authorizations or
      Approvals Required. None of Acquisition, the Company or any of its
      subsidiaries is in violation of its charter or by-laws or is in default
      (or, with the giving of notice or lapse of time, would be in default)
      ("Default") under any indenture, mortgage, loan or credit agreement, note,
      contract, franchise, lease, license or other instrument to which
      Acquisition, the Company or any of its subsidiaries is a party or by which
      it or any of them may be bound or to which any of the property or assets
      of Acquisition, the Company or any of its subsidiaries is subject (each,
      an "Instrument"), except for such Defaults as would not, individually or
      in the aggregate, result in a Material Adverse Change or except for such
      defaults that have been waived in writing. The execution, delivery and
      performance by Acquisition and the Company of its obligations under this
      Agreement, Acquisition's execution and delivery of, and the performance of
      Acquisition


                                       9


      (and, after the Merger, the Company and the Guarantors) of, the
      Registration Rights Agreement, the DTC Letter of Representations, the
      Indenture, the Supplemental Indenture and the Pledge Agreement to which it
      is a party, and the issuance and delivery of the Securities or the
      Exchange Securities, and consummation of the transactions contemplated
      hereby and thereby and by the Offering Memorandum and Acquisition and the
      Company's execution, delivery and performance of the Merger Agreement and
      related agreements and the consummation of the transactions contemplated
      hereby and thereby (i) will not result in any violation of the provisions
      of the charter or by-laws of Acquisition or the Company or any of its
      subsidiaries, (ii) will not conflict with or constitute a breach of, or
      Default or a Debt Repayment Triggering Event (as defined below) under, or
      result in the creation or imposition of any lien, charge or encumbrance
      upon any property or assets of Acquisition or the Company or any of its
      subsidiaries pursuant to, or require the consent of any other party to,
      any Instrument, except for such conflicts, breaches, Defaults, Debt
      Repayment Triggering Events, liens, charges or encumbrances as would not,
      individually or in the aggregate, result in a Material Adverse Change or
      Defaults that may arise under the Company's 7.58% senior notes due 2009
      (the "7.58% Notes"), and (iii) will not result in any violation of any
      law, administrative regulation or administrative or court decree
      applicable to Acquisition or the Company or any of its subsidiaries except
      for such violations that would not, individually or in the aggregate,
      result in a Material Adverse Change. No consent, approval, authorization
      or other order of, or registration or filing with, any court or other
      governmental or regulatory authority or agency, is required for
      Acquisition's or the Company's or each Guarantor's execution, delivery and
      performance of this Agreement, the Registration Rights Agreement, the DTC
      Letter of Representations, the Indenture, the Supplemental Indenture or
      the Pledge Agreement, to which it is a party, or the issuance and delivery
      of the Securities or the Exchange Securities, or consummation of the
      transactions contemplated hereby and thereby and by the Offering
      Memorandum, except such as will be obtained by Acquisition, the Company or
      the Guarantors and are in full force and effect under the Securities Act,
      the Trust Indenture Act and such as may be required under state securities
      laws or the blue sky laws of any jurisdiction in connection with the
      purchase and distribution of the Securities by the Initial Purchasers in
      the manner contemplated herein and in the Offering Memorandum and in
      connection with Acquisition's (and after the Merger, the Company's)
      obligations under the Registration Rights Agreement. As used herein, a
      "Debt Repayment Triggering Event" means any event or condition which
      gives, or with the giving of notice or lapse of time would give, the
      holder of any note, debenture or other evidence of indebtedness (or any
      person acting on such holder's behalf) the right to require the
      repurchase, redemption or repayment of all or a portion of such
      indebtedness by Acquisition or the Company and any of its subsidiaries.

            (t) No Material Actions or Proceedings. Except as otherwise
      disclosed in the Offering Memorandum, there are no legal or governmental
      actions, suits or proceedings pending or, to the best of the knowledge of
      Acquisition and the Company, threatened (i) against or affecting
      Acquisition or the Company or any of the Company's subsidiaries, (ii)
      which has as the subject thereof any property owned or leased by, the
      Company or any of its subsidiaries, where in any such case (A) there is a
      reasonable possibility that such action, suit or proceeding might be
      determined adversely to Acquisition or the


                                       10


      Company or such subsidiary and (B) any such action, suit or proceeding, if
      so determined adversely, would reasonably be expected to result in a
      Material Adverse Change or adversely affect the consummation of the Merger
      and related transactions or the transactions contemplated by this
      Agreement.

            (u) Intellectual Property Rights. The Company and its subsidiaries
      own, possess or license sufficient trademarks, trade names, patent rights,
      copyrights, licenses, approvals, trade secrets and other similar rights
      (collectively, "Intellectual Property Rights") reasonably necessary to
      conduct their businesses as now conducted; and the expected expiration of
      any of such Intellectual Property Rights would not result in a Material
      Adverse Change. Neither the Company nor any of its subsidiaries has
      received any notice of infringement or conflict with asserted Intellectual
      Property Rights of others, which infringement or conflict, if the subject
      of an unfavorable decision, ruling or filing would reasonably be expected
      to result in a Material Adverse Change and, except as otherwise disclosed
      in the Offering Memorandum, neither the Company nor any of its
      subsidiaries is in default under the terms of any license or similar
      agreement related to any Intellectual Property Rights necessary to conduct
      their business as now conducted or contemplated.

            (v) All Necessary Permits, Etc. The Company and each of its
      subsidiaries possess such valid and current certificates, authorizations
      or permits issued by the appropriate municipal, state, federal or foreign
      regulatory agencies or bodies necessary to conduct their respective
      businesses as now conducted, and neither the Company nor any subsidiary
      has received any notice of proceedings relating to the revocation or
      modification of, or non-compliance with, any such license, certificate,
      authorization or permit which, singly or in the aggregate, if the subject
      of an unfavorable decision, ruling or finding, could reasonably be
      expected to result in a Material Adverse Change.

            (w) Title to Properties. Except as otherwise disclosed in the
      Offering Memorandum, the Company and each of its subsidiaries has good and
      marketable title to all their properties and assets reflected as owned in
      the financial statements referred to in Section 1(p) above (or elsewhere
      in the Offering Memorandum), in each case free and clear of any security
      interests, mortgages, liens, encumbrances, equities, claims and other
      defects, except such as do not materially and adversely affect the value
      of such property and do not materially interfere with the use made or
      proposed to be made of such property by the Company and its subsidiaries
      taken as a whole. Any real property, improvements, equipment and personal
      property held under lease by the Company or any of its subsidiaries are
      held under valid and enforceable leases, with such exceptions as are not
      material or do not materially interfere with the use made or proposed to
      be made of such real property, improvements, equipment or personal
      property by the Company or such subsidiary. Acquisition, as of the date of
      this Agreement, owns no property or assets.

            (x) Material Agreements. The agreements, contracts or instruments
      listed in Schedule C attached hereto are the only material agreements,
      contracts or instruments binding upon Acquisition and/or the Company and
      its subsidiaries, or will be binding upon the Company or its subsidiaries
      after the consummation of the Merger, that are


                                       11


      material to the operation of the business of Acquisition and/or the
      Company and its subsidiaries, taken as a whole.

            (y) Tax Law Compliance. The Company and its subsidiaries have filed
      all federal, state and foreign income and franchise tax returns required
      to be filed and have paid all taxes shown on such returns required to be
      paid by any of them which are due and payable and, if due and payable, any
      related or similar assessment, fine or penalty levied against any of them.
      The Company and each Guarantor has made adequate charges, accruals and
      reserves in the applicable financial statements referred to in Section
      1(p) above in respect of all federal, state and foreign income and
      franchise taxes for all periods as to which the tax liability of the
      Company or any of its subsidiaries has not been finally determined, except
      where such failure would not reasonably be expected to result in a
      Material Adverse Change.

            (z) Company Not an "Investment Company". Acquisition and the Company
      have been advised of the rules and requirements under the Investment
      Company Act of 1940, as amended (the "Investment Company Act").
      Acquisition (and after the Merger, the Company) is not, nor after receipt
      of payment for the Securities and the application of the proceeds as
      described in the Offering Memorandum under "Use of Proceeds" will it be,
      an "investment company" within the meaning of Investment Company Act and
      will conduct its business in a manner so that it will not become subject
      to the Investment Company Act.

            (aa) Insurance. Each of the Company and its subsidiaries are, and at
      the Closing Date will be, insured by recognized, financially sound
      institutions with policies in such amounts and with such deductibles and
      covering such risks as are generally deemed adequate and customary for
      their businesses including, but not limited to, policies covering real and
      personal property owned or leased by the Company and its subsidiaries
      against theft, damage, destruction, acts of vandalism and earthquakes. The
      Company has no reason to believe that it or any subsidiary will not be
      able (i) to renew its existing insurance coverage as and when such
      policies expire or (ii) to obtain comparable coverage from similar
      institutions as may be necessary or appropriate to conduct its business as
      now conducted and at a cost that would not result in a Material Adverse
      Change. To the best of the Company's knowledge, after due inquiry, neither
      the Company nor any subsidiary has been denied any insurance coverage
      which it has sought or for which it has applied and there are no claims by
      the Company or any of its subsidiaries under any current insurance policy
      as to which any insurance company or institution is denying, or will deny,
      liability or coverage or defending under a reservation of rights clause.

            (bb) No Price Stabilization or Manipulation. None of Acquisition,
      the Company, the Guarantors or any of their respective affiliates has
      taken and will take, directly or indirectly, any action designed to or
      that might be reasonably expected to cause or result in stabilization or
      manipulation of the price of any security of the Company to facilitate the
      sale or resale of the Securities.


                                       12


            (cc) Solvency. The Company and each Guarantor is, and, after giving
      effect to the sale of the Notes, the Merger, the funding of the Senior
      Credit Facility and the application of the proceeds from the sale of the
      Notes and the funding of the Senior Credit Facility, as described in the
      Offering Memorandum, will be, Solvent. As used herein, the term "Solvent"
      means, with respect to the Company and each Guarantor on a particular
      date, that on such date (i) the fair market value of the assets of the
      Company or such Guarantor is greater than the total amount of liabilities
      (including contingent liabilities) of the Company or such Guarantor, (ii)
      the present fair salable value of the assets of the Company or such
      Guarantor is greater than the amount that will be required to pay the
      probable liabilities of the Company or such Guarantor on its debts as they
      become absolute and matured, (iii) the Company or such Guarantor is able
      to realize upon its assets and pay its debts and other liabilities,
      including contingent obligations, as they mature and (iv) the Company or
      such Guarantor does not have unreasonably small capital.

            (dd) No Unlawful Contributions or Other Payments. Neither the
      Company nor any of its subsidiaries nor, to the best of the Company's or
      any Guarantor's knowledge, any employee or agent of the Company or any
      subsidiary, has made any contribution or other payment to any official of,
      or candidate for, any federal, state or foreign office in violation of any
      law or of the character necessary to be disclosed in the Offering
      Memorandum in order to make the statements therein not misleading.

            (ee) Company's Accounting System. The Company maintains a system of
      accounting controls sufficient to provide reasonable assurances that (i)
      transactions are executed in accordance with management's general or
      specific authorization; (ii) transactions are recorded as necessary to
      permit preparation of financial statements in conformity with generally
      accepted accounting principles as applied in the United States and to
      maintain accountability for assets; (iii) access to material assets is
      permitted only in accordance with management's general or specific
      authorization; and (iv) the recorded accountability for assets is compared
      with existing assets at reasonable intervals and appropriate action is
      taken with respect to any differences.

            (ff) Compliance with Environmental Laws. Except as otherwise
      disclosed in the Offering Memorandum or as would not, individually or in
      the aggregate, result in a Material Adverse Change (i) neither the Company
      nor any of its subsidiaries, to the best of the Company's knowledge after
      due inquiry, is in violation of any federal, state, local or foreign law
      or regulation relating to pollution or protection of human health or the
      environment (including, without limitation, ambient air, surface water,
      groundwater, land surface or subsurface strata) or wildlife, including
      without limitation, laws and regulations relating to emissions,
      discharges, releases or threatened releases of chemicals, pollutants,
      contaminants, wastes, toxic substances, hazardous substances, petroleum
      and petroleum products (collectively, "Materials of Environmental
      Concern"), or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Materials of Environmental Concern (collectively, "Environmental Laws"),
      which violation includes, but is not limited to, noncompliance with any
      permits or other governmental authorizations required for the operation of
      the business of the Company or its subsidiaries under applicable
      Environmental Laws, or


                                       13


      noncompliance with the terms and conditions thereof, nor has the Company
      or any of its subsidiaries received any written communication, whether
      from a governmental authority, citizens group, employee or otherwise, that
      alleges that the Company or any of its subsidiaries is in violation of any
      Environmental Law; (ii) there is, to the best of the Company's knowledge
      after due inquiry, no claim, action or cause of action filed with a court
      or governmental authority, no investigation with respect to which the
      Company or any Guarantor has received written notice, and no written
      notice by any person or entity alleging potential liability for
      investigatory costs, cleanup costs, governmental responses costs, natural
      resources damages, property damages, personal injuries, attorneys' fees or
      penalties arising out of, based on or resulting from the presence, or
      release into the environment, of any Material of Environmental Concern at
      any location owned, leased or operated by the Company or any of its
      subsidiaries, now or in the past (collectively, "Environmental Claims"),
      pending or, to the best of the Company's or any Guarantor's knowledge,
      threatened against the Company or any of its subsidiaries or any person or
      entity whose liability for any Environmental Claim the Company or any of
      its subsidiaries has retained or assumed either contractually or by
      operation of law; and (iii) to the best of the Company's or any
      Guarantor's knowledge, there are no past or present actions, activities,
      circumstances, conditions, events or incidents, including, without
      limitation, the release, emission, discharge, presence or disposal of any
      Material of Environmental Concern, that reasonably could result in a
      violation of any Environmental Law or form the basis of a potential
      Environmental Claim against the Company or any of its subsidiaries or
      against any person or entity whose liability for any Environmental Claim
      the Company or any of its subsidiaries has retained or assumed either
      contractually or by operation of law.

            (gg) ERISA Compliance. The Company and its subsidiaries and any
      "employee benefit plan" (as defined under the Employee Retirement Income
      Security Act of 1974, as amended, and the regulations and published
      interpretations thereunder (collectively, "ERISA")) established or
      maintained by the Company, its subsidiaries or their "ERISA Affiliates"
      (as defined below) are in compliance in all respects with ERISA or, if not
      in compliance, would not reasonably be expected to result in a Material
      Adverse Change. "ERISA Affiliate" means, with respect to the Company or a
      subsidiary, any member of any group of organizations described in Sections
      414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended,
      and the regulations and published interpretations thereunder (the "Code")
      of which the Company or such subsidiary is a member. No "reportable event"
      (as defined under ERISA) has occurred or is reasonably expected to occur
      with respect to any "employee benefit plan" established or maintained by
      the Company, its subsidiaries or any of their ERISA Affiliates. No
      "employee benefit plan" established or maintained by the Company, its
      subsidiaries or any of their ERISA Affiliates, if such "employee benefit
      plan" were terminated, would have any "amount of unfunded benefit
      liabilities" (as defined under ERISA). Neither the Company, its
      subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
      expects to incur any liability under (i) Title IV of ERISA with respect to
      termination of, or withdrawal from, any "employee benefit plan" or (ii)
      Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit
      plan" established or maintained by the Company, its subsidiaries or any of
      their ERISA Affiliates that is intended to be qualified under


                                       14


      Section 401(a) of the Code is so qualified and nothing has occurred,
      whether by action or failure to act, which would cause the loss of such
      qualification.

            (hh) Regulation S Compliance. Acquisition, the Company, the
      Guarantors and their respective affiliates and all authorized persons
      acting on their behalf (other than the Initial Purchasers, as to whom
      Acquisition, the Company and the Guarantors make no representation) have
      complied with and will comply with the offering restrictions requirements
      of Regulation S in connection with the offering of the Securities outside
      the United States and, in connection therewith, the Offering Memorandum
      will contain the disclosure required by Rule 902(h).

            (ii) Taxes; Fees. There are no stamp or other issuance or transfer
      taxes or duties or other similar fees or charges required to be paid in
      connection with the execution and delivery of this Agreement or the
      issuance or sale by Acquisition of the Securities.

            (jj) No Labor Disputes. No material labor dispute with the employees
      of the Company or any of its subsidiaries exists or, to the knowledge of
      the Company, is imminent; and the Company is not aware of any existing,
      threatened or imminent labor disturbance by the employees of any of its
      principal customers, suppliers, manufacturers or contractors that could
      have a material adverse effect on the Company or its subsidiaries, taken
      as a whole.

            (kk) Merger. The Merger Agreement has been duly authorized, executed
      and delivered by, and (subject to its adoption by the shareholders of the
      Company) is a valid and binding agreement of Acquisition and the Company
      enforceable against Acquisition and the Company in accordance with its
      terms, except as the enforcement thereof may be limited by bankruptcy,
      insolvency, reorganization, moratorium or other similar laws relating to
      or affecting the rights and remedies of creditors or by general equitable
      principles; and Acquisition and the Company are not aware of any fact
      which makes the consummation of the Merger unlikely.

            (ll) Senior Credit Facility. Acquisition and the Company are not
      aware of any fact which will prevent the Company, on the date the Merger
      is consummated, to borrow funds under the proposed Senior Credit Facility,
      as described in the Offering Memorandum, that are sufficient, together
      with the proceeds from the other financings as described in the Offering
      Memorandum, including the issuance of the Notes, to consummate the Merger.

            (mm) Repayment of Existing Debt. Acquisition and the Company are not
      aware of any fact that will prevent it, on the date the Merger is
      consummated, to repay the existing debt of the Company (other than a
      30-day notice period requirement, for which the Company is seeking a
      waiver from the holders thereof, in connection with a redemption of the
      7.58% Notes), in the manner contemplated in the Offering Memorandum, with
      proceeds from the issuance and sale of the Securities or from the funding
      of the Senior Credit Facility.


                                       15


            (nn) No Operations. Acquisition has no subsidiaries and has
      conducted no business prior to the date hereof other than in connection
      with the transactions contemplated by this Agreement, the Offering
      Memorandum and the Merger Agreement.

            Any certificate signed by an officer of Acquisition or the Company
and delivered to the Initial Purchasers or to counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by Acquisition or the
Company to each Initial Purchaser as to the matters set forth therein.

            Section 2. Purchase, Sale and Delivery of the Securities.

            (a) The Securities. Acquisition agrees to issue and sell to the
      Initial Purchasers, severally and not jointly, all of the Securities on
      the basis of the representations, warranties and agreements, and upon the
      terms herein set forth. On the basis of the representations, warranties
      and agreements herein contained, and upon the terms but subject to the
      conditions herein set forth, the Initial Purchasers agree, severally and
      not jointly, to purchase from Acquisition the respective principal amount
      of Notes as set forth on Schedule B, opposite such Initial Purchaser's
      name payable on the Closing Date.

            (b) The Closing Date. Delivery of certificates for the Securities in
      definitive form to be purchased by the Initial Purchasers and payment
      therefor shall be made at the offices of Shearman & Sterling, 599
      Lexington Avenue, New York, New York 10022-6069 (or such other place as
      may be agreed to by Acquisition and the Initial Purchasers) at 9:00 a.m.
      New York City time, on March 27, 2001, or such other time and date as the
      Initial Purchasers shall designate by notice to Acquisition (the time and
      date of such closing are called the "Closing Date"). Acquisition hereby
      acknowledges that circumstances under which the Initial Purchasers may
      provide notice to postpone the Closing Date as originally scheduled
      include, but are in no way limited to, any determination by Acquisition or
      the Initial Purchasers to recirculate to investors copies of an amended or
      supplemented Offering Memorandum or a delay as contemplated by the
      provisions of Section 16 hereof.

            (c) Delivery of the Notes. Acquisition shall deliver, or cause to be
      delivered, to Banc of America Securities LLC, for the account of the
      Initial Purchasers, certificates for the Notes at the Closing Date against
      the irrevocable release of a wire transfer of immediately available funds
      for the amount of the purchase price therefore, of 100% of the aggregate
      principal amount of the Notes issued by Acquisition plus interest, if any,
      from March 27, 2001, which will be immediately deposited in the account
      established under the Pledge Agreement. Acquisition and, after the
      consummation of the Merger and release of the Collateral to Acquisition,
      the Company jointly and severally agree to pay, on the date of the
      consummation of the Merger, the fees and commissions of the Initial
      Purchasers, in immediately available funds, equal to 3% of the aggregate
      principal amount of Notes issued by Acquisition. The certificates for the
      Notes shall be in such denominations and registered in the name of the
      Depository or its nominee, pursuant to the DTC Letter of Representations,
      and shall be made available for inspection on the business day preceding
      the Closing Date at a location in New York City, as the Initial


                                       16


      Purchasers may designate. Time shall be of the essence, and delivery at
      the time and place specified in this Agreement is a further condition to
      the obligations of the Initial Purchasers.

            (d) Delivery of Offering Memorandum to the Initial Purchasers. Not
      later than 12:00 p.m. on the second business day following the date of
      this Agreement, Acquisition shall deliver or cause to be delivered copies
      of the Offering Memorandum in such quantities and at such places as the
      Initial Purchasers shall reasonably request.

            (e) Initial Purchasers as Qualified Institutional Buyer. Each
      Initial Purchaser represents and warrants to, and agrees with, Acquisition
      that (i) it is a "qualified institutional buyer" within the meaning of
      Rule 144A (a "Qualified Institutional Buyer"), and (ii) with respect to
      those Securities sold in reliance on Regulation S, (A) has not engaged and
      will not engage in any direct selling efforts within the meaning of
      Regulation S and (B) has complied and will comply with the offering
      restrictions requirement of Regulations S.

            Section 3. Additional Covenants. Acquisition and the Company further
jointly and severally covenants and agrees with each Initial Purchaser as
follows:

            (a) Initial Purchasers' Review of Proposed Amendments and
      Supplements. Prior to amending or supplementing the Offering Memorandum,
      Acquisition or the Company shall furnish to the Initial Purchasers for
      review a copy of each such proposed amendment or supplement, and
      Acquisition or the Company shall not use any such proposed amendment or
      supplement to which any Initial Purchaser reasonably objects with the
      advice of its independent counsel.

            (b) Amendments and Supplements to the Offering Memorandum and Other
      Securities Act Matters. If, prior to the completion of the placement of
      the Securities by the Initial Purchasers with the Subsequent Purchasers,
      any event shall occur or condition exist as a result of which it is
      necessary to amend or supplement the Offering Memorandum in order to make
      the statements therein, in the light of the circumstances when the
      Offering Memorandum is delivered to a Subsequent Purchaser, not
      misleading, or if in the opinion of the Initial Purchasers or counsel for
      the Initial Purchasers it is otherwise necessary to amend or supplement
      the Offering Memorandum to comply with law, Acquisition or the Company
      agrees to promptly prepare (subject to Section 3(a) hereof), and furnish
      at its own expense to the Initial Purchasers, amendments or supplements to
      the Offering Memorandum so that the statements in the Offering Memorandum
      as so amended or supplemented will not, in the light of the circumstances
      when the Offering Memorandum is delivered to a Subsequent Purchaser, be
      misleading or so that the Offering Memorandum, as amended or supplemented,
      will comply with law.

            Acquisition and the Company hereby expressly acknowledge that the
      indemnification and contribution provisions of Sections 8 and 9 hereof are
      specifically applicable and relate to each offering memorandum,
      registration statement, prospectus, amendment or supplement referred to in
      this Section 3(b).


                                       17


            (c) Copies of the Offering Memorandum. Acquisition agrees to furnish
      the Initial Purchasers, without charge, as many copies of the Offering
      Memorandum and any amendments and supplements thereto as they shall have
      reasonably requested prior to or at the time of the original printing of
      the Offering Memorandum or any amendment or supplement thereto.

            (d) Blue Sky Compliance. Acquisition and the Company shall cooperate
      with the Initial Purchasers and counsel for the Initial Purchasers to
      qualify or register the Securities for sale under (or obtain exemptions
      from the application of) the Blue Sky or state securities laws of those
      jurisdictions designated by the Initial Purchasers, shall comply with such
      laws and shall continue such qualifications, registrations and exemptions
      in effect so long as required for the distribution of the Securities.
      Acquisition and the Company shall not be required to qualify as a foreign
      corporation or to take any action that would subject it to general service
      of process in any such jurisdiction where it is not presently qualified or
      where it would be subject to taxation as a foreign corporation.
      Acquisition and the Company will advise the Initial Purchasers promptly of
      the suspension of the qualification or registration of (or any such
      exemption relating to) the Securities for offering, sale or trading in any
      jurisdiction or any initiation or threat of any proceeding for any such
      purpose, and in the event of the issuance of any order suspending such
      qualification, registration or exemption, Acquisition and the Company
      shall use its reasonable best efforts to obtain the withdrawal thereof at
      the earliest possible moment.

            (e) Use of Proceeds. Acquisition (and, after the Merger, the
      Company) shall in connection with the Merger, use the net proceeds from
      the sale of the Securities sold by it and the funding of the Senior Credit
      Facility in the manner described under the caption "Use of Proceeds" in
      the Offering Memorandum.

            (f) Depositary. Acquisition (and, after the Merger, the Company)
      will cooperate with the Initial Purchasers and use its reasonable best
      efforts to permit the Securities to be eligible for clearance and
      settlement through the facilities of the Depositary.

            (g) Additional Issuer Information. At any time the Company is not
      subject to section 13 or 15 of the Exchange Act, the Company covenants
      that it will furnish, at its expense, upon request, to registered holders
      of Securities within the time periods specified in the Exchange Act (i)
      all quarterly and annual financial information that would be required to
      be contained in a filing with the Commission on Forms 10-Q and 10-K if the
      Company were required to file such Forms, including a "Management
      Discussion and Analysis of Financial Condition and Results of Operations"
      and, with respect to the annual information only, a report on the annual
      financial statements by the Company's certified independent accounts; and
      (ii) all current reports that would be required to be filed with the
      Commission on Form 8-K if the Company were required to file such reports.
      In addition, following the date Acquisition and, after the Merger, the
      Company is required to consummate the exchange offer contemplated by the
      Registration Rights Agreement, whether or not required by the Commission,
      Acquisition and, after the Merger, the Company will file a copy of all of
      the information and reports referred to in


                                       18


      clauses (i) and (ii) above with the Commission for public availability
      within the time periods specified in the Commission's rules and
      regulations (unless the Commission will not accept such a filing) and make
      such information available to securities analysts and prospective
      purchasers of Securities upon request. In addition, Acquisition and, after
      the Merger, the Company and Guarantors have agreed that, for so long as
      Securities (but not the Exchange Securities) remain outstanding, they will
      furnish to holders and beneficial owners of Securities and to securities
      analysts and prospective purchasers of Securities, upon their request, the
      information required to be delivered pursuant to Rule 144A(d)(4) under the
      Securities Act.

            (h) Future Agreement Not to Offer or Sell Additional Securities.
      Acquisition, during the period of 180 days following the date of the
      Offering Memorandum, and the Company, for the period which is the shorter
      of 180 days from the date of the Offering Memorandum the termination of
      the Merger Agreement, will not, without the prior written consent of Banc
      of America Securities LLC (which consent may not be unreasonably withheld
      by such Initial Purchaser), directly or indirectly, sell, offer, contract
      or grant any option to sell, pledge, transfer or establish an open "put
      equivalent position" within the meaning of Rule 16a-1(h) under the
      Exchange Act, or otherwise dispose of or transfer, or announce the
      offering of, or file any registration statement under the Securities Act
      in respect of, any debt securities of the Company or securities
      exchangeable for or convertible into debt securities of the Company (other
      than to register the Exchange Securities).

            (i) Future Reports to the Initial Purchasers. For so long as any
      Securities or Exchange Securities remain outstanding, the Company will
      furnish to the Initial Purchasers (i) within 90 days after the end of each
      fiscal year, copies of the Annual Report of the Company containing the
      balance sheet of the Company as of the close of such fiscal year and
      statements of income, stockholders' equity and cash flows for the year
      then ended and the opinion thereon of the Company's independent public or
      certified public accountants and including such information and financial
      statements as would be required if the Issuer were filing such Annual
      Report with the Commission pursuant to the Exchange Act; (ii) as soon as
      practicable after the filing thereof, copies of each proxy statement,
      Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report
      on Form 8-K or other report filed by the Company with the Commission; and
      (iii) as soon as available, copies of any report or communication of the
      Company mailed generally to holders of its capital stock or debt
      securities (including the holders of the Securities).

            (j) No Integration. Acquisition and, prior to the termination, if
      any, of the Merger Agreement, the Company each agree that it will not and
      will cause its affiliates not to, make any offer or sale of securities of
      any class if, as a result of the doctrine of "integration" referred to in
      Rule 502 under the Securities Act, such offer or sale would render invalid
      (for the purpose of (i) the sale of the Securities by Acquisition to the
      Initial Purchasers, (ii) the resale of the Securities by the Initial
      Purchasers to Subsequent Purchasers or (iii) the resale of the Securities
      by such Subsequent Purchasers to others) the exemption from the
      registration requirements of the Securities Act provided by Section 4(2)
      thereof or by Rule 144A or by Regulation S thereunder or otherwise.


                                       19


            (k) Legended Securities. Each certificate for a Note will bear the
      legend substantially in the form contained in "Notice to Investors" in the
      Offering Memorandum for the time period and upon the other terms stated in
      the Offering Memorandum.

            (l) PORTAL. Acquisition will use its reasonable best efforts to
      cause such Notes when issued to be eligible for the National Association
      of Securities Dealers, Inc. PORTAL market (the "PORTAL market").

            (m) Rating of Securities. Acquisition shall take all reasonable
      action necessary to enable Standard & Poor's Ratings Services, a division
      of McGraw Hill, Inc. ("S&P"), and Moody's Investor Services, Inc.
      ("Moody's") to provide their respective credit ratings to the Securities.

            (n) Collateral. Acquisition shall direct the deposit of the proceeds
      of the issuance and sale of the Notes with the Collateral Agent in
      accordance with the terms of the Pledge Agreement on the Closing Date.

            Banc of America Securities LLC, on behalf of the Initial Purchasers,
may, in their sole discretion, waive in writing the performance by Acquisition
or the Company of any one or more of the foregoing covenants or extend the time
for their performance.

            Section 4. Payment of Expenses. Acquisition (and, after the Merger,
the Company) agrees to pay all costs, fees and expenses incurred in connection
with the performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses
that have been agreed to be paid by Vestar in connection with this Offering, as
described in the Amended and Restated Fee Letter (the "Fee Letter"), dated
February 15, 2001, entered into among Vestar and the Initial Purchasers and
certain of their affiliates, (ii) all necessary issue, transfer and other stamp
taxes in connection with the issuance and sale of the Securities to the Initial
Purchasers, (iii) all fees and expenses of Acquisition's, the Company's and the
Guarantors' counsel, independent public or certified public accountants and
other advisors, (iv) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of each Preliminary
Offering Memorandum and the Offering Memorandum (including financial
statements), and all amendments and supplements thereto, (v) all filing fees,
reasonable attorneys' fees and expenses incurred by Acquisition, the Company,
the Guarantors or the Initial Purchasers in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Securities for offer and sale under the Blue Sky laws
and, if requested by an Initial Purchaser, preparing and printing a "Blue Sky
Survey" or memorandum, and any supplements thereto, advising such Initial
Purchaser of such qualifications, registrations and exemptions, (vi) the fees
and expenses of the Trustee, including the fees and disbursements of counsel for
the Trustee in connection with the Indenture, the Securities and the Exchange
Securities, (vii) fees and expenses of the Collateral Agent, including fees and
disbursements of counsel for the Collateral Agent in connection with the Pledge
Agreement, (viii) any fees payable in connection with the rating of the
Securities or the Exchange Securities with the ratings agencies and the initial
listing of the Securities with the PORTAL market, (ix) all fees and expenses
(including reasonable fees and expenses of counsel) of Acquisition in connection
with approval of the Securities by the Depositary for "book-entry" transfer, and
(x) the


                                       20


performance by Acquisition and the Company of their respective other obligations
under this Agreement. Except as provided in this Section 4, Section 6, Section 8
and Section 9 hereof, the Initial Purchasers shall pay their own expenses,
including the fees and disbursements of their counsel. The provisions of this
Section 4 shall not supercede or otherwise affect any agreement between
Acquisition and the Company regarding the allocation of such expenses between
themselves.

            Section 5. Conditions of the Obligations of the Initial Purchasers.
The obligations of the Initial Purchasers to purchase and pay for the Securities
as provided herein on the Closing Date shall be subject to the accuracy of the
representations and warranties on the part of Acquisition and the Company set
forth in Section 1 hereof as of the date hereof and as of the Closing Date as
though then made and to the timely performance by Acquisition and the Company of
its covenants and other obligations hereunder, and to each of the following
additional conditions:

            (a) Accountants' Comfort Letter. On the date hereof the Initial
      Purchasers shall have received from the Independent Accountants, a letter
      dated the date hereof addressed to the Initial Purchasers, in form and
      substance satisfactory to the Initial Purchasers, containing statements
      and information of the type ordinarily included in accountant's "comfort
      letters" to the Initial Purchasers, delivered according to Statement of
      Auditing Standards Nos. 71, 72 and 76 (or any successor bulletins), with
      respect to the audited and unaudited financial statements and certain
      financial information contained in the Offering Memorandum.

            (b) No Material Adverse Change or Ratings Agency Change. For the
      period from and after the date of this Agreement and prior to the Closing
      Date:

                  (i) in the judgment of the Initial Purchasers there shall not
            have occurred any Material Adverse Change the effect of which, in
            the sole judgment of the Initial Purchasers, makes it impracticable
            to proceed with the Offering; and

                  (ii) there shall not have occurred any downgrading, nor shall
            any notice have been given of any intended or potential downgrading
            or of any review for a possible change that does not indicate the
            direction of the possible change, in the rating accorded any
            securities of Acquisition or the Company or any of its subsidiaries
            by any "nationally recognized statistical rating organization" as
            such term is defined for purposes of Rule 436(g)(2) under the
            Securities Act.

            (c) Opinion of Counsel for Acquisition. On the Closing Date, the
      Initial Purchasers shall have received the opinion of Kirkland & Ellis,
      counsel for Acquisition, dated as of such Closing Date, the form of which
      is attached as Exhibit C.

            (d) Opinion of Counsel for the Company. On the Closing Date, the
      Initial Purchasers shall have received the opinion of Kaplan, Strangis and
      Kaplan, P.A., counsel for the Company, dated as of such Closing Date, the
      form of which is attached as Exhibit D.


                                       21


            (e) Opinion of Counsel for the Initial Purchasers. On the Closing
      Date, the Initial Purchasers shall have received the favorable opinion of
      Shearman & Sterling, counsel for the Initial Purchasers, dated as of such
      Closing Date, with respect to such matters as may be requested by the
      Initial Purchasers and are customary in this type of financing.

            (f) Officers' Certificate. On the Closing Date, the Initial
      Purchasers shall have received written certificates from Acquisition and
      the Company executed by the Chairman of the Board, Chief Executive Officer
      or President of Acquisition and the Company, as the case may be, and the
      Chief Financial Officer or Chief Accounting Officer of Acquisition and the
      Company, as the case may be, dated as of the Closing Date, to the effect
      set forth in subsection (b)(ii) and (iii) of this Section 5, and each
      further to the effect that:

                  (i) for the period from and after the date of this Agreement
            and prior to the Closing Date, to their knowledge, after due
            inquiry, there has not occurred any Material Adverse Change;

                  (ii) the representations, warranties and covenants of
            Acquisition and the Company, as the case may be, and set forth in
            Section 1 of this Agreement are true and correct with the same force
            and effect as though expressly made on and as of the Closing Date;
            and

                  (iii) Acquisition and the Company have complied in all
            material respects with all the agreements and satisfied all the
            conditions on its part to be performed or satisfied at or prior to
            the Closing Date.

            (g) Bring-down Comfort Letters. On the Closing Date, the Initial
      Purchasers shall have received from the Independent Accountants, a letter
      dated such date, in form and substance satisfactory to the Initial
      Purchasers, to the effect that they reaffirm the statements made in the
      letter furnished by them pursuant to subsection (a) of this Section 5,
      except that the specified date referred to therein for the carrying out of
      procedures shall be no more than three business days prior to the Closing
      Date.

            (h) PORTAL Listing. At the Closing Date, the Notes shall have been
      designated for trading on the PORTAL market.

            (i) Registration Rights Agreement. Acquisition shall have entered
      into the Registration Rights Agreement and the Initial Purchasers shall
      have received executed counterparts thereof.

            (j) Deposit of Collateral. Acquisition shall have deposited, or
      shall have directed the deposit of, the proceeds of the offering with the
      Collateral Agent, as contemplated in the Pledge Agreement (it being
      understood that this condition shall be deemed satisfied to the extent it
      occurs simultaneously with the purchase and payment of the Securities).


                                       22


            (k) Depositary. At the Closing Date, the Notes will be eligible for
      clearance and settlement through the facilities of the Depositary.

            (l) Pledge Agreement. Acquisition shall have entered into the Pledge
      Agreement and the Initial Purchasers shall have received executed
      counterparts thereof.

            (m) Agreement with Vestar and the Collateral Agent. Vestar shall
      have entered into an agreement with the Collateral Agent, as contemplated
      and attached as an exhibit to the Pledge Agreement, that provides that, if
      the Merger is not consummated prior to May 31, 2001, Vestar will deposit
      with the Collateral Agents such funds as required in the Pledge Agreement
      to redeem the Notes in accordance with their terms.

            (n) Additional Documents. On or before the Closing Date, the Initial
      Purchasers and counsel for the Initial Purchasers shall have received such
      information, documents and opinions as they may reasonably require for the
      purposes of enabling them to pass upon the issuance and sale of the
      Securities as contemplated herein, or in order to evidence the accuracy of
      any of the representations and warranties, or the satisfaction of any of
      the conditions or agreements, herein contained.

            If any condition specified in this Section 5 is not satisfied when
and as required to be satisfied, this Agreement may be terminated by the Initial
Purchasers by notice to the Company at any time on or prior to the Closing Date,
which termination shall be without liability on the part of any party to any
other party, except that Section 4, Section 6, Section 8 and Section 9 shall at
all times be effective and shall survive such termination.

            Section 6. Reimbursement of Initial Purchasers' Expenses. If this
Agreement is terminated by the Initial Purchasers pursuant to Section 5, or if
the sale to the Initial Purchasers of the Securities on the Closing Date is not
consummated because of any refusal, inability or failure on the part of
Acquisition or the Company to perform any agreement herein or to comply with any
provision hereof, Acquisition agrees to reimburse the Initial Purchasers upon
demand for all reasonable out-of-pocket expenses that shall have been incurred
by the Initial Purchasers in connection with the proposed purchase and the
offering and sale of the Securities, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges, as has been agreed to be paid by Vestar, as described in
the Fee Letter.

            Section 7. Offer, Sale and Resale Procedures. The Initial
Purchasers, on the one hand, and Acquisition and the Company, on the other hand,
hereby establish and agree to observe the following procedures in connection
with the offer and sale of the Securities:

            (a) Offers and Sales Only to Qualified Institutional Buyers and
      Non-U.S. Persons. Offers and sales of the Securities will be made only by
      the Initial Purchasers or Affiliates thereof qualified to do so in the
      jurisdictions in which such offers or sales are made. Each such offer or
      sale shall only be made (A) to persons whom the offeror or seller
      reasonably believes to be qualified institutional buyers (as defined in
      Rule 144A under the Securities Act) or (B) non-U.S. persons outside the
      United States to whom the offeror or seller reasonably believes offers and
      sales of the Securities may be made in


                                       23


      reliance upon Regulation S under the Securities Act, upon the terms and
      conditions set forth in Annex I hereto, which Annex I is hereby expressly
      made a part hereof.

            (b) No General Solicitation. The Securities will be offered by
      approaching prospective Subsequent Purchasers on an individual basis. No
      general solicitation or general advertising (within the meaning of Rule
      502(c) under the Securities Act) will be used in the United States in
      connection with the offering of the Securities.

            (c) Restrictions on Transfer. Upon original issuance by Acquisition,
      and until such time as the same is no longer required under the applicable
      requirements of the Securities Act, the Notes (and all securities issued
      in exchange therefor or in substitution thereof, other than the Exchange
      Securities) shall bear a legend substantially in the following form:

            "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
      AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
      THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
      ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
      ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
      NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE
      HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
      OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER
      THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
      COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE OR ANY
      PREDECESSOR OF THIS NOTE (THE "RESALE RESTRICTION TERMINATION DATE") ONLY
      (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
      NOTES AND THE GUARANTEES ENDORSED THEREON ARE ELIGIBLE FOR RESALE PURSUANT
      TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
      REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
      RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
      QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
      BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
      NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING
      OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER
      AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
      ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
      OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE
      40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S
      UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE
      RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF
      COUNSEL, CERTIFICATION AND/OR OTHER


                                       24


      INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE
      FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
      APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
      TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER
      THE RESALE RESTRICTION TERMINATION DATE."

Following the sale of the Securities by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to Acquisition or the Company for any losses, damages or
liabilities suffered or incurred by Acquisition or the Company, including any
losses, damages or liabilities under the Securities Act, arising from or
relating to any resale or transfer of any Security.

            Section 8. Indemnification.

            (a) Indemnification of the Initial Purchasers. Acquisition and, from
      and after the Merger, the Company jointly and severally agrees to
      indemnify and hold harmless each Initial Purchaser, its directors,
      officers and employees, and each person, if any, who controls any Initial
      Purchaser within the meaning of Section 15 of the Securities Act and
      Section 20 of the Exchange Act against any loss, claim, damage, liability
      or expense, as incurred, to which such Initial Purchaser or such
      controlling person may become subject, under the Securities Act, the
      Exchange Act or other federal or state statutory law or regulation, or at
      common law or otherwise (including in settlement of any litigation, if
      such settlement is effected with the written consent of Acquisition and/or
      the Company), insofar as such loss, claim, damage, liability or expense
      (or actions in respect thereof as contemplated below) arises out of or is
      based (i) upon any untrue statement or alleged untrue statement of a
      material fact contained in the Preliminary Offering Memorandum or the
      Offering Memorandum (or any amendment or supplement thereto), or the
      omission or alleged omission therefrom of a material fact necessary in
      order to make the statements therein, in the light of the circumstances
      under which they were made, not misleading; or (ii) in whole or in part
      upon any inaccuracy in the representations and warranties of Acquisition
      or the Company contained herein; or (iii) in whole or in part upon any
      failure of Acquisition or the Company to perform its obligations hereunder
      or under law; or (iv) any act or failure to act or any alleged act or
      failure to act by any Initial Purchaser in connection with, or relating in
      any manner to, the offering contemplated hereby, and which is included as
      part of or referred to in any loss, claim, damage, liability or action
      arising out of or based upon any matter covered by clause (i) above to the
      extent such expenses are not covered in items (i) through (iv) (subject to
      the limitations set forth below), provided that neither Acquisition or the
      Company shall be liable under this clause (iv) to the extent that a court
      of competent jurisdiction shall have determined by a final judgment that
      such loss, claim, damage, liability or action resulted directly from any
      such acts or failures to act undertaken or omitted to be taken by such
      Initial Purchaser through its gross negligence or willful misconduct; and
      to reimburse each Initial Purchaser and each such controlling person for
      any and all expenses (including the fees and disbursements of counsel
      chosen by the Initial Purchasers) as such expenses are reasonably incurred
      by such Initial Purchaser or such controlling person in connection with
      investigating, defending, settling, compromising or paying any such loss,
      claim,


                                       25


      damage, liability, expense or action to the extent such expenses are not
      covered in items (i) through (ii) above (subject to the limitations set
      forth below); provided, however, that the foregoing indemnity agreement
      shall not apply to any loss, claim, damage, liability or expense to the
      extent, but only to the extent, arising out of or based upon any untrue
      statement or alleged untrue statement or omission or alleged omission made
      in reliance upon and in conformity with written information furnished to
      Acquisition or the Company by the Initial Purchasers expressly for use in
      any Preliminary Offering Memorandum or the Offering Memorandum (or any
      amendment or supplement thereto). The indemnity agreement set forth in
      this Section 8(a) shall be in addition to any liabilities that Acquisition
      or, from and after the Merger, the Company may otherwise have.

            (b) Indemnification of Acquisition, the Company and their Directors
      and Officers. Each Initial Purchaser agrees to indemnify and hold harmless
      Acquisition and each of its directors and each person, if any, who
      controls Acquisition within the meaning of the Securities Act or the
      Exchange Act and the Company and each of its directors and each person, if
      any, who controls the Company within the meaning of the Securities Act or
      the Exchange Act, against any loss, claim, damage, liability or expense,
      as incurred, to which Acquisition or the Company or any such director, or
      controlling person may become subject, under the Securities Act, the
      Exchange Act, or other federal or state statutory law or regulation, or at
      common law or otherwise (including in settlement of any litigation, if
      such settlement is effected with the written consent of the Initial
      Purchasers), insofar as such loss, claim, damage, liability or expense (or
      actions in respect thereof as contemplated below) arises out of or is
      based upon any untrue or alleged untrue statement of a material fact
      contained in any Preliminary Offering Memorandum or the Offering
      Memorandum (or any amendment or supplement thereto), or arises out of or
      is based upon the omission or alleged omission to state therein a material
      fact required to be stated therein or necessary to make the statements
      therein not misleading, in each case to the extent, but only to the
      extent, that such untrue statement or alleged untrue statement or omission
      or alleged omission was made in any Preliminary Offering Memorandum or the
      Offering Memorandum (or any amendment or supplement thereto), in reliance
      upon and in conformity with written information furnished to Acquisition
      by the Initial Purchasers expressly for use therein; and to reimburse
      Acquisition or the Company, or any such director or controlling person for
      any legal and other expenses reasonably incurred by Acquisition or the
      Company, or any such director or controlling person in connection with
      investigating, defending, settling, compromising or paying any such loss,
      claim, damage, liability, expense or action. Acquisition and the Company
      hereby acknowledge that the only information that the Initial Purchasers
      have furnished to Acquisition expressly for use in any Preliminary
      Offering Memorandum or the Offering Memorandum (or any amendment or
      supplement thereto) are the statements set forth (A) in the ninth
      paragraph on introductory page ii of the Offering Memorandum and (B) the
      first sentence in the third paragraph, the first three sentences in the
      fourth paragraph, the third sentence of the sixth paragraph and the eighth
      paragraph under the caption "Plan of Distribution" in the Offering
      Memorandum; and the Initial Purchasers confirm that such statements are
      correct. The indemnity agreement set forth in this Section 8(b) shall be
      in addition to any liabilities that each Initial Purchaser may otherwise
      have.


                                       26


            (c) Notifications and Other Indemnification Procedures. Promptly
      after receipt by an indemnified party under this Section 8 of notice of
      the commencement of any action, such indemnified party will, if a claim in
      respect thereof is to be made against an indemnifying party under this
      Section 8, notify the indemnifying party in writing of the commencement
      thereof, but the omission so to notify the indemnifying party will not
      relieve it from any liability which it may have to any indemnified party
      for contribution or otherwise than under the indemnity agreement contained
      in this Section 8 or to the extent it is not prejudiced as a proximate
      result of such failure. In case any such action is brought against any
      indemnified party and such indemnified party seeks or intends to seek
      indemnity from an indemnifying party, the indemnifying party will be
      entitled to participate in and, to the extent that it shall elect, jointly
      with all other indemnifying parties similarly notified, by written notice
      delivered to the indemnified party promptly after receiving the aforesaid
      notice from such indemnified party, to assume the defense thereof with
      counsel reasonably satisfactory to such indemnified party; provided,
      however, if the defendants in any such action include both the indemnified
      party and the indemnifying party and the indemnified party shall have
      reasonably concluded that a conflict may arise between the positions of
      the indemnifying party and the indemnified party in conducting the defense
      of any such action or that there may be legal defenses available to it
      and/or other indemnified parties which are different from or additional to
      those available to the indemnifying party, the indemnified party or
      parties shall have the right to select separate counsel to assume such
      legal defenses and to otherwise participate in the defense of such action
      on behalf of such indemnified party or parties. Upon receipt of notice
      from the indemnifying party to such indemnified party of such indemnifying
      party's election so to assume the defense of such action and approval by
      the indemnified party of counsel, the indemnifying party will not be
      liable to such indemnified party under this Section 8 for any legal or
      other expenses subsequently incurred by such indemnified party in
      connection with the defense thereof unless (i) the indemnified party shall
      have employed separate counsel in accordance with the proviso to the next
      preceding sentence (it being understood, however, that the indemnifying
      party shall not be liable for the expenses of more than one separate
      counsel (together with local counsel), approved by the indemnifying party
      (the Initial Purchasers in the case of Section 8(b) and Section 9),
      representing the indemnified parties who are parties to such action) or
      (ii) the indemnifying party shall not have employed counsel satisfactory
      to the indemnified party to represent the indemnified party within a
      reasonable time after notice of commencement of the action, in each of
      which cases the fees and expenses of counsel shall be at the expense of
      the indemnifying party.

            (d) Settlements. The indemnifying party under this Section 8 shall
      not be liable for any settlement of any proceeding effected without its
      written consent (which shall not be unreasonably withheld), but if settled
      with such consent or if there be a final non-appealable judgment for the
      plaintiff, the indemnifying party agrees to indemnify the indemnified
      party against any loss, claim, damage, liability or expense by reason of
      such settlement or judgment. Notwithstanding the foregoing sentence, if at
      any time an indemnified party shall have requested an indemnifying party
      to reimburse the indemnified party for fees and expenses of counsel as
      contemplated by Section 8(c) hereof, the indemnifying party agrees that it
      shall be liable for any settlement of any proceeding effected without its
      written consent if (i) such settlement is entered into more than


                                       27


      45 days after receipt by such indemnifying party of the aforesaid request,
      (ii) such indemnifying party shall have received notice of the final terms
      of such proposed settlement as soon as practicable prior to such
      settlement being entered into and (iii) such indemnifying party shall not
      have reimbursed the indemnified party in accordance with such request
      prior to the date of such settlement. No indemnifying party shall, without
      the prior written consent of the indemnified party, effect any settlement,
      compromise or consent to the entry of judgment in any pending or
      threatened action, suit or proceeding in respect of which any indemnified
      party is or could have been a party and indemnity was or could have been
      sought hereunder by such indemnified party, unless such settlement,
      compromise or consent includes an unconditional release of such
      indemnified party from all liability on claims that are the subject matter
      of such action, suit or proceeding.

            Section 9. Contribution. If the indemnification provided for in
Section 8 is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party (in
the case of the Company, from and after the Merger) shall contribute to the
aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by Acquisition and it affiliates or the Company and its
affiliates, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of Acquisition and
its affiliates or the Company and its affiliates, on the one hand, and the
Initial Purchasers, on the other hand, in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
Acquisition and the Company, on the one hand, and the Initial Purchasers, on the
other hand, in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by Acquisition and deposited with the
Collateral Agent, whether or not the Merger is completed and the total discount
received by the Initial Purchasers bear to the aggregate initial offering price
of the Securities. The relative fault of Acquisition and the Company, on the one
hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by Acquisition or the Company, on the one hand,
or the Initial Purchasers, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

            The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for


                                       28


contribution is to be made under this Section 9; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.

            Acquisition, the Company and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in this Section 9.

            Notwithstanding the provisions of this Section 9, the Initial
Purchasers shall not be required to contribute any amount in excess of the
discount received by the Initial Purchaser in connection with the Securities
distributed by them. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each director, officer and
employee of the Initial Purchasers and each person, if any, who controls any of
the Initial Purchasers within the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Initial Purchasers, and
each director of Acquisition or the Company, and each person, if any, who
controls Acquisition or the Company within the meaning of the Securities Act and
the Exchange Act shall have the same rights to contribution as Acquisition or
the Company.

            Section 10. Termination of this Agreement. Prior to the Closing
Date, this Agreement may be terminated by the Initial Purchasers by notice given
to Acquisition and the Company if at any time (i) trading or quotation in
securities generally on either the Nasdaq Stock Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal, Delaware or any other state authorities; (iii) there
shall have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States' or international
political, financial or economic conditions, as in the judgment of the Initial
Purchasers is material and adverse and makes it impracticable to market the
Securities in the manner and on the terms described in the Offering Memorandum
or to enforce contracts for the sale of securities; or (iv) in the judgment of
the Initial Purchasers there shall have occurred any Material Adverse Change the
effect of which, in the sole judgment of the Initial Purchasers, makes it
impracticable to proceed with the offering of the Notes. Any termination
pursuant to this Section 10 shall be without liability on the part of (a)
Acquisition or the Company to any Initial Purchaser, except that Acquisition and
the Company shall be obligated to reimburse the expenses of the Initial
Purchasers pursuant to Sections 4 and 6 hereof, (b) any Initial Purchaser to
Acquisition or the Company, or (c) of any party hereto to any other party except
that the provisions of Section 8, Section 9 and Section 18 shall at all times be
effective and shall survive such termination.

            Section 11. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of Acquisition and the Company of their officers and of the Initial
Purchasers set forth in or made


                                       29


pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers, Acquisition or
the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Securities sold hereunder and any termination of this Agreement.

            Section 12. Notices. All communications hereunder shall be in
writing and shall be mailed, hand delivered or telecopied and confirmed to the
parties hereto as follows:

If to the Initial Purchasers:

            Banc of America Securities LLC
            100 North Tryon Street
            7th Floor
            Charlotte, NC  28255
            Facsimile:  704-388-9941
            Attention:  James G. Rose, Jr.

with a copy to:

            Shearman & Sterling
            599 Lexington Avenue
            New York, NY  10022
            Facsimile:  212-848-7179
            Attention:  Rohan S. Weerasinghe

If to the Company:

            Michael Foods, Inc.
            Signal Bank Building
            Suite 324
            5353 Wayzata Boulevard
            Minneapolis, MN  55416
            Facsimile:  952-546-1500
            Attention:  Chief Financial Officer

and if to the Company prior to the Merger:

            Kaplan, Strangis and Kaplan, P.A.
            90 South Seventh Street
            Suite 5500
            Minneapolis, MN  55402
            Facsimile:  612-375-1143
            Attention:  James C. Melville


                                       30


If to Acquisition:

            Michael Foods Acquisition Corp.
            c/o Vestar Capital Partners IV, L.P.
            1225 17th Street
            Suite 1660 Denver, CO 80202
            Facsimile: 303-292-6300
            Attention:  J. Christopher Henderson

and if to Acquisition or the Company following the Merger:

            Kirkland & Ellis
            200 East Randolph Drive
            Chicago, IL  60601
            Facsimile:  312-861-2200
            Attention:  Dennis M. Myers

            Any party hereto may change the address for receipt of
communications by giving written notice to the others.

            Section 13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, including any substitute Initial
Purchasers pursuant to Section 16 hereof, and to the benefit of the employees,
officers and directors and controlling persons referred to in Section 8 and
Section 9, and in each case their respective successors, and no other person
will have any right or obligation hereunder. The term "successors" shall not
include any purchaser of the Securities as such from any of the Initial
Purchasers by reason of such purchase.

            Section 14. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.

            Section 15. Governing Law; Consent to Jurisdiction.

            (a) Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY
      AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
      YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.

            (b) Consent to Jurisdiction. Any legal suit, action or proceeding
      arising out of or based upon this Agreement or the transactions
      contemplated hereby ("Related Proceedings") may be instituted in the
      federal courts of the United States of America located in the City and
      County of New York or the courts of the State of New York in each case
      located in the City and County of New York (collectively, the "Specified
      Courts"), and each party irrevocably submits to the non-exclusive
      jurisdiction (except for


                                       31


      proceedings instituted in regard to the enforcement of a judgment of any
      such court (a "Related Judgment"), as to which such jurisdiction is
      non-exclusive) of such courts in any such suit, action or proceeding.
      Service of any process, summons, notice or document by mail to such
      party's address set forth above shall be effective service of process for
      any suit, action or other proceeding brought in any such court. The
      parties irrevocably and unconditionally waive any objection to the laying
      of venue of any suit, action or other proceeding in the Specified Courts
      and irrevocably and unconditionally waive and agree not to plead or claim
      in any such court that any such suit, action or other proceeding brought
      in any such court has been brought in an inconvenient forum.

            Section 16. Default of One or More of the Several Initial
Purchasers. If any one or more of the several Initial Purchasers shall fail or
refuse to purchase Notes that it or they have agreed to purchase hereunder on
the Closing Date, and the aggregate number of Notes that such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Notes to be purchased on such
date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the number of Notes set forth opposite their respective names
on Schedule B bears to the aggregate number of Notes set forth opposite the
names of all such non-defaulting Initial Purchasers, or in such other
proportions as may be specified by the Initial Purchasers with the consent of
the non-defaulting Initial Purchasers, to purchase the Notes which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase on such date. If any one or more of the Initial Purchasers shall
fail or refuse to purchase Notes and the aggregate number of Notes with respect
to which such default occurs exceeds 10% of the aggregate number of Notes to be
purchased on the Closing Date, and arrangements satisfactory to the Initial
Purchasers and Acquisition for the purchase of such Notes are not made within 48
hours after such default, this Agreement shall terminate without liability of
any party to any other party except that the provisions of Section 4, Section 8
and Section 9 shall at all times be effective and shall survive such
termination, but only as to such non-defaulting Initial Purchasers. In any such
case either the Initial Purchasers or Acquisition shall have the right to
postpone the Closing Date, as the case may be, but in no event for longer than
seven days in order that any changes to the Offering Memorandum or any other
documents or arrangements deemed necessary or desirable may be effected.

            As used in this Agreement, the term "Initial Purchaser" shall be
deemed to include any person substituted for a defaulting Initial Purchaser
under this Section 10. Any action taken under this Section 16 shall not relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser under this Agreement.

            Section 17. General Provisions. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof except the Amended and
Restated Commitment Letter, dated February 15, 2001, entered into among Vestar
and the Initial Purchasers and their affiliates, the description of the payment
of fees and expenses in connection with this Offering contained in the Fee
Letter and any agreement entered into between the Company and Acquisition
relating to the allocation of expenses of the Offering between themselves. This
Agreement may be executed in two or more counterparts, each one of which shall
be an original, with the same effect as if the signatures


                                       32


thereto and hereto were upon the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by
each party whom the condition is meant to benefit. The Table of Contents and the
section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.

            Section 18. Liability of the Company Prior to the Merger.
Notwithstanding anything to the contrary contained herein, unless and until the
Merger is consummated, none of the Company and its subsidiaries shall have any
liability arising under or related to this Agreement or arising in connection
with or related to the Offering of the Notes, except for liabilities, if any, of
the Company in connection with a violation of the Section 3(h) or Section 3(j)
of this Agreement.


                                       33


            If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to Acquisition and the Company the enclosed
copies hereof, whereupon this instrument, along with all counterparts hereof,
shall become a binding agreement in accordance with its terms.

                                            Very truly yours,


                                            MICHAEL FOODS ACQUISITION CORP.

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


                                            MICHAEL FOODS, INC.

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


The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial
Purchasers as of the date first above written.


BANC OF AMERICA SECURITIES LLC

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


BEAR, STEARNS & CO. INC.

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



                                                                      SCHEDULE A

                                   GUARANTORS

Guarantor                                          Jurisdiction of Organization
- ---------                                          ----------------------------

Farm Fresh Foods, Inc.                                       California

Farm Fresh Foods of Nevada, Inc.                             Nevada

Kohler Mix Specialties of CT, Inc.                           Connecticut

Michael Foods of Delaware, Inc.                              Delaware

Casa Trucking, Inc.                                          Minnesota

Crystal Farms Refrigerated Distribution Company              Minnesota

Kohler Mix Specialties, Inc.                                 Minnesota

Midwest Mix, Inc.                                            Minnesota

Minnesota Products, Inc.                                     Minnesota

Papetti's Hygrade Egg Products, Inc.                         Minnesota

Northern Star Co.                                            Minnesota

M.G. Waldbaum Company                                        Nebraska

Papetti Electroheating Corp.                                 New Jersey

WFC, Inc.                                                    Wisconsin

Wisco Farm Cooperative                                       Wisconsin



                                                                      SCHEDULE B

                               INITIAL PURCHASERS

                                                        Aggregate Principal
                                                        Amount of Securities
                       Initial Purchasers                 to be Purchased
                       ------------------              ---------------------

Banc of America Securities LLC ....................... $   140,000,000
Bear, Stearns & Co. Inc. ............................. $    60,000,000
                                                       ---------------
Total                                                  $   200,000,000



                                                                      SCHEDULE C

                               MATERIAL AGREEMENTS

1.    Egg Supplier Agreement between Papetti's of Iowa Food Products, Inc. and
      Sunbest/Papetti Farms dated October 19, 1993.

2.    Consolidated, Restated and Amended License Agreement dated June 9, 2000 by
      and between North Carolina State University and the Company.

3.    7.58% Senior Notes due February 26, 2009 issued under those certain Loan
      Agreements dated February 26, 1997 between the Company and various lenders
      named therein, including Metropolitan Life Insurance Company, as Agent,
      including all security, pledge and collateral agreements related thereto.

4.    Form of Credit Agreement, between the Company, as borrower, Holdings and
      the subsidiaries of the Company from time to time, as guarantors, the
      lenders from time to time and, Bank of America, N. A., as Agent.

5.    Composite Amended Agreement and Plan of Merger, dated as of December 21,
      2000, by and among Holdings, the Issuer and the Company.

6.    Lease Agreement, dated as of June 1, 1997, by and between Park National
      Bank Building Corporation and the Company, relating to the lease of office
      space located at 5353 Wayzata Boulevard, St. Louis Park, MN 55416.

7.    Lease, dated as of February 26, 1997, by and between the Company and A&A
      Urban Renewal, relating to the lease of a facility located at 100 Trumbull
      St., Elizabeth, NJ.

8.    Lease, dated as of February 26, 1997, by and between Michael Foods, Inc.
      (a Delaware coproration) and Papetti Holding Company, et al., relating to
      the lease of a facility located at 877-879 E. North Ave., Elizabeth, NJ.

9.    Lease, dated as of February 26, 1997, by and between Michael Foods, Inc.
      (a Delaware corporation) and Papetti Holding Company, relating to the
      lease of a facility located at 847-855 E. North Ave., Elizabeth, NJ.

10.   Lease, dated as of February 26, 1997, by and between Michael Foods, Inc.
      (a Delaware corporation) and Jersey Pride Urban Renewal, relating to the
      lease of a facility located at One Papetti Plaza., Elizabeth, NJ.

11.   Lease, dated as of January 15, 1993, by and between Midwest Mix, Inc. and
      Associated Milk Producters, Inc., relating to the lease of a facility
      located at 1101 Main Street, Sulphur Springs, TX.



12.   Lease, dated as of April 30, 1999, by and between Kohler Mix Specialties
      of Connecticut, Inc. and H.P. Hood, Inc., relating to a lease of a
      facility located at 100 Milk Lane, Newington, CT.

13.   Lease, dated as of May 4, 1988, by and between Park Place OPCO, LLC and
      Crystal Farms Refrigerated Distribution Company, relating to an office
      facility located at 6465 Wayzata Blvd. St. Louis Park, MN.

14.   Lease Agreement, dated as of June 27, 2000, by and among Civic Center
      Properties, LLC and the Company, relating to a facility located at 3840 N.
      Civic Center Dr., North Las Vegas, NV.

15.   Letter Agreement, dated as of December 21, 2000, between the Issuer and
      Vestar Capital Partners IV, L.P.

16.   Letter Agreement, dated as of December 21, 2000, between the Issuer and
      Marathon Fund Limited Partnership IV.

17.   Form of Employment Agreement between the Company and Gregg A. Ostrander.

18.   Form of Employment Agreement between the Company and John D. Reedy.

19.   Form of Employment Agreement between the Company and James D. Clarkson.

20.   Form of Employment Agreement between the Company and Bill L. Goucher.



                                                                      SCHEDULE D

                       SUBSIDIARIES OF MICHAEL FOODS, INC.

Subsidiary                                         Jurisdiction of Organization
- ----------                                         ----------------------------

Farm Fresh Foods, Inc.                                    California

Farm Fresh Foods of Nevada, Inc.                          Nevada

Kohler Mix Specialties of CT, Inc.                        Connecticut

Michael Foods of Delaware, Inc.                           Delaware

Casa Trucking, Inc.                                       Minnesota

Crystal Farms Refrigerated Distribution Company           Minnesota

Kohler Mix Specialties, Inc.                              Minnesota

Midwest Mix, Inc.                                         Minnesota

Minnesota Products, Inc.                                  Minnesota

Papetti's Hygrade Egg Products, Inc.                      Minnesota

Northern Star Co.                                         Minnesota

M.G. Waldbaum Company                                     Nebraska

Papetti Electroheating Corp.                              New Jersey

R&P Liquid Egg Technology, L.P.                           New Jersey

WFC, Inc.                                                 Wisconsin

Wisco Farm Cooperative                                    Wisconsin



                                                                       EXHIBIT A

                      FORM OF REGISTRATION RIGHTS AGREEMENT



                                                                       EXHIBIT B

                            FORM OF PLEDGE AGREEMENT



                                                                       EXHIBIT C

                   FORM OF OPINION OF COUNSEL FOR ACQUISITION

                                 March __, 2001

Banc of America Securities LLC
Bear, Stearns & Co. Inc.,
as Initial Purchasers
c/o Banc of America Securities LLC
9 West 57th Street, 47th Floor
New York, New York 10019

            Re:   $200,000,000 __% Senior Subordinated Notes due 2011

Ladies and Gentlemen:

      We are issuing this letter in our capacity as special counsel for Michael
Foods Acquisition Corp., a Minnesota corporation (the "Issuer") in response to
the requirement in Section 5(c) of the Purchase Agreement dated March 16, 2001
(the "Purchase Agreement") among the Issuer, Michael Foods, Inc., a Minnesota
corporation (the "Company"), and Banc of America Securities LLC and Bear,
Stearns & Co. Inc. (the "Initial Purchasers" and herein being called "you"). The
issuance and sale of the Notes by the Issuer is part of the financing that will
be used to consummate the acquisition of the Company in accordance with an
agreement and plan of merger dated as of December 21, 2000, and as amended on
March 6, 2001 (the "Merger Agreement"), among the Company, M-Foods Holdings,
Inc., a Delaware corporation ("Holdings"), and the Issuer. Pursuant to the terms
of the Merger Agreement, and subject to the conditions set forth therein, the
Issuer will merge with and into the Company (the "Merger") and the Company, as a
wholly owned subsidiary of Holdings, will continue as the surviving corporation
(the "Surviving Corporation"). Every term which is defined or given a special
meaning in the Purchase Agreement and which is not given a different meaning in
this letter has the same meaning whenever it is used in this letter as the
meaning it is given in the Purchase Agreement.

      In connection with the preparation of this letter, we have among other
things read:

      (a)   the Offering Memorandum of the Issuer, dated March __, 2001,
            covering the offering and sale of the Securities (the "Offering
            Memorandum");

      (b)   an executed original of the Purchase Agreement;


      (c)   an executed original of the Indenture;

      (d)   specimen certificates of the Notes;

      (e)   an executed original of the Registration Rights Agreement;

      (f)   an executed original of the Pledge Agreement;

      (g)   the form of the Supplemental Indenture to be executed by the
            Surviving Corporation and the Subsidiaries (as defined below) upon
            consummation of the Merger;

      (h)   a certified copy of resolutions adopted by the Board of Directors of
            the Issuer on March 16, 2001;

      (i)   copies of all certificates and other documents delivered today at
            the closing of the purchase and sale of the Notes under the Purchase
            Agreement; and

      (j)   any executed original of the Merger Agreement and certified copies
            of resolutions adopted by the Board of Directors of the Issuer and
            Holdings on December 21, 2000 and March 6, 2001 in connection
            therewith.

      The term "Transaction Documents" is used in this letter to collectively
refer to the Purchase Agreement, the Indenture, the Notes, the Registration
Rights Agreement and the Pledge Agreement.

      Subject to the assumptions, qualifications and limitations which are
identified in this letter, we advise you that:

1.    The Issuer is a corporation existing and in good standing under the
      Minnesota Business Corporation Act (the "MBCA"). The Issuer is not
      qualified to do business as a foreign corporation in any state.

2.    All of the outstanding shares of capital stock of the Issuer have been
      duly authorized and validly issued, are fully paid and nonassessable. All
      the outstanding shares of capital stock of the Issuer are owned of record
      by Holdings and, after consummation of the Merger in accordance with the
      terms of the Merger Agreement, all the outstanding shares of capital stock
      of the Surviving Corporation will be owned of record by Holdings. The
      issuance and sale of Notes by the Issuer will not be subject to any
      pre-emptive rights under the articles of incorporation or by-laws of the
      Issuer or any agreement known to us to which the Issuer is a party.

3.    The Issuer has the power and authority to enter into and perform its
      obligations under the Transaction Documents.


4.    The Purchase Agreement has been duly authorized, executed and delivered by
      the Issuer.

5.    The Indenture has been duly authorized, executed and delivered by the
      Issuer, is a valid and binding obligation of the Issuer, and is
      enforceable against the Issuer in accordance with its terms.


6.    The Registration Rights Agreement has been duly authorized, executed and
      delivered by the Issuer, is a valid and binding obligation of the Issuer,
      and is enforceable against the Issuer in accordance with its terms.

7.    The Pledge Agreement has been duly authorized, executed and delivered by
      the Issuer, is a valid and binding obligation of the Issuer, and is
      enforceable against the Issuer in accordance with its terms.

8.    The Notes have been duly authorized, executed and delivered by the Issuer
      and, when paid for by the Initial Purchasers in accordance with the terms
      of the Purchase Agreement (assuming the due authorization, execution and
      delivery of the Indenture by the Trustee and due authentication and
      delivery of the Notes by the Trustee in accordance with the Indenture),
      will constitute Notes under the terms of the Indenture, will constitute
      valid and binding obligations of the Issuer, and will be enforceable
      against the Issuer in accordance with their terms.

9.    The Board of Directors of the Issuer has adopted by requisite vote the
      resolutions necessary to authorize the execution, delivery and performance
      of the Exchange Notes. No approval by the stockholders of the Issuer is
      required.

10.   The execution and delivery of the Transaction Documents by the Issuer, the
      performance by the Issuer of its respective obligations thereunder, the
      consummation of the transactions contemplated thereby (including, without
      limitation, the Issuer's issuance and sale of the Notes to you in
      accordance with the terms of the Purchase Agreement and the application of
      the proceeds therefrom in accordance with the terms of the Pledge
      Agreement), the assumption by operation of law of the obligations of the
      Issuer under the Notes by the Surviving Corporation in connection with the
      Merger, the execution of the Supplemental Indenture by the Surviving
      Corporation and the Subsidiaries, and the issuance of the Guarantees by
      the Subsidiaries pursuant to the terms of the Supplemental Indenture do
      not and will not conflict with or constitute or result in a breach or
      default under (or an event which with notice or the passage of time or
      both would constitute a default under) any of, (i) the charter, bylaws or
      other organizational documents of the Issuer, the Company and the
      Subsidiaries, (ii) any statute or governmental rule or regulation which,
      in our experience, is normally applicable both to general business
      corporations that are not engaged in regulated business activities and to
      transactions of the type contemplated by the Offering Memorandum (but
      without our having made any special investigation as to other laws and
      provided that we express no opinion in this



      paragraph with respect to (a) any laws, rules or regulations to which the
      Issuer or the Company may be subject as a result of the Initial
      Purchasers' legal or regulatory status or the involvement of the Initial
      Purchasers in such transactions, (b) any laws, rules or regulations
      relating to misrepresentations or fraud or (c) the Securities Act, the
      Exchange Act or the Trust Indenture Act) or (iii) the terms or provisions
      of any contract or form of contract set forth on Exhibit A attached hereto
      (other than item 3 thereof), except for, with respect to items (ii) and
      (iii) only, any such conflict, breach or default which would not,
      individually or in the aggregate, reasonably be expected to have a
      Material Adverse Change or to materially impair the ability of the Issuer
      or, after consummation of the Merger, the Surviving Corporation and the
      Subsidiaries to perform their respective obligations under the Transaction
      Documents. The Issuer and the Company have certified to us that Exhibit A
      represents all of their respective material contracts.


11.   To our actual knowledge, no consent, waiver, approval, authorization or
      order of any court or governmental authority is required in connection
      with the performance by the Issuer of obligations in connection with the
      offering, the issuance and sale by the Issuer of the Notes to the Initial
      Purchasers, the consummation by the Issuer of the other transactions
      contemplated by the Transaction Documents, the assumption by operation of
      law of the obligations of the Issuer under the Notes by the Surviving
      Corporation in connection with the Merger or the issuance of the
      Guarantees by the Subsidiaries pursuant to the terms of the Supplemental
      Indenture, except such as may be required under the Securities Act, the
      Exchange Act, the Trust Indenture Act and the securities or Blue Sky laws
      of the various states (and the rules and regulations thereunder), as to
      which we express no opinion in this paragraph.

12.   No registration under the Securities Act of the Notes is required in
      connection with: (i) the sale of the Notes to the Initial Purchasers in
      the manner contemplated by the Purchase Agreement and the Offering
      Memorandum; (ii) the initial resale of the Notes by the Initial Purchasers
      in accordance with Section 7 of the Purchase Agreement; (iii) assumption
      by operation of law of the obligations of the Issuer under the Notes by
      the Surviving Corporation in connection with the Merger; or (iv) the
      issuance of the Guarantees by the Subsidiaries pursuant to the terms of
      the Supplemental Indenture, and prior to the commencement of the Exchange
      Offer or the effectiveness of the Shelf Registration Statement (as defined
      in the Registration Rights Agreement), the Indenture is not required to be
      qualified under the Trust Indenture Act, in each case assuming (A) that
      the Subsequent Purchasers who buy such Notes in the initial resale thereof
      are qualified institutional buyers as defined in Rule 144A promulgated
      under the Securities Act, or persons other than U.S. persons in connection
      with offers made in reliance upon Regulation S under the Securities Act
      and (B) the compliance with the covenants set forth in Section 7 of the
      Purchase Agreement by the Initial Purchasers.



13.   The information in the Offering Memorandum under the headings "United
      States Federal Tax Consequences," "Description of Notes" and "Notice to
      Investors" to the extent that such information summarizes laws,
      governmental rules or regulations or documents referred to therein is
      correct in all material respects.

14.   We have no knowledge about any legal or governmental proceeding that is
      pending or threatened against the Issuer, the Company or any of the
      Subsidiaries that has caused us to conclude that such proceeding would be
      required to be described by Item 103 of Regulation S-K under the
      Securities Act if the issuance of the Notes were being registered under
      the Securities Act but is not so described in the Offering Memorandum. 1.

15.   The Issuer is not, nor immediately after the sale of the Notes to the
      Initial Purchasers and application of the proceeds therefrom in accordance
      with the terms of the Pledge Agreement will be, an "investment company" as
      such term is defined in the Investment Company Act. The Company is not,
      nor immediately after the assumption by operation of law of the
      obligations of the Issuer under the Notes in connection with the Merger
      and the application of the net proceeds from the sale of the Notes as
      described in the Offering Memorandum under the caption "Use of Proceeds"
      will the Surviving Corporation be, an "investment company" as such term is
      defined in the Investment Company Act.

16.   To our actual knowledge, there are no contracts, agreements or
      understandings between the Company or the Issuer and any person granting
      such person the right to require the Company or the Issuer, as applicable,
      to include any securities with the Exchange Notes registered pursuant to
      the Exchange Registration Statement.

17.   None of the sale, issuance, execution or delivery of the Notes, the
      assumption by operation of law of the obligations of the Issuer under the
      Notes in connection with the Merger or the application of the proceeds
      therefrom in accordance with the terms of the Pledge Agreement and, upon
      consummation of the Merger, as described in the Offering Memorandum under
      the caption "Use of Proceeds," will contravene Regulation T (12 C.F.R.
      Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R.
      Part 224) of the Board of Governors of the Federal Reserve System.

18.   The Merger Agreement has been duly authorized, executed and delivered by
      the Issuer and Holdings and approved and adopted by Holdings as to sole
      stockholder of the Issuer and (assuming the due authorization, execution
      and delivery by the Company) is enforceable against each in accordance
      with its terms. All of the obligations of the Issuer under the Transaction
      Documents will become obligations of the Surviving Corporation by
      operation of law upon consummation of the Merger pursuant to Section
      302A.641, Subd. 2 of the MBCA.

19.   The provisions of the Pledge Agreement are effective to create in favor of
      the Collateral Agent (as defined in the Pledge Agreement) as agent of and
      securities intermediary for the Trustee, for the benefit of the holders of
      the Notes, a valid security interest in that



      portion of the Collateral (as defined in the Pledge Agreement) in which a
      security interest may be created under Article 9 of the Uniform Commercial
      Code of the State of New York (the "New York UCC") as security for the
      payment of the Obligations (as defined in the Pledge Agreement).

20.   The Collateral Agent will have a perfected security interest in the
      Pledged Financial Assets (as defined in the Pledge Agreement) and the
      Pledged Security Entitlements (as defined in the Pledge Agreement)
      (collectively, the "Pledged Investment Property") upon BNY Midwest Trust
      Company, as securities intermediary (the "Securities Intermediary") with
      respect to such Pledged Investment Property, receiving the certificates,
      if any, constituting Pledged Financial Assets and indicating by book-entry
      that the Pledged Financial Assets have been credited to the Collateral
      Account maintained with the Securities Intermediary by the Collateral
      Agent for the benefit of the Secured Parties (as defined in the Pledge
      Agreement), and the Securities Intermediary agreeing that it will comply
      with entitlement orders with respect to the Pledged Financial Assets
      originated by the Collateral Agent without further consent by the Issuer.
      Assuming that neither the Collateral Agent, the Securities Intermediary,
      nor any other Secured Party has notice of an adverse claim to such Pledged
      Investment Property or any Pledged Financial Asset and that the security
      interest of the Collateral Agent for the benefit of the Secured Parties in
      such Pledged Investment Property is perfected as described above, no
      action based on an adverse claim to such Pledged Investment Property or
      such Pledged Financial Assets may be asserted against the Collateral Agent
      or any other Secured Party.

                                   ----------

      The purpose of our professional engagement was not to establish factual
matters, and preparation of the Offering Memorandum involved many determinations
of a wholly or partially nonlegal character. We make no representation that we
have independently verified the accuracy, completeness or fairness of the
Offering Memorandum or that the actions taken in connection with the preparation
of the Offering Memorandum (including the actions described in the next
paragraph) were sufficient to cause the Offering Memorandum to be accurate,
complete or fair. We are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the Offering Memorandum except to
the extent otherwise explicitly indicated in numbered paragraph 13 above.

      We can however confirm that we have participated in conferences with
representatives of the Company and the Issuer, representatives of the Initial
Purchasers, counsel for the Initial Purchasers and representatives of the
independent accountants for the Company during which disclosures in the Offering
Memorandum and related matters were discussed. In addition, we have reviewed
certain corporate records furnished to us by the Company and the Issuer.



      Based upon our participation in the conferences and our document review
identified in the preceding paragraph, our understanding of applicable law and
the experience we have gained in our practice thereunder and relying as to
materiality to a large extent upon the opinions and on statements of officers of
the Company, we can, however, advise you that nothing has come to our attention
that has caused us to conclude that the Offering Memorandum, at the date it
bears or on the date of this letter, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

                                   ----------

      Except for the activities described in the immediately preceding section
of this letter, we have not undertaken any investigation to determine the facts
upon which the advice in this letter is based. We note that our ongoing
representation of the Issuer and Holdings in connection with the transactions
contemplated by the Merger Agreement precludes us from serving as counsel to the
Company until such time the Merger has been consummated.

      We have assumed for purposes of this letter: each document we have
reviewed for purposes of this letter is accurate and complete, each such
document that is an original is authentic, each such document that is a copy
conforms to an authentic original, and all signatures on each such document are
genuine; that the Purchase Agreement and every other agreement we have examined
for purposes of this letter constitutes a valid and binding obligation of each
party to that document and that each such party has satisfied all legal
requirements that are applicable to such party to the extent necessary to
entitle such party to enforce such agreement (except that we make no such
assumption with respect to the Issuer); and that you have acted in good faith
and without notice of any fact which has caused you to reach any conclusion
contrary to any of the advice provided in this letter. We have also made other
assumptions which we believe to be appropriate for purposes of this letter.

      For purposes of our opinion in paragraph 20 above, we have assumed that:
(A) BNY Midwest Trust Company is a "securities intermediary" within the meaning
of Section 8-102(a)(14) of the New York UCC and the Federal Book-Entry
Regulations (as defined in the Pledge Agreement) and is acting as such with
respect to the Collateral Account pursuant to an agreement governed by the State
of New York; (B) the Collateral Account is a "securities account" within the
meaning of Section 8-501(a) of the New York UCC; (C) all property from time to
time credited to the Collateral Account are "financial assets" within the
meaning of Section 8-102(a)(9) of the New York UCC; (D) the Issuer is, and will
remain, the only "entitlement holder" (within the meaning of Section 8-102(a)(7)
of the New York UCC and the Federal Book-Entry Regulations) of the Collateral
Account and the Pledged Financial Assets from time to time credited to the
Collateral Account; (E) BNY Midwest Trust Company, as securities intermediary,
if it holds the Pledged Financial Assets directly, holds them in the



Collateral Account indorsed to such securities intermediary or in blank; (F) BNY
Midwest Trust Company has, and will continue to have, a Participant's Securities
Account in its name at the Federal Reserve Bank of New York; and (G) the Federal
Reserve Bank of New York has made, and will continue to make, appropriate
entries on its records crediting the Pledged Financial Assets referred to in
paragraph 20 above consisting of Government Securities (as defined in the Pledge
Agreement) to the Participant's Securities Account referred to in clause (F)
above. In addition, our opinions in paragraphs 19 and 20 above are further
subject to all qualifications in Schedule A.

      In preparing this letter we have relied without independent verification
upon: (i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Purchase
Agreement and other documents specifically identified at the beginning of this
letter as having been read by us; (iii) factual information provided to us by
the Company and the Issuer or their representatives; and (iv) factual
information we have obtained from such other sources as we have deemed
reasonable. We have assumed that there has been no relevant change or
development between the dates as of which the information cited in the preceding
sentence was given and the date of this letter and that the information upon
which we have relied is accurate and does not omit disclosures necessary to
prevent such information from being misleading. For purposes of numbered
paragraph 1, we have relied exclusively upon certificates issued by governmental
authorities in the relevant jurisdictions and such opinion is not intended to
provide any conclusion or assurance beyond that conveyed by those certificates.
For purposes of the first sentence in numbered paragraph 15, we have assumed
that the proceeds from the sale of the Notes will be invested in Government
Securities as prescribed by the Pledge Agreement.

      We confirm that we do not have knowledge that has caused us to conclude
that our reliance and assumptions cited in the two immediately preceding
paragraphs are unwarranted. Whenever this letter provides advice about (or based
upon) our knowledge of any particular information or about any information which
has or has not come to our attention such advice is based entirely on the
conscious awareness at the time this letter is delivered on the date it bears by
the lawyers with Kirkland & Ellis at that time who spent substantial time
representing the Issuer in connection with the offering effected pursuant to the
Offering Memorandum.

      Each opinion (an "enforceability opinion") in this letter that any
particular contract is a valid and binding obligation or is enforceable in
accordance with its terms is subject to: (i) the effect of bankruptcy,
insolvency, fraudulent conveyance and other similar laws affecting creditors'
rights generally and judicially developed doctrines in this area such as
substantive consolidation and equitable subordination; (ii) the effect of
general principles of equity; and (iii) other commonly recognized statutory and
judicial constraints on enforceability including statutes of limitations.
"General principles of equity" include but are not limited to: principles
limiting the availability of specific performance and injunctive relief;
principles which limit the availability of a remedy under certain circumstances
where another remedy has been elected;



principles requiring reasonableness, good faith and fair dealing in the
performance and enforcement of an agreement by the party seeking enforcement;
principles which may permit a party to cure a material failure to perform its
obligations; and principles affording equitable defenses such as waiver, laches
and estoppel. It is possible that terms in a particular contract covered by our
enforceability opinion may not prove enforceable for reasons other than those
explicitly cited in this letter should an actual enforcement action be brought,
but (subject to all the exceptions, qualifications, exclusions and other
limitations contained in this letter) such unenforceability would not in our
opinion prevent the party entitled to enforce that contract from realizing the
principal benefits purported to be provided to that party by the terms in that
contract which are covered by our enforceability opinion.

      Our advice on every legal issue addressed in this letter is based
exclusively on the internal law of the State of New York or the federal law of
the United States, except that (i) the opinions in paragraphs 4, 5, 6, 7, 8 and
18 with respect to due authorization, execution and delivery of the agreements
or instruments referenced therein by the Issuer are based solely on our review
of the MBCA; (ii) the opinion in paragraph 18 with respect to due authorization,
execution and delivery of the Merger Agreement by Holdings is based on the
General Corporation Law of the State of Delaware; and (iii) the opinion in the
second sentence of paragraph 21 with respect to the effects of the Merger are
based solely on our review of Section 302A.641, Subd. 2 of the MBCA. We note
that we are not admitted to practice in the State of Minnesota and, as such, our
opinions are based solely on our review of the applicable statutory provisions
of the MBCA without regard to any regulations promulgated thereunder or any
judicial, administrative or regulatory interpretations thereof. Each of the
Transaction Documents provide that the governing law thereunder shall be the
laws of the State of New York. We express no opinion as to what law might be
applied by any courts to resolve any issue addressed by our opinion and we
express no opinion as to whether any relevant difference exists between the laws
upon which our opinions are based and any other laws which may actually be
applied to resolve issues which may arise under the Transaction Documents. The
manner in which any particular issue would be treated in any actual court case
would depend in part on facts and circumstances particular to the case and would
also depend on how the court involved chose to exercise the wide discretionary
authority generally available to it. This letter is not intended to guarantee
the outcome of any legal dispute which may arise in the future.

      None of the opinions or other advice contained in this letter considers or
covers: (i) any state securities or Blue Sky laws or regulations, (ii) any
financial statements or supporting schedules (or any notes to any such
statements or schedules) or other financial or statistical information set forth
or incorporated by reference in (or omitted from) the Offering Memorandum or
(iii) any rules and regulations of the National Association of Securities
Dealers, Inc. relating to the compensation of underwriters. In addition, none of
the opinions or other advice contained in this letter covers or otherwise
addresses any of the following types of provisions which may be contained in the
Transaction Documents: (i) provisions mandating contribution towards judgments
or settlements among various parties; (ii) waivers of benefits and



rights to the extent they cannot be waived under applicable law; (iii)
provisions providing for liquidated damages, late charges and prepayment
charges, in each case if deemed to constitute penalties; (iv) provisions which
might require indemnification or contribution in violation of general principles
of equity or public policy, including, without limitation, indemnification or
contribution obligations which arise out of the failure to comply with
applicable state or federal securities laws; or (v) requirements in the
Transaction Documents specifying that provisions thereof may only be waived in
writing (these provisions may not be valid, binding or enforceable to the extent
that an oral agreement or an implied agreement by trade practice or course of
conduct has been created modifying any provision of such documents). This letter
does not cover any other laws, statutes, governmental rules or regulations or
decisions which in our experience are not usually considered for or covered by
opinions like those contained in this letter or are not generally applicable to
transactions of the kind covered by the Purchase Agreement.

      This letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which we did not have knowledge at that time,
by reason of any change subsequent to that time in any law other governmental
requirement or interpretation thereof covered by any of our opinions or advice,
or for any other reason.

      This letter may be relied upon by the Initial Purchasers only for the
purpose served by the provision in the Purchase Agreement cited in the initial
paragraph of this letter in response to which it has been delivered. Without our
written consent: (i) no person other than the Initial Purchasers may rely on
this letter for any purpose; (ii) this letter may not be cited or quoted in any
financial statement, offering memorandum, private placement memorandum or other
similar document; (iii) this letter may not be cited or quoted in any other
document or communication which might encourage reliance upon this letter by any
person or for any purpose excluded by the restrictions in this paragraph; and
(iv) copies of this letter may not be furnished to anyone for purposes of
encouraging such reliance.

                                                   Very truly yours,


                                                   KIRKLAND & ELLIS



                                    Exhibit A

                  Material Contracts of the Company and Issuer

1.    Egg Supplier Agreement between Papetti's of Iowa Food Products, Inc. and
      Sunbest/Papetti Farms dated October 19, 1993.

2.    Consolidated, Restated and Amended License Agreement dated June 9, 2000 by
      and between North Carolina State University and the Company.

3.    7.58% Senior Notes due February 26, 2009 issued under those certain Loan
      Agreements dated February 26, 1997 between the Company and various lenders
      named therein, including Metropolitan Life Insurance Company, as Agent,
      including all security, pledge and collateral agreements related thereto.

4.    Form of Credit Agreement, between the Company, as borrower, Holdings and
      the subsidiaries of the Company from time to time, as guarantors, the
      lenders from time to time and, Bank of America, N. A., as Agent.

5.    Composite Amended Agreement and Plan of Merger, dated as of December 21,
      2000, by and among Holdings, the Issuer and the Company.

6.    Lease Agreement, dated as of June 1, 1997, by and between Park National
      Bank Building Corporation and the Company, relating to the lease of office
      space located at 5353 Wayzata Boulevard, St. Louis Park, MN 55416.

7.    Lease, dated as of February 26, 1997, by and between the Company and A&A
      Urban Renewal, relating to the lease of a facility located at 100 Trumbull
      St., Elizabeth, NJ.

8.    Lease, dated as of February 26, 1997, by and between Michael Foods, Inc.
      (a Delaware coproration) and Papetti Holding Company, et al., relating to
      the lease of a facility located at 877-879 E. North Ave., Elizabeth, NJ.

9.    Lease, dated as of February 26, 1997, by and between Michael Foods, Inc.
      (a Delaware corporation) and Papetti Holding Company, relating to the
      lease of a facility located at 847-855 E. North Ave., Elizabeth, NJ.

10.   Lease, dated as of February 26, 1997, by and between Michael Foods, Inc.
      (a Delaware corporation) and Jersey Pride Urban Renewal, relating to the
      lease of a facility located at One Papetti Plaza., Elizabeth, NJ.

11.   Lease, dated as of January 15, 1993, by and between Midwest Mix, Inc. and
      Associated Milk Producters, Inc., relating to the lease of a facility
      located at 1101 Main Street, Sulphur Springs, TX.



12.   Lease, dated as of April 30, 1999, by and between Kohler Mix Specialties
      of Connecticut, Inc. and H.P. Hood, Inc., relating to a lease of a
      facility located at 100 Milk Lane, Newington, CT.

13.   Lease, dated as of May 4, 1988, by and between Park Place OPCO, LLC and
      Crystal Farms Refrigerated Distribution Company, relating to an office
      facility located at 6465 Wayzata Blvd. St. Louis Park, MN.

14.   Lease Agreement, dated as of June 27, 2000, by and among Civic Center
      Properties, LLC and the Company, relating to a facility located at 3840 N.
      Civic Center Dr., North Las Vegas, NV.

15.   Letter Agreement, dated as of December 21, 2000, between the Issuer and
      Vestar Capital Partners IV, L.P.

16.   Letter Agreement, dated as of December 21, 2000, between the Issuer and
      Marathon Fund Limited Partnership IV.

17.   Form of Employment Agreement between the Company and Gregg A. Ostrander.

18.   Form of Employment Agreement between the Company and John D. Reedy.

19.   Form of Employment Agreement between the Company and James D. Clarkson.

20.   Form of Employment Agreement between the Company and Bill L. Goucher.


                                      C-2


                                   Schedule A

                                 Qualifications

            The opinions and advice contained in paragraphs 19 and 20 of our
letter are subject to the following advice:

      (a)   Our opinions regarding the creation and perfection of security
            interests are subject to (i) the limitations on the existence and
            perfection of security interests in collateral following its sale,
            exchange or other disposition, and in proceeds resulting from the
            operation of Sections 9-306 and 9-309 of the New York UCC, and (ii)
            the effect of Section 547 of the Bankruptcy Code with respect to
            preferential transfers and Section 552 of the Bankruptcy Code with
            respect to any collateral acquired by the Issuer subsequent to the
            commencement of a case against or by the Issuer under the Bankruptcy
            Code.

      (b)   The rights of an entitlement holder with respect to any security
            entitlement are subject to the limitations set forth in Section
            8-503 of the New York UCC.

      c)    Our opinions regarding the priority of security interests are
            subject to the provisions of Sections 9-115(5)(b) and 9-115(5)(c) of
            the New York UCC.


                                      C-3


                                                                       EXHIBIT D

                    FORM OF OPINION OF COUNSEL OF THE COMPANY

            Opinion of Kaplan, Strangis and Kaplan, P.A., counsel of the Company
to be delivered pursuant to Section 5(d) of the Purchase Agreement.

                                 March 27, 2001

Banc of America Securities LLC
Bear, Stearns & Co. Inc.,
as Initial Purchasers
c/o Banc of America Securities LLC
9 West 57th Street, 47th Floor
New York, New York 10019

            Re:   Michael Foods, Inc. $200,000,000 11 3/4% Senior Subordinated
                  Notes due 2011

Ladies and Gentlemen:

      We have acted as special counsel to Michael Foods, Inc., a Minnesota
Corporation (the "Company"), in connection with the Purchase Agreement dated
March 16, 2001 (the "Purchase Agreement") among the Company, Michael Foods
Acquisition Corp., a Minnesota corporation, and Banc of America Securities LLC
and Bear, Stearns & Co. Inc. This opinion is being delivered pursuant to Section
5(d) of the Purchase Agreement. All capitalized terms used herein and not
defined herein shall have the meanings assigned to them in the Purchase
Agreement.

      In connection with this opinion, we have reviewed the following documents:

      (i)   An executed original of the Purchase Agreement;

      (ii)  A certified copy of resolutions adopted by the Board of Directors of
            the Company on February 28, 2001 with respect to the Purchase
            Agreement; and

      (iii) An executed original of the Merger Agreement and certified copies of
            resolutions adopted by the Board of Directors of the Company on
            December 21, 2000 and February 28, 2001 in connection therewith.

      In addition, we have examined such documents, reviewed such questions of
law and received such information from officers and representatives of the
Company, as we have deemed necessary or appropriate for the purposes of this
opinion.

      As to questions of fact material to our opinions, we have relied upon
representations made in the Purchase Agreement and upon certificates of officers
of the Company and of public


                                       4


officials (including, without limitation, those certificates delivered to others
on the Closing Date). We have also assumed that there has been no relevant
change or development between the dates as of which the information cited in the
preceding sentence was given and the date of this letter and that information
upon which we have relied is accurate and does not omit disclosures necessary to
prevent such information from being misleading. For purposes of numbered
paragraphs 2 (with respect to the Company's subsidiaries listed in Exhibit B)
and 3 below, we have relied exclusively upon certificates issued by governmental
authorities in the relevant jurisdictions and such opinions are not intended to
provide any conclusion or assurance beyond that conveyed by those certificates.

      In rendering our opinions set forth below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies. We have also assumed the legal capacity for all
purposes relevant hereto of all natural persons and, with respect to all parties
to agreements or instruments relevant hereto other than the Company, that such
parties had the requisite power and authority (corporate or otherwise) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties, and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties.

      Whenever our opinion expressed in this letter provides advice about (or is
based upon) our knowledge of any particular information or about any information
which has or has not come to our attention, such advice is based entirely upon
the conscious awareness at the time this letter is delivered on the date it
bears by Mary S. Giesler and James C. Melville, the attorneys in this firm who
have represented the Company in connection with the Purchase Agreement. We
hereby advise you that we have not regularly represented the Company with
respect to its ongoing operations, and the purpose of our professional
engagement was not to establish factual matters or be involved in the
preparation of the Offering Memorandum. We make no representation that we have
independently verified the accuracy, completeness or fairness of the Offering
Memorandum or that the actions taken in connection with the preparation of the
Offering Memorandum were sufficient to cause the Offering Memorandum to be
accurate, complete or fair. We are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the Offering
Memorandum. No inference as to our knowledge with respect to such matters should
be drawn from the fact of our limited representation of the Company.

      Based on the foregoing, and subject to the qualifications set forth below,
we are of the opinion that:

      1.    The Company is a corporation existing and in good standing under the
            laws of the State of Minnesota.

      2.    Each of the Company's subsidiaries listed on Exhibit A and Exhibit B
            attached hereto (the "Subsidiaries") is an existing corporation,
            limited partnership or cooperative, as applicable, and is in good
            standing under the laws of the jurisdiction of its organization.


                                       5


      3.    The Company and each of the Subsidiaries are qualified to do
            business as a foreign corporation, limited partnership or
            cooperative, as applicable, and is in good standing in those states
            listed on Exhibit C attached hereto, which we have been informed by
            the Company are the only states where it or the Subsidiaries own or
            lease property.

      4.    Based solely on our review of the minute books, and stock or
            partnership interest records or limited partnership agreements of
            such entities, to our knowledge, all of the issued and outstanding
            capital stock or partnership interests, as the case may be, of the
            Subsidiaries is owned of record by the Company or one of its
            Subsidiaries as indicated on Exhibit D attached hereto, except as
            noted thereon.

      5.    The Company and each of the Subsidiaries has the power to own and
            lease their respective properties and to conduct their respective
            businesses as described in the Offering Memorandum.

      6.    The Purchase Agreement has been duly authorized by all requisite
            corporate action, executed and delivered by the Company.

      7.    The Merger Agreement has been duly authorized by all requisite
            corporate action, executed and delivered by the Company. The Merger
            Agreement (assuming the due authorization, execution and delivery by
            Issuer and M-Foods Holdings, Inc.) constitutes the valid and binding
            obligation of the Company enforceable in accordance with its terms.

      8.    Upon consummation of the Merger, all of the obligations of the
            Issuer under the Purchase Agreement, the Indenture, the Notes, the
            Registration Rights Agreement and the Pledge Agreement will become
            obligations of the Surviving Corporation by operation of law
            pursuant to Section 302A.641, Subd. 2 of the Minnesota Business
            Corporation Act.

      Our opinions set forth above are subject to the following qualifications:

      (a) Our opinions are subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar law of general
application, including (without limitation) applicable fraudulent transfer laws.

      (b) Our opinions are subject to the effect of general principles of
equity, including (without limitation) concepts of materiality, reasonableness,
good faith and fair dealing, and other similar doctrines affecting the
enforceability of agreements generally (regardless of whether considered in a
proceeding in equity or at law).

      (c) Minn. Statutes Section 290.371, Subd. 5 provides that any corporation
required to file a Notice of Business Activities Report does not have a cause of
action upon which it may bring suit under Minnesota law unless the corporation
has filed a Notice of Business Activities Report and provides that the use of
the courts of the State of Minnesota for all contracts executed and all causes
of action that arose before the end of any period for which a corporation failed
to file a


                                       6


required report is precluded. Insofar as our opinions may relate to the valid,
binding and enforceable character of any agreement under Minnesota law or in a
Minnesota court, we have assumed that any party seeking to enforce such
agreement has at all times been, and will continue at all times to be, exempt
from the requirements of filing a Notice of Business Activities Report or, if
not exempt, has duly filed, and will continue to duly file, all Notice of
Business Activities Reports.

      (d) We are qualified to practice law only in the State of Minnesota and
don't purport to be expert in the laws of any other state. Our opinions
expressed above are limited to the laws of the State of Minnesota. We call your
attention to the fact that the Purchase Agreement states that it is governed by
New York law. We have not examined the question of what law would govern the
interpretation or enforcement of such agreement.

      Our opinions are limited to the specific issues addressed and are limited
in all respects to laws and facts existing on the date of this letter. We do not
assume any obligation to provide you with any subsequent opinion or advice by
reason of any fact about which we did not have knowledge at that time, by reason
of any change subsequent to that time of any law, other governmental requirement
or interpretation thereof covered by any of our opinions or advice or for any
other reason.

      This letter may be relied upon by the Initial Purchasers only for the
purpose served by the provision in the Purchase Agreement cited in the initial
paragraph of this letter, in response to which it has been delivered.

      Without our written consent: (i) no person other than the Initial
Purchasers may rely on this letter for any purpose; (ii) this letter may not be
cited or quoted in any financial statement, offering memorandum, private
placement memorandum, or other similar document; (iii) this letter may not be
cited or quoted in any other document or communication which might encourage
reliance upon this letter by any person or for any purpose excluded by the
restrictions in this paragraph; and (iv) copies of this letter may not be
furnished to anyone for purposes of encouraging such reliance.


                                       7


                                                                       Exhibit A

Subsidiaries of the Company incorporated in the State of Minnesota:

Casa Trucking, Inc.
Crystal Farms Refrigerated Distribution Company
Kohler Mix Specialties, Inc.
Midwest Mix, Inc.
Minnesota Products, Inc.
Northern Star Co.
Papetti's Hygrade Egg Products, Inc.


                                      A-1


                                                                       Exhibit B

Subsidiaries of the Company formed in jurisdictions other than Minnesota:

        Entity Name                            State of Formation
        -----------                            ------------------

Farm Fresh Foods, Inc.                         California corporation
Farm Fresh Foods of Nevada, Inc.               Nevada corporation
Kohler Mix Specialties of Connecticut, Inc.    Connecticut corporation
M.G. Waldbaum Company                          Nebraska corporation
Michael Foods of Delaware, Inc.                Delaware corporation
Papetti Electroheating Corporation             New Jersey corporation
R&P Liquid Egg Technology Limited Partnership  New Jersey limited partnership
WFC, Inc.                                      Wisconsin corporation
Wisco Farm Cooperative                         Wisconsin cooperative association


                                      B-1


                                                                       Exhibit C

Foreign Qualification of the Company and its Subsidiaries:



- ------------------------------------------------------------------------------------------------
    Name of Entity                                      State of         States in which
                                                      Incorporation         Qualified
- ------------------------------------------------------------------------------------------------
                                                                  
    Casa Trucking, Inc.                               Minnesota         Iowa
                                                                        New Jersey
                                                                        Pennsylvania
- ------------------------------------------------------------------------------------------------
    Crystal Farms Refrigerated Distribution           Minnesota         Colorado
    Company                                                             Illinois
                                                                        Indiana
                                                                        Iowa
                                                                        Kansas
                                                                        Missouri
                                                                        Nebraska
                                                                        North Dakota
                                                                        Ohio
                                                                        Pennsylvania
                                                                        South Dakota
- ------------------------------------------------------------------------------------------------
    Farm Fresh Foods, Inc.                            California        None
- ------------------------------------------------------------------------------------------------
    Farm Fresh Foods of Nevada, Inc.                  Nevada            None
- ------------------------------------------------------------------------------------------------
    Kohler Mix Specialties, Inc.                      Minnesota         Wisconsin
- ------------------------------------------------------------------------------------------------
    Kohler Mix Specialties of Connecticut, Inc.       Connecticut       None
- ------------------------------------------------------------------------------------------------
    M.G. Waldbaum Company                             Nebraska          Colorado
                                                                        Iowa
                                                                        Minnesota
                                                                        Ohio
                                                                        South Dakota
                                                                        Texas
                                                                        Wisconsin
- ------------------------------------------------------------------------------------------------
    Michael Foods, Inc.                               Minnesota         Pennsylvania
- ------------------------------------------------------------------------------------------------
    Michael Foods of Delaware, Inc.                   Delaware          Minnesota
- ------------------------------------------------------------------------------------------------
    Midwest Mix, Inc.                                 Minnesota         Texas
- ------------------------------------------------------------------------------------------------
    Minnesota Products, Inc.                          Minnesota         None
- ------------------------------------------------------------------------------------------------
    Northern Star Co.                                 Minnesota         None
- ------------------------------------------------------------------------------------------------
    Papetti Electroheating Corporation                New Jersey        None
- ------------------------------------------------------------------------------------------------
    Papetti's Hygrade Egg Products, Inc.              Minnesota         New Jersey
                                                                        Pennsylvania
- ------------------------------------------------------------------------------------------------
    WFC, Inc.                                         Wisconsin         None
- ------------------------------------------------------------------------------------------------
    Wisco Farm Cooperative                            Wisconsin         None
- ------------------------------------------------------------------------------------------------
    R&P Liquid Egg Technology Limited Partnership     New Jersey        None
- ------------------------------------------------------------------------------------------------



                                      C-1


                                                                       Exhibit D

Record Ownership of the Company's Subsidiaries:



                                                                                    Percentage
Name of Entity                                  Record Owner                        Ownership
- --------------                                  ------------                        ----------
                                                                                 
Casa Trucking, Inc.                             M.G. Waldbaum Company                  100%

Crystal Farms Refrigerated Distribution         Michael Foods of Delaware, Inc.        100%
Company
Farm Fresh Foods, Inc.                          Michael Foods of Delaware, Inc.        100%

Farm Fresh Foods of Nevada, Inc.                Michael Foods of Delaware, Inc.        100%

Kohler Mix Specialties, Inc.                    Michael Foods of Delaware, Inc.        100%

Kohler Mix Specialties of Connecticut, Inc.     Kohler Mix Specialties, Inc.           100%

M.G. Waldbaum Company                           Michael Foods of Delaware, Inc.        100%

Michael Foods of Delaware, Inc.                 Michael Foods, Inc.                    100%

Midwest Mix, Inc.                               Kohler Mix Specialties, Inc.           100%

Minnesota Products, Inc.                        Northern Star Co.                      100%

Northern Star Co.                               Michael Foods of Delaware, Inc.        100%

Papetti Electroheating Corporation              Papetti's Hygrade Egg Products,        100%
                                                Inc.

Papetti's Hygrade Egg Products, Inc.            M.G. Waldbaum Company                  100%

R&P Liquid Egg Technology Limited               General Partner:
Partnership                                     Papetti Electroheating Corporation
                                                Limited Partners:
                                                Papetti's Hygrade Egg Products,       1.00%
                                                Inc.
                                                Raztek Corporation-not a direct       49.00%
                                                or indirect subsidiary of the         50.00%
                                                Company

WFC, Inc.                                       Michael Foods of Delaware, Inc.        100%

Wisco Farm Cooperative                          WFC, Inc.                              100%




                                                                         ANNEX I

                    TERMS AND CONDITIONS OF OFFERS AND SALES

Resale Pursuant to Regulation S or Rule 144A.

The Initial Purchasers understand that:

            (a) The Initial Purchasers agree that they have not offered or sold
and will not offer or sell the Securities in the United States or to, or for the
benefit or account of, a U.S. Person (other than a distributor), in each case,
as defined in Rule 902 under the Securities Act (i) as part of its distribution
at any time and (ii) otherwise until 40 days after the later of the commencement
of the offering of the Securities pursuant hereto and the Closing Date, other
than in accordance with Regulation S of the Securities Act or another exemption
from the registration requirements of the Securities Act. Such Initial
Purchasers agree that, during such 40-day restricted period, they will not cause
any advertisement with respect to the Securities (including any "tombstone"
advertisement) to be published in any newspaper or periodical or posted in any
public place and will not issue any circular relating to the Securities, except
such advertisements as permitted by and include the statements required by
Regulation S.

            (b) The Initial Purchasers agree that, at or prior to confirmation
of a sale of Securities by them to any distributor, dealer or person receiving a
selling concession, fee or other remuneration during the 40-day restricted
period referred to in Rule 903(c)(3) under the Securities Act, they will send to
such distributor, dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following effect:

      "The Securities covered hereby have not been registered under the U.S.
      Securities Act of 1933, as amended (the "Securities Act"), and may not be
      offered and sold within the United States or to, or for the account or
      benefit of, U.S. persons (i) as part of your distribution at any time or
      (ii) otherwise until 40 days after the later of the commencement of the
      Offering and the Closing Date, except in either case in accordance with
      Regulation S under the Securities Act (or Rule 144A or to Accredited
      Institutions in transactions that are exempt from the registration
      requirements of the Securities Act), and in connection with any subsequent
      sale by you of the Notes covered hereby in reliance on Regulation S during
      the period referred to above to any distributor, dealer or person
      receiving a selling concession, fee or other remuneration, you must
      deliver a notice to substantially the foregoing effect. Terms used above
      have the meanings assigned to them in Regulation S."

EX-4.2

                                                                     Exhibit 4.2

                                                                  EXECUTION COPY

                         MICHAEL FOODS ACQUISITION CORP.

                   11 3/4% SENIOR SUBORDINATED NOTES DUE 2011

                                    INDENTURE

                           Dated as of March 27, 2001

                            BNY MIDWEST TRUST COMPANY

                                     Trustee



                             CROSS-REFERENCE TABLE*

Trust Indenture Act                                                 Indenture
Section                                                             Section
310(a)(1) .........................................................   7.10
   (a)(2) .........................................................   7.10
   (a)(5) .........................................................   7.10
   (b) ............................................................   7.10
   (c) ............................................................   N.A.
311(a) ............................................................   7.11
   (b) ............................................................   7.11
312(a) ............................................................   2.05
   (b) ............................................................  12.03
   (c) ............................................................  12.03
313(a) ............................................................   7.06
   (b)(2) .........................................................   7.06
   (c) ............................................................   7.06
                                                                     12.02
   (d) ............................................................   7.06
314(a) ............................................................   4.03
                                                                     12.05
   (c)(1) .........................................................  12.04
   (c)(2) .........................................................  12.04
   (e) ............................................................  12.05
316(a)(last sentence) .............................................   2.09
   (a)(1)(A) ......................................................   6.05
   (a)(1)(B) ......................................................   6.04
317(a)(1) .........................................................   6.08
*This Cross-Reference Table is not part of this Indenture.


                                       2


                                TABLE OF CONTENTS
                                Table of Contents
                                      Page
              Article 1 DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions.............................................10

Section 1.02. Other Definitions.......................................34

Section 1.03. Incorporation by Reference of Trust Indenture Act.......35

Section 1.04. Rules of Construction...................................35

                               Article 2 THE NOTES

Section 2.01. Form and Dating.........................................36

Section 2.02. Execution and Authentication............................36

Section 2.03. Registrar and Paying Agent..............................37

Section 2.04. Paying Agent to Hold Money in Trust.....................37

Section 2.05. Holder Lists............................................38

Section 2.06. Transfer and Exchange...................................38

Section 2.07. Replacement Notes.......................................50

Section 2.08. Outstanding Notes.......................................50

Section 2.09. Treasury Notes..........................................51

Section 2.10. Temporary Notes.........................................51

Section 2.11. Cancellation............................................51

Section 2.12. Defaulted Interest......................................52

Section 2.13. CUSIP Numbers...........................................52

                       Article 3 REDEMPTION AND PREPAYMENT

Section 3.01. Notices to Trustee......................................52

Section 3.02. Selection of Notes to Be Redeemed.......................52

Section 3.03. Notice of Redemption....................................53


                                       3


Section 3.04. Effect of Notice of Redemption..........................54

Section 3.05. Deposit of Redemption Price.............................54

Section 3.06. Notes Redeemed in Part..................................54

Section 3.07. Optional Redemption.....................................54

Section 3.08. Mandatory Redemption....................................55

Section 3.09. Offer to Purchase.......................................55

                               Article 4 COVENANTS

Section 4.01. Payment of Notes........................................57

Section 4.02. Maintenance of Office or Agency.........................58

Section 4.03. Reports.................................................58

Section 4.04. Compliance Certificate..................................59

Section 4.05. Taxes...................................................59

Section 4.06. Stay, Extension and Usury Laws..........................60

Section 4.07. Restricted Payments.....................................60

Section 4.08. Dividend and Other Payment Restrictions Affecting
              Restricted Subsidiaries.................................64

Section 4.09. Incurrence of Indebtedness and Issuance
              of Preferred Stock .....................................65

Section 4.10. Asset Sales.............................................69

Section 4.11. Transactions with Affiliates............................71

Section 4.12. Liens...................................................73

Section 4.13. Corporate Existence.....................................73

Section 4.14. Offer to Repurchase upon Change of Control..............73

Section 4.15. Limitation on Other Senior Subordinated Debt............74

Section 4.16. Sale and Leaseback Transactions.........................75

Section 4.17. Limitation on Issuances of Guarantees of Indebtedness...75

Section 4.18. Additional Guarantees...................................75


                                       4


Section 4.19. Business Activities.....................................76

Section 4.20. Designation of Restricted and Unrestricted Subsidiaries.76

                              Article 5 SUCCESSORS

Section 5.01.     Merger, Consolidation, or Sale of Assets............76

Section 5.02.     Successor Corporation Substituted...................77

                         Article 6 DEFAULTS AND REMEDIES

Section 6.01.     Events of Default...................................78

Section 6.02.     Acceleration........................................80

Section 6.03.     Other Remedies......................................80

Section 6.04.     Waiver of Past Defaults.............................81

Section 6.05.     Control by Majority.................................81

Section 6.06.     Limitation on Suits.................................82

Section 6.07.     Rights of Holders of Notes to Receive Payment.......82

Section 6.08.     Collection Suit by Trustee..........................82

Section 6.09.     Trustee May File Proofs of Claim....................82

Section 6.10.     Priorities..........................................83

Section 6.11.     Undertaking for Costs...............................83

                                Article 7 TRUSTEE

Section 7.01.     Duties of Trustee...................................84

Section 7.02.     Rights of Trustee...................................85

Section 7.03.     Individual Rights of Trustee........................86

Section 7.04.     Trustee's Disclaimer................................86

Section 7.05.     Notice of Defaults..................................86

Section 7.06.     Reports by Trustee to the Holders of the Notes......86

Section 7.07.     Compensation and Indemnity..........................86


                                       5


Section 7.08.     Replacement of Trustee..............................87

Section 7.09.     Successor Trustee by Merger, etc....................88

Section 7.10.     Eligibility; Disqualification.......................89

Section 7.11.     Preferential Collection of Claims Against Company...89

               Article 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01.     Option to Effect Legal Defeasance or Covenant
                  Defeasance..........................................89

Section 8.02.     Legal Defeasance and Discharge......................89

Section 8.03.     Covenant Defeasance.................................90

Section 8.04.     Conditions to Legal Defeasance or Covenant
                  Defeasance..........................................90

Section 8.05.     Deposited Money and Cash Equivalents to be Held
                  in Trust; Other Miscellaneous Provisions............92

Section 8.06.     Repayment to Company................................92

Section 8.07.     Reinstatement.......................................92

                   Article 9 AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01.     Without Consent of Holders of Notes.................93

Section 9.02.     With Consent of Holders of Notes....................94

Section 9.03.     Compliance with Trust Indenture Act.................95

Section 9.04.     Revocation and Effect of Consents...................95

Section 9.05.     Notation on or Exchange of Notes....................96

Section 9.06.     Trustee to Sign Amendments, etc.....................96

Section 9.07.     Payments for Consent................................96

                            Article 10 SUBORDINATION

Section 10.01.    Agreement to Subordinate............................97

Section 10.02.    Liquidation; Dissolution; Bankruptcy................97

Section 10.03.    Default on Designated Senior Debt...................97

Section 10.04.    Acceleration of Securities..........................98


                                       6


Section 10.05.    When Distribution Must Be Paid Over.................98

Section 10.06.    Notice by the Company...............................99

Section 10.07.    Subrogation.........................................99

Section 10.08.    Relative Rights.....................................99

Section 10.09.    Subordination May Not Be Impaired by the Company...100

Section 10.10.    Distribution or Notice to Representative...........100

Section 10.11.    Rights of Trustee and Paying Agent.................100

Section 10.12.    Authorization to Effect Subordination..............100

                     Article 11 NOTE GUARANTEES

Section 11.01.    Guarantee..........................................101

Section 11.02.    Subordination of Note Guarantee....................102

Section 11.03.    Limitation on Guarantor Liability..................102

Section 11.04.    Execution and Delivery of Note Guarantee...........102

Section 11.05.    Guarantors May Consolidate, etc., on Certain Terms.103

Section 11.06.    Releases Following Sale of Assets..................104

                      Article 12 MISCELLANEOUS

Section 12.01.    Trust Indenture Act Controls.......................104

Section 12.02.    Notices............................................105

Section 12.03.    Communication by Holders of Notes with
                  Other Holders of Notes ............................106

Section 12.04.    Certificate and Opinion as to Conditions Precedent.106

Section 12.05.    Statements Required in Certificate or Opinion......107

Section 12.06.    Rules by Trustee and Agents........................107

Section 12.07.    No Personal Liability of Directors, Officers,
                  Employees and Stockholders.........................107

Section 12.08.    Governing Law......................................108

Section 12.09.    No Adverse Interpretation of Other Agreements......108


                                 7


Section 12.10.    Successors.........................................108

Section 12.11.    Severability.......................................108

Section 12.12.    Counterpart Originals..............................108

Section 12.13.    Table of Contents, Headings, etc...................108


                                       8


                                    EXHIBITS

Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF IAI CERTIFICATE
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE


                                       9


            INDENTURE dated as of March 27, 2001 among Michael Foods Acquisition
Corp., a Minnesota corporation (the "Company"), the Guarantors and BNY Midwest
Trust Company, an Illinois banking corporation, as trustee (the "Trustee").

            The Company (and, upon consummation of the Merger, Michael Foods)
and the Trustee agree as follows for the benefit of each other and for the equal
and ratable benefit of the 11 3/4% Senior Subordinated Notes due 2011 (the
"Notes"):

                                   ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

            Section 1.01. Definitions.

            "144A Global Note" means a global note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.

            "Acquired Debt" means, with respect to any specified Person (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.

            "Additional Notes" means up to $100 million in aggregate principal
amount of Notes (other than the Initial Notes) issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof.

            "Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings.

            "Agent" means any Registrar, Paying Agent or co-registrar.

            "Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.

            "Asset Acquisition" means (a) an Investment by the Company or any of
its Restricted Subsidiaries in any other Person if, as a result of such
Investment, such Person shall


                                       10


become a Restricted Subsidiary of the Company, or shall be merged with or into
the Company or any Restricted Subsidiary of the Company, or (b) the acquisition
by the Company or any Restricted Subsidiary of the Company of all or
substantially all of the assets of any other Person or any division or line of
business of any other Person.

            "Asset Sale" means: (i) the sale, lease, conveyance or other
disposition of any assets or rights; provided that the sale, lease, conveyance
or other disposition of all or substantially all of the assets of the Company
and its Restricted Subsidiaries taken as a whole will be governed by Sections
4.14 and/or 5.01 hereof and not by Section 4.10 hereof; (ii) the issuance or
sale of Equity Interests by any of the Company's Restricted Subsidiaries or the
sale of Equity Interests in any of its Subsidiaries; and (iii) the sale or other
disposition for cash of the common units of the limited liability company formed
to hold the dairy products business of the Company and its Restricted
Subsidiaries (the "Dairy LLC") that are owned indirectly by the members of
M-Foods Investors LLC.

            Notwithstanding the foregoing, the following items shall not be
deemed to be

Asset Sales:

            (i) any single transaction or series of related transactions that
      involves assets having a fair market value of less than $5.0 million;

            (ii) a transfer of assets between or among the Company and its
      Restricted Subsidiaries;

            (iii) an issuance of Equity Interests by a Restricted Subsidiary to
      the Company or to another Restricted Subsidiary;

            (iv) the sale, or lease, as the case may be, of equipment,
      inventory, or other assets in the ordinary course of business, including
      leases with a duration of no greater than twenty-four months with respect
      to facilities which are temporarily not in use or pending their
      disposition;

            (v) the sale or other disposition of cash or Cash Equivalents;

            (vi) a Restricted Payment or Permitted Investment that is permitted
      by Section 4.07 hereof;

            (vii) the licensing of intellectual property to third Persons on
      customary terms as determined by the Board of Directors in good faith;

            (viii) any sale of accounts receivable, or participations therein,
      in connection with any Qualified Receivables Transaction; and

            (ix) the sale of non voting common equity interest of the Dairy LLC
      to a limited liability company whose members are the members of M-Foods
      Investors LLC.

            "Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments


                                       11


during the remaining term of the lease included in such sale and leaseback
transaction, including any period for which such lease has been extended or may,
at the option of the lessor, be extended. Such present value shall be calculated
using a discount rate equal to the rate of interest implicit in such transaction
determined in accordance with GAAP.

            "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.

            "Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.

            "Board of Directors" means (i) with respect to a corporation, the
board of directors of the corporation; (ii) with respect to a partnership, the
Board of Directors of the general partner of the partnership; and (iii) with
respect to any other Person, the board or committee of such Person serving a
similar function.

            "Borrowing Base" means, as of any date, an amount equal to:

            (i) 80% of the face amount of all accounts receivable owned by the
      Company and its Restricted Subsidiaries as of the end of the most recent
      fiscal quarter preceding such date that were not more than 90 days past
      due; plus

            (ii) 50% of the book value of all inventory owned by the Company and
      its Restricted Subsidiaries of the end of the most recent fiscal quarter
      preceding such date; all calculated on a consolidated basis and in
      accordance with GAAP.

            "Broker-Dealer" has the meaning set forth in the Registration Rights
      Agreement.

            "Business Day" means any day other than a Legal Holiday.

            "Capital Lease Obligation" means, at the time any determination
      thereof is to be made, the amount of the liability in respect of a capital
      lease that would at that time be required to be capitalized on a balance
      sheet in accordance with GAAP.

            "Capital Stock" means (i) in the case of a corporation, corporate
      stock, (ii) in the case of an association or a business entity, any and
      all shares, interests, participations, rights or other equivalents
      (however designated) of corporate stock, (iii) in the case of a
      partnership or limited liability company, partnership or membership
      interests (whether general or limited), and (iv) any other interest or
      participation that confers on a Person the right to receive a share of the
      profits and losses of, or distributions of assets of, the issuing Person.

            "Cash Equivalents" means (i) United States dollars, (ii) securities
      issued or directly and fully guaranteed or insured by the United States
      government or any agency or


                                       12


instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than six
months from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with institutional lenders having capital
and surplus in excess of $500.0 million, a Thomson Bank Watch Rating of "B" or
better and chartered or organized in the United States, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Rating Services and in each case
maturing within six months after the date of acquisition, and (vi) money market
funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (i) through (v) of this definition.

            "Change of Control" means the occurrence of any of the following:
(i) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Parent and its Restricted Subsidiaries or the Company and its Restricted
Subsidiaries, in each case, taken as a whole, to any "person" (as that term is
used in Section 13(d)(3) of the Exchange Act) other than the Principals or the
Related Parties of the Principals, (ii) the adoption of a plan relating to the
liquidation or dissolution of the Parent or the Company, (iii) the consummation
of any transaction (including, without limitation, any merger or consolidation)
(a) prior to a Public Equity Offering by the Company or the Parent, the result
of which is that the Principals and their Related Parties become the "Beneficial
Owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act) of less than 50% of the Voting Stock of the Company or the Parent (measured
by voting power rather than the number of shares) or (b) after a Public Equity
Offering of the Company or the Parent, any "person" or "groups" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), other than the
Principals and their Related Parties, becomes the beneficial owner (as defined
above), directly or indirectly, of 35% or more of the Voting Stock of the
Company or the Parent, as the case may be, and such person is or becomes,
directly or indirectly, the beneficial owner of a greater percentage of the
voting power of the Voting Stock of the Company or the Parent, as the case may
be, calculated on a fully diluted basis, than the percentage beneficially owned
by the Principals and their Related Parties; (iv) the first day on which a
majority of the members of the Board of Directors of the Parent or the Company
are not Continuing Directors, or (v) the Parent or the Company consolidates
with, or merges with or into, any Person, or any Person consolidates with, or
merges with or into, the Parent or the Company, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the Parent, the
Company or such other Person is converted into or exchanged for cash, securities
or other property, other than any such transaction where (A) the Voting Stock of
the Parent or the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance) and (B) immediately after such
transaction, (a) prior to a Public Equity Offering of the Parent or the Company,
the Principals and their Related Parties become the "beneficial owner" (as
defined above) of not less than 50% of the Voting Stock of the surviving or
transferee Person or (b) after a Public Equity Offering of the Parent or the


                                       13


Company, no "person" or "group" (as such terms are used in Section 13(d) and
14(d) of the Exchange Act), other than the Principals and their Related Parties,
becomes, directly or indirectly, the beneficial owner of 35% or more of the
Voting Stock of the Parent or the Company, as the case may be, and such person
is or becomes, directly or indirectly, the beneficial owner of a greater
percentage of the voting power of the Voting Stock of the Parent or the Company,
as the case may be, calculated on a fully diluted basis, than the percentage
beneficially owned by the Principals and their Related Parties.

            "Clearstream" means Clearstream Banking, societe anonyme.

            "Collateral Agent" means BNY, as Collateral Agent under the Pledge
Agreement.

            "Company" means Michael Foods Acquisition Corp., a Minnesota
corporation, and, upon consummation of the Merger, Michael Foods.

            "Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus
(i) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus (ii)
consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether or not paid or accrued and whether or not capitalized
(including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations), to the extent that
any such expense was deducted in computing such Consolidated Net Income; plus
(iii) depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income; plus (iv) one
time nonrecurring costs and expenses of the Company and its Subsidiaries
incurred in connection with the Merger Agreement (including fees paid to the
Equity Sponsors in connection with the Merger); minus (v) non-cash items
increasing such Consolidated Net Income for such period, excluding any items
which represent the reversal of any accrual of, or cash reserve for, anticipated
cash charges in any prior period.

            Notwithstanding the preceding, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other non-cash
expenses of, a Restricted Subsidiary of the Company shall be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company only to
the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments,


                                       14


decrees, orders, statutes, rules and governmental regulations applicable to that
Subsidiary or its stockholders.

            "Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:

            (i) the Net Income of any Person that is not a Restricted Subsidiary
      or that is accounted for by the equity method of accounting shall be
      included only to the extent of the amount of dividends or distributions
      paid in cash to the specified Person or a Wholly Owned Restricted
      Subsidiary thereof;

            (ii) the Net Income of any Restricted Subsidiary shall be excluded
      to the extent that the declaration or payment of dividends or similar
      distributions by that Restricted Subsidiary of that Net Income is not at
      the date of determination permitted without any prior governmental
      approval (that has not been obtained) or, directly or indirectly, by
      operation of the terms of its charter or any agreement, instrument,
      judgment, decree, order, statute, rule or governmental regulation
      applicable to that Restricted Subsidiary or its stockholders;

            (iii) the Net Income (or loss) of any Person acquired in a pooling
      of interests transaction for any period prior to the date of such
      acquisition shall be excluded;

            (iv) the cumulative effect of a change in accounting principles
      shall be excluded;

            (v) the Net Income (or loss) of any Unrestricted Subsidiary shall be
      excluded, whether or not distributed to the specified Person or one of its
      Subsidiaries;

            (vi) any increase in cost of sales as a result of the step-up in
      inventory valuation arising from applying the purchase method of
      accounting in accordance with GAAP in connection with any acquisition
      consummated after the Merger Date, net of taxes, shall be excluded; and

            (vii) non-cash charges relating to employee benefit or other
      management compensation plans of the Company or any of its Restricted
      Subsidiaries or any non-cash compensation charge arising from any grant of
      stock, stock options or other equity-based awards, of the Company or any
      of its Restricted Subsidiaries (excluding any, in each case, non-cash
      charge to the extent that it represents an accrual of or reserve for cash
      expenses in any future period or amortization of a prepaid cash expense
      incurred in a prior period) in each case, to the extent that such non-cash
      charges are deducted in computing such Consolidated Net Income shall be
      excluded.

            "Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company or the Parent, as the case may
be, who: (i) was a member of such Board of Directors on the date hereof or the
Date of the Merger; or (ii) was nominated for election or elected to such Board
of Directors with the approval of a majority of the


                                       15


Continuing Directors who were members of such Board at the time of such
nomination or election.

            "Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 11.02 hereof or such other address as to which
the Trustee may give notice to the Company.

            "Credit Agreement" means that certain Credit Agreement, to be dated
as of the Merger Date, by and among the Company, Holdings, the guarantor
subsidiaries named therein, Bank of America, N.A., as Agent and the other
Lenders named therein providing for up to $370 million in term loan borrowings
and $100 million of revolving credit borrowings, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder or adding Subsidiaries
of the Company as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.

            "Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case with banks or other institutional lenders providing for revolving
credit loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time.

            "Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.

            "Dairy LLC" has the meaning set forth in the definition of "Asset
Sale".

            "Default" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.

            "Definitive Note" means a certificated Note registered in the name
of the Holder thereof and issued in accordance with Section 2.06 hereof, in the
form of Exhibit A hereto, except that such Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Interests in the Global
Note" attached thereto.

            "Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

            "Designated Non-cash Consideration" means the fair market value of
non-cash consideration (as determined in good faith by the principal financial
officer of the Company) received by the Company or any of its Restricted
Subsidiaries in connection with an Asset Sale


                                       16


that is so designated as Designated Non-cash Consideration pursuant to an
Officers' Certificate, setting forth the basis of such valuation, less the
amount of cash or Cash Equivalents received in connection with a subsequent sale
of such Designated Non-cash Consideration.

            "Designated Senior Debt" means (i) any Indebtedness outstanding
under the Credit Agreement; and (ii) any other Senior Debt permitted hereunder
the principal amount of which that is committed and available to be drawn on is
$25.0 million or more and that has been designated by the Company as "Designated
Senior Debt." For purposes of determining whether a particular issue of Senior
Debt may qualify as "Designated Senior Debt," the principal amount of one or
more issues of Senior Debt owing to a common lender (or its Affiliates) may be
aggregated.

            "Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature; provided that if such Capital Stock is issued to
any employee or to any plan for the benefit of employees of the Company or any
of its Subsidiaries or by any such plan to such employees, such Capital Stock
shall not constitute Disqualified Stock solely because it may be required to be
repurchased by the Company or such Subsidiary in order to satisfy applicable
statutory or regulatory obligations; and provided, further, that any Capital
Stock that would constitute Disqualified Stock solely because the holders
thereof have the right to require the Company to repurchase such Capital Stock
upon the occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07.

            "Domestic Subsidiary" means any Restricted Subsidiary that was
formed under the laws of the United States or any state thereof or the District
of Columbia or that guarantees or otherwise provides direct credit support for
any Indebtedness of the Company.

            "Egg Products Division" means those operations and Subsidiaries of
the Company and its Restricted Subsidiaries engaged in the egg products
business.

            "Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

            "Equity Offering" means an offering of the Equity Interests (other
than Disqualified Stock) of the Company or the Parent, other than public
offerings with respect to the Equity Interests registered on Form S-8.

            "Equity Sponsors" means Vestar and GHJ&M.

            "Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.


                                       17


            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Exchange Notes" means the Notes issued in the Exchange Offer in
accordance with Section 2.06(f) hereof.

            "Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.

            "Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.

            "Excluded Contributions" means the net cash proceeds received by the
Company after the date of this Indenture from (a) contributions to its common
equity capital and (b) the sale (other than to a Subsidiary or to any management
equity plan or stock option plan or any other management or employee benefit
plan or agreement of the Company or any of its Subsidiaries) of Capital Stock
(other than Disqualified Stock) of the Company, in each case designated within
60 days of the receipt of such net cash proceeds as Excluded Contributions
pursuant to an Officers' Certificate, the cash proceeds of which are excluded
from the calculation set forth in clause (iii) of the second paragraph of
Section 4.07.

            "Existing Indebtedness" means (a) Indebtedness of Michael Foods and
its Subsidiaries (other than Indebtedness under the Credit Agreement) to be
assumed in connection with the Merger in an aggregate amount not to exceed $8.3
million, until such amounts are repaid and (b) the 7.58% Notes; provided that
such 7.58% Notes are repaid within 35 days of the Merger Date.

            "Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of: (i) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued, including, without limitation, amortization of debt issuance costs and
original issue discount, noncash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations; plus
(ii) the consolidated interest of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus (iii) any interest expense on
Indebtedness of another Person that is Guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is called
upon; plus (iv) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividends on Equity Interests payable
solely in Equity Interests of the Company (other than Disqualified Stock) or to
the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.


                                       18


            "Fixed Charge Coverage Ratio" means, with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays, repurchases or redeems any Indebtedness or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.

            In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:

            (i) the Recapitalization, Investments, acquisitions, dispositions,
      mergers, consolidations and discontinued operations (as determined in
      accordance with GAAP) that have been made by the Company or any Restricted
      Subsidiary of the Company during the four-quarter reference period or
      subsequent to such reference period and on or prior to or simultaneously
      with the Calculation Date shall be calculated on a pro forma basis
      including Pro Forma Cost Savings assuming that the Recapitalization and
      all such Investments, acquisitions, dispositions, mergers, consolidations
      and discontinued operations (and the change in any associated fixed charge
      obligations and the change in EBITDA resulting therefrom) had occurred on
      the first day of the four-quarter reference period. If since the beginning
      of such period any Person (that subsequently became a Restricted
      Subsidiary of the Company or was merged with or into the Company or any
      Restricted Subsidiary of the Company since the beginning of such period)
      shall have made any Investment, acquisition, disposition, merger,
      consolidation or discontinued operation that would have required
      adjustment pursuant to this definition, then the Fixed Charge Coverage
      Ratio shall be calculated giving pro forma effect thereto for such period
      as if such Investment, acquisition, disposition, merger, consolidation or
      discontinued operation had occurred at the beginning of the applicable
      four-quarter period; and

            (ii) in calculating Fixed Charges attributable to interest on any
      Indebtedness computed on a pro forma basis, (a) interest on outstanding
      Indebtedness determined on a fluctuating basis as of the Calculation Date
      and which will continue to be so determined thereafter and shall be deemed
      to have accrued at a fixed rate per annum equal to the rate of interest on
      such Indebtedness in effect on the Calculation Date; (b) if interest on
      any Indebtedness actually incurred on the Calculation Date may optionally
      be determined at an interest rate based upon a factor of a prime or
      similar rate, a eurocurrency interbank offered rate, or other rates, then
      the interest rate in effect on the Calculation Date will be deemed to have
      been in effect during the four-quarter period; and (c) notwithstanding
      clause (a) above, interest on Indebtedness determined on a fluctuating
      basis, to the extent such interest is covered by agreements relating to
      interest rate swaps, caps or collars, shall be deemed to accrue at the
      rate per annum resulting after giving effect to the operation of such
      agreement.


                                       19


            For purposes of this definition, whenever pro forma effect is to be
given to a transaction, the pro forma calculations shall be made in good faith
by a responsible financial or accounting officer of the Company.

            "Foreign Borrowing Base" means, as of any date, an amount equal to:

            (i) 80% of the face amount of all accounts receivable owned by the
      Foreign Restricted Subsidiaries as of the end of the most recent fiscal
      quarter preceding such date that were not more than 90 days past due; plus

            (ii) 50% of the book value of all inventory owned by the Foreign
      Restricted Subsidiaries as of the end of the most recent fiscal quarter
      preceding such date; all calculated on a consolidated basis and in
      accordance with GAAP.

            "Foreign Restricted Subsidiary" means any Restricted Subsidiary of
the Company incorporated in any jurisdiction outside the United States.

            "GHJ&M" means Golden Hawn Johnson & Morrison.

            "GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect as of the date hereof.

            "Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, issued in accordance
with certain sections of this Indenture.

            "Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.

            "Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.

            "Guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.

            "Guarantors" means:

            (i) each direct or indirect Domestic Subsidiary of the Company; and

            (ii) any other subsidiary that executes a Note Guarantee in
      accordance with the provisions hereof;


                                       20


and their respective successors and assigns.

            "Hedging Obligations" means, with respect to any specified Person,
the obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.

            "Holder" means a Person in whose name a Note is registered.

            "Holdings" means M-Foods Holdings, Inc., a Delaware corporation and
the immediate parent of the Company.

            "Immaterial Guarantor" means any Guarantor that is an Immaterial
Subsidiary.

            "Immaterial Subsidiary" means any Subsidiary of the Company that has
less than $100,000 in total assets.

            "IAI Global Note" means the global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.

            "Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:

            (i) borrowed money;

            (ii) evidenced by bonds, notes, debentures or similar instruments or
      letters of credit (or reimbursement agreements in respect thereof);

            (iii) banker's acceptances;

            (iv) representing Capital Lease Obligations;

            (v) the balance deferred and unpaid of the purchase price of any
      property, except any such balance that constitutes an accrued expense or
      trade payable; or

            (vi) representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.

The amount of any Indebtedness outstanding as of any date shall be:


                                       21


            (i) the accreted value thereof, in the case of any Indebtedness
      issued with original issue discount; and

            (ii) the principal amount thereof, together with any interest
      thereon that is more than 30 days past due, in the case of any other
      Indebtedness.

            "Indenture" means this Indenture, as amended or supplemented from
time to time.

            "Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.

            "Initial Notes" means $200.0 million in aggregate principal amount
of Notes originally issued under this Indenture on the date hereof.

            "Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.

            "Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guarantees or other obligations), advances or
capital contributions (excluding commission, travel and similar advances to
officers and employees made consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made a Restricted Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in the
final paragraph of Section 4.07 hereof. The acquisition by the Company or any
Restricted Subsidiary of the Company of a Person that holds an Investment in a
third Person shall be deemed to be an Investment by the Company or such
Restricted Subsidiary in such third Person in an amount equal to the fair market
value of the Investment held by the acquired Person in such third Person in an
amount determined as provided in the final paragraph of Section 4.07 hereof.

            "Issue Date" means the date on which the initial $200.0 million in
aggregate principal amount of the Notes were originally issued under this
Indenture.

            "Legal Holiday" means a Saturday, a Sunday or a day on which
commercial banks in The City of New York or at a place of payment are authorized
or required by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.


                                       22


            "Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.

            "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

            "Liquidated Damages" means the additional amounts (if any) payable
by the Company in the event of a Registration Default under, and as defined in,
the Registration Rights Agreement.

            "Merger" means the merger of Michael Foods Acquisition Corp. with
and into Michael Foods in accordance with the terms of the Merger Agreement.

            "Merger Agreement" means the Agreement and Plan of Merger, dated as
of December 21, 2000 by and among Holdings, Michael Foods Acquisition Corp.
(f/k/a Protein Acquisition Corp.) and Michael Foods, as amended on March 6,
2001.

            "Merger Date" means the date of the consummation of the Merger
pursuant to the terms of the Merger Agreement.

            "Michael Foods" means Michael Foods, Inc. a Minnesota corporation.

            "Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however (i) any
gain (or loss), together with any related provision for taxes on such gain (or
loss), realized in connection with: (a) any Asset Sale (without reference to the
$5.0 million limitation); or (b) the disposition of any securities by such
Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and (ii) any
extraordinary gain (or loss), together with any related provision for taxes on
such extraordinary gain (or loss).

            "Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries or the holders of the common
equity units of Dairy LLC in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any
Designated Non-cash Consideration or other non-cash consideration received in
any Asset Sale), net of the direct costs relating to such Asset Sale or
disposition of such Designated Non-cash Consideration or other non-cash
consideration, including, without limitation, legal, accounting and investment
banking fees, and sales commissions, and any relocation expenses incurred as a
result thereof (including the amount of taxes payable by any Person resulting
from an Asset Sale of units in Dairy LLC, which amount of taxes shall be deemed
to be for each such Person the amount of tax calculated by applying the highest
federal, New York State and City individual income tax rates applicable to the
type of income realized from such Asset Sale), in each case, after taking into
account any available tax credits or


                                       23


deductions and any tax sharing arrangements, and amounts required to be applied
to the repayment of Indebtedness (other than revolving credit Indebtedness,
unless there is a required reduction in commitments), secured by a Lien on the
asset or assets that were the subject of such Asset Sale and any reserve for
adjustment in respect of (1) the sale price of such asset or assets established
in accordance with GAAP and (2) any liabilities associated with such asset or
assets and retained by the Company after such sale or other disposition thereof,
including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction.

            "Non-Recourse Debt" means Indebtedness:

            (i) as to which neither the Company nor any of its Restricted
      Subsidiaries (a) provides credit support of any kind (including any
      undertaking, agreement or instrument that would constitute Indebtedness),
      (b) is directly or indirectly liable as a guarantor or otherwise, or (c)
      constitutes the lender;

            (ii) no default with respect to which (including any rights that the
      holders thereof may have to take enforcement action against an
      Unrestricted Subsidiary) would permit upon notice, lapse of time or both
      any holder of any other Indebtedness (other than the Notes) of the Company
      or any of its Restricted Subsidiaries to declare a default on such other
      Indebtedness or cause the payment thereof to be accelerated or payable
      prior to its stated maturity; and

            (iii) as to which the lenders have been notified in writing that
      they will not have any recourse to the stock or assets of the Company or
      any of its Restricted Subsidiaries.

            "Non-U.S. Person" means a Person who is not a U.S. Person.

            "Note Guarantee" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and on the Notes, executed
pursuant to the provisions of this Indenture.

            "Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes, if any are issued, shall
be treated as a single class for all purposes under this Indenture.

            "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

            "Offering" means the offering of the Notes by the Company.

            "Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.


                                       24


            "Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer, or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.

            "Opinion of Counsel" means an opinion from legal counsel that meets
the requirements of Section 12.05 hereof. The counsel may be an employee of or
counsel to the Company.

            "Parent" means any direct or indirect parent company of the Company.

            "Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).

            "Permitted Business" means any business conducted or proposed to be
conducted as described in the Offering Memorandum) by the Company and its
Restricted Subsidiaries on the date hereof and other businesses reasonably
related or ancillary thereto.

            "Permitted Investments" means:

            (i) any Investment in the Company or in a Restricted Subsidiary of
      the Company;

            (ii) any Investment in Cash Equivalents;

            (iii) any Investment by the Company or any Restricted Subsidiary of
      the Company in a Person, if as a result of such Investment:

                  (a)   such Person becomes a Restricted Subsidiary of the
                        Company; or

                  (b)   such Person is merged, consolidated or amalgamated with
                        or into, or transfers or conveys substantially all of
                        its assets to, or is liquidated into, the Company or a
                        Restricted Subsidiary of the Company;

            (iv) any Investment made as a result of the receipt of non-cash
      consideration from an Asset Sale that was made pursuant to and in
      compliance with Section 4.10 of this Indenture;

            (v) any Investment the payment for which consists of Equity
      Interests (other than Disqualified Stock) of the Company;

            (vi) Hedging Obligations;

            (vii) other Investments in any Person having an aggregate fair
      market value (measured on the date each such Investment was made and
      without giving effect to


                                       25


      subsequent changes in value), when taken together with all other
      Investments made pursuant to this clause (vii) since the date hereof, not
      to exceed $15 million;

            (viii) any Investment of the Company or any of its Restricted
      Subsidiaries or of Michael Foods and any of its Restricted Subsidiaries
      existing on the date hereof;

            (ix) loans to employees that are approved in good faith by a
      majority of the Board of Directors of the Company in an amount not to
      exceed $3.0 million outstanding at any time;

            (x) any Investment acquired by the Company or any of its Restricted
      Subsidiaries:

                  (a)   in exchange for any other Investment or accounts
                        receivable held by the Company or any such Restricted
                        Subsidiary in connection with or as a result of a
                        bankruptcy, workout, reorganization or recapitalization
                        of the Company, or

                  (b)   as a result of a foreclosure by the Company or any of
                        its Restricted Subsidiaries with respect to any secured
                        Investment or other transfer of title with respect to
                        any secured Investment in default;

            (xi) Investments consisting of the licensing or contribution of
      intellectual property pursuant to joint marketing arrangements with other
      Persons;

            (xii) Investments in joint ventures engaged in a Permitted Business
      not in excess of $20.0 million in the aggregate outstanding at any one
      time;

            (xiii) Investments by the Company or a Restricted Subsidiary of the
      Company in a Receivables Subsidiary or any Investment by a Receivables
      Subsidiary in any other Person, in each case, in connection with a
      Qualified Receivables Transaction; and

      (xiv) Investments consisting of payments pursuant to the Technology
Agreement up to an aggregate under this clause (xiv) of $360,000 per fiscal
year.

            "Permitted Junior Securities" means (i) Equity Interests in the
Company or any Guarantor; or (ii) debt securities that are subordinated to all
Senior Debt and any debt securities issued in exchange for Senior Debt at least
to the same extent as, or to a greater extent than, the Notes and the Note
Guarantees are subordinated to Senior Debt as provided hereunder.

            "Permitted Liens" means:

            (i) Liens on the assets of the Company and any Guarantor securing
      Senior Debt that was permitted by the terms hereof to be incurred;

            (ii) Liens in favor of the Company or any Restricted Subsidiary of
the Company;


                                       26


            (iii) Liens on property of a Person existing at the time such Person
      is merged with or into or consolidated with the Company or any Restricted
      Subsidiary of the Company; provided that such Liens were in existence
      prior to the contemplation of such merger or consolidation and do not
      extend to any assets other than those of the Person merged into or
      consolidated with the Company or the Restricted Subsidiary;

            (iv) Liens on property existing at the time of acquisition thereof
      by the Company or any Restricted Subsidiary of the Company; provided that
      such Liens were in existence prior to the contemplation of such
      acquisition and do not extend to any property other than the property so
      acquired by the Company or the Restricted Subsidiary;

            (v) Liens to secure Indebtedness (including Capital Lease
      Obligations) permitted by clause (iv) of Section 4.09 covering only the
      assets acquired with such Indebtedness;

            (vi) Liens of the Company and its Restricted Subsidiaries and of
      Michael Foods and its Restricted Subsidiaries existing on the date hereof;

            (vii) Liens incurred in the ordinary course of business of the
      Company or any Restricted Subsidiary of the Company with respect to
      obligations that do not exceed $5.0 million at any one time outstanding;

            (viii) Liens to secure the performance of statutory obligations,
      surety or appeal bonds, performance bonds or other similar obligations
      (exclusive of obligations for the payment of borrowed money) incurred in
      the ordinary course of business;

            (ix) Liens for taxes, assessments or governmental charges or claims
      that are not yet delinquent or that are being contested in good faith by
      appropriate proceedings promptly instituted and diligently concluded;
      provided that any reserve or other appropriate provision as shall be
      required in conformity with GAAP shall have been made therefor;

            (x) Liens upon specific items of inventory or other goods and
      proceeds of any Person securing such Person's obligations in respect of
      bankers' acceptances issued or created for the account of such Person to
      facilitate the purchase, shipment or storage of such inventory or other
      goods;

            (xi) Liens imposed by law, such as carriers', warehousemen's,
      mechanics', materialmen's and other like Liens;

            (xii) Liens incurred or deposits made in the ordinary course of
      business in connection with workers' compensation, unemployment insurance
      and other types of social security, including any Lien securing letters of
      credit issued in the ordinary course of business consistent with past
      practice in connection therewith;

            (xiii) Liens to secure Indebtedness of any Foreign Restricted
      Subsidiary permitted by clause (xvi) of Section 4.09 covering only the
      assets of such Foreign Restricted Subsidiary; and


                                       27


            (xiv) Liens on assets of a Receivables Subsidiary arising in
      connection with a Qualified Receivables Transaction.

            "Permitted Refinancing Indebtedness" means any Indebtedness of the
      Company or any of its Restricted Subsidiaries issued in exchange for, or
      the net proceeds of which are used to extend, refinance, renew, replace,
      defease or refund other Indebtedness of the Company or any of its
      Restricted Subsidiaries (other than intercompany Indebtedness); provided
      that:

            (i) the principal amount (or accreted value, if applicable) of such
      Permitted Refinancing Indebtedness does not exceed the principal amount
      (or accreted value, if applicable) of the Indebtedness so extended,
      refinanced, renewed, replaced, defeased or refunded (plus all accrued
      interest thereon and the amount of any reasonably determined premium
      necessary to accomplish such refinancing and such reasonable expenses
      incurred in connection therewith);

            (ii) such Permitted Refinancing Indebtedness has a final maturity
      date later than the final maturity date of, and has a Weighted Average
      Life to Maturity equal to or greater than the Weighted Average Life to
      Maturity of, the Indebtedness being extended, refinanced, renewed,
      replaced, defeased or refunded;

            (iii) if the Indebtedness being extended, refinanced, renewed,
      replaced, defeased or refunded is subordinated in right of payment to the
      Notes, such Permitted Refinancing Indebtedness has a final maturity date
      later than the final maturity date of, and is subordinated in right of
      payment to, the Notes on terms at least as favorable to the Holders of
      Notes as those contained in the documentation governing the Indebtedness
      being extended, refinanced, renewed, replaced, defeased or refunded; and

            (iv) such Indebtedness is incurred either by the Company or by the
      Restricted Subsidiary who is the obligor on the Indebtedness being
      extended, refinanced, renewed, replaced, defeased or refunded.

            "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.

            "Pledge Agreement" means the pledge agreement dated as of the Issue
Date between the Company and BNY, as Trustee under the Indenture and as
Collateral Agent.

            "Principals" means the Equity Sponsors and their respective
Affiliates.

            "Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued hereunder except where otherwise
permitted by the provisions of this Indenture.

            "Pro Forma Cost Savings" means, with respect to any period, the
reduction in costs and related adjustments that occurred during the four-quarter
period or after the end of the four-quarter period and on or prior to the
Calculation Date that (i) were directly attributable to an Asset Acquisition and
calculated on a basis that is consistent with Regulation S-X under the


                                       28


Securities Act as in effect and applied as hereof or (ii) were actually
implemented by the business that was the subject of any such Asset Acquisition
within six months of the date of the Asset Acquisition and prior to the
Calculation Date that are supportable and quantifiable by the underlying
accounting records of such business and are described, as provided below, in an
Officer's Certificate, as if in the case of each of clause (i) and (ii), all
such reductions in costs had been effected as of the beginning of such period.
Pro Forma Cost Savings described in clause (ii) above shall be set forth in
reasonable specificity in a certificate delivered to the Trustee from the
Company's Chief Financial Officer and, in the case of Prof Forma Cost Savings in
excess of $5.0 million per four-quarter period, such certificate shall be
accompanied by a supporting opinion from an accounting firm of national
standing.

            "Public Equity Offering" means an offer and sale of common stock
(other than Disqualified Stock) of the Company or the Parent pursuant to a
registration statement that has been declared effective by the SEC pursuant to
the Securities Act (other than a registration statement on Form S-8 or otherwise
relating to equity securities issuable under any employee benefit plan of the
Company).

            "Purchase Money Note" means a promissory note evidencing a line of
credit, or evidencing other Indebtedness owed to the Company or any Restricted
Subsidiary of the Company in connection with a Qualified Receivables
Transaction, which note shall be repaid from cash available to the maker of such
note, other than amounts required to be established as reserves pursuant to
agreement, amounts paid to investors in respect of interest, principal and other
amounts owning to such investors and amounts paid in connection with the
purchase of newly generated receivables.

            "Qualified Receivables Transaction" means any transaction or series
of transactions that may be entered into by the Company or by any Restricted
Subsidiary of the Company pursuant to which the Company or any Restricted
Subsidiary of the Company may sell, convey or otherwise transfer to a
Receivables Subsidiary any accounts receivable (whether now existing or arising
in the future) of the Company or any Restricted Subsidiary of the Company and
any asset related thereto, including, without limitation, all collateral
securing such accounts receivable, and all guarantees or other obligations in
respect of such accounts receivable, proceeds of such accounts receivable and
other assets that are customarily transferred, or in respect of which security
interests are customarily granted, in connection with an asset securitization
transaction involving accounts receivable.

            "Recapitalization" means the Merger and all related transactions as
described in the Offering Memorandum.

            "Receivables Subsidiary" means a Subsidiary of the Company (other
than a Guarantor) that engages in no activities other than in connection with
the financing of accounts receivables and that is designated by the Board of
Directors of the Company (as provided below) as a Receivables Subsidiary (a) no
portion of the Indebtedness or any other Obligations (contingent or otherwise)
of which (i) is guaranteed by the Company or any other Restricted Subsidiary of
the Company (excluding guarantees of obligations (other than the principal of,
and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings), (ii) is recourse to or obligates the Company or any other
Restricted Subsidiary of the Company in any other way


                                       29


other than pursuant to standard Securitization Undertakings or (iii) subjects
any property or asset of the issuer or any other Restricted Subsidiary of the
Company, directly or indirectly, contingently or otherwise to the satisfaction
thereof, other than pursuant to Standard Securitization Undertakings, (b) with
which neither the issuer nor any other Restricted Subsidiary of the Company has
any material contract, agreement, arrangement or understanding (except in
connection with a Purchase Money Note or Qualified Receivables Transaction)
other than on terms no less favorable to the issuer or such other Restricted
Subsidiary of the Company than those that might be obtained at the time from
Persons that are not Affiliates of the Company, other than fees payable in the
ordinary course of business in connection with servicing accounts receivable,
and (c) to which neither the Company nor any other Restricted Subsidiary of the
Company has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve a certain level of operating results.
Any such designation by the Board of Directors of the Company shall be evidenced
to the Trustee by filing with the Trustee a certified copy of the resolution of
the Board of Directors of the Company giving effect to such designation and an
Officers' Certificate certifying to the best of such officer's knowledge and
belief after consulting with counsel, that such designation complied with the
foregoing conditions.

            "QIB" means a "qualified institutional buyer" as defined in Rule
144A.

            "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 27, 2001, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.

            "Regulation S" means Regulation S promulgated under the Securities
Act.

            "Regulation S Global Note" means a global Note bearing the Global
Note Legend and the Private Placement Legend and deposited with or on behalf of
and registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes resold in
reliance on Rule 904 of Regulation S.

            "Related Party" means (i) any controlling stockholder, 80% (or more)
owned Subsidiary, or immediate family member (in the case of an individual) of
any Principal; or (ii) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of any one or more Principals
and/or such other Persons referred to in the immediately preceding clause (i).

            "Representative" means the Trustee, agent or representative for any
Senior Debt.

            "Responsible Officer" when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed


                                       30


by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular subject
and who shall have direct responsibility for the administration of this
Indenture.

            "Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.

            "Restricted Global Note" means a Global Note bearing the Private
Placement Legend.

            "Restricted Investment" means any Investment other than a Permitted
Investment.

            "Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.

            "Rule 144" means Rule 144 promulgated under the Securities Act.

            "Rule 144A" means Rule 144A promulgated under the Securities Act.

            "Rule 903" means Rule 903 promulgated under the Securities Act.

            "Rule 904" means Rule 904 promulgated the Securities Act.

            "7.58% Notes" means the 7.58% Senior Promissory Note due 2009 of
Michael Foods.

            "SEC" means the Securities and Exchange Commission.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Senior Debt" means:

            (i) all Indebtedness of the Company or any Guarantor outstanding
      under the Credit Agreement and all Hedging Obligations with respect
      thereto whether outstanding on the Merger Date or incurred thereafter;

            (ii) any other Indebtedness of the Company or any Guarantor
      permitted to be incurred under the terms hereof, unless the instrument
      under which such Indebtedness is incurred expressly provides that it is on
      a parity with or subordinated in right of payment to the Notes or any Note
      Guarantee; and

            (iii) all Obligations with respect to the items listed in the
      preceding clauses (i) and (ii) (including any interest accruing subsequent
      to the filing of a petition of bankruptcy at the rate provided for in the
      documentation with respect thereto, whether or not such interest is an
      allowed claim under applicable law).

            Notwithstanding anything to the contrary in the preceding, Senior
Debt will not include:


                                       31


            (i) any liability for federal, state, local or other taxes owed or
      owing by the Company;

            (ii) any Indebtedness of the Company to any of its Subsidiaries or
      other Affiliates;

            (iii) any trade payables;

            (iv) the portion of any Indebtedness that is incurred in violation
      of this Indenture; or

            (v) Non-Recourse Debt.

            "Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.

            "Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.

            "Standard Securities Undertaking" means representations, warranties,
covenants and indemnities entered into by the Company or any Restricted
Subsidiary of the Company that are reasonably customary in all accounts
receivable transaction.

            "Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

            "Subsidiary" means, with respect to any specified Person: (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof); provided, however,
that R&P Liquid Egg Technology Limited Partnership, a New Jersey limited
partnership shall not be a "Subsidiary" under this definition.

            "Technology Agreement" means the Technology Agreement among
Papetti's Hygrade Egg Products, Inc. a New Jersey corporation and Raztek
Corporation, a California corporation dated June 12, 1991 as amended through the
date hereof and as may be amended, modified, replaced or restated from time to
time hereafter.

            "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.


                                       32


            "Total Net Tangible Assets" means the total consolidated net assets,
less goodwill and intangibles, of the Company and its Restricted Subsidiaries,
as shown on the most recent balance sheet of the Company.

            "Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.

            "Unrestricted Definitive Note" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.

            "Unrestricted Global Note" means a permanent global Note in the form
of Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.

            "Unrestricted Subsidiary" means any Subsidiary (other than any
Subsidiary in the Egg Products Division) of the Company that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary:

            (i) has no Indebtedness other than Non-Recourse Debt;

            (ii) is not party to any agreement, contract, arrangement or
      understanding with the Company or any Restricted Subsidiary of the Company
      unless the terms of any such agreement, contract, arrangement or
      understanding are no less favorable to the Company or such Restricted
      Subsidiary than those that might be obtained at the time from Persons who
      are not Affiliates of the Company;

            (iii) is a Person with respect to which neither the Company nor any
      of its Restricted Subsidiaries has any direct or indirect obligation (a)
      to subscribe for additional Equity Interests or (b) to maintain or
      preserve such Person's financial condition or to cause such Person to
      achieve any specified levels of operating results;

            (iv) is a guarantor or otherwise directly or indirectly provides
      credit support for any Indebtedness of the Company or any of its
      Restricted Subsidiaries at the time of such designation unless such
      guarantee or credit support is released upon such designation; and

            (v) has at least one director on its Board of Directors that is not
      a director or executive officer of the Company or any of its Restricted
      Subsidiaries and has at least one executive officer that is not a director
      or executive officer of the Company or any of its Restricted Subsidiaries.

Any designation of a Restricted Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation


                                       33


complied with the preceding conditions and was permitted by Section 4.07. If, at
any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes hereof and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09, the Company shall be in default
hereunder.

            "U.S. Person" means a U.S. person as defined in Rule 902(o) under
the Securities Act.

            "Vestar" means Vestar Capital Partners, a New York general
partnership.

            "Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.

            "Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by (ii) the then outstanding principal
amount of such Indebtedness.

            "Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.

      Section 1.02. Other Definitions.

                                                            Defined in
             Term                                            Section
             "Affiliate Transaction"......................     4.11
             "Asset Sale Offer"...........................     4.10
             "Authentication Order".......................     2.02
             "Change of Control Offer"....................     4.14
             "Change of Control Payment"..................     4.14
             "Change of Control Payment Date".............     4.14
             "Covenant Defeasance"........................     8.03
             "DTC"........................................     2.03
             "Event of Default"...........................     6.01
             "Excess Proceeds"............................     4.10
             "incur"......................................     4.09
             "Legal Defeasance"...........................     8.02
             "Offer Amount"...............................     3.09
             "Offer Period"...............................     3.09


                                       34


                                                            Defined in
             Term                                            Section
             "Paying Agent"...............................     2.03
             "Payment Blockage Notice"....................    10.03
             "Payment Blockage Period"....................    10.03
             "Permitted Debt".............................     4.09
             "Purchase Date"..............................     3.09
             "Registrar"..................................     2.03
             "Repurchase Offer"...........................     3.09
             "Restricted Payments"........................     4.07

            Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

            The following TIA terms used in this Indenture have the following
meanings:

            "indenture securities" means the Notes;

            "indenture security Holder" means a Holder of a Note;

            "indenture to be qualified" means this Indenture;

            "indenture trustee" or "institutional trustee" means the Trustee;
and

            "obligor" on the Notes means the Company and any successor obligor
upon the Notes.

            All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.

            Section 1.04. Rules of Construction. Unless the context otherwise
requires:

            a term has the meaning assigned to it;

            an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;

            "or" is not exclusive;

            words in the singular include the plural, and in the plural include
the singular;

            provisions apply to successive events and transactions; and

            references to sections of or rules under the Securities Act shall be
      deemed to include substitute, replacement of successor sections or rules
      adopted by the SEC from time to time.


                                       35


                                   ARTICLE 2

                                    THE NOTES

            Section 2.01. Form and Dating. (a) General. The Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A hereto. The Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.

            The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.

            (b) Global Notes. Notes issued in global form shall be substantially
in the form of Exhibit A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.

            (c) Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream shall be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearstream.

            Section 2.02. Execution and Authentication. One Officer shall sign
the Notes for the Company by manual or facsimile signature.

            If the Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.

            A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.


                                       36


            The Trustee shall, upon a written order of the Company signed by one
Officer (an "Authentication Order"), authenticate Notes for original issue up to
the aggregate principal amount of $300 million, of which $200 million will be
issued as Initial Notes on the date hereof. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as provided in
Section 2.07 hereof.

            The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.

            Section 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency where Notes may be presented for registration of transfer or
for exchange ("Registrar") and an office or agency where Notes may be presented
for payment ("Paying Agent"). The Registrar shall keep a register of the Notes
and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall promptly notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar; provided, however, that neither the Company
nor any of its Subsidiaries shall act as Paying Agent for purposes of Section 7
of the Pledge Agreement.

            The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.

            The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes.

            Section 2.04. Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal, premium or
Liquidated Damages, if any, or interest on the Notes, and shall notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Restricted Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.


                                       37


            Section 2.05. Holder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA ss.
312(a). If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Company shall otherwise comply with TIA ss.
312(a).

            Section 2.06. Transfer and Exchange. (a) Transfer and Exchange of
Global Notes. A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes shall be exchanged by the Company for Definitive
Notes if (i) the Company delivers to the Trustee notice from the Depositary that
it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either case,
a successor Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion determines that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and delivers a written notice to such effect to
the Trustee or (iii) there shall have occurred and be continuing a Default or
Event of Default with respect to the Notes. Upon the occurrence of any of the
preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued
in such names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections 2.07
and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.

            (b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:

            (i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth in
the Private Placement Legend. Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.06(b)(i).


                                       38


      (ii) All Other Transfers and Exchanges of Beneficial Interests in Global
Notes. In connection with all transfers and exchanges of beneficial interests
that are not subject to Section 2.06(b)(i) above, the transferor of such
beneficial interest must deliver to the Registrar either (1) a written order
from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in the Global Note in an amount equal
to the beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase or (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to cause to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above. Upon consummation of an Exchange Offer by the Company
in accordance with Section 2.06(f) hereof, the requirements of this Section
2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar
of the instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

      (iii) Transfer of Beneficial Interests to Another Restricted Global Note.
A beneficial interest in any Restricted Global Note may be transferred to a
Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with the requirements of
Section 2.06(b)(ii) above and the Registrar receives the following:

            (A) if the transferee shall take delivery in the form of a
      beneficial interest in the 144A Global Note, then the transferor must
      deliver a certificate in the form of Exhibit B hereto, including the
      certifications in item (1) thereof; and

            (B) if the transferee shall take delivery in the form of a
      beneficial interest in the Regulation S Global Note, then the transferor
      must deliver a certificate in the form of Exhibit B hereto, including the
      certifications in item (2) thereof.

            (iv) Transfer and Exchange of Beneficial Interests in a Restricted
      Global Note for Beneficial Interests in the Unrestricted Global Note. A
      beneficial interest in any Restricted Global Note may be exchanged by any
      holder thereof for a beneficial interest in an Unrestricted Global Note or
      transferred to a Person who takes delivery thereof in the form of a
      beneficial interest in an Unrestricted Global Note if the exchange or
      transfer complies with the requirements of Section 2.06(b)(ii) above and:

            (A) such exchange or transfer is effected pursuant to the Exchange
      Offer in accordance with the Registration Rights Agreement and the holder
      of the


                                       39


      beneficial interest to be transferred, in the case of an exchange, or the
      transferee, in the case of a transfer, certifies in the applicable Letter
      of Transmittal that it is not (1) a broker-dealer, (2) a Person
      participating in the distribution of the Exchange Notes or (3) a Person
      who is an affiliate (as defined in Rule 144) of the Company;

            (B) such transfer is effected pursuant to the Shelf Registration
      Statement in accordance with the Registration Rights Agreement;

            (C) such transfer is effected by a Broker-Dealer pursuant to the
      Exchange Offer Registration Statement in accordance with the Registration
      Rights Agreement; or

            (D) the Registrar receives the following:

                  (1) if the holder of such beneficial interest in a Restricted
            Global Note proposes to exchange such beneficial interest for a
            beneficial interest in an Unrestricted Global Note, a certificate
            from such holder in the form of Exhibit C hereto, including the
            certifications in item (1)(a) thereof; or

                  (2) if the holder of such beneficial interest in a Restricted
            Global Note proposes to transfer such beneficial interest to a
            Person who shall take delivery thereof in the form of a beneficial
            interest in an Unrestricted Global Note, a certificate from such
            holder in the form of Exhibit B hereto, including the certifications
            in item (4) thereof;

            and, in each such case set forth in this subparagraph (D), if the
            Registrar so requests or if the Applicable Procedures so require, an
            Opinion of Counsel in form reasonably acceptable to the Registrar to
            the effect that such exchange or transfer is in compliance with the
            Securities Act and that the restrictions on transfer contained
            herein and in the Private Placement Legend are no longer required in
            order to maintain compliance with the Securities Act.

            If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.

            Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.

            (c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.


                                       40


      (i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Restricted Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive Note, then, upon receipt by the
Registrar of the following documentation:

            (A) if the holder of such beneficial interest in a Restricted Global
      Note proposes to exchange such beneficial interest for a Restricted
      Definitive Note, a certificate from such holder in the form of Exhibit C
      hereto, including the certifications in item (2)(a) thereof;

            (B) if such beneficial interest is being transferred to a QIB in
      accordance with Rule 144A under the Securities Act, a certificate to the
      effect set forth in Exhibit B hereto, including the certifications in item
      (1) thereof;

            (C) if such beneficial interest is being transferred to a Non-U.S.
      Person in an offshore transaction in accordance with Rule 903 or Rule 904
      under the Securities Act, a certificate to the effect set forth in Exhibit
      B hereto, including the certifications in item (2) thereof;

            (D) if such beneficial interest is being transferred pursuant to an
      exemption from the registration requirements of the Securities Act in
      accordance with Rule 144 under the Securities Act, a certificate to the
      effect set forth in Exhibit B hereto, including the certifications in item
      (3)(a) thereof;

            (E) if such beneficial interest is being transferred to an
      Institutional Accredited Investor in reliance on an exemption from the
      registration requirements of the Securities Act other than those listed in
      subparagraphs (B) through (D) above, a certificate to the effect set forth
      in Exhibit B hereto, including the certifications, certificates and
      Opinion of Counsel required by item (3) thereof, if applicable;

            (F) if such beneficial interest is being transferred to the Company
      or any of its Subsidiaries, a certificate to the effect set forth in
      Exhibit B hereto, including the certifications in item (3)(b) thereof; or

            (G) if such beneficial interest is being transferred pursuant to an
      effective registration statement under the Securities Act, a certificate
      to the effect set forth in Exhibit B hereto, including the certifications
      in item (3)(c) thereof,

the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect


                                       41


Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.

      (ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global Note
may exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:

            (A) such exchange or transfer is effected pursuant to the Exchange
      Offer in accordance with the Registration Rights Agreement and the holder
      of such beneficial interest, in the case of an exchange, or the
      transferee, in the case of a transfer, certifies in the applicable Letter
      of Transmittal that it is not (1) a broker-dealer, (2) a Person
      participating in the distribution of the Exchange Notes or (3) a Person
      who is an affiliate (as defined in Rule 144) of the Company;

            (B) such transfer is effected pursuant to the Shelf Registration
      Statement in accordance with the Registration Rights Agreement;

            (C) such transfer is effected by a Broker-Dealer pursuant to the
      Exchange Offer Registration Statement in accordance with the Registration
      Rights Agreement; or

            (D) the Registrar receives the following:

                  (3) if the holder of such beneficial interest in a Restricted
            Global Note proposes to exchange such beneficial interest for a
            Definitive Note that does not bear the Private Placement Legend, a
            certificate from such holder in the form of Exhibit C hereto,
            including the certifications in item (1)(b) thereof; or

                  (4) if the holder of such beneficial interest in a Restricted
            Global Note proposes to transfer such beneficial interest to a
            Person who shall take delivery thereof in the form of a Definitive
            Note that does not bear the Private Placement Legend, a certificate
            from such holder in the form of Exhibit B hereto, including the
            certifications in item (4) thereof;

            and, in each such case set forth in this subparagraph (D), if the
            Registrar so requests or if the Applicable Procedures so require, an
            Opinion of Counsel in form reasonably acceptable to the Registrar to
            the effect that such exchange or transfer is in compliance with the
            Securities Act and that the restrictions on transfer contained
            herein and in the Private Placement Legend are no longer required in
            order to maintain compliance with the Securities Act.


                                       42


      (iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(h) hereof, and the Company shall execute and the
Trustee shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the Depositary
and the Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall not bear the Private Placement Legend.

      (d) Transfer and Exchange of Definitive Notes for Beneficial Interests.

      (i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Note, then, upon receipt by
the Registrar of the following documentation:

            (A) if the Holder of such Restricted Definitive Note proposes to
      exchange such Note for a beneficial interest in a Restricted Global Note,
      a certificate from such Holder in the form of Exhibit C hereto, including
      the certifications in item (2)(b) thereof;

            (B) if such Restricted Definitive Note is being transferred to a QIB
      in accordance with Rule 144A under the Securities Act, a certificate to
      the effect set forth in Exhibit B hereto, including the certifications in
      item (1) thereof;

            (C) if such Restricted Definitive Note is being transferred to a
      Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
      Rule 904 under the Securities Act, a certificate to the effect set forth
      in Exhibit B hereto, including the certifications in item (2) thereof;

            (D) if such Restricted Definitive Note is being transferred pursuant
      to an exemption from the registration requirements of the Securities Act
      in accordance with Rule 144 under the Securities Act, a certificate to the
      effect set forth in Exhibit B hereto, including the certifications in item
      (3)(a) thereof;

            (E) if such Restricted Definitive Note is being transferred to an
      Institutional Accredited Investor in reliance on an exemption from the
      registration


                                       43


requirements of the Securities Act other than those listed in subparagraphs (B)
through (D) above, a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel required by
item (3) thereof, if applicable;

            (F) if such Restricted Definitive Note is being transferred to the
      Company or any of its Subsidiaries, a certificate to the effect set forth
      in Exhibit B hereto, including the certifications in item (3)(b) thereof;
      or

            (G) if such Restricted Definitive Note is being transferred pursuant
      to an effective registration statement under the Securities Act, a
      certificate to the effect set forth in Exhibit B hereto, including the
      certifications in item (3)(c) thereof,

      the Trustee shall cancel the Restricted Definitive Note, increase or cause
      to be increased the aggregate principal amount of, in the case of clause
      (A) above, the appropriate Restricted Global Note, in the case of clause
      (B) above, the 144A Global Note, in the case of clause (C) above, the
      Regulation S Global Note, and in all other cases, the IAI Global Note.

      (ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note only if:

            (A) such exchange or transfer is effected pursuant to the Exchange
      Offer in accordance with the Registration Rights Agreement and the Holder,
      in the case of an exchange, or the transferee, in the case of a transfer,
      certifies in the applicable Letter of Transmittal that it is not (1) a
      broker-dealer, (2) a Person participating in the distribution of the
      Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
      144) of the Company;

            (B) such transfer is effected pursuant to the Shelf Registration
      Statement in accordance with the Registration Rights Agreement;

            (C) such transfer is effected by a Broker-Dealer pursuant to the
      Exchange Offer Registration Statement in accordance with the Registration
      Rights Agreement; or

            (D) the Registrar receives the following:

                  (5) if the Holder of such Definitive Notes proposes to
            exchange such Notes for a beneficial interest in the Unrestricted
            Global Note, a certificate from such Holder in the form of Exhibit C
            hereto, including the certifications in item (1)(c) thereof; or

                  (6) if the Holder of such Definitive Notes proposes to
            transfer such Notes to a Person who shall take delivery thereof in
            the form of a


                                       44


            beneficial interest in the Unrestricted Global Note, a certificate
            from such Holder in the form of Exhibit B hereto, including the
            certifications in item (4) thereof;

            and, in each such case set forth in this subparagraph (D), if the
            Registrar so requests or if the Applicable Procedures so require, an
            Opinion of Counsel in form reasonably acceptable to the Registrar to
            the effect that such exchange or transfer is in compliance with the
            Securities Act and that the restrictions on transfer contained
            herein and in the Private Placement Legend are no longer required in
            order to maintain compliance with the Securities Act.

            Upon satisfaction of the conditions of any of the subparagraphs in
            this Section 2.06(d)(ii), the Trustee shall cancel the Definitive
            Notes and increase or cause to be increased the aggregate principal
            amount of the Unrestricted Global Note.

            (iii) Unrestricted Definitive Notes to Beneficial Interests in
      Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
      exchange such Note for a beneficial interest in an Unrestricted Global
      Note or transfer such Definitive Notes to a Person who takes delivery
      thereof in the form of a beneficial interest in an Unrestricted Global
      Note at any time. Upon receipt of a request for such an exchange or
      transfer, the Trustee shall cancel the applicable Unrestricted Definitive
      Note and increase or cause to be increased the aggregate principal amount
      of one of the Unrestricted Global Notes.

            If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.

            (e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).

            (i) Restricted Definitive Notes to Restricted Definitive Notes. Any
      Restricted Definitive Note may be transferred to and registered in the
      name of Persons who take delivery thereof in the form of a Restricted
      Definitive Note if the Registrar receives the following:


                                       45


            (A) if the transfer shall be made pursuant to Rule 144A under the
      Securities Act, then the transferor must deliver a certificate in the form
      of Exhibit B hereto, including the certifications in item (1) thereof;

            (B) if the transfer shall be made pursuant to Rule 903 or Rule 904,
      then the transferor must deliver a certificate in the form of Exhibit B
      hereto, including the certifications in item (2) thereof; and

            (C) if the transfer shall be made pursuant to any other exemption
      from the registration requirements of the Securities Act, then the
      transferor must deliver a certificate in the form of Exhibit B hereto,
      including the certifications, certificates and Opinion of Counsel required
      by item (3) thereof, if applicable.

            (ii) Restricted Definitive Notes to Unrestricted Definitive Notes.
      Any Restricted Definitive Note may be exchanged by the Holder thereof for
      an Unrestricted Definitive Note or transferred to a Person or Persons who
      take delivery thereof in the form of an Unrestricted Definitive Note if:

                  (A) such exchange or transfer is effected pursuant to the
            Exchange Offer in accordance with the Registration Rights Agreement
            and the Holder, in the case of an exchange, or the transferee, in
            the case of a transfer, certifies in the applicable Letter of
            Transmittal that it is not (1) a broker-dealer, (2) a Person
            participating in the distribution of the Exchange Notes or (3) a
            Person who is an affiliate (as defined in Rule 144) of the Company;

                  (B) any such transfer is effected pursuant to the Shelf
            Registration Statement in accordance with the Registration Rights
            Agreement;

                  (C) any such transfer is effected by a Broker-Dealer pursuant
            to the Exchange Offer Registration Statement in accordance with the
            Registration Rights Agreement; or

                  (D) the Registrar receives the following:

            (1) if the Holder of such Restricted Definitive Notes proposes to
      exchange such Notes for an Unrestricted Definitive Note, a certificate
      from such Holder in the form of Exhibit C hereto, including the
      certifications in item (1)(d) thereof; or

            (2) if the Holder of such Restricted Definitive Notes proposes to
      transfer such Notes to a Person who shall take delivery thereof in the
      form of an Unrestricted Definitive Note, a certificate from such Holder in
      the form of Exhibit B hereto, including the certifications in item (4)
      thereof;

      and, in each such case set forth in this subparagraph (D), if the
      Registrar so requests, an Opinion of Counsel in form reasonably acceptable
      to the Company to the effect that such exchange or transfer is in
      compliance with


                                       46


      the Securities Act and that the restrictions on transfer contained herein
      and in the Private Placement Legend are no longer required in order to
      maintain compliance with the Securities Act.

            (iii) Unrestricted Definitive Notes to Unrestricted Definitive
      Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes
      to a Person who takes delivery thereof in the form of an Unrestricted
      Definitive Note. Upon receipt of a request to register such a transfer,
      the Registrar shall register the Unrestricted Definitive Notes pursuant to
      the instructions from the Holder thereof.

            (f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
Broker-Dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.

                  (g) Legends. The following legends shall appear on the face of
            all Global Notes and Definitive Notes issued under this Indenture
            unless specifically stated otherwise in the applicable provisions of
            this Indenture.

                  (i) Private Placement Legend.

                        (A) Except as permitted by subparagraph (B) below, each
                  Global Note and each Definitive Note (and all Notes issued in
                  exchange therefor or substitution thereof) shall bear the
                  legend in substantially the following form:

                  "THIS NOTE AND ANY GUARANTEES OF THIS NOTE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                  "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
                  NOTE NOR ANY GUARANTEES OF THIS NOTE NOR ANY INTEREST OR
                  PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED,
                  TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
                  THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
                  EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
                  OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS
                  ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
                  SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE
                  LATER OF THE


                                       47


                  ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
                  COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
                  NOTE (OR ANY PREDECESSOR OF THIS NOTE AND ANY GUARANTEES OF
                  THIS NOTE) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY
                  (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO
                  AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
                  (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT
                  TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
                  PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
                  BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN
                  ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
                  TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
                  RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
                  NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
                  THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E)
                  PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
                  REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
                  AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
                  TRANSFER (i) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE
                  40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF
                  REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE
                  (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO
                  REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
                  AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND
                  (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
                  CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY
                  IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER
                  AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
                  HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."

                        (B) Notwithstanding the foregoing, any Global Note or
                  Definitive Note issued pursuant to subparagraphs (b)(iv),
                  (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
                  to this Section 2.06 (and all Notes issued in exchange
                  therefor or substitution thereof) shall not bear the Private
                  Placement Legend.

            (ii) Global Note Legend. Each Global Note shall bear a legend in
      substantially the following form:

                  "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
                  INDENTURE GOVERNING THE NOTE) OR ITS NOMINEE IN CUSTODY FOR
                  THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
                  TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
                  (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
                  REQUIRED PURSUANT TO SECTION


                                       48


                  2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
                  IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
                  INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
                  TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
                  INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
                  SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
                  COMPANY."

            (h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who shall take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who shall take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

            (i) General Provisions Relating to Transfers and Exchanges.

            (ii) To permit registrations of transfers and exchanges, the Company
      shall execute and the Trustee shall authenticate Global Notes and
      Definitive Notes upon the Company's order or at the Registrar's request.

            (iii) No service charge shall be made to a holder of a beneficial
      interest in a Global Note or to a Holder of a Definitive Note for any
      registration of transfer or exchange, but the Company may require payment
      of a sum sufficient to cover any transfer tax or similar governmental
      charge payable in connection therewith (other than any such transfer taxes
      or similar governmental charge payable upon exchange or transfer pursuant
      to Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

            (iv) The Registrar shall not be required to register the transfer of
      or exchange any Note selected for redemption in whole or in part, except
      the unredeemed portion of any Note being redeemed in part.

            (v) All Global Notes and Definitive Notes issued upon any
      registration of transfer or exchange of Global Notes or Definitive Notes
      shall be the valid and legally binding obligations of the Company,
      evidencing the same debt, and entitled to the same benefits under this
      Indenture, as the Global Notes or Definitive Notes surrendered upon such
      registration of transfer or exchange.


                                       49


            (vi) The Company shall not be required (A) to issue, to register the
      transfer of or to exchange any Notes during a period beginning at the
      opening of business 15 days before the day of any selection of Notes for
      redemption under Section 3.02 hereof and ending at the close of business
      on the day of selection, (B) to register the transfer of or to exchange
      any Note so selected for redemption in whole or in part, except the
      unredeemed portion of any Note being redeemed in part or (C) to register
      the transfer of or to exchange a Note between a record date and the next
      succeeding Interest Payment Date.

            (vii) Prior to due presentment for the registration of a transfer of
      any Note, the Trustee, any Agent and the Company may deem and treat the
      Person in whose name any Note is registered as the absolute owner of such
      Note for the purpose of receiving payment of principal of and interest on
      such Notes and for all other purposes, and none of the Trustee, any Agent
      or the Company shall be affected by notice to the contrary.

            (viii) The Trustee shall authenticate Global Notes and Definitive
      Notes in accordance with the provisions of Section 2.02 hereof.

            (ix) All certifications, certificates and Opinions of Counsel
      required to be submitted to the Registrar pursuant to this Section 2.06 to
      effect a registration of transfer or exchange may be submitted by
      facsimile with the original to follow by first class mail.

            Section 2.07. Replacement Notes. If any mutilated Note is
surrendered to the Trustee or the Company and the Trustee receives evidence to
its satisfaction of the destruction, loss or theft of any Note, the Company
shall issue and the Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.

            Every replacement Note issued pursuant to this Section 2.07 is an
additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with all other Notes duly
issued hereunder.

            Section 2.08. Outstanding Notes. The Notes outstanding at any time
are all the Notes authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note; however, Notes held by the
Company or a Subsidiary of the Company shall not be deemed to be outstanding for
purposes of Section 3.07(b) hereof.

            If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.


                                       50


            If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

            If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.

            Section 2.09. Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that the Trustee knows are so
owned shall be so disregarded.

            Section 2.10. Temporary Notes. Until certificates representing Notes
are ready for delivery, the Company may prepare and the Trustee, upon receipt of
an Authentication Order, shall authenticate temporary Notes. Temporary Notes
shall be substantially in the form of certificated Notes but may have variations
that the Company considers appropriate for temporary Notes and as shall be
reasonably acceptable to the Trustee. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Notes in exchange
for temporary Notes.

            Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.

            Section 2.11. Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement
or cancellation and shall dispose of such canceled Notes in its customary
manner. Subject to Section 2.07, the Company may not issue new Notes to replace
Notes that it has paid or that have been delivered to the Trustee for
cancellation.

            Section 2.12. Defaulted Interest. If the Company defaults in a
payment of interest on the Notes, it shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in
each case at the rate provided in the Notes and in Section 4.01 hereof. The
Company shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.


                                       51


            Section 2.13. CUSIP Numbers. The Company in issuing the Notes may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the "CUSIP" numbers.

                                   ARTICLE 3

                            REDEMPTION AND PREPAYMENT

            Section 3.01. Notices to Trustee. If the Company elects to redeem
Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it
shall furnish to the Trustee, at least 35 days but not more than 60 days before
a redemption date (unless a shorter notice period shall be satisfactory to the
Trustee in its reasonable discretion), an Officers' Certificate setting forth
(i) the clause of this Indenture pursuant to which the redemption shall occur,
(ii) the redemption date, (iii) the principal amount of Notes to be redeemed and
(iv) the redemption price.

            Section 3.02. Selection of Notes to Be Redeemed. If less than all of
the Notes are to be redeemed at any time, selection of Notes for redemption
shall be made by the Trustee in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed,
or, if the Notes are not so listed, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 35 nor more than 60 days prior to the
redemption date by the Trustee (unless a shorter time period shall be
satisfactory to the Trustee) from the outstanding Notes not previously called
for redemption.

            The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.

            Section 3.03. Notice of Redemption. Subject to the provisions of
Section 3.09 hereof, at least 30 days (or in the case of a "Special Mandatory
Redemption" described in Section 3.08(b), 10 Business Days) but not more than 60
days before a redemption date, the Company shall mail or cause to be mailed, by
first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address.


                                       52


            The notice shall identify the Notes to be redeemed and shall state:

            (a) the redemption date;

            (b) the redemption price;

            (c) if any Note is being redeemed in part, the portion of the
      principal amount of such Note to be redeemed and that, after the
      redemption date upon surrender of such Note, a new Note or Notes in
      principal amount equal to the unredeemed portion shall be issued upon
      cancellation of the original Note;

            (d) the name and address of the Paying Agent;

            (e) that Notes called for redemption must be surrendered to the
      Paying Agent to collect the redemption price and become due on the date
      fixed for redemption;

            (f) that, unless the Company defaults in making such redemption
      payment, interest on Notes called for redemption ceases to accrue on and
      after the redemption date;

            (g) the paragraph of the Notes and/or Section of this Indenture
      pursuant to which the Notes called for redemption are being redeemed; and

            (h) that no representation is made as to the correctness or accuracy
      of the CUSIP number, if any, listed in such notice or printed on the
      Notes.

            At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph. The notice, if mailed in the manner provided herein
shall be presumed to have been given, whether or not the Holder receives such
notice.

            Section 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.

            Section 3.05. Deposit of Redemption Price. One Business Day prior to
the redemption date, the Company shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Notes to be redeemed on that date. The Trustee or the Paying
Agent shall promptly return to the Company any money deposited with the Trustee
or the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.

            If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person


                                       53


in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.

            Section 3.06. Notes Redeemed in Part. Upon surrender of a Note that
is redeemed in part, the Company shall issue and, upon the Company's written
request, the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.

            Section 3.07. Optional Redemption. (a) Except as set forth in
clauses (b) and (c) of this Section 3.07, the Notes shall not be redeemable at
the Company's option prior to April 1, 2006. Thereafter, the Company may redeem
all or a part of the Notes from time to time, upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, to the applicable redemption date, if redeemed
during the twelve-month period beginning on April 1 of the years indicated
below:

               Year                                     Percentage
               2006 ..................................   105.875%
               2007 ..................................   103.917%
               2008 ..................................   101.958%
               2009 and thereafter ...................   100.000%

            (b) At any time prior to April 1, 2004, the Company may on any one
or more occasions redeem up to 35% of the sum of (i) the initial aggregate
principal amount of the Notes and (ii) the initial aggregate principal amount of
any Additional Notes at a redemption price of 111.750% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings of
the Company (or of the Parent to the extent such proceeds are contributed to the
common equity of the Company); provided that (A) at least 65% of the sum of (x)
the initial aggregate principal amount of the Notes and (y) the initial
aggregate principal amount of any Additional Notes issued remains outstanding
immediately after the occurrence of such redemption, excluding Notes held by the
Company and its Subsidiaries; and (B) the redemption must occur within 60 days
of the date of the closing of such Equity Offering.

            (c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.

            Section 3.08. Mandatory Redemption. (a) Except as set forth in
clause (b) of this Section 3.08 and Section 4.10 and 4.14 hereof, the Company is
not required to make mandatory redemption or sinking fund payments with respect
to the Notes.

            (b) In the event that the Merger is not consummated on or before the
earlier to occur of (i) May 31, 2001 and (ii) if it appears, in the sole
judgment of the Company, that the


                                       54


Merger shall not be consummated, the date on which notice of same is delivered
by the Company to the Collateral Agent and the Trustee, the Company shall be
required to redeem the Notes, in whole, on at least five Business Days' prior
written notice mailed by first class mail to each Holder at a redemption price
equal to 101% of the aggregate principal amount of the Notes plus accrued
interest thereon but not including, the date of repurchase.

            Section 3.09. Offer to Purchase. In the event that, pursuant to
Sections 4.10 and 4.14 hereof, the Company shall be required to commence an
offer to all Holders to purchase Notes (a "Repurchase Offer"), it shall follow
the procedures specified below.

            The Repurchase Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 or 4.14 hereof (the "Offer Amount") or, if
less than the Offer Amount has been tendered, all Notes tendered in response to
the Repurchase Offer. Payment for any Notes so purchased shall be made in the
same manner as interest payments are made.

            If the Purchase Date is on or after an interest record date and on
or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Repurchase Offer.

            Upon the commencement of a Repurchase Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall state:

            (a) that the Repurchase Offer is being made pursuant to this Section
      3.09 and Sections 4.10 or 4.14 hereof and the length of time the
      Repurchase Offer shall remain open;

            (b) the Offer Amount, the purchase price and the Purchase Date;

            (c) that any Note not tendered or accepted for payment shall
      continue to accrete or accrue interest;

            (d) that, unless the Company defaults in making such payment, any
      Note accepted for payment pursuant to the Repurchase Offer shall cease to
      accrete or accrue interest after the Purchase Date;

            (e) that Holders electing to have a Note purchased pursuant to a
      Repurchase Offer may only elect to have all of such Note purchased or a
      portion of such Note in denominations of $1,000 or integral multiples
      thereof;


                                       55


            (f) that Holders electing to have a Note purchased pursuant to any
      Repurchase Offer shall be required to surrender the Note, with the form
      entitled "Option of Holder to Elect Purchase" on the reverse of the Note
      completed, or transfer by book-entry transfer, to the Company, the
      Depositary, if appointed by the Company, or a Paying Agent at the address
      specified in the notice at least three days before the Purchase Date;

            (g) that Holders shall be entitled to withdraw their election if the
      Company, the Depositary or the Paying Agent, as the case may be, receives,
      not later than the expiration of the Offer Period, a telegram, telex,
      facsimile transmission or letter setting forth the name of the Holder, the
      principal amount of the Note the Holder delivered for purchase and a
      statement that such Holder is withdrawing his election to have such Note
      purchased;

            (h) that, if the aggregate principal amount of Notes surrendered by
      Holders exceeds the Offer Amount, the Company shall select the Notes to be
      purchased on a pro rata basis (with such adjustments as may be deemed
      appropriate by the Company so that only Notes in denominations of $1,000,
      or integral multiples thereof, shall be purchased); and

            (i) that Holders whose Notes were purchased only in part shall be
      issued new Notes equal in principal amount to the unpurchased portion of
      the Notes surrendered (or transferred by book-entry transfer).

            On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Repurchase
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Repurchase Offer on the Purchase
Date.

            Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.


                                       56


                                   ARTICLE 4

                                    COVENANTS

            Section 4.01. Payment of Notes. The Company shall pay or cause to be
paid the principal of, premium, if any, and interest on the Notes on the dates
and in the manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if a
Person other than the Company or a Subsidiary thereof, holds as of 12:00 p.m.
(noon) Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.

            The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.

            Section 4.02. Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee.

            The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

            The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.


                                       57


            Section 4.03. Reports. (a) Whether or not required by the SEC, so
long as any Notes are outstanding (unless defeased in a legal defeasance), the
Company will furnish to the Holders of Notes, within the time periods specified
in the SEC's rules and regulations (including any extensions permitted
thereunder), (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report on the annual financial statements by
the Company's certified independent accountants; and (ii) all current reports
that would be required to be filed with the SEC on Form 8-K if the Company were
required to file such reports. In addition, following the date by which the
Company is required to consummate the Exchange Offer, whether or not required by
the SEC, the Company will file a copy of all of the information and reports
referred to in clauses (i) and (ii) above with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, the
Company and the Guarantors have agreed that, for so long as any Notes (but not
the Exchange Notes) remain outstanding, they will furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act if not obtainable from the SEC.

            (b) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries (other than Subsidiaries that individually or as a
group constitute an Immaterial Subsidiary), then the quarterly and annual
financial information required by paragraph (a) above shall include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," in the Offering Memorandum of the
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company.

            Section 4.04. Compliance Certificate. (a) The Company and each
Guarantor (to the extent that such Guarantor is so required under the TIA) shall
deliver to the Trustee, within 120 days after the end of each fiscal year, an
Officers' Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.


                                       58


            (b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.

            (c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith, but in no event later than three Business
Days, upon any Officer becoming aware of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.

            Section 4.05. Taxes. The Company shall pay, and shall cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.

            Section 4.06. Stay, Extension and Usury Laws. The Company and each
of the Guarantors covenant (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company and each of the Guarantors
(to the extent that it may lawfully do so) hereby expressly waive all benefit or
advantage of any such law, and covenant that it shall not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.

            Section 4.07. Restricted Payments. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly:

            (i) declare or pay any dividend or make any other payment or
      distribution on account of the Company's or any of its Restricted
      Subsidiaries' Equity Interests (including, without limitation, any payment
      in connection with any merger or consolidation involving the Company or
      any of its Restricted Subsidiaries) or to the direct or indirect holders
      of the Company's or any of its Restricted Subsidiaries' Equity Interests
      in their capacity as such (other than dividends or distributions payable
      in Equity Interests (other than Disqualified Stock) of the Company or to
      the Company or a Restricted Subsidiary of the Company);

            (ii) purchase, redeem or otherwise acquire or retire for value
      (including, without limitation, in connection with any merger or
      consolidation involving the Company) any Equity Interests of the Company,
      the Parent or any Subsidiary of the Company (other than a Wholly Owned
      Restricted Subsidiary);


                                       59


            (iii) make any payment on or with respect to, or purchase, redeem,
      defease or otherwise acquire or retire for value any Indebtedness that is
      subordinated to the Notes or the Note Guarantees, except a payment of
      interest or principal at the Stated Maturity thereof; or

            (iv) make any Restricted Investment (all such payments and other
      actions set forth in clauses (1) through (4) above being collectively
      referred to as "Restricted Payments"),

unless, at the time of and after giving effect to such Restricted Payment:

            (i) no Default or Event of Default shall have occurred and be
      continuing or would occur as a consequence thereof; and

            (ii) the Company would, at the time of such Restricted Payment and
      after giving pro forma effect thereto as if such Restricted Payment had
      been made at the beginning of the applicable four-quarter period, have
      been permitted to incur at least $1.00 of additional Indebtedness pursuant
      to the Fixed Charge Coverage Ratio test set forth in the first paragraph
      of Section 4.09; and

            (iii) such Restricted Payment, together with the aggregate amount of
      all other Restricted Payments made by the Company and its Restricted
      Subsidiaries after the date hereof (excluding Restricted Payments
      permitted by clauses (ii), (iii), (vi), (vii), (viii), and (x) of the next
      succeeding paragraph), is less than the sum, without duplication, of:

                  (A) 50% of the Consolidated Net Income of the Company for the
            period (taken as one accounting period) beginning on the Merger Date
            and ending on the date of the Company's most recently ended fiscal
            quarter for which internal financial statements are available at the
            time of such Restricted Payment (or, if such Consolidated Net Income
            for such period is a deficit, less 100% of such deficit), plus

                  (B) 100% of the aggregate net cash proceeds received by the
            Company subsequent to the Merger Date as a contribution to its
            common equity capital or from the issue or sale of Equity Interests
            of the Company (other than Excluded Contributions or net cash
            proceeds from the issue and sale of Disqualified Stock) or from the
            issue or sale of convertible or exchangeable Disqualified Stock or
            convertible or exchangeable debt securities of the Company that have
            been converted into or exchanged for such Equity Interests (other
            than Equity Interests (or Disqualified Stock or debt securities)
            sold to a Subsidiary of the Company); plus

                  (C) an amount equal to the net reduction in Investments by the
            Company and its Restricted Subsidiaries, subsequent to the Merger
            Date, resulting from payments of interest on Indebtedness,
            dividends, repayments of loans or advances or other transfers of
            assets, in each case to the Company or any such Restricted
            Subsidiary from any such Investment, or from the net cash proceeds
            from the sale of any such Investment, or from a redesignation of an
            Unrestricted Subsidiary to a


                                       60


            Restricted Subsidiary, but only if and to the extent such amounts
            are not included in the calculation of Consolidated Net Income and
            not to exceed in the case of any Investment the amount of the
            Investment previously made by the Company or any Restricted
            Subsidiary in such Person or Unrestricted Subsidiary; provided, that
            any amounts in excess of the amount of the Investment may be added
            to the amounts otherwise available under this clause (C) to make
            Restricted Investments pursuant to this clause (C).

            So long as no Default has occurred and is continuing or would be
caused thereby, the preceding provisions will not prohibit:

            (i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of the Indenture;

            (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any Restricted
Subsidiary or of any Equity Interests of the Company in exchange for, or out of
the net cash proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary of the Company) of, Equity Interests of the Company other
than Disqualified Stock; provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause (iii) (B) of the preceding
paragraph;

            (iii) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Restricted Subsidiary with the
net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;

            (iv) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of any series or class of its common Equity Interests on
a pro rata basis;

            (v) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company and any distribution, loan or
advance to the Parent for the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests, of the Parent, in each case held
by any former or current employees, officers, directors or consultants of the
Company or any of its Restricted Subsidiaries or their respective estates,
spouses or family members under any management equity plan or stock option or
other management or employee benefit plan upon the death, disability or
termination of employment of such Persons, in an amount not to exceed $2.0
million in any calendar year; provided that the Company may carry over and make
in a subsequent calendar year, in addition to the amounts permitted for such
calendar year, the amount of such purchases, redemptions or other acquisitions
or retirements for value permitted to have been made but not made in any
preceding calendar year up to a maximum of $6.0 million in any calendar year;
and provided further that such amount in any calendar year may be increased by
an amount not to exceed (x) the net cash proceeds from the sale of Equity
Interests (other than Disqualified Stock) of the Company (or the Parent to the
extent such net cash proceeds are contributed to the common equity of the
Company) to employees, officers, directors or consultants of the Company and its
Restricted Subsidiaries that occurs after the Merger Date (to the extent the
cash proceeds from the sale of such Equity Interests have not otherwise been
applied to the


                                       61


payment of Restricted Payments pursuant to clause (ii) above or previously
applied to the payment of Restricted Payments pursuant to this clause (v)) plus
(y) the cash proceeds of key man life insurance policies received by the Company
and its Restricted Subsidiaries after the Merger Date less any amounts
previously applied to the payment of Restricted Payments pursuant to this clause
(v); provided further that cancellation of Indebtedness owing to the Company
from employees, officers, directors and consultants of the Company or any of its
Restricted Subsidiaries in connection with a repurchase of Equity Interests of
the Company from such Persons will not be deemed to constitute a Restricted
Payment for purposes of this covenant or any other provisions of the Indenture;
provided further that the net cash proceeds from such sales of Equity Interests
described in clause (x) of this clause (v) shall be excluded from clause
(iii)(B) of the preceding paragraph to the extent such proceeds have been or are
applied to the payment of Restricted Payments pursuant to this clause (v);

            (vi) the payment of dividends or other distributions or the making
of loans or advances to the Parent in amounts required for the Parent to pay
franchise taxes and other fees required to maintain its existence and provide
for all other operating costs of the Parent to the extent attributable to the
ownership or operation of the Company and its Restricted Subsidiaries,
including, without limitation, in respect of director fees and expenses,
administrative, legal and accounting services provided by third parties and
other costs and expenses including all costs and expenses with respect to
filings with the SEC, of up to an aggregate under this clause (vi) of $500,000
per fiscal year plus any indemnification claims made by directors or officers of
the Parent attributable to the ownership or operation of the Company and its
Restricted Subsidiaries;

            (vii) the payment of dividends or other distributions by the Company
to the Parent in amounts required to pay the tax obligations of the Parent
attributable to the Company and its Subsidiaries determined as if the Company
and its Subsidiaries had filed a separate consolidated, combined or unitary
return for the relevant taxing jurisdiction; provided that (x) the amount of
dividends paid pursuant to this clause (vii) to enable the Parent to pay Federal
and state income taxes (and franchise taxes based on income) at any time shall
not exceed the amount of such Federal and state income taxes (and franchise
taxes based on income) actually owing by the Parent at such time to the
respective tax authorities for the respective period and (y) any refunds
received by the Parent attributable to the Company or any of its Subsidiaries
shall promptly be returned by the Parent to the Company through a contribution
or purchase of common stock (other than Disqualified Stock) of the Company from
the Company;

            (viii) repurchases of Capital Stock deemed to occur upon the
cashless exercise of stock options and warrants;

            (ix) other Restricted Payments not otherwise permitted by this
Section 4.07 in an aggregate amount not to exceed $25.0 million;

            (x) Restricted Payments to holders of equity interests of Michael
Foods contemplated by the Merger Agreement;

            (xi) the declaration and payment of dividends and distributions to
holders of any class or series of Disqualified Stock of the Company or any of
its Restricted Subsidiaries issued or incurred in accordance with Section 4.09;
and


                                       62


            (xii) Investments that are made with Excluded Contributions.

            The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued for the
purposes hereof shall be determined by the Board of Directors whose resolution
with respect thereto shall be delivered to the Trustee. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $5.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.

            Section 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:

            (i) pay dividends or make any other distributions on its Capital
      Stock to the Company or any of its Restricted Subsidiaries, or with
      respect to any other interest or participation in, or measured by, its
      profits, or pay any indebtedness owed to the Company or any of its
      Restricted Subsidiaries;

            (ii) make loans or advances to the Company or any of its Restricted
      Subsidiaries; or

            (iii) transfer any of its properties or assets to the Company or any
      of its Restricted Subsidiaries.

            However, the preceding restrictions will not apply to encumbrances
or restrictions existing under or by reason of:

            (i) Existing Indebtedness as in effect on the date hereof and the
      Credit Agreement as in effect on the Merger Date and any amendments,
      modifications, restatements, renewals, increases, supplements, refundings,
      replacements or refinancings thereof; provided that such amendments,
      modifications, restatements, renewals, increases, supplements, refundings,
      replacements or refinancings are no more restrictive, taken as a whole,
      with respect to such encumbrances than those contained in such Existing
      Indebtedness, as in effect on the date hereof;

            (ii) this Indenture, the Notes and the Note Guarantees;

            (iii) applicable law or regulation;

            (iv) any agreements or instrument governing Indebtedness or Capital
      Stock of a Person acquired by the Company or any of its Restricted
      Subsidiaries as in effect at the


                                       63


      time of such acquisition (except to the extent such Indebtedness was
      incurred in connection with or in contemplation of such acquisition),
      which encumbrance or restriction is not applicable to any Person, or the
      properties or assets of any Person, other than the Person, or the property
      or assets of the Person, so acquired, provided that, in the case of
      Indebtedness, such Indebtedness was permitted by the terms of this
      Indenture to be incurred;

            (v) customary non-assignment provisions in leases entered into in
the ordinary course of business;

            (vi) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so acquired
of the nature described in clause (iii) of the preceding paragraph;

            (vii) an agreement entered into for the sale or disposition of
Capital Stock or assets of a Restricted Subsidiary or an agreement entered into
for the sale of specified assets (in either case, so long as such encumbrance or
restriction, by its terms, terminates on the earlier of the termination of such
agreement or the consummation of such agreement and so long as such restriction
applies only to the Capital Stock or assets to be sold);

            (viii) Permitted Refinancing Indebtedness, provided that the
encumbrances and restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced;

            (ix) Permitted Liens securing Indebtedness that limit the right of
the debtor to dispose of the assets subject to such Lien;

            (x) customary limitations on the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business; and

            (xi) any Purchase Money Note, or other Indebtedness or contractual
requirements of a Receivables Subsidiary in connection with a Qualified
Securitization Transaction; provided that such restrictions only apply only to
such Receivables Subsidiary.

            Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock. The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and the Company
will not permit any of its Restricted Subsidiaries to issue any Disqualified
Stock or preferred stock; provided, however, that the Company and the Guarantors
may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if
the Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred


                                       64


or such Disqualified Stock is issued would have been at least 2.00 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.

            So long as no Default shall have occurred and be continuing or would
be caused thereby, the first paragraph of this Section 4.09 will not prohibit
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):

            (i) the incurrence by the Company or any Guarantor of Indebtedness
      under the Credit Agreement (and the incurrence by the Guarantors of
      guarantees thereof) in an aggregate principal amount at any one time
      outstanding (with letters of credit being deemed to have a principal
      amount equal to the maximum potential liability of the Company and the
      Guarantors thereunder) not to exceed $470 million and (b) the incurrence
      by the Company or any Guarantor of additional Indebtedness under Credit
      Facilities (and the incurrence by the Guarantors of guarantees thereof) in
      an aggregate principal amount at any one time outstanding (with letters of
      credit being deemed to have a principal amount equal to the maximum
      potential liability of the Company and the Guarantors thereunder) not to
      exceed the amount, if any, by which (x) the amount of the Borrowing Base
      as of the date of such incurrence exceeds (y) the aggregate amount of
      Indebtedness permitted to be incurred pursuant to the immediately
      preceding clause (a) as of the date of such incurrence, less, in the case
      of each of clause (a) and (b) the aggregate amount of all Net Proceeds of
      Asset Sales applied by the Company or any Guarantor to repay any
      Indebtedness under the Credit Agreement or the Credit Facilities (and, in
      the case of any revolving credit Indebtedness under the Credit Agreement
      or a Credit Facility, to effect a corresponding commitment reduction
      thereunder) pursuant to Section 4.10;

            (ii) the incurrence by the Company or any Guarantor of the Existing
      Indebtedness;

            (iii) the incurrence by the Company and its Restricted Subsidiaries
      of Indebtedness represented by the Notes to be issued on the Issue Date
      and the related Note Guarantees and the Exchange Notes and the related
      Note Guarantees to be issued pursuant to the Registration Rights
      Agreement;

            (iv) the incurrence by the Company or any of its Restricted
      Subsidiaries of Indebtedness represented by Capital Lease Obligations,
      mortgage financings or purchase money obligations, in each case, incurred
      for the purpose of financing all or any part of the purchase price or cost
      of construction or improvement of property, plant or equipment used in the
      business of the Company or any of its Restricted Subsidiaries in an
      aggregate principal amount, including all Permitted Refinancing
      Indebtedness incurred to refund, refinance or replace any Indebtedness
      incurred pursuant to this clause (iv), not to exceed $15 million at any
      time outstanding;

            (v) the incurrence by the Company or any of its Restricted
      Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
      net proceeds of which are


                                       65


      used to refund, refinance or replace Indebtedness (other than intercompany
      Indebtedness) that was permitted to be incurred under the first paragraph
      of this Section 4.09 or clauses (ii), (iii), (iv), (v), or (xv), of this
      Section 4.09;

            (vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries; provided, however, that:

            (a) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the Notes, in the
case of the Company, or the Note Guarantee, in the case of a Guarantor; and

            (b) (1) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than the Company
or a Restricted Subsidiary thereof and (2) any sale or other transfer of any
such Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary thereof; shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (vi);

            (vii) the incurrence by the Company or any of its Restricted
      Subsidiaries of Hedging Obligations that are incurred:

            (a) for the purpose of fixing or hedging interest rate risk with
respect to any floating rate Indebtedness that is permitted by the terms of this
Indenture to be outstanding;

            (b) for the purpose of fixing or hedging currency exchange rate risk
with respect to any currency exchanges; or

            (c) for the purpose of fixing or hedging commodity price risk with
respect to any commodity purchases;

            (viii) the guarantee by the Company or any Guarantor of Indebtedness
      of the Company or a Restricted Subsidiary of the Company that was
      permitted to be incurred by this Section 4.09;

            (ix) the accrual of interest, the accretion or amortization of
      original issue discount, the payment of interest on any Indebtedness in
      the form of additional Indebtedness with the same terms, and the payment
      of dividends on Disqualified Stock in the form of additional shares of the
      same class of Disqualified Stock will not be deemed to be an incurrence of
      Indebtedness or an issuance of Disqualified Stock for purposes of this
      Section 4.09; provided, in each such case, that the amount thereof is
      included in Fixed Charges of the Company as accrued;

            (x) the incurrence by the Company's Unrestricted Subsidiaries of
      Non-Recourse Debt, provided, however, that if any such Indebtedness ceases
      to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
      deemed to constitute an


                                       66


      incurrence of Indebtedness by a Restricted Subsidiary of the Company that
      was not permitted by this clause (x);

            (xi) the incurrence by the Company or any of its Restricted
      Subsidiaries of Indebtedness constituting reimbursement obligations with
      respect to letters of credit issued in the ordinary course of business,
      including, without limitation, letters of credit in respect of workers'
      compensation claims or self-insurance, or other Indebtedness with respect
      to reimbursement type obligations regarding workers' compensation claims
      or self-insurance; provided, however, that, upon the drawing of such
      letters of credit or the incurrence of such Indebtedness, such obligations
      are reimbursed within 30 days following such drawing or incurrence;

            (xii) the incurrence by the Company or any of its Restricted
      Subsidiaries of Indebtedness arising from agreements of the Company or
      such Restricted Subsidiary providing for indemnification, adjustment of
      purchase price or similar obligations, in each case, incurred or assumed
      in connection with the disposition of any business, assets or Capital
      Stock of a Restricted Subsidiary, other than guarantees of Indebtedness
      incurred by any Person acquiring all or any portion of such business,
      assets or a Subsidiary for the purpose of financing such acquisition;
      provided that:

            (a) that Indebtedness is not reflected on the balance sheet of the
Company or any Restricted Subsidiary (contingent obligations referred to in a
footnote or footnotes to financial statements and not otherwise reflected on the
balance sheet will not be deemed to be reflected on that balance sheet for
purposes of this clause (a)); and

            (b) the maximum assumable liability in respect of that Indebtedness
shall at no time exceed the gross proceeds including noncash proceeds (the fair
market value of those noncash proceeds being measured at the time received and
without giving effect to any subsequent changes in value) actually received by
the Company and/or that Restricted Subsidiary in connection with that
disposition;

            (xiii) the issuance of preferred stock by any of the Company's
      Restricted Subsidiaries issued to the Company or another Restricted
      Subsidiary; provided that any subsequent issuance or transfer of any
      Equity Securities or any other event that results in any such Restricted
      Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent
      transfer of any such shares of preferred stock (except to the Company or
      another Restricted Subsidiary) shall be deemed, in each case to be an
      issuance of such shares of preferred stock;

            (xiv) the incurrence by the Company or any of its Restricted
      Subsidiaries of obligations in respect of performance and surety bonds and
      completion guarantees provided by the Company or such Restricted
      Subsidiary in the ordinary course of business;

            (xv) the incurrence by the Company or any Guarantor of Indebtedness
      in an aggregate principal amount (or accreted value, as applicable) at any
      time outstanding,


                                       67


      including all Permitted Refinancing Indebtedness incurred to refund,
      refinance or replace any Indebtedness incurred pursuant to this clause
      (xv), not to exceed $30 million;

            (xvi) the incurrence by the Foreign Restricted Subsidiaries of the
      Company of Indebtedness in an aggregate principal amount at any one time
      outstanding (with letters of credit being deemed to have a principal
      amount equal to the maximum potential liability of the Restricted
      Subsidiaries under any credit facility entered into in connection
      therewith) not to exceed the greater of (x) $20 million or (y) the amount
      of the Foreign Borrowing Base as of the date of such incurrence; and

            (xvii) the incurrence of any Indebtedness by a Receivables
      Subsidiary that is not recourse to the Company or any other Restricted
      Subsidiary of the Company (other than Standard Securitization
      Undertakings) incurred in connection with a Qualified Receivables
      Transaction.

            For purposes of determining compliance with this Section 4.09, in
the event that any proposed Indebtedness meets the criteria of more than one of
the categories of Permitted Debt described in clauses (i) through (xvii) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company will be permitted to classify such item of Indebtedness on the
date of its incurrence in any manner that complies with this Section 4.09.
Indebtedness under the Credit Agreement immediately following the Merger shall
be deemed to have been incurred on the Merger Date in reliance on the exception
provided by clause (i) of the definition of Permitted Debt.

            Section 4.10. Asset Sales. The Company will not, and will not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed of;
(ii) such fair market value is determined by the Company's Board of Directors
and evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee; and (iii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of Cash Equivalents. For purposes of this provision, each of the
following shall be deemed to be cash:

            (a) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet), of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Notes or any Note Guarantee) that are assumed by the
transferee of any such assets and where the Company and all Restricted
Subsidiaries are released from any further liability in connection therewith;

            (b) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are within
180 days of receipt thereof converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received in that conversion);

            (c) any Designated Non-cash Consideration received by the Company or
any of its Restricted Subsidiaries in such Asset Sale having a fair market
value, taken together with


                                       68


all other Designated Non-cash Consideration received pursuant to this clause (c)
that is at that time outstanding, not to exceed 15% of Total Net Tangible Assets
at the time of the receipt of such Designated Noncash Consideration, with the
fair market value of each item of Designated Noncash Consideration being
measured at the time received without giving effect to subsequent changes in
value; and

            (d) any combination thereof.

            For purposes of paragraph (c) above, any liabilities of the Company
or any Restricted Subsidiary that are not assumed by the transferee of such
assets in respect of which the Company and all Restricted Subsidiaries are not
released from any future liabilities in connection therewith shall not be
considered consideration.

            Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds at its option:

                  (1)   to repay Senior Debt and, if the Senior Debt repaid is
                        revolving credit Indebtedness, to correspondingly reduce
                        commitments with respect thereto;

                  (2)   to acquire all or substantially all of the assets of, or
                        a majority of the Voting Stock of, another Permitted
                        Business;

                  (3)   to acquire other assets, including investments in
                        property or capital expenditures, that are used or
                        useful in a Permitted Business; or

                  (4)   any combination of the foregoing.

            Pending the final application of any such Net Proceeds, the Company
may temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited hereunder.

            Any Net Proceeds from Asset Sales that are not applied or invested
as provided in the preceding paragraph will constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will
make an Asset Sale Offer to all Holders of Notes and Additional Notes, if any,
and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth herein with respect to offers
to purchase with the proceeds of sales of assets to purchase the maximum
principal amount of Notes and Additional Notes, if any, and such other pari
passu Indebtedness that may be purchased out of the Excess Proceeds. The offer
price in any Asset Sale Offer will be equal to 100% of principal amount plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase, and will be payable in cash. If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and such other pari passu Indebtedness tendered into
such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes and such other pari passu Indebtedness to be purchased on a pro
rata basis based on the principal amount of Notes and Additional Notes


                                       69


and such other pari passu Indebtedness tendered. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.

            The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.

            Section 4.11. Transactions with Affiliates. The Company will not,
and will not permit any of its Restricted Subsidiaries to, make any payment to,
or sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"),
unless: (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and (ii) the Company delivers to the
Trustee: (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $1.0
million, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been approved by a majority
of the disinterested members of the Board of Directors; and (b) with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, an opinion as to the
fairness to the Company or such Restricted Subsidiary of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing. No outside director or
non-management director shall be deemed not to be a "disinterested director" by
reason of his receipt of reasonable and customary directors' fees or the
participation in reasonable and customary directors' stock grant, stock option
or stock warrant plans, or such other form of director remuneration as is
reasonable and customary.

            The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:

                  (1)   any consulting or employment agreement entered into by
                        the Company or any of its Restricted Subsidiaries
                        consistent with the past practice of the Company or such
                        Restricted Subsidiary;

                  (2)   transactions between or among the Company and/or its
                        Restricted Subsidiaries;

                  (3)   payment of reasonable directors fees to directors of the
                        Company and the Parent and the provision of customary
                        indemnification to directors and officers of the Company
                        and the Parent;


                                       70


                  (4)   sales of Equity Interests (other than Disqualified
                        Stock) to Affiliates of the Company;

                  (5)   any tax sharing agreement or arrangement and payments
                        pursuant thereto among the Company and its Subsidiaries
                        and any other Person with which the Company or its
                        Subsidiaries is required or permitted to file a
                        consolidated tax return or with which the Company or any
                        of its Restricted Subsidiaries is or could be part of a
                        consolidated group for tax purposes in amounts not
                        otherwise prohibited by this Indenture;

                  (6)   Restricted Payments that are permitted by the provisions
                        of Section 4.07;

                  (7)   the payment (directly or through the Parent) of annual
                        management, consulting, monitoring and advising fees and
                        related expenses to the Equity Sponsors and their
                        respective Affiliates pursuant to management agreements
                        entered into in connection with the Merger pursuant to
                        the Merger Agreement and as described under the caption
                        "Certain Relationships and Related Transactions
                        Management Agreement" of the Offering Memorandum;

                  (8)   payments by the Company or any of its Restricted
                        Subsidiaries to the Equity Sponsors and their respective
                        Affiliates for any financial advisory, financing,
                        underwriting or placement services or in respect of
                        other investment banking activities, including, without
                        limitation, in connection with acquisitions or
                        divestitures, which payments are approved by the
                        majority of the Board of Directors of the Company in
                        good faith and are in an amount not to exceed the
                        greater of (i) $1.0 million or (ii) 1.25% of the
                        aggregate transaction value (including enterprise value
                        in connection with acquisitions or divestitures) (or
                        portion thereof) in respect of which such services are
                        rendered.

                  (9)   loans to employees that are approved in good faith by a
                        majority of the Board of Directors of the Company in an
                        amount not to exceed $3.0 million outstanding at any
                        time;

                  (10)  agreements (and payments relating thereto) pursuant to
                        the Merger Agreement and as otherwise described in the
                        Offering Memorandum, as the same may be amended,
                        modified or replaced from time to time, so long as any
                        amendment, modification or replacement is no less
                        favorable to the Company and its Restricted Subsidiaries
                        than the Agreement described in the Offering Memorandum
                        and in effect on the Merger Date;

                  (11)  transactions with a joint venture engaged in a Permitted
                        Business; provided that all the outstanding ownership
                        interests of such joint venture are owned only by the
                        Company, its Restricted Subsidiaries and Persons who are
                        not Affiliates of the Company; and


                                       71


                  (12)  transactions between a Receivables Subsidiary and any
                        Person in which the Receivables Subsidiary has an
                        Investment.

            Section 4.12. Liens. The Company will not, and will not permit any
of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind securing Indebtedness,
Attributable Debt or trade payables (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under this Indenture and the Notes are secured on an equal and ratable basis
with the obligations so secured until such time as such obligations are no
longer secured by a Lien.

            Section 4.13. Corporate Existence. Subject to Article 5 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.

            Section 4.14. Offer to Repurchase upon Change of Control. (a) Upon
the occurrence of a Change of Control, each Holder of Notes shall have the right
to require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the Company shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and stating (1) that the
Change of Control Offer is being made pursuant to this Section 4.14 and that all
Notes tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"); (3)
that any Note not tendered will continue to accrue interest; (4) that, unless
the Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; (5) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (7) that Holders whose Notes are being purchased
only


                                       72


in part will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof. The Company shall
comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Indenture
relating to such Change of Control Offer, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations described in this Indenture by virtue thereof.

            (b) By 12:00 p.m. (noon) Eastern Time on the Change of Control
Payment Date, the Company shall, to the extent lawful, (1) accept for payment
all Notes or portions thereof properly tendered pursuant to the Change of
Control Offer, (2) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Notes or portions thereof so tendered and
(3) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers' Certificate stating the aggregate principal amount of
Notes or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to each Holder of Notes so tendered the Change of Control Payment
for such Notes, and the Trustee shall promptly authenticate and mail (or cause
to be transferred by book entry) to each Holder a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered, if any; provided
that each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. Prior to compliance with this Section 4.14, but in any event
within 90 days following a Change of Control, the Company will either repay all
outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of Notes
required by this Section 4.14. The Company shall publicly announce the results
of the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.

            (c) Notwithstanding anything to the contrary in this Section 4.14,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.14 and Section 3.09 hereof and all other provisions of this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.

            Section 4.15. Limitation on Other Senior Subordinated Debt. The
Company shall not incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is by its terms subordinate or junior in right
of payment to any Senior Debt of the Company and senior in any respect in right
of payment to the Notes. No Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is by its terms
subordinate or junior in right of payment to the Senior Debt of such Guarantor
and senior in any respect in right of payment to such Guarantor's Note
Guarantee.

            Section 4.16. Sale and Leaseback Transactions. The Company will not,
and will not permit any of its Restricted Subsidiaries to, enter into any sale
and leaseback transaction; provided that the Company or any Restricted
Subsidiary may enter into a sale and leaseback transaction if:


                                       73


            (i) the issuer or that Restricted Subsidiary, as applicable, could
      have incurred Indebtedness in an amount equal to the Attributable Debt
      relating to such sale and leaseback transaction under the Fixed Charge
      Coverage Ratio test in the first paragraph of Section 4.09;

            (ii) the gross cash proceeds of that sale and leaseback transaction
      are at least equal to the fair market value, as determined in good faith
      by the Board of Directors of the Company and set forth in an Officers'
      Certificate delivered to the Trustee, of the property that is the subject
      of that sale and leaseback transaction; and

            (iii) the transfer of assets in that sale and leaseback transaction
      is permitted by, and the Company applies the proceeds of such transaction
      in compliance with, the requirements of Section 4.10.

            Section 4.17. Limitation on Issuances of Guarantees of Indebtedness.
The Company will not permit any of its Restricted Subsidiaries, directly or
indirectly, to Guarantee or pledge any assets to secure the payment of any other
Indebtedness of the Company unless either (1) such Restricted Subsidiary is a
Guarantor or (2) such Restricted Subsidiary simultaneously executes and delivers
a supplemental indenture providing for the Guarantee of the payment of the Notes
by such Restricted Subsidiary, which Guarantee shall be senior to or pari passu
with such Subsidiary's Guarantee of or pledge to secure such other Indebtedness,
unless such other Indebtedness is Senior Debt, in which case the Guarantee of
the Notes may be subordinated to the Guarantee of such Senior Debt to the same
extent as the Notes are subordinated to such Senior Debt.

            (b) Notwithstanding clause(a) of this Section 4.17, any Note
Guarantee will provide by its terms that it will be automatically and
unconditionally released and discharged pursuant to Section 11.06. Such Note
Guarantee shall be in the form of Exhibit F attached hereto.

            Section 4.18. Additional Guarantees. If the Company or any of its
Restricted Subsidiaries acquires or creates another Domestic Subsidiary (other
than a Receivables Subsidiary) on or after the Merger Date, then the newly
acquired or created Domestic Subsidiary (other than an Immaterial Subsidiary)
must become a Guarantor and execute a supplemental indenture in the form of
Exhibit F hereto providing for the Guarantee of the payment of the Notes by such
Domestic Subsidiary on the same basis as the Guarantors on the Merger Date and
deliver an Opinion of Counsel to the Trustee within 20 Business Days of the date
on which it was acquired or created.

            Section 4.19. Business Activities. The Company will not, and will
not permit any Restricted Subsidiary to, engage in any business other than
Permitted Businesses.

            Section 4.20. Designation of Restricted and Unrestricted
Subsidiaries. The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default; provided that in no event shall (i) there be any Unrestricted
Subsidiaries on or immediately following the Merger Date and (ii) the business
currently operated by the Egg Products Division be transferred to or held by an


                                       74


Unrestricted Subsidiary. If a Restricted Subsidiary is designated as an
Unrestricted Subsidiary, the aggregate fair market value of all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary so designated (after giving effect to any sale of Equity Interests of
such Subsidiary in connection with such designation) will be deemed to be a
Restricted Investment made as of the time of such designation and will either
reduce the amount available for Restricted Payments pursuant to the first
paragraph of Section 4.07 or reduce the amount available for future Permitted
Investments under one or more clauses of the definition of "Permitted
Investments". That designation will only be permitted if such Investment would
be permitted at that time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors of the Company
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (1) such Indebtedness is permitted under Section 4.09 hereof,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.

                                   ARTICLE 5

                                   SUCCESSORS

            Section 5.01. Merger, Consolidation, or Sale of Assets. The Company
will not, directly or indirectly, consolidate or merge with or into another
Person (whether or not the Company is the surviving corporation), and the
Company will not, and will not cause or permit any Restricted Subsidiary to,
sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company and its Restricted Subsidiaries taken
as a whole, in one or more related transactions, to another Person (including by
way of consolidation or merger), unless:

            (1)   either: (a) the Company or such Restricted Subsidiary, as the
                  case may be, is the surviving corporation; or (b) the Person
                  formed by or surviving any such consolidation or merger (if
                  other than the Company or such Restricted Subsidiary) or to
                  which such sale, assignment, transfer, conveyance or other
                  disposition shall have been made is a corporation, partnership
                  or limited liability company organized or existing under the
                  laws of the United States, any state thereof or the District
                  of Columbia; provided, that in the case such Person is a
                  limited liability company or a partnership, a co-obligor of
                  the Notes is a corporation;

            (2)   the Person formed by or surviving any such consolidation or
                  merger (if other than the Company or such Restricted
                  Subsidiary) or the Person to which such sale, assignment,
                  transfer, conveyance or other disposition shall have been made
                  assumes all the obligations of the Company or such Restricted
                  Subsidiary (if such Restricted Subsidiary is a Guarantor), as
                  the


                                       75


                  case may be, under the Notes, the Indenture and the
                  Registration Rights Agreement pursuant to agreements
                  reasonably satisfactory to the Trustee;

            (3)   immediately after such transaction no Default or Event of
                  Default exists; and

            (4)   the Company or the Person formed by or surviving any such
                  consolidation or merger (if other than the Company), or to
                  which such sale, assignment, transfer, conveyance or other
                  disposition shall have been made, will, on the date of such
                  transaction after giving pro forma effect thereto and any
                  related financing transactions as if the same had occurred at
                  the beginning of the applicable four-quarter period be
                  permitted to incur at least $1.00 of additional Indebtedness
                  pursuant to the Fixed Charge Coverage Ratio test set forth in
                  the first paragraph of Section 4.09.

            In addition, neither the Company nor any Restricted Subsidiary may,
directly or indirectly, lease all or substantially all of its properties or
assets, in one or more related transactions, to any other Person. This Section
5.01 will not apply to (i) a sale, assignment, transfer, conveyance or other
disposition of assets between or among the Company and any of its Restricted
Subsidiaries or (ii) the Merger on the terms set forth in the Merger Agreement
and as described in the Offering Memorandum so long as Michael Foods and each of
its Domestic Restricted Subsidiaries existing on the date hereof execute and
deliver to the Trustee a supplemental indenture providing for (i) the assumption
by Michael Foods of the Company's obligations under this Indenture and (ii) each
of the Domestic Restricted Subsidiaries of Michael Foods to become a party to
this Indenture.

            Section 5.02. Successor Corporation Substituted. Upon any
consolidation or merger, or any sale, assignment, transfer, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, conveyance or other disposition is made shall succeed to,
and be substituted for (so that from and after the date of such consolidation,
merger, sale, conveyance or other disposition, the provisions of this Indenture
referring to the "Company" shall refer instead to the successor corporation and
not to the Company), and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; provided, however, that the predecessor Company shall not
be relieved from the obligation to pay the principal of and interest on the
Notes except in the case of a sale of all of the Company's assets that meets the
requirements of Section 5.01 hereof.

                                   ARTICLE 6

                              DEFAULTS AND REMEDIES

            Section 6.01. Events of Default. Each of the following is an "Event
of Default":


                                       76


            (a) default in the payment when due of interest on, or Liquidated
Damages with respect to, the Notes (whether or not permitted by Article 10
hereof) and such default continues for a period of 30 days;

            (b) default in payment when due of the principal of or premium, if
any, on the Notes (whether or not permitted by Article 10 hereof);

            (c) failure by the Company to comply with the provisions of Sections
3.08(b), 4.10, 4.14 and 5.01 hereof;

            (d) failure by the Company or any of its Restricted Subsidiaries for
45 days after notice from the Trustee or holders of at least 25% in principal
amount of the Notes including Additional Notes, if any then outstanding to
comply with any of its other covenants or agreements in this Indenture or the
Notes;

            (e) default by the Company or any Restricted Subsidiary under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date hereof, if
that default (i) is caused by a failure to make any payment when due at final
maturity any such Indebtedness of (a "Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its express maturity, and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $15 million
or more (other than the 7.58% Notes to be repaid in connection with the Merger
so long as such 7.58%Notes are repaid within 35 days of the Merger Date.

            (f) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of $15.0 million, which judgments are
not paid, discharged or stayed for a period of 60 days after such judgments have
become final and non appealable and in the event such judgment is covered by
insurance, an enforcement proceeding has been commenced by any creditor upon
such judgment or decree that is not promptly stayed;

            (g) except as permitted by this Indenture, any Note Guarantee of a
Guarantor (other than an Immaterial Guarantor) shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Guarantor (other than an Immaterial Guarantor), or
any Person acting on behalf of any Guarantor (other than an Immaterial
Guarantor), shall deny or disaffirm its obligations under its Note Guarantee;

            (h) the Pledge Agreement shall cease to be in full force and effect
or enforceable in accordance with its terms (other than in accordance with its
terms) or the Company denies or disaffirms its obligations under the Pledge
Agreement or the obligations under the Pledge Agreement cease to be secured by a
perfected first priority security interest in any portion of the collateral
purported to be pledged under the Pledge Agreement (other than in accordance
with its terms); and


                                       77


            (i) any Guarantor, the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:

            (i) commences a voluntary case; or

            (ii) consents to entry of an order for relief against it in an
involuntary case; or

            (iii) consents to the appointment of a custodian of it or for all or
substantially all of its property; or

            (iv) makes a general assignment for the benefit of its creditors; or

            (v) generally is not paying its debts as they become due; or

            (j) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:

            (i) is for relief against any Guarantor, the Company or any of its
      Subsidiaries that is a Significant Subsidiary or any group of Subsidiaries
      that, taken as a whole, would constitute a Significant Subsidiary in an
      involuntary case;

            (ii) appoints a custodian of any Guarantor, the Company or any of
      its Subsidiaries that is a Significant Subsidiary or any group of
      Subsidiaries that, taken as a whole, would constitute a Significant
      Subsidiary or for all or substantially all of the property of any
      Guarantor, the Company or any of its Subsidiaries that is a Significant
      Subsidiary or any group of Subsidiaries that, take as a whole, would
      constitute a Significant Subsidiary; or

            (iii) orders the liquidation of any Guarantor, the Company or any of
      its Subsidiaries that is a Significant Subsidiary or any group of
      Subsidiaries that, taken as a whole, would constitute a Significant
      Subsidiary;

            and the order or decree remains unstayed and in effect for 60
consecutive days; or

            In the event of a declaration of acceleration of the Notes because
an Event of Default has occurred and is continuing as a result of the
acceleration of any Indebtedness described in clause (e) of the preceding
paragraph, the declaration of acceleration of the Notes shall be automatically
annulled if the holders of any Indebtedness described in clause (e) of the
preceding paragraph have rescinded the declaration of acceleration in respect of
such Indebtedness within 30 days of the date of such declaration and if (i) the
annulment of the acceleration of Notes would not conflict with any judgment or
decree of an court of competent jurisdiction and (ii) all existing Events of
Default, except nonpayment of principal or interest on the Notes that became due
solely because of the acceleration of the Notes have been cured or waived.

            Section 6.02. Acceleration. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may


                                       78


declare all the principal, premium, if any, accrued interest and Liquidated
Damages, if any, of the Notes to be due and payable by notice in writing to the
Company and (if from the Holders) the Trustee specifying the respective Event of
Default and it is a "notice of acceleration", and upon receipt of such notice
the same shall become due and payable upon the first to occur of an acceleration
under any issue of then outstanding Designated Senior Debt; or (2) five Business
Days after receipt by the Company and each Representative of holders of
Designated Senior Debt then outstanding of such notice of acceleration, unless
all Events of Default specified in their respective notices of acceleration
shall have been cured within said five Business Day period. Notwithstanding the
foregoing, in the case of an Event of Default described in clause (i) or (j) of
Section 6.01, with respect to the Company or any of its Subsidiaries all
outstanding Notes.

            In the case of any Event of Default occurring by reason of any
willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, an equivalent premium shall also become and be immediately
due and payable to the extent permitted by law upon the acceleration of the
Notes. If an Event of Default occurs at any time that the Notes are outstanding,
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes, then an additional premium shall also become
immediately due and payable to the extent permitted by law upon acceleration of
the Notes.

            Section 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

            The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

            Section 6.04. Waiver of Past Defaults. Holders of not less than a
majority in aggregate principal amount of the then outstanding Notes by notice
to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium and Liquidated Damages, if any, or interest on, the Notes (including in
connection with an offer to purchase) (provided, however, that the Holders of a
majority in aggregate principal amount of the then outstanding Notes may rescind
an acceleration and its consequences, including any related payment default that
resulted from such acceleration). The Company shall deliver to the Trustee an
Officers' Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored to their
former positions and rights hereunder and under the Notes, respectively. This
Section 6.04 shall be in lieu of


                                       79


Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA is
hereby expressly excluded from this Indenture and the Notes, as permitted by the
TIA. Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.

            Section 6.05. Control by Majority. Subject to Section 2.09, holders
of a majority in principal amount of the then outstanding Notes may direct in
writing the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of Holders of Notes not taking part in such direction, and the
Trustee shall have the right to decline to follow any such direction, if the
Trustee, being advised by counsel, determines that such action so directed may
not be lawfully taken or if the Trustee, in good faith shall by a Responsible
Officer, determine that the proceedings so directed may involve the Trustee in
personal liability; provided that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction. In the
event the Trustee takes any action or follows any direction pursuant to this
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against any loss or expense caused by taking such action
or following such direction. This Section 6.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.

            Section 6.06. Limitation on Suits. A Holder of a Note may pursue a
remedy with respect to this Indenture, the Notes or the Note Guarantees only if:

            (a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;

            (b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;

            (c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;

            (d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and

            (e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.

            A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.

            Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal, premium and Liquidated Damages, if
any, and interest on the Note, on or after the respective due dates expressed in
the Note (including in connection with an offer to purchase), or


                                       80


to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.

            Section 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of, premium and
Liquidated Damages, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

            Section 6.09. Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other securities or property
payable or deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.

            Section 6.10. Priorities. If the Trustee collects any money pursuant
to this Article, it shall pay out the money in the following order:

            First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;

            Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any and
interest, respectively; and


                                       81


            Third: to the Company or to such party as a court of competent
jurisdiction shall direct.

            The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10.

            Section 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as a Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit
by Holders of more than 10% in principal amount of the then outstanding Notes.

                                   ARTICLE 7

                                     TRUSTEE

            Section 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in its exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.

            (b) Except during the continuance of an Event of Default:

            (i) the duties of the Trustee shall be determined solely by the
      express provisions of this Indenture and the Trustee need perform only
      those duties that are specifically set forth in this Indenture and no
      others, and no implied covenants or obligations shall be read into this
      Indenture against the Trustee; and

            (ii) in the absence of bad faith on its part, the Trustee may
      conclusively rely, as to the truth of the statements and the correctness
      of the opinions expressed therein, upon certificates or opinions furnished
      to the Trustee and conforming to the requirements of this Indenture.
      However, the Trustee shall examine the certificates and opinions to
      determine whether or not they conform to the requirements of this
      Indenture (but need not confirm or investigate the accuracy of
      mathematical calculations or other facts purported to be stated therein).

            (c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

            (i) this paragraph does not limit the effect of paragraph (b) of
this Section;


                                       82


            (ii) the Trustee shall not be liable for any error of judgment made
      in good faith by a Responsible Officer, unless it is proved that the
      Trustee was negligent in ascertaining the pertinent facts; and

            (iii) the Trustee shall not be liable with respect to any action it
      takes or omits to take in good faith in accordance with a direction
      received by it pursuant to Section 6.05 hereof.

            (d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.

            (e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.

            (f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money or assets held in trust by the Trustee need not be segregated from other
funds or assets except to the extent required by law.

            Section 7.02. Rights of Trustee. (a) The Trustee may conclusively
rely upon any document (whether in its original or facsimile form) believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.

            (b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require (other than in connection with the Exchange Offer
contemplated by Section 2.06(f) unless required by the TIA) an Officers'
Certificate or an Opinion of Counsel or both. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

            (c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent or attorney
appointed with due care.

            (d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.

            (e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.


                                       83


            (f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.

            (g) The Trustee shall not be deemed to have knowledge of any Default
or Event of Default except (i) any Event of Default occurring pursuant to
Section 6.01(a) or 6.01(b) or (ii) any Event of Default of which the Trustee
shall have received written notification or otherwise obtained actual knowledge.

            Section 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.

            Section 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.

            Section 7.05. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to the Holders of the Notes a notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, or interest on any Note,
the Trustee may withhold the notice if and so long as the board of directors,
the executive committee or a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.

            Section 7.06. Reports by Trustee to the Holders of the Notes. Within
60 days after each September 1 beginning with the September 1 following the date
of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA ss. 313(a) (but if no event described in TIA ss.
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).

            A copy of each report at the time of its mailing to the Holders of
the Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes


                                       84


are listed in accordance with TIA ss. 313(d). The Company shall promptly notify
the Trustee when the Notes are listed on any securities exchange or of any
delisting thereof.

            Section 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel and
any taxes or other expenses incurred by a trust created pursuant to Section 8.04
hereof.

            The Company shall indemnify the Trustee and its agents against any
and all losses, liabilities, claims, damages or expenses (including
compensation, fees, disbursements and expenses of Trustee's agents and counsel)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company or
any Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense is judicially determined to have been caused by
to its own negligence or bad faith. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.

            The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.

            To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture. The Trustee's right to receive payment of any
amounts due under this Section 7.07 shall not be subordinated to any other
liability or Indebtedness of the Company.

            When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

            The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.


                                       85


            Section 7.08. Replacement of Trustee. A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.

            The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:

            (a)   the Trustee fails to comply with Section 7.10 hereof;

            (b)   the Trustee is adjudged a bankrupt or an insolvent or an order
                  for relief is entered with respect to the Trustee under any
                  Bankruptcy Law;

            (c)   a Custodian or public officer takes charge of the Trustee or
                  its property; or

            (d)   the Trustee becomes incapable of acting.

            If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.

            If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition at the expense of the Company any court of competent
jurisdiction for the appointment of a successor Trustee.

            If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

            A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.

            Section 7.09. Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.


                                       86


            Section 7.10. Eligibility; Disqualification. There shall at all
times be a Trustee hereunder that is a corporation organized and doing business
under the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition.

            This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.ss.310(a)(1), (2) and (5). The Trustee is subject to TIA
ss.310(b); provided, however, that there shall be excluded from the operation of
TIA ss.310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in TIA
ss.310(b)(1) are met.

            Section 7.11. Preferential Collection of Claims Against Company. The
Trustee is subject to TIA ss.311(a), excluding any creditor relationship listed
in TIA ss.311(b). A Trustee who has resigned or been removed shall be subject to
TIA ss.311(a) to the extent indicated therein.

                                   ARTICLE 8

                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

            Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or Section 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8

            Section 8.02. Legal Defeasance and Discharge. Upon the Company's
exercise under Section 8.02 hereof of the option applicable to this Section
8.02, the Company shall, subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, be deemed to have been discharged from its obligations
with respect to all outstanding Notes and all obligations of the Guarantors
shall be deemed to have been discharged with respect to their obligations under
the Subsidiary Guarantees on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company and the Guarantors shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes and
Subsidiary Guarantees, respectively, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.04 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, interest and Liquidated Damages,
if any, on such Notes when such payments


                                       87


are due, (b) the Company's obligations with respect to such Notes under Article
2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (d) this Article 8. Subject to compliance with this Article 8, the Company
may exercise its option under this Section 8.02 notwithstanding the prior
exercise of its option under Section 8.03 hereof.

            Section 8.03. Covenant Defeasance. Upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, the Company
and each of the Guarantors shall, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from their respective obligations
under the covenants set forth in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.01 hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(g) hereof shall not constitute Events of Default.

            Section 8.04. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either Section 8.02
or 8.03 hereof to the outstanding Notes:

            In order to exercise either Legal Defeasance or Covenant Defeasance:

            (i) the Company must irrevocably deposit with the Trustee, in trust,
      for the benefit of the Holders of the Notes, cash in U.S. dollars,
      non-callable Government Securities, or a combination thereof, in such
      amounts as shall be sufficient, in the opinion of a nationally recognized
      firm of independent public accountants, to pay the principal of, premium
      and Liquidated Damages, if any, and interest on the outstanding Notes on
      the stated maturity or on the applicable redemption date, as the case may
      be, and the Company must specify whether the Notes are being defeased to
      maturity or to a particular redemption date;

            (ii) in the case of an election under Section 8.02 hereof, the
      Company shall have delivered to the Trustee an Opinion of Counsel
      reasonably acceptable to the Trustee confirming that (A) the Company has
      received from, or there has been published by, the Internal Revenue
      Service a ruling or (B) since the date of this Indenture, there has been a


                                       88


      change in the applicable federal income tax law, in either case to the
      effect that, and based thereon such Opinion of Counsel shall confirm that,
      the Holders of the outstanding Notes shall not recognize income, gain or
      loss for federal income tax purposes as a result of such Legal Defeasance
      and shall be subject to federal income tax on the same amounts, in the
      same manner and at the same times as would have been the case if such
      Legal Defeasance had not occurred;

            (iii) in the case of an election under Section 8.03 hereof, the
      Company shall have delivered to the Trustee an Opinion of Counsel
      reasonably acceptable to the Trustee confirming that the Holders of the
      outstanding Notes shall not recognize income, gain or loss for federal
      income tax purposes as a result of such Covenant Defeasance and shall be
      subject to federal income tax on the same amounts, in the same manner and
      at the same times as would have been the case if such Covenant Defeasance
      had not occurred;

            (iv) no Default or Event of Default shall have occurred and be
      continuing either (i) on the date of such deposit, or (ii) insofar as an
      Event of Default set forth in Section 6.01(i) or Section 6.01(j) shall
      have occurred and be continuing, at any time in the period ending on the
      91st day after the date of deposit (other than a Default or Event of
      Default resulting from the borrowing of funds to be applied to such
      deposit);

            (v) such Legal Defeasance or Covenant Defeasance shall not result in
      a breach or violation of, or constitute a default under any material
      agreement or instrument (other than this Indenture) to which the Company
      or any of its Subsidiaries is a party or by which the Company or any of
      its Subsidiaries is bound, including the Credit Agreement;

            (vi) the Company shall have delivered to the Trustee an Officers'
      Certificate stating that the deposit was not made by the Company with the
      intent of preferring the Holders of Notes over any other creditors of the
      Company with the intent of defeating, hindering, delaying or defrauding
      any other creditors of the Company or others; and

            (vii) the Company shall have delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent, including, without limitation, the conditions set forth in this
      Section 8.04, provided for or relating to the Legal Defeasance or the
      Covenant Defeasance have been complied with.

            Section 8.05. Deposited Money and Cash Equivalents to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money
and non-callable Cash Equivalents (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.


                                       89


            The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable Cash
Equivalents deposited pursuant to Section 8.04(i) hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

            Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Cash Equivalents held by it as provided
in Section 8.05 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.05(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

            Section 8.06. Repayment to Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, interest, or Liquidated Damages,
if any, on any Note and remaining unclaimed for two years after such principal,
and premium, if any, interest, or Liquidated Damages, if any, has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a secured creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
shall be repaid to the Company.

            Section 8.07. Reinstatement. If the Trustee or Paying Agent is
unable to apply any United States dollars or non-callable Government Securities
in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium, if
any, or interest on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.


                                       90


                                   ARTICLE 9

                        AMENDMENT, SUPPLEMENT AND WAIVER

            Section 9.01. Without Consent of Holders of Notes. Notwithstanding
Section 9.02 of this Indenture, without the consent of any Holder of Notes, the
Company, the Guarantors and the Trustee may amend or supplement this Indenture,
the Notes or the Pledge Agreement:

            (a) to cure any ambiguity, defect, error or inconsistency;

            (b) to provide for uncertificated Notes in addition to or in place
of certificated Notes;

            (c) to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of Notes in the case of a merger or
consolidation or sale of all or substantially all of the assets of the Company
or of such Guarantor;

            (d) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the legal
rights under this Indenture of any such Holder;

            (e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act;

            (f) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date hereof; or

            (g) to allow any Subsidiary to guarantee the Notes.

            Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02(b) hereof stating that such amended or supplemental Indenture complies with
this Section 9.01, the Trustee shall join with the Company in the execution of
any amended or supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter
into such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.

            Section 9.02. With Consent of Holders of Notes. Except as provided
below in this Section 9.02, the Company and the Trustee may amend or supplement
this Indenture (including Sections 3.09, 4.10 and 4.14 hereof), the Notes and
the Pledge Agreement with the consent of the Holders of at least a majority in
principal amount of the Notes (including Additional Notes, if any) then
outstanding voting as a single class (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default or


                                       91


compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including Additional Notes, if any) voting as a single class
(including, without limitation, consents obtained in connection with a tender
offer or exchange offer for, the Notes). Without the consent of at least 75% in
aggregate principal amount of the Notes then outstanding (including Additional
Notes, if any) voting as a single class (including consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes), no waiver or amendment to this Indenture may make any change in the
provisions of Article 10 hereof that adversely affects the rights of any Holder
of Notes. Furthermore, neither Article 8, Article 10 nor Section 11.02 shall be
amended or modified without the consent of the Administrative Agent under the
Credit Agreement. Section 2.08 hereof shall determine which Notes are considered
to be "outstanding" for purposes of this Section 9.02.

            Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02(b) hereof stating that
any such amended or supplemental Indenture complies with this Section 9.02, the
Trustee shall join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.

            It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.

            After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver.

            Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority
in aggregate principal amount of the Notes (including Additional Notes, if any)
then outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):

            (a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;

            (b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions, or waive any payment, with respect to the redemption of
the Notes, except with respect to Sections 3.09, 4.10 and 4.14 hereof;


                                       92


            (c) reduce the rate of or change the time for payment of interest on
any Note;

            (d) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest or Liquidated Damages, if any, on the Notes
(except a rescission of acceleration of the Notes (including Additional Notes,
if any) by the Holders of at least a majority in aggregate principal amount of
the Notes and a waiver of the payment default that resulted from such
acceleration);

            (e) make any Note payable in money other than U. S. dollars;

            (f) make any change in the provisions of this Indenture relating to
waivers of (i) past Defaults or (ii) the rights of the Holders of the Notes to
receive payments of principal of or premium, if any, or interest or Liquidated
Damages, if any, on the Notes;

            (g) amend or modify the obligations of the Company to make offers to
purchase Notes and Additional Notes, if any, pursuant to Section 3.08(b);

            (h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions; or

            (i) release any Guarantor from any of its obligations under its Note
Guarantee of these Notes or this Indenture or release any collateral under the
Pledge Agreement, except in accordance with the terms of this Indenture or the
Pledge Agreement, respectively.

            Section 9.03. Compliance with Trust Indenture Act. Every amendment
or supplement to this Indenture or the Notes shall be set forth in a amended or
supplemental Indenture that complies with the TIA as then in effect.

            Section 9.04. Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Note is
a continuing consent by such Holder of a Note and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However,
any such Holder of a Note or subsequent Holder of a Note may revoke the consent
as to its Note if the Trustee receives written notice of revocation before the
date the waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.

            Section 9.05. Notation on or Exchange of Notes. The Trustee may
place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Company in exchange for all Notes may issue
and the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.

            Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.

            Section 9.06. Trustee to Sign Amendments, etc. The Trustee shall
sign any amended or


                                       93


supplemental Indenture authorized pursuant to this Article 9 if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or supplemental
Indenture until the Board of Directors approves it. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive and (subject to
Section 7.01 hereof) shall be fully protected in relying upon, in addition to
the documents required by Section 11.04 hereof, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's rights, duties or immunities under this Indenture or
otherwise. In signing any amendment, supplement or waiver, the Trustee shall be
entitled to receive an indemnity reasonably satisfactory to it.

            Section 9.07. Payments for Consent. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or
cause to be paid any consideration to or for the benefit of any Holder of Notes
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to be paid and is paid to all Holders of the Notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.

                                   ARTICLE 10

                                  SUBORDINATION

            Section 10.01. Agreement to Subordinate. The Company agrees, and
each Holder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article 10, to the prior payment in full of all Senior Debt
(whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.

            Section 10.02. Liquidation; Dissolution; Bankruptcy. The holders of
Senior Debt of the Company will be entitled to receive payment in full in Cash
Equivalents of all Obligations due in respect of Senior Debt of the Company
(including interest after the commencement of any bankruptcy proceeding at the
rate specified in the applicable Senior Debt of the Company) before the Holders
of Notes will be entitled to receive any payment with respect to the Notes, and
until all Obligations with respect to Senior Debt of the Company are paid in
full in cash or Cash Equivalents, any distribution, to which the Holder would be
entitled shall be made to the holders of such Senior Debt (except that Holders
of Notes may receive and retain Permitted Junior Securities and payments made
from the trust pursuant to Article 8 hereof), in the event of any distribution
to creditors of the Company: (i) in a liquidation or dissolution of the Company;
(ii) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property; (iii) in an assignment by
the Company for the benefit of its creditors; or (iv) in any marshaling of the
Company's assets and liabilities.


                                       94


            Section 10.03. Default on Designated Senior Debt. The Company may
not make any payment in respect of the Notes (except in Permitted Junior
Securities or from the trust pursuant to Article 8 hereof).

            (a) In the event of and during the continuation beyond any
applicable grace period of any default in the payment of principal of, interest
or premium, if any, on any Designated Senior Debt, or any Obligation owing from
time to time under or in respect of Senior Debt, or in the event that any event
of default (other than a payment default) with respect to any Designated Senior
Debt shall have occurred and be continuing and shall have resulted in such
Designated Senior Debt becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable; or

            (b) If any event of default other than as described in clause (a)
above with respect to any Designated Senior Debt shall have occurred and be
continuing permitting the holders of such Designated Senior Debt or the holders
of any series thereof (or their Representative or Representatives) to declare
such Designated Senior Debt due and payable prior to the date on which it would
otherwise have become due and payable;

                  (1) in case of any payment or nonpayment default specified in
            clause (a), unless and until such default shall have been cured or
            waived in writing in accordance with the instruments governing such
            Designated Senior Debt or such acceleration shall have been
            rescinded or annulled, or

                  (2) in case of any nonpayment event of default specified in
            clause (b), during the period (a "Payment Blockage Period")
            commencing on the date the Company or the Trustee receives written
            notice (a "Payment Blockage Notice") of such event of default from a
            Representative of the holders of such Designated Senior Debt (which
            notice shall be binding on the Trustee and the Holders of Notes as
            to the occurrence of such a nonpayment event of default) and ending
            on the earlier of:

                              (A) 179 days after such date; and

                              (B) the date, if any, on which such Designated
                              Senior Debt to which such default relates is paid
                              in full in cash or such default is cured or waived
                              in writing in accordance with the instruments
                              governing such Designated Senior Debt by the
                              holders of such Designated Senior Debt; and

                              (C) the date the Trustee receives notice from the
                              representative rescinding the Payment Blockage
                              Notice.

            (c) No new Payment Blockage Notice may be delivered to the Company
or the Trustee that would start a new Payment Blockage Period unless and until:
(i) 360 days have elapsed since the delivery of the immediately prior Payment
Blockage Notice that started a Payment Blockage Period; and (ii) all scheduled
payments of principal, interest and premium and Liquidated Damages, if any, on
the Notes that have come due have been paid in full in cash. No nonpayment event
of default which existed or was continuing with respect to the Designated


                                       95


Senior Debt on the date of delivery of any Payment Blockage Notice to the
Trustee shall be or be made the basis for the commencement of any subsequent
Payment Blockage Period unless such event of default is cured or waived for a
period of not less than 90 consecutive days.

            Section 10.04. Acceleration of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company and the
Trustee shall promptly notify holders of Senior Debt of the acceleration.

            Section 10.05. When Distribution Must Be Paid Over. In the event
that the Trustee or any Holder receives any payment of any Obligations with
respect to the Notes (except in Permitted Junior Securities or from the trust
pursuant to Article 8 hereof) at a time when the Trustee or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Article 10
hereof, such payment shall be held by the Trustee or such Holder, as applicable,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to the holders of Senior Debt as their interests may
appear or their Representative under this Indenture or other agreement (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.

            With respect to the holders of Senior Debt, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.

            Section 10.06. Notice by the Company. The Company shall promptly
notify the Trustee and the Paying Agent in writing of any facts known to the
Company that would cause a payment of any Obligations with respect to the Notes
to violate this Article 10, but failure to give such notice shall not affect the
subordination of the Notes to the Senior Debt as provided in this Article 10.

            Section 10.07. Subrogation. After all Senior Debt is paid in full
and until the Notes are paid in full, Holders of Notes shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the Notes) to
the rights of holders of Senior Debt to receive distributions applicable to
Senior Debt to the extent that distributions otherwise payable to the Holders of
Notes have been applied to the payment of Senior Debt. A distribution made under
this Article 10 to holders of Senior Debt that otherwise would have been made to
Holders of Notes is not, as between the Company and Holders, a payment by the
Company on the Notes.

            Section 10.08. Relative Rights. This Article 10 defines the relative
rights of Holders of Notes and holders of Senior Debt. Nothing in this Indenture
shall:


                                       96


            (a) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest on the Notes in accordance with their terms;

            (b) affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior Debt; or

            (c) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of Notes.

            If the Company fails because of this Article 10 to pay principal of
or interest on a Note on the due date, the failure is still a Default or Event
of Default.

            Section 10.09. Subordination May Not Be Impaired by the Company. No
right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.

            Section 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.

            Upon any payment or distribution of assets of the Company referred
to in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.

            Section 10.11. Rights of Trustee and Paying Agent. Notwithstanding
the provisions of this Article 10 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Notes, unless
the Trustee shall have received at its Corporate Trust Office at least five
Business Days prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Notes to violate
this Article 10. Only the Company or a Representative may give the notice.
Nothing in this Article 10 shall impair the claims of, or payments to, the
Trustee under or pursuant to Section 7.07 hereof.

            The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.

            Section 10.12. Authorization to Effect Subordination. Each Holder of
Notes, by the Holder's acceptance thereof, authorizes and directs the Trustee on
such Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided


                                       97


in this Article 10, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, the lenders under the Credit Agreement are hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.

                                   ARTICLE 11

                                 NOTE GUARANTEES

            Section 11.01. Guarantee. Subject to this Article 11 each of the
Guarantors hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that: (a) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful (subject in all cases to any applicable grace period
provided herein), and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same immediately.
Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.

            The Guarantors hereby agree that their obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Subject to Section 6.06
hereof, each Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenant that this Note Guarantee shall
not be discharged except by complete performance of the obligations contained in
the Notes and this Indenture.

            If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.

            Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all


                                       98


obligations guaranteed hereby. Each Guarantor further agrees that, as between
the Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article 6 hereof for the purposes of this Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this Note
Guarantee. The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Note Guarantee.

            Section 11.02. Subordination of Note Guarantee. The Obligations of
each Guarantor under its Note Guarantee pursuant to this Article 11 shall be
junior and subordinated to the Guarantee of any Senior Debt of such Guarantor on
the same basis as the Notes are junior and subordinated to Senior Debt of the
Company. For the purposes of the foregoing sentence, the Trustee and the Holders
shall have the right to receive and/or retain payments by any of the Guarantors
only at such times as they may receive and/or retain payments in respect of the
Notes pursuant to this Indenture, including Article Ten hereof.

            Section 11.03. Limitation on Guarantor Liability. Each Guarantor,
and by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the Note Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any Note Guarantee.
To effectuate the foregoing intention, the Trustee, the Holders and the
Guarantors hereby irrevocably agree that the obligations of such Guarantor will,
after giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article Eleven, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.

            Section 11.04. Execution and Delivery of Note Guarantee. To evidence
its Note Guarantee set forth in Section 11.01, each Guarantor hereby agrees that
a notation of such Note Guarantee substantially in the form included in Exhibit
E shall be endorsed by an Officer of such Guarantor on each Note authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of such Guarantor by its President or one of its Vice Presidents.

            Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.

            If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.


                                       99


            The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.

            In the event that the Company creates or acquires any new
Subsidiaries subsequent to the date of this Indenture, if required by Section
4.18 hereof, the Company shall cause such Subsidiaries to execute supplemental
indentures to this Indenture and Note Guarantees in accordance with Section 4.18
hereof and this Article 11, to the extent applicable.

            Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.06, a Guarantor may not sell or
otherwise dispose of all or substantially all of its assets , or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person) another Person unless:

            (a) immediately after giving effect to such transaction, no Default
or Event of Default exists; and

            (b) either:

            (i) the Person acquiring the property in any such sale or
      disposition or the Person formed by or surviving any such consolidation or
      merger is a corporation, partnership or limited liability company,
      organized or existing under (i) the laws of the United States, any state
      thereof or the District of Columbia or (ii) the laws of the same
      jurisdiction as that Guarantor and, in each case, assumes all the
      obligations of that Guarantor under this Indenture, its Note Guarantee and
      the Registration Rights Agreement pursuant to a supplemental indenture
      satisfactory to the Trustee; or

            (ii) such sale or other disposition complies with Section 4.10,
      including the application of the Net Proceeds therefrom.

            In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Note Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by a
Guarantor, such successor Person shall succeed to and be substituted for a
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Note Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
all of such Note Guarantees had been issued at the date of the execution hereof.

            Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.


                                      100


            Section 11.06. Releases Following Sale of Assets. Any Guarantor will
be released and relieved of any obligations under its Note Guarantee, (i) in
connection with any sale or other disposition of all or substantially all of the
assets of that Guarantor (including by way of merger or consolidation) to a
Person that is not (either before or after giving effect to such transaction) a
Restricted Subsidiary of the Company, if the sale or other disposition of all or
substantially all of the assets of that Guarantor complies with Section 4.10
hereof, including the application of the Net Proceeds therefrom; (ii) in
connection with any sale of all of the Capital Stock of a Guarantor to a Person
that is not (either before or after giving effect to such transaction) a
Restricted Subsidiary of the Company, if the sale of all such Capital Stock of
that Guarantor complies with Section 4.10 hereof, including the application of
the Net Proceeds therefrom; (iii) if the Company designates any Restricted
Subsidiary that is a Guarantor (other than the Egg Products Division) as an
Unrestricted Subsidiary in accordance with the terms hereof; or (iv) in
connection with any sale of Capital Stock of a Guarantor (other than the Egg
Products Division) to a Person that results in the Guarantor no longer being a
Subsidiary of the Company, if the sale of such Capital Stock of that Guarantor
complies with Section 4.10, including the application of the Net Proceeds
therefrom. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any Guarantor from its obligations under its Note Guarantee.

            Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article Eleven.

                                   ARTICLE 12

                                  MISCELLANEOUS

            Section 12.01. Trust Indenture Act Controls. This Indenture is
subject to the provisions of the TIA that are required to be a part of this
Indenture, and shall, to the extent applicable, be governed by such provisions.
If any provision of this Indenture modifies any TIA provision that may be so
modified, such TIA provision shall be deemed to apply to this Indenture as so
modified. If any provision of this Indenture excludes any TIA provision that may
be so excluded, such TIA provision shall be excluded from this Indenture.

            The provisions of TIA ss.ss.310 through 317 that impose duties on
any Person (including the provisions automatically deemed included unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

            Section 12.02. Notices. Any notice or communication by the Company,
any Guarantor or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the others' address


                                      101


            If to the Company and/or any Guarantor:

            Prior to the Merger Date:

            Michael Foods Acquisition Corp.
            c/o Vestar Capital Partners IV, L.P.
            1225 Seventeenth Street, Suite 1660
            Denver Colorado 80202
            Telecopier No.: (303) 292-6639

            Attention: J. Christopher Henderson

            Following the Merger Date:

            Michael Foods, Inc.
            Park National Bank Building
            5353 Wayzata Blvd., Suite 324
            Minneapolis, MN 55416
            Telecopier No.: (952) 546-1500

            Attention:  John D. Reedy, Executive Vice President
                        and Chief Financial Officer

            With a copy to:

            Kirkland & Ellis
            Aon Center
            200 East Randolph Drive
            Chicago, IL 60601
            Telecopier No.: (312) 861-2200

            Attention: Dennis M. Myers

            If to the Trustee:

            BNY Midwest Trust Company
            2 North La Salle Street
            Suite 1020
            Chicago, IL 60602
            Telecopier No.: (312) 827-8542

            Attention: Dan Donovan

            The Company, any Guarantor or the Trustee, by notice to the others
may designate additional or different addresses for subsequent notices or
communications.

            All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five


                                      102


Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and
the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.

            Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.

            If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.

            If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.

            Section 12.03. Communication by Holders of Notes with Other Holders
of Notes. Holders may communicate pursuant to TIA ss.312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA
ss.312(c).

            Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture (other than in connection with the Exchange Offer
contemplated by Section 2.06(e) or under Section 2.02 hereof unless required by
the TIA), the Company shall furnish to the Trustee:

            (a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied;

            (b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied; and

            (c) where applicable, a certificate or opinion by an independent
certified public accountant satisfactory to the Trustee that complies with TIA
Section 314(c).

            Section 12.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA ss.314(a)(4)) shall comply with the provisions of TIA ss.314(e) and shall
include:

            (a) a statement that the Person making such certificate or opinion
has read such covenant or condition;


                                      103


            (b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;

            (c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and

            (d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.

            Section 12.06. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.

            Section 12.07. No Personal Liability of Directors, Officers,
Employees and Stockholders. No director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or the Guarantors under the Notes, the
Exchange Notes, the Note Guarantees, this Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
of Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such a waiver is against public policy.

            Section 12.08. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

            Section 12.09. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
All agreements of each Guarantor in this Indenture shall bind its successors,
except as otherwise provided in Section 11.05.

            Section 12.10. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors. All agreements of each Guarantor in
this Indenture shall bind its successors, except as otherwise provided in
Section 11.05.

            Section 12.11. Severability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.


                                      104


            Section 12.12. Counterpart Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.

            Section 12.13. Table of Contents, Headings, etc. The Table of
Contents, Cross-Reference Table and Headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.

                              [Signatures on following page]


                                      105


                                   SIGNATURES

Dated as of March 27, 2001

                                Very truly yours,

                                MICHAEL FOODS ACQUISITION CORP.

                                By:____________________________
                                     Name:
                                     Title:


                                BNY MIDWEST TRUST COMPANY
                                    as Trustee

                                By:____________________________
                                     Name:
                                     Title:


                                      106


                                                                       EXHIBIT A

                                 (Face of Note)

            CUSIP/CINS. 144A 594072AB6
                        REGS U59322AA2

            11 3/4% Senior Subordinated Notes due 2011

No. ___     $____________

                         MICHAEL FOODS ACQUISITION CORP.

      promises to pay to CEDE & Co., or registered assigns, the principal sum of
      ___________Dollars on April 1, 2011

Interest Payment Dates: April 1 and October 1

Record Dates:  March 15 and September 15

                                         Dated: March 27, 2001

                                         Michael Foods Acquisition Corp.

                                         By:____________________________
                                            Name:
                                            Title:

This is one of the Global
Notes referred to in the
within-mentioned Indenture:

BNY MIDWEST TRUST COMPANY,

as Trustee

By:________________________
(Authorized Signatory)



                                 (BACK OF NOTE)

                   11 3/4% Senior Subordinated Notes due 2011

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(A) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

THIS NOTE AND ANY GUARANTEES OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR ANY GUARANTEES OF THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE AND ANY GUARANTEES OF THIS NOTE)
(THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO


                                      A-2


CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.

            Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.

            1. Interest. Michael Foods Acquisition Corp., a Minnesota
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 11 3/4% per annum from the date hereof until maturity and shall pay
the Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company shall pay interest and Liquidated
Damages semi-annually on April 1 and October 1 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be October 1, 2001. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.

            2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the March 15 or
September 15 next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes shall be payable as to principal, premium and Liquidated
Damages, if any, and interest at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds shall be required with respect to principal of and interest, premium and
Liquidated Damages on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Company or the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.


                                      A-3


            3. Paying Agent and Registrar. Initially, BNY Midwest Trust Company,
the Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.

            4. Indenture. The Company issued the Notes under an Indenture dated
as of March 27, 2001 (the "Indenture") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. This Note is an obligation of the Company limited to $200.0 million
in aggregate principal amount. The Indenture pursuant to which this Note is
issued provides that up to $100 million of Additional Notes may be issued
thereunder.

            5. Optional Redemption.

            (a) Except as set forth in this paragraph 5 and paragraph 6 below,
the Notes shall not be redeemable at the Company's option prior to April 1,
2006. Thereafter, the Company may redeem all or a part of these Notes, upon not
less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on April 1 of the
years indicated below:

               Year                                   Percentage
               2006 ................................    105.875%
               2007 ................................    103.917%
               2008 ................................    101.958%
               2009 and thereafter .................    100.000%

            (b)Notwithstanding the foregoing, at any time prior to April 1,
2004, the Company may on one or more occasions redeem up to 35% of the aggregate
principal amount of Notes originally issued under the Indenture at a redemption
price of 111.750% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the redemption date, with
the net cash proceeds of one or more Equity Offerings of the Company (or of the
Parent to the extent such proceeds are contributed to the common equity of the
Company); provided that at least 65% of the aggregate principal amount of Notes
remains outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries); and such redemption
shall occur within 60 days of the date of the closing of such Equity Offering.

            6. Mandatory Redemption.


                                      A-4


            (a)Except as set forth in paragraph 7 below and clause (b) of this
paragraph 6, the Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.

            (b)In the event that the Merger is not consummated on or prior to
the earlier to occur of (i) May 31, 2001 and (ii) if it appears, in the sole
judgment of the Company, that the Merger shall not be consummated, the date on
which notice of same is delivered by the Company to the Collateral Agent and the
Trustee, the Company shall be required to redeem the Notes, in whole, on at
least five Business Days' prior written notice mailed by first class mail to
each Holder at a redemption price equal to 101% of the aggregate principal
amount of the Notes plus accrued interest thereon and premium, if any, to, but
not including, the date of repurchase.

            7. Repurchase at Option of Holder.

            (a) Upon the occurrence of a Change of Control, each Holder of Notes
will have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice.

            (b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, within 365 days of each date on which the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company will be required to make an offer to
all Holders of Notes (a "Repurchase Offer") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase, in accordance with the procedures set forth in the Indenture. To
the extent that the aggregate amount of Notes (including any Additional Notes)
tendered pursuant to a Repurchase Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase shall receive a Repurchase
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.

            8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be


                                      A-5


redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.

            9. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

            10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.

            11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes and Additional Notes, if any, voting as a single class, and any existing
default or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes and Additional Notes, if any, voting as a single class.
Without the consent of any Holder of a Note, the Indenture or the Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger or consolidation or sale of all or substantially
all of the assets of the Company, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act or to allow any
Subsidiary to guarantee the Notes, to provide for the issuance of Additional
Notes in accordance with the limitations set forth in the Indenture, or to allow
any Guarantor to execute a supplemental indenture to the Indenture with respect
to the Notes.

            12. Defaults and Remedies. Events of Default include: (a) default
for 30 days in the payment when due of interest on, or Liquidated Damages with
respect to, the Notes (whether or not permitted by Article 10 of the Indenture);
(b) default in payment of the principal of or premium, if any, on the (whether
or not permitted by Article 10 of the Indenture); (c) failure by the Company or
any of its Restricted Subsidiaries to comply with the provisions of Sections
3.08(b), 4.10, 4.14 and 5.01 of the Indenture; (d) failure by the Company or any
of its Restricted Subsidiaries for 45 days after notice from the Trustee or
holders of at least 25% in principal amount of the Notes (including Additional
Notes, if any) then outstanding to comply with any of the other agreements in
the Indenture; (e) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the


                                      A-6


payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created
after the date of the Indenture, if that default (i) is caused by a failure to
pay principal of or interest or premium, if any, on such Indebtedness after
giving effect to the grace period provided in such Indebtedness on the date of
such default (a "Payment Default"); or (ii) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $15.0 million or more (other than
the 7.58% Notes to be repaid in connection with the Merger so long as such 7.58%
Notes are repaid within 35 days of the Merger Date); (f) failure by the Company
or any of its Restricted Subsidiaries to pay final judgments aggregating in
excess of $15.0 million, which judgments are not paid, discharged or stayed for
a period of 60 days after such judgments have become non-appealable and, in the
event such judgment is covered by insurance, an enforcement proceeding has been
commenced by any creditor upon such judgment or decree that is not properly
stayed; (g) except as permitted by the Indenture, any Note Guarantee of a
Guarantor (other than an Immaterial Guarantor) being held in any judicial
proceeding to be unenforceable or invalid or ceasing for any reason to be in
full force and effect or any Guarantor (other than an Immaterial Guarantor), or
any Person acting on behalf of any Guarantor, (other than an Immaterial
Guarantor) shall deny or disaffirm its obligations under its Note Guarantee; (h)
causes the Pledge Agreement to cease to be in full force and effect or
enforceable in accordance with its terms (other than in accordance with its
terms) or the Company denies or disaffirms its obligations under the Pledge
Agreement or the obligations under the Pledge Agreement cease to be secured by a
perfected first priority security interest in any portion of the collateral
purported to be pledge under the Pledge Agreement (other than in accordance with
its terms) and (i) certain events of bankruptcy or insolvency with respect to
the Company or any of its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary. In
the event of a declaration of acceleration of the Notes because an Event of
Default has occurred and is continuing as a result of the acceleration of any
Indebtedness described in clause (f) above, the declaration of acceleration of
the Notes shall be automatically annulled if the holders of any Indebtedness
described in clause (f) above have rescinded the declaration of acceleration in
respect of such Indebtedness within 30 days of the date of such declaration and
if (i) the annulment of the acceleration of Notes would not conflict with any
judgment or decree of a court of competent jurisdiction and (ii) all existing
Events of Default, except nonpayment of principal or interest on the Notes that
became due solely because of the acceleration of the Notes have been cured or
waived. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the principal, premium, if any, accrued interest and Liquidated
Damages, if any, of the Notes to be due and payable immediately. Notwithstanding
the foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company or any of its Subsidiaries
all outstanding Notes shall become due and payable without further action or
notice. Holders of the Notes may not enforce the Indenture, the Notes or the
Notes Guarantees except as provided in the Indenture. The Holders of a majority
in aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes. The Company is required to deliver to the


                                      A-7


Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.

            13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

            14. No Recourse Against Others. No director, officer, employee,
incorporator or stockholder of the Company or any of the Guarantors, as such,
shall have any liability for any obligations of the Company or such Guarantor
under the Notes, the Note Guarantees or the Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
of Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such a waiver is against public policy.

            15. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.

            16. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).

            17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement, dated as of March 27, 2001, between the Company and the parties named
on the signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have the rights
set forth in one or more registration rights agreements, if any, between the
Company and the other parties thereto, relating to rights given by the Company
to the purchasers of Additional Notes (collectively, the "Registration Rights
Agreement").

            18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

            The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:

            Prior to the Merger Date:


                                      A-8


            Michael Foods Acquisition Corp.
            c/o Vestar Capital Partners IV, LP
            1225 Seventeenth Street, Suite 1660
            Denver, Colorado 80202
            Telecopier No.: (303) 292-6639

            Attention: J. Christopher Henderson

            Following the Merger Date:

            Michael Foods, Inc.
            Park National Bank Building
            5353 Wayzata Blvd., Suite 324
            Minneapolis, MN 55416

            Attention: John D. Reedy, Executive Vice President
                       and Chief Financial Officer


                                      A-9


                                 ASSIGNMENT FORM

To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to

- -------------------------------------------------------------------------------
                 (Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
and irrevocably appoint
- -------------------------------------------------------------------------------
to transfer this Note on the books of the Company.  The agent may substitute
another to act for him.
- -------------------------------------------------------------------------------

Date: _______________
                               Your Signature:__________________________
                               (Sign exactly as your name appears on the face of
                               this Note)
Signature Guarantee.


                                      B-1


                       OPTION OF HOLDER TO ELECT PURCHASE

            If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:

            Section 4.10                                     Section 4.14

            If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $________

Date: _______________                    Your Signature:________________________
                                         (Sign exactly as your name appears on
                                         the Note)
                                         Tax Identification No:_________________
Signature Guarantee.


                                      B-2


                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

Prior to the Merger Date:
Michael Foods Acquisition Corp.
c/o Vestar Capital Partners IV, L.P.
1225 Seventeenth Street, Suite 1660
Denver Colorado 80202
Telecopier No.: (303) 292-6639

Following the Merger Date:
Michael Foods, Inc.
Park National Bank Building
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416

Attention: J. Christopher Henderson

BNY Midwest Trust Company
2 North La Salle Street
Suite 1020
Chicago, IL 60602
Telecopier No.: (312) 827-8542

Attention: Dan Donovan

            Re: 11 3/4% Senior Subordinated Notes due 2011

            Reference is hereby made to the Indenture, dated as of March 27,
2001 (the "Indenture"), between Michael Foods Acquisition Corp., as issuer (the
"Company"), and BNY Midwest Trust Company, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.

            ______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:

            [CHECK ALL THAT APPLY]

            1. Check if Transferee will take delivery of a beneficial interest
in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its


                                      B-3


own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.

            2. Check if Transferee will take delivery of a beneficial interest
in the Regulation S Global Note or a Definitive Note pursuant to Regulation S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.

            3. Check and complete if Transferee will take delivery of a
beneficial interest in the IAI Global Note or a Definitive Note pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

            (a) such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;

                                       or

            (b) such Transfer is being effected to the Company or a subsidiary
thereof;

                                       or


                                      B-4


            (c) such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;

                                       or

            (d) such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the IAI Global Note and/or the Definitive Notes and
in the Indenture and the Securities Act.

            4. Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Note or of an Unrestricted Definitive Note.

            (a) Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.

            (b) Check if Transfer is pursuant to Regulation S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) he restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.

            (c) Check if Transfer is pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration


                                      B-5


requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and
in compliance with the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any State of the United States and (ii)
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will not be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes or Restricted
Definitive Notes and in the Indenture.

            This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.

                                    [Insert Name of Transferor]

                                    By:________________________
                                       Name:
                                       Title:

Dated:_____________,____


                                      B-6


                       ANNEX A TO CERTIFICATE OF TRANSFER

      1. The Transferor owns and proposes to transfer the following:

                            [CHECK ONE OF (a) OR (b)]

            (a) a beneficial interest in the:

            (i) 144A Global Note (CUSIP        ), or

            (ii) Regulation S Global Note (CUSIP        ), or

            (iii) IAI Global Note (CUSIP        ); or

            (b) a Restricted Definitive Note.

      2. After the Transfer the Transferee will hold:

                                   [CHECK ONE]

            (a) a beneficial interest in the:

            (i) 144A Global Note (CUSIP        ), or

            (ii) Regulation S Global Note (CUSIP        ), or

            (iii) IAI Global Note (CUSIP        ); or

            (iv) Unrestricted Global Note (CUSIP        ); or

            (b) a Restricted Definitive Note; or

            (c) an Unrestricted Definitive Note,

            in accordance with the terms of the Indenture.


                                      B-7


                                                                       EXHIBIT C

                         FORM OF CERTIFICATE OF EXCHANGE

Prior to the Merger Date:

Michael Foods Acquisition Corp.
c/o Vestar Capital Partners IV, LP
1225 Seventeenth Street, Suite 1660
Denver, Colorado 80202
Telecopier No.: (303) 292-6639

Following the Merger Date:

Michael Foods, Inc.
Park National Bank Building
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416

BNY Midwest Trust Company
2 North La Salle Street
Suite 1020
Chicago, IL  60602
Telecopier No.:  (312) 827-8542

Attention:  Dan Donovan

            Re: 11 3/4% Senior Subordinated Notes due 2011

                              (CUSIP______________)

            Reference is hereby made to the Indenture, dated as of March 27,
2001 (the "Indenture"), between Michael Foods Acquisition Corp., as issuer (the
"Company") and BNY Midwest Trust Company, as trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.

            ____________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:

            1. Exchange of Restricted Definitive Notes or Beneficial Interests
in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note

            (a) Check if Exchange is from Beneficial Interest in a Restricted
Global Note to Beneficial Interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an


                                      C-1


Unrestricted Global Note in an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

            (b) Check if Exchange is from Beneficial Interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

            (c) Check if Exchange is from Restricted Definitive Note to
Beneficial Interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.

            (d) Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

            2. Exchange of Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes for Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes

            (a) Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial


                                      C-2


interest in a Restricted Global Note for a Restricted Definitive Note with an
equal principal amount, the Owner hereby certifies that the Restricted
Definitive Note is being acquired for the Owner's own account without transfer.
Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue to be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Definitive Note and in the Indenture and the Securities Act.

            (b) Check if Exchange is from Restricted Definitive Note to
Beneficial Interest in a Restricted Global Note. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] 144A Global Note, Regulation S Global Note, IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.

            This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.

                                          [Insert Name of Owner]

                                    By:________________________
                                       Name:
                                       Title:

Dated: ________________, ____


                                      C-3


                                                                       EXHIBIT D

                            FORM OF CERTIFICATE FROM
                   ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

Prior to the Merger Date:

Michael Foods Acquisition Corp.
c/o Vestar Capital Partners IV, LP
1225 Seventeenth Street, Suite 1660
Denver, Colorado 80202
Telecopier No.: (303) 292-6639

After the Merger Date:

Michael Foods, Inc.
Park National Bank Building
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416

BNY Midwest Trust Company
2 North La Salle Street
Suite 1020
Chicago, IL 60602
Telecopier No.: (312) 827-8562

            Re: 11 3/4% Senior Subordinated Notes due 2011

            Reference is hereby made to the Indenture, dated as of March 27,
2001 (the "Indenture"), between Michael Foods Acquisition Corp., as issuer (the
"Company") and BNY Midwest Trust Company, as trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.

            In connection with our proposed purchase of $____________ aggregate
principal amount of:

            (a)   a beneficial interest in a Global Note, or

            (b)   a Definitive Note,

            we confirm that:

            1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").


                                      D-1


            2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.

            3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Placement Agents.

            4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.

            5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.

            You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.

                                    [Insert Name of Accredited Investor]


                                    By:________________________
                                       Name:
                                       Title:

Dated:__________________,____


                                      D-2


                          FORM OF NOTATION OF GUARANTEE

            For value received, each Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and subject
to the provisions in the Indenture dated as of March __, 2001 (the "Indenture")
among Michael Foods Acquisition Corp. and BNY Midwest Trust Company, as trustee
(the "Trustee"), (a) the due and punctual payment of the principal of, premium,
if any, and interest on the Notes (as defined in the Indenture), whether at
maturity, by acceleration, redemption or otherwise, the due and punctual payment
of interest on overdue principal and premium, and, to the extent permitted by
law, interest, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee all in accordance with the terms of
the Indenture and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. The
obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth
in Article Eleven of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Subsidiary Guarantee. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder, to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose; provided, however, that the Indebtedness evidenced by
this Subsidiary Guarantee shall cease to be so subordinated and subject in right
of payment upon any defeasance of this Note in accordance with the provisions of
the Indenture.

                                    [Name of Guarantor]

                                    By:________________________
                                       Name:
                                       Title:


                                      E-1


                                                                       EXHIBIT F

                         FORM OF SUPPLEMENTAL INDENTURE
                    TO BE DELIVERED BY SUBSEQUENT GUARANTORS

            Supplemental Indenture (this "Supplemental Indenture"), dated as of
_____________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of Michael Foods Acquisition Corp. (or its permitted successor), a
Minnesota corporation (the "Company"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and BNY Midwest Trust Company, as
trustee under the Indenture referred to below (the "Trustee").

                               W I T N E S S E T H

            WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of March 27, 2001 providing for
the issuance of an aggregate principal amount of up to $300 million of 11 3/4%
Senior Subordinated Notes due 2011 (the "Notes");

            WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and

            WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

            NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

            1. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

            2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees
as follows:

      (a) Along with all other Guarantors, to jointly and severally Guarantee to
each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the obligations of the Company
hereunder or thereunder, that:

            (i) the principal of and interest on the Notes will be promptly paid
in full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the



Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and

            (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Guarantors shall be jointly and severally obligated to pay the same
immediately.

      (b) The obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance that might otherwise constitute a legal or equitable discharge or
defense of a guarantor.

      (c) The following is hereby waived: diligence presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever.

      (d) This Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and the Indenture.

      (e) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors, or any Custodian, Trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.

      (f) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.

      (g) As between the Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 of the Indenture for the
purposes of this Note Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Note Guarantee.

      (h) The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under any Note Guarantee.

      (i) Pursuant to Section 10.02 of the Indenture, after giving effect to any
maximum amount and any other contingent and fixed liabilities that are relevant
under any



applicable Bankruptcy or fraudulent conveyance laws, and after giving effect to
any collections from, rights to receive contribution from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under Article 10 of the Indenture shall result in the obligations of
such Guarantor under its Note Guarantee not constituting a fraudulent transfer
or conveyance.

            3. Subordination. The Obligations of the Guaranteeing Subsidiary
under its Note Guarantee pursuant to this Supplemental Indenture shall be junior
and subordinated to the Senior Debt of the Guaranteeing Subsidiary on the same
basis as the Notes are junior and subordinated to the Senior Debt of the
Company. For the purposes of the foregoing sentence, the Trustee and the Holders
shall have the right to receive and/or retain payments by the Guaranteeing
Subsidiary only at such time as they may receive and/or retain payments in
respect of the Notes pursuant to the Indenture, including Article 10 thereof.

            4. Execution and Delivery. Each Guaranteeing Subsidiary agrees that
the Note Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.

            5. Guaranteeing Subsidiary May Consolidate, Etc., on Certain Terms.
Except as otherwise provided in Section 11.06 of the Indenture, a Guarantor may
not sell or otherwise dispose of all or substantially all of its assets, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person unless:

      (a)   the Company or a Guarantor is the surviving corporation or the
            entity or the Person formed by or surviving any such consolidation
            or merger (if other than a Guarantor or the Company) or to which
            such sale, assignment, transfer, lease, conveyance or other
            disposition shall have been made is a corporation organized,
            partnership or limited liability company or existing under (i) the
            laws of the United States, any state thereof or the District of
            Columbia or (ii) the laws of the same jurisdiction as that
            Guarantor;

                  (i)   the entity or Person formed by or surviving any such
                        consolidation or merger (if other than a Guarantor or
                        the Company) or the entity or Person to which such sale,
                        transfer, conveyance or other disposition assumes all
                        the obligations of such Guarantor under the Notes, the
                        Indenture, its Note Guarantee and the Registration
                        Rights Agreement, pursuant to a supplemental indenture
                        in the form of Exhibit E to the Indenture;

                  (ii)  immediately after giving effect to such transaction, no
                        Default or Event of Default exists; and

                  (iii) the Company will, at the time of such transaction and
                        after giving pro forma effect thereto as if such
                        transaction had occurred at the beginning of the
                        applicable four-quarter period, be permitted to incur at
                        least $1.00 of additional Indebtedness pursuant to the



                        Fixed Charge Coverage Ratio test set forth in the first
                        paragraph of Section 4.09 of the Indenture;

            (b) In case of any such consolidation, merger, sale or conveyance
      and upon the assumption by the successor corporation, by supplemental
      indenture, executed and delivered to the Trustee and satisfactory in form
      to the Trustee, of the Note Guarantee endorsed upon the Notes and the due
      and punctual performance of all of the covenants and conditions of the
      Indenture to be performed by a Guarantor, such successor corporation shall
      succeed to and be substituted for a Guarantor with the same effect as if
      it had been named herein as a Guarantor. Such successor corporation
      thereupon may cause to be signed any or all of the Note Guarantees to be
      endorsed upon all of the Notes issuable hereunder which theretofore shall
      not have been signed by the Company and delivered to the Trustee. All the
      Note Guarantees so issued shall in all respects have the same legal rank
      and benefit under the Indenture as the Note Guarantees theretofore and
      thereafter issued in accordance with the terms of the Indenture as though
      all of such Note Guarantees had been issued at the date of the execution
      hereof.

            (c) Except as set forth in Articles 4 and 5 of the Indenture, and
      notwithstanding clauses (a) and (b) above, nothing contained in the
      Indenture or in any of the Notes shall prevent any consolidation or merger
      of a Guarantor with or into the Company or another Guarantor, or shall
      prevent any sale or conveyance of the property of a Guarantor as an
      entirety or substantially as an entirety to the Company or another
      Guarantor.

      6. Releases.

            (a) Any Guarantor will be released and relieved of any obligations
under its Note Guarantee, (i) in connection with any sale or other disposition
of all or substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or after giving
effect to such transaction) a Restricted Subsidiary of the Company, if the sale
or other disposition of all or substantially all of the assets of that Guarantor
complies with Section 4.10 of the Indenture, including the application of the
Net Proceeds therefrom; (ii) in connection with any sale of all of the Capital
Stock of a Guarantor to a Person that is not (either before or after giving
effect to such transaction) a Restricted Subsidiary of the Company, if the sale
of all such Capital Stock of that Guarantor complies with Section 4.10 of the
Indenture, including the application of the Net Proceeds therefrom; (iii) if the
Company designates any Restricted Subsidiary that is a Guarantor (other than the
Egg Products Division) as an Unrestricted Subsidiary in accordance with the
terms hereof; or (iv) in connection with any sale of Capital Stock of a
Guarantor (other than the Egg Products Division) to a Person that results in the
Guarantor no longer being a Subsidiary of the Company, if the sale of such
Capital Stock of that Guarantor complies with Section 4.10, including the
application of the Net Proceeds therefrom. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Company in accordance with the
provisions of the Indenture, including without limitation Section 4.10 hereof,
the Trustee shall execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Note Guarantee.



            (b) Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under the Indenture
as provided in Article 10 of the Indenture.

            7. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.

            8. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

            9. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

            10. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.

            11. Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.



            IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

Dated:  _______________, ____

                                   [Guaranteeing Subsidiary]

                                    By:________________________
                                       Name:
                                       Title:


                                    MICHAEL FOODS ACQUISITION CORP.

                                    By:________________________
                                       Name:
                                       Title:


                                    BNY MIDWEST TRUST COMPANY, AS TRUSTEE

                                    By:________________________
                                       Name:
                                       Title:

EX-4.3

                                                                     Exhibit 4.3

                             SUPPLEMENTAL INDENTURE

            This Supplemental Indenture (this "Supplemental Indenture"), dated
as of April 10, 2001, by and among Casa Trucking, Inc., Crystal Farms
Refrigerated Distribution Company, Farm Fresh Foods of Nevada, Inc., Kohler Mix
Specialties, Inc., Kohler Mix Specialties of Connecticut, Inc., M.G. Waldbaum
Company, Michael Foods of Delaware, Inc., Midwest Mix, Inc., Minnesota Products,
Inc., Northern Star Co., Papetti Electroheating Corporation, Papetti's Hygrade
Egg Products, Inc., WFC, Inc. and Wisco Farm Cooperative (each a "Guaranteeing
Subsidiary" and, collectively, the "Guaranteeing Subsidiaries" ), each of which
is a direct or indirect subsidiary of Michael Foods, Inc., a Minnesota
corporation (the "Company"), the Company and BNY Midwest Trust Company, as
trustee under the Indenture referred to below (the "Trustee").

                               W I T N E S S E T H

            WHEREAS, Michael Foods Acquisition Corp. ("Acquisition") has
heretofore executed and delivered to the Trustee an indenture (the "Indenture"),
dated as of March 27, 2001 providing for the issuance of an aggregate principal
amount of up to $300 million of 11 3/4% Senior Subordinated Notes due 2011 (the
"Notes");

            WHEREAS, pursuant to the Merger, all of the obligations of
Acquisition under the Indenture will become obligations of the Company;

            WHEREAS, the Indenture provides that under certain circumstances
each Guaranteeing Subsidiary shall execute and deliver to the Trustee a
supplemental indenture pursuant to which such Guaranteeing Subsidiary shall
unconditionally guarantee all of the Company's obligations under the Notes and
the Indenture on the terms and conditions set forth herein and in the Indenture;
and

            WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

            NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Company, each Guaranteeing Subsidiary and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:

            1. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

            2. Assumption of Obligations. Michael Foods, Inc., a Minnesota
corporation, as successor by merger to M-Foods Acquisition Corp., a Minnesota
corporation ("Acquisition"), hereby expressly assumes all of the respective
obligations of Acquisition as issuer of the Notes under the Indenture.

            3. Agreement to Guarantee. Each of the Guaranteeing Subsidiaries
hereby agrees to become subject to the terms of the Indenture as a Guarantor.



            4. Incorporation of Terms of Indenture. The obligations of the
Guaranteeing Subsidiaries under the Note Guarantees shall be governed in all
respects by the terms of the Indenture and shall constitute a Note Guarantee
thereunder. Each of the Guaranteeing Subsidiaries shall be bound by the terms of
the Indenture as they relate to the Note Guarantees.

            5. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.

            6. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

            7. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

            8. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.

            9. Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.



      IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

Dated: April 10, 2001

                              FARM FRESH FOODS OF NEVADA, INC.

                              By: _________________________________________
                                    Name:
                                    Title:


                              KOHLER MIX SPECIALTIES OF CONNECTICUT,
                              INC.

                              By: _________________________________________
                                    Name:
                                    Title:


                              MICHAEL FOODS OF DELAWARE, INC.

                              By: _________________________________________
                                    Name:
                                    Title:


                              CASA TRUCKING, INC.

                              By: _________________________________________
                                    Name:
                                    Title:


                              CRYSTAL FARMS REFRIGERATED
                              DISTRIBUTION CO.

                              By: _________________________________________
                                    Name:
                                    Title:




                              KOHLER MIX SPECIALTIES, INC.

                              By: _________________________________________
                                    Name:
                                    Title:


                              MIDWEST MIX, INC.

                              By: _________________________________________
                                    Name:
                                    Title:


                              MINNESOTA PRODUCTS, INC.

                              By: _________________________________________
                                    Name:
                                    Title:


                              PAPETTI'S HYGRADE EGG PRODUCTS, INC.

                              By: _________________________________________
                                    Name:
                                    Title:


                              NORTHERN STAR CO.

                              By: _________________________________________
                                    Name:
                                    Title:


                              M. G. WALDBAUM COMPANY

                              By: _________________________________________
                                    Name:
                                    Title:




                              PAPETTI ELECTROHEATING CORPORATION

                              By: _________________________________________
                                    Name:
                                    Title:


                              WFC, INC.

                              By: _________________________________________
                                    Name:
                                    Title:


                              WISCO FARM COOPERATIVE

                              By: _________________________________________
                                    Name:
                                    Title:


                              MICHAEL FOODS, INC.

                              By: _________________________________________
                                    Name:
                                    Title:


                              BNY MIDWEST TRUST COMPANY, AS TRUSTEE

                              By: _________________________________________
                                    Name:
                                    Title:

EX-4.4

                                                                     Exhibit 4.4

                          SECOND SUPPLEMENTAL INDENTURE

          This Second Supplemental Indenture (this "SUPPLEMENTAL INDENTURE"),
dated as of May 2, 2001, by and among M-Foods Dairy, LLC and M-Foods Dairy TXCT,
LLC (each a "GUARANTEEING SUBSIDIARY" and, collectively, the "GUARANTEEING
SUBSIDIARIES" ), each of which is an indirect subsidiary of Michael Foods, Inc.,
a Minnesota corporation (the "COMPANY"), the Company and BNY Midwest Trust
Company, as trustee under the Indenture referred to below (the "TRUSTEE").

                                W I T N E S E T H

          WHEREAS, Michael Foods Acquisition Corp. ("ACQUISITION") has
heretofore executed and delivered to the Trustee an indenture (the "INDENTURE"),
dated as of March 27, 2001 providing for the issuance of an aggregate principal
amount of up to $300 million of 11 3/4% Senior Subordinated Notes due 2011 (the
"NOTES");

          WHEREAS, Section 4.18 of the Indenture provides that, if the Company
creates or acquires another Domestic Subsidiary on or after the Merger Date,
then the newly created or acquired Domestic Subsidiary must become a Guarantor
and execute a supplemental indenture within 20 Business Days of the date it was
acquired or created pursuant to which such Guarantor shall unconditionally
guarantee all of the Company's obligations under the Notes and the Indenture on
the terms and conditions set forth herein and in the Indenture;

          WHEREAS, on April 10, 2001, in connection with the consummation of the
Merger and the transfer of certain assets of certain of the Domestic
Subsidiaries of the Company to the Guaranteeing Subsidiaries, the Company
acquired the Guaranteeing Subsidiaries; and

          WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

          NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto mutually covenant and agree for the equal and ratable benefit of
the Holders of the Notes as follows:

          1.   CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

          2.   AGREEMENT TO GUARANTEE. Each of the Guaranteeing Subsidiaries
hereby agrees to become subject to the terms of the Indenture as a Guarantor.

          3.   INCORPORATION OF TERMS OF INDENTURE. The obligations of the
Guaranteeing Subsidiaries under the Note Guarantees shall be governed in all
respects by the terms of the Indenture and shall constitute a Note Guarantee
thereunder. Each of the Guaranteeing Subsidiaries shall be bound by the terms of
the Indenture as they relate to the Note Guarantees.



          4.   NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.

          5.   NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SECOND SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

          6.   COUNTERPARTS. The parties may sign any number of copies of this
Second Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.

          7.   EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.

          8.   TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Second
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiaries and the
Company.



         IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.

Dated: May 2, 2001

                              MICHAEL FOODS, INC.

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


                              M-FOODS DAIRY, LLC

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


                              M-FOODS DAIRY TXCT, LLC

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


                              BNY MIDWEST TRUST COMPANY, AS TRUSTEE

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

EX-4.5

                                                                     Exhibit 4.5

                                  $200,000,000

                   11 3/4% Senior Subordinated Notes due 2011

                         REGISTRATION RIGHTS AGREEMENT

                           dated as of March 27, 2001
                                  by and among

                        Michael Foods Acquisition Corp.

                                     -and-

                         Banc of America Securities LLC
                           Bear, Stearns & Co. Inc.,

                                     -and-

                     The Subsidiaries listed in Schedule A,
                                 as Guarantors



            This Registration Rights Agreement (this "Agreement") is made and
entered into as of March 27, 2001, by and among Michael Foods Acquisition Corp.,
a Minnesota corporation (the "Issuer") and Banc of America Securities LLC, and
Bear, Stearns & Co. Inc. (the "Initial Purchasers") who have agreed to purchase
the Issuer's 11 3/4% Senior Subordinated Notes due 2011 (the "Notes") pursuant
to the Purchase Agreement (as defined below) and will be entered into by the
subsidiaries of Michael Foods, Inc. ("Michael Foods") listed in Schedule A
herein (the "Subsidiaries" and each a "Guarantor" and, collectively, the
"Guarantors"), upon consummation of the Merger (defined below) and the execution
of a counterpart signature page hereto.

            This Agreement is made pursuant to the Purchase Agreement, dated
March 16, 2001 (the "Purchase Agreement"), by and among the Issuer, Michael
Foods and the Initial Purchasers. In order to induce the Initial Purchasers to
purchase the Notes, the Issuer has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section 5 of
the Purchase Agreement.

            The Issuer has entered into an Agreement and Plan of Merger, dated
as of December 21, 2000, among the Issuer, Michael Foods and M-Foods Holdings,
Inc. (the "Merger"), pursuant to which the Issuer will merge with and into
Michael Foods and Michael Foods will be the surviving corporation and a wholly
owned subsidiary of M-Foods Holdings, Inc. As a result of the Merger, all of the
obligations of the Issuer under this Agreement will become obligations of
Michael Foods and each Guarantor will become bound by the obligations of this
Agreement upon the consummation of the Merger and the execution of a counterpart
signature page to this Agreement by each such Guarantor.

            Capitalized terms used herein and not otherwise defined herein shall
have the meaning assigned to them under the Indenture, dated as of March 27,
2001 (the "Indenture"), entered into between the Issuer and BNY Midwest Trust
Company, as Trustee, relating to the Notes and the Exchange Notes (as defined
below).

            The parties hereby agree as follows:

            Section 1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:

            Act: The Securities Act of 1933, as amended.

            Affiliate: As defined in Rule 144 under the Act.

            Broker-Dealer: Any broker or dealer registered under the Exchange
Act.

            Certificated Securities: Definitive Notes, as defined in the
Indenture.

            Closing Date: The date hereof.

            Commission: The Securities and Exchange Commission.



            Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Issuer to
the Registrar under the Indenture of Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Notes tendered by Holders
thereof pursuant to the Exchange Offer.

            Consummation Deadline: As defined in Section 3(b) hereof.

            Effectiveness Deadline: As defined in Sections 3(a) and 4(a) hereof.

            Exchange Act: The Securities Exchange Act of 1934, as amended.

            Exchange Notes: The Issuer's 11 3/4% Senior Subordinated Notes due
2011 to be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii)
as contemplated by Section 4 hereof.

            Exchange Offer: The exchange and issuance by the Issuer of a
principal amount of Exchange Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Notes that are tendered by such Holders in connection with such exchange and
issuance.

            Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.

            Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act and pursuant to Regulation S under
the Act.

            Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.

            Holders: As defined in Section 2 hereof.

            Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.

            Recommencement Date: As defined in Section 6(d) hereof.

            Registration Default: As defined in Section 5 hereof.

            Registration Statement: Any registration statement of Michael Foods,
relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case, (i) that is filed pursuant to
the provisions of this Agreement and (ii) including the


                                       2


Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.

            Regulation S: Regulation S promulgated under the Act.

            Rule 144: Rule 144 promulgated under the Act.

            Shelf Registration Statement: As defined in Section 4 hereof.

            Suspension Notice: As defined in Section 6(d) hereof.

            TIA: The Trust Indenture Act of 1939 as in effect on the date of the
Indenture.

            Transfer Restricted Securities: Each (A) Note, until the earliest to
occur of (i) the date on which such Note is exchanged in the Exchange Offer for
an Exchange Note which is entitled to be resold to the public by the Holder
thereof without complying with the prospectus delivery requirements of the Act,
(ii) the date on which such Note has been disposed of in accordance with a Shelf
Registration Statement (and the purchasers thereof have been issued Exchange
Notes) or (iii) the date on which such Note is distributed to the public
pursuant to Rule 144 under the Act or is saleable pursuant to Rule 144(k) under
the Act (or similar provisions then in effect) and (B) Exchange Note held by a
Broker-Dealer until the date on which such Exchange Note is disposed of by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including the delivery of the Prospectus
contained therein).

            Section 2. Holders. A Person is deemed to be a holder of Transfer
Restricted Securities (each, a "Holder") whenever such Person owns Transfer
Restricted Securities.

            Section 3. Registered Exchange Offer. (a) Unless the Exchange Offer
shall not be permitted by applicable federal law (after the procedures set forth
in Section 6(a)(i) below have been complied with), the Issuer and the Guarantors
shall (i) cause the Exchange Offer Registration Statement to be filed with the
Commission as soon as practicable after the Closing Date, but in no event later
than 90 days after the Closing Date (such 90th day being the "Filing Deadline"),
(ii) use its reasonable best efforts to cause such Exchange Offer Registration
Statement to become effective at the earliest possible time, but in no event
later than 180 days after the Closing Date (such 180th day being the
"Effectiveness Deadline") and (iii) in connection with the foregoing, (A) file
all pre-effective amendments to such Exchange Offer Registration Statement as
may be necessary in order to cause it to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Exchange Offer Registration Statement, commence and
Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate
form permitting (i) registration of the Exchange Notes to be offered in exchange
for the Notes that are Transfer Restricted Securities and (ii) resales of
Exchange Notes by any Broker-Dealer that tendered Notes into the Exchange Offer
that such Broker-Dealer acquired for its own account as a result of market


                                       3


making activities or other trading activities (other than Notes acquired
directly from the Issuer or any of its Affiliates) as contemplated by Section
3(c) below.

            (b) The Issuer and the Guarantors shall use their respective
reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 Business Days. The Issuer and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Exchange Notes shall be
included in the Exchange Offer Registration Statement. The Issuer and the
Guarantors shall use their respective best efforts to cause the Exchange Offer
to be Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
Business Days thereafter (such 30th day being the "Consummation Deadline").

            (c) The Issuer shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Notes acquired directly from
the Issuer or any Affiliate of the Issuer), may exchange such Transfer
Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of this Agreement. See the Shearman & Sterling no-action letter (available
July 2, 1993).

            Because any such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus meeting
the requirements of the Act in connection with its initial sale of any Exchange
Notes received by such Broker-Dealer in the Exchange Offer, the Issuer and the
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement through the Consummation Deadline and thereafter as
provided in the remainder of this paragraph. To the extent necessary to ensure
that the prospectus contained in the Exchange Offer Registration Statement is
available for sales of Exchange Notes by any Broker-Dealer that acquired
Exchange Notes as a result of market-making or similar activities such that the
Broker-Dealer would be required to deliver a prospectus under the Act upon a
subsequent sale or other disposition of the Exchange Notes, then the Issuer and
the Guarantors agree, in the event any of them receives notice from a
Broker-Dealer within 10 Business Days of the Consummation of the Exchange Offer
that such Broker-Dealer holds Transfer Restricted Securities that were acquired
for the account of such Broker-Dealer as a result of market making or similar
activities to use their respective reasonable best efforts to keep the Exchange
Offer Registration Statement continuously effective, supplemented, amended and
current as required by and subject to the provisions of Section 6(a) and (c)
hereof and in conformity with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of 180 days from the


                                       4


Consummation Deadline or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Registration Statement have been sold
pursuant thereto. The Issuer and the Guarantors shall provide copies of the
latest version of such Prospectus to such Broker-Dealers, in such number as such
Broker-Dealers may reasonably request promptly upon such request, and in no
event later than two Business Days after the date of such request, at any time
during such period.

            Section 4. Shelf Registration. (a) Shelf Registration. If (i) the
Exchange Offer is not permitted by applicable law (after the Issuer and the
Guarantors have complied with the procedures set forth in Section 6(a)(i) below)
or (ii) if any Holder of Transfer Restricted Securities shall notify the Issuer
in writing within 20 Business Days following the Consummation Deadline that (A)
such Holder was prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Exchange Notes acquired by
it in the Exchange Offer to the public without delivering a prospectus and the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder or (C) such Holder is a
Broker-Dealer and holds Notes acquired directly from the Issuer or any of its
Affiliates, then the Issuer and the Guarantors shall: (x) cause to be filed, on
or prior to 90 days after the earlier of (i) the date on which the Issuer
determines that the Exchange Offer Registration Statement cannot be filed as a
result of clause (a)(i) above and (ii) the date on which the Issuer receives the
notice specified in clause (a)(ii) above, (such earlier date, the "Filing
Deadline"), a shelf registration statement pursuant to Rule 415 under the Act
(which may be an amendment to the Exchange Offer Registration Statement (the
"Shelf Registration Statement")), relating to all Transfer Restricted
Securities, and (y) shall use their respective reasonable best efforts to cause
such Shelf Registration Statement to become effective on or prior to 180 days
after the Filing Deadline for the Shelf Registration Statement (such 180th day
the "Effectiveness Deadline").

            If, after the Issuer and the Guarantors filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a) above,
the Issuer and the Guarantors are required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer is not permitted under
applicable federal law (i.e., clause (a)(i) above), then the filing of the
Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above; provided that, in such event, the Issuer and
the Guarantors shall remain obligated to use best efforts to meet the
Effectiveness Deadline set forth in clause (y).

            To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the other
securities required to be registered therein pursuant to Section 6(b)(ii)
hereof, the Issuer and the Guarantors shall use their respective reasonable best
efforts to keep any Shelf Registration Statement required by this Section 4(a)
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Sections 6(b) and (c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at
least two years (as extended pursuant to Section 6(c)(i)) following the Closing
Date, or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Shelf Registration Statement have been sold pursuant
thereto.


                                       5


            (b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Issuer in writing, within 10 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Issuer by such Holder not materially misleading. The Issuer
shall not be obligated to supplement such Shelf Registration Statement after it
has been declared effective by the Commission more than one time per quarterly
period to reflect additional holders.

            Section 5. Liquidated Damages. If (i) any Registration Statement
required by this Agreement is not filed with the Commission on or prior to the
applicable Filing Deadline, (ii) any such Registration Statement has not been
declared effective by the Commission on or prior to the applicable Effectiveness
Deadline, (iii) the Exchange Offer has not been Consummated on or prior to the
Consummation Deadline, (iv) the Shelf Registration Statement or the Exchange
Offer Registration Statement is declared effective but thereafter, pending the
announcement of a material corporate transaction, the Issuer issues a notice
that the Shelf Registration Statement is unusable, or such notice is required
under applicable securities laws to be issued by the Issuer, and, during the
period specified in Section 4(a) above, the aggregate number of days in any
consecutive twelve-month period for which all such notices are issued or
required to be issued exceeds 45 days, or (v) the Exchange Offer Registration
Statement is filed and declared effective but thereafter (A) during the period
through and including the Consummation Deadline, shall cease to be effective or
fail to be usable for its intended purpose without being succeeded within five
Business Days by a post-effective amendment to such Exchange Offer Registration
Statement that cures such failure and that is itself declared effective
immediately or (B) during the period from the day after the Consummation
Deadline through and including the one-hundred-eightieth day after the
Consummation Deadline, pending the announcement of a material corporate
transaction, the Issuer issues a notice that the Exchange Offer Registration
Statement is unusable for the purposes contemplated by the second paragraph of
Section 3(c) above, or such notice is required under applicable securities laws
to be issued by the Issuer, and, during the 180-day period specified in Section
3(c) above, the aggregate number of days for which all such notices are issued
or required to be issued exceeds 45 days (each such event referred to in clauses
(i) through (v), a "Registration Default"), then the Issuer and the Guarantors
hereby jointly and severally agree to pay to each Holder of Transfer Restricted
Securities affected thereby liquidated damages in an amount equal to $.05 per
week per $1,000 in principal amount of Transfer Restricted Securities held by
such Holder for each week or portion thereof that the Registration Default
continues for the first 90-day period immediately following the occurrence of
such Registration Default. The amount of the liquidated damages shall increase
by an additional $.05 per week per $1,000 in principal amount of Transfer
Restricted Securities with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of liquidated
damages of $.50 per week per $1,000 in principal amount of Transfer Restricted
Securities. Notwithstanding anything to the contrary set forth herein, (1) upon
filing of the Exchange Offer Registration Statement (and/or, if applicable, the
Shelf Registration Statement), in the case of (i) above, (2) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if


                                       6


applicable, the Shelf Registration Statement), in the case of (ii) above, (3)
upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon
the filing of a post-effective amendment to the Registration Statement or an
additional Registration Statement that causes the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable in the case of (iv) or (v)(A) or (B) above, as
applicable, the liquidated damages payable with respect to the Transfer
Restricted Securities as a result of such clause (i), (ii), (iii), (iv) or
(v)(A) or (B), as applicable, shall cease.

            All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Damages Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Issuer and the Guarantors to pay accrued liquidated damages with respect to such
securities shall survive until such time as such obligations with respect to
such securities shall have been satisfied in full.

            In the event that the Exchange Offer Registration Statement is
declared effective but thereafter the Issuer issues a notice as contemplated by
clause (v)(B) above, the number of days during which such Registration Statement
is unusable shall be deducted from the first annual 45-day "blackout" period
permitted under clause (iv) above for purposes of determining the number of days
during which Additional Interest would accrue in the event of a Registration
Default under clause (iv) above.

            Section 1. Registration Procedures. (a) Exchange Offer Registration
Statement. In connection with the Exchange Offer, the Issuer and the Guarantors
shall (x) comply with all applicable provisions of Section 6(c) below, (y) use
their respective reasonable best efforts to effect such exchange and to permit
the resale of Exchange Notes by any Broker-Dealer that tendered in the Exchange
Offer Notes that such Broker-Dealer acquired for its own account as a result of
its market making activities or other trading activities (other than Notes
acquired directly from the Issuer or any of its Affiliates) being sold in
accordance with the intended method or methods of distribution thereof, and (z)
comply with all of the following provisions:

            (i) If, following the date hereof there has been announced a change
      in Commission policy with respect to exchange offers such as the Exchange
      Offer, that in the reasonable opinion of counsel to the Issuer raises a
      substantial question as to whether the Exchange Offer is permitted by
      applicable federal law, the Issuer and the Guarantors hereby agree to seek
      a no-action letter or other favorable decision from the Commission
      allowing the Issuer and the Guarantors to Consummate an Exchange Offer for
      such Transfer Restricted Securities. The Issuer and the Guarantors hereby
      agree to pursue the issuance of such a decision to the Commission staff
      level. In connection with the foregoing, the Issuer and the Guarantors
      hereby agree to take all such other actions as may be requested by the
      Commission or otherwise reasonably required in connection with the
      issuance of such decision, including without limitation (A) participating
      in telephonic conferences with the Commission, (B) delivering to the
      Commission staff an analysis prepared by counsel to the Issuer setting
      forth the legal bases, if any, upon which


                                       7


      such counsel has concluded that such an Exchange Offer should be permitted
      and (C) diligently pursuing a resolution (which need not be favorable) by
      the Commission staff.

            (ii) As a condition to its participation in the Exchange Offer, each
      Holder of Transfer Restricted Securities (including, without limitation,
      any Holder who is a Broker-Dealer) shall furnish, upon the request of the
      Issuer, prior to the Consummation of the Exchange Offer, a written
      representation to the Issuer and the Guarantors (which may be contained in
      the letter of transmittal contemplated by the Exchange Offer Registration
      Statement) to the effect that (A) it is not an Affiliate of the Issuer,
      (B) it is not engaged in, and does not intend to engage in, and has no
      arrangement or understanding with any person to participate in, a
      distribution of the Exchange Notes to be issued in the Exchange Offer and
      (C) it is acquiring the Exchange Notes in its ordinary course of business.
      As a condition to its participation in the Exchange Offer each Holder
      using the Exchange Offer to participate in a distribution of the Exchange
      Notes shall acknowledge and agree that if the resales are of Exchange
      Notes obtained by such Holder in exchange for Notes acquired directly from
      the Issuer or an Affiliate thereof, it (1) could not, under Commission
      policy as in effect on the date of this Agreement, rely on the position of
      the Commission enunciated in Morgan Stanley and Co., Inc. (available June
      5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988),
      as interpreted in the Commission's letter to Shearman & Sterling dated
      July 2, 1993, and similar no-action letters (including, if applicable, any
      no-action letter obtained pursuant to clause (i) above), and (2) must
      comply with the registration and prospectus delivery requirements of the
      Act in connection with a secondary resale transaction and that such a
      secondary resale transaction must be covered by an effective registration
      statement containing the selling security holder information required by
      Item 507 or 508, as applicable, of Regulation S-K.

            (iii) Prior to effectiveness of the Exchange Offer Registration
      Statement, the Issuer and the Guarantors shall provide a supplemental
      letter to the Commission (A) stating that the Issuer and the Guarantors
      are registering the Exchange Offer in reliance on the position of the
      Commission enunciated in Exxon Capital Holdings Corporation (available May
      13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as
      interpreted in the Commission's letter to Shearman & Sterling dated July
      2, 1993, and, if applicable, any no-action letter obtained pursuant to
      clause (i) above, (B) including a representation that neither the Issuer
      nor any Guarantor has entered into any arrangement or understanding with
      any Person to distribute the Exchange Notes to be received in the Exchange
      Offer and that, to the best of the Issuer's and each Guarantor's
      information and belief, each Holder participating in the Exchange Offer is
      acquiring the Exchange Notes in its ordinary course of business and has no
      arrangement or understanding with any Person to participate in the
      distribution of the Exchange Notes received in the Exchange Offer and (C)
      any other undertaking or representation required by the Commission as set
      forth in any no-action letter obtained pursuant to clause (i) above, if
      applicable.


                                       8


            (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Issuer and the Guarantors shall:

            (i) comply with all the provisions of Section 6(c) below and use
      their respective reasonable best efforts to effect such registration to
      permit the sale of the Transfer Restricted Securities being sold in
      accordance with the intended method or methods of distribution thereof (as
      indicated in the information furnished to the Issuer pursuant to Section
      4(b) hereof), and pursuant thereto the Issuer and the Guarantors will
      prepare and file with the Commission a Registration Statement relating to
      the registration on any appropriate form under the Act, which form shall
      be available for the sale of the Transfer Restricted Securities in
      accordance with the intended method or methods of distribution thereof
      within the time periods and otherwise in accordance with the provisions
      hereof, and

            (ii) issue, upon the request of any Holder or Purchasers of Notes
      covered by any Shelf Registration Statement contemplated by this
      Agreement, Exchange Notes having an aggregate principal amount equal to
      the aggregate principal amount of Notes sold pursuant to the Shelf
      Registration Statement and surrendered to the Issuer for cancellation; the
      Issuer shall register Exchange Notes on the Shelf Registration Statement
      for this purpose and issue the Exchange Notes to the Purchaser(s) of
      securities subject to the Shelf Registration Statement in the names as
      such Purchaser(s) shall designate.

            (c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Issuer and
the Guarantors shall:

            (i) use their respective reasonable best efforts to keep such
      Registration Statement continuously effective and provide all requisite
      financial statements for the period specified in Section 3 or 4 of this
      Agreement, as applicable. Upon the occurrence of any event that would
      cause any such Registration Statement or the Prospectus contained therein
      (A) to contain an untrue statement of material fact or omit to state any
      material fact necessary to make the statements therein (in light of the
      circumstances under which they were made) not misleading or (B) not to be
      effective and usable for resale of Transfer Restricted Securities during
      the period required by this Agreement, the Issuer and the Guarantors shall
      file promptly an appropriate amendment to such Registration Statement
      curing such defect, and, if Commission review is required, use their
      respective reasonable best efforts to cause such amendment to be declared
      effective as soon as practicable.

            (ii) prepare and file with the Commission such amendments and
      post-effective amendments to the applicable Registration Statement as may
      be necessary to keep such Registration Statement effective for the
      applicable period set forth in Section 3 or 4 hereof, as the case may be;
      cause the Prospectus to be supplemented by any required Prospectus
      supplement, and as so supplemented to be filed pursuant to Rule 424 under
      the Act, and to comply fully with Rules 424, 430A and 462, as applicable,
      under the Act in a timely manner; and comply with the provisions of the
      Act with respect to the disposition of all securities covered by such
      Registration Statement during the applicable


                                       9


      period in accordance with the intended method or methods of distribution
      by the sellers thereof set forth in such Registration Statement or
      supplement to the Prospectus;

            (iii) with respect to a Shelf Registration Statement, advise each
      selling Holder promptly and, if requested by such selling Holder, confirm
      such advice in writing, (A) when the Prospectus or any Prospectus
      supplement or post-effective amendment has been filed, and, with respect
      to any applicable Registration Statement or any post-effective amendment
      thereto, when the same has become effective, (B) of any request by the
      Commission for amendments to the Registration Statement or amendments or
      supplements to the Prospectus or for additional information relating
      thereto, (C) of the issuance by the Commission of any stop order
      suspending the effectiveness of the Registration Statement under the Act
      or of the suspension by any state securities commission of the
      qualification of the Transfer Restricted Securities for offering or sale
      in any jurisdiction, or the initiation of any proceeding for any of the
      preceding purposes, (D) of the existence of any fact or the happening of
      any event that makes any statement of a material fact made in the
      Registration Statement, the Prospectus, any amendment or supplement
      thereto or any document incorporated by reference therein untrue, or that
      requires the making of any additions to or changes in the Registration
      Statement in order to make the statements therein not misleading, or that
      requires the making of any additions to or changes in the Prospectus in
      order to make the statements therein, in the light of the circumstances
      under which they were made, not misleading. If at any time the Commission
      shall issue any stop order suspending the effectiveness of the
      Registration Statement, or any state securities commission or other
      regulatory authority shall issue an order suspending the qualification or
      exemption from qualification of the Transfer Restricted Securities under
      state securities or Blue Sky laws, the Issuer and the Guarantors shall use
      their respective reasonable best efforts to obtain the withdrawal or
      lifting of such order at the earliest possible time;

            (iv) subject to Section 6(c)(i), if any fact or event contemplated
      by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
      supplement or post-effective amendment to the Registration Statement or
      related Prospectus or any document incorporated therein by reference or
      file any other required document so that, as thereafter delivered to the
      purchasers of Transfer Restricted Securities, the Prospectus will not
      contain an untrue statement of a material fact or omit to state any
      material fact necessary to make the statements therein, in the light of
      the circumstances under which they were made, not misleading;

            (v) furnish to the Initial Purchasers and, with respect to a Shelf
      Registration Statement, each selling Holder named in any Registration
      Statement or Prospectus in connection with such exchange or sale, if any,
      before filing with the Commission, copies of any Registration Statement or
      any Prospectus included therein or any amendments or supplements to any
      such Registration Statement or Prospectus (including all documents
      incorporated by reference after the initial filing of such Registration
      Statement), which documents will be subject to the review and comment of
      such Holders in connection with such sale, if any, for a period of at
      least five Business Days, and the Issuer will not file any such
      Registration Statement or Prospectus or any amendment or supplement to any
      such Registration Statement or Prospectus (including all such documents
      incorporated by


                                       10


      reference) to which such Holders shall reasonably object within five
      Business Days after the receipt thereof. A Holder shall be deemed to have
      reasonably objected to such filing if such Registration Statement,
      amendment, Prospectus or supplement, as applicable, as proposed to be
      filed, contains an untrue statement of a material fact or omits to state
      any material fact necessary to make the statements therein (in light of
      the circumstances under which they were made) not misleading or fails to
      comply with the applicable requirements of the Act;

            (vi) with respect to a Shelf Registration Statement, provide copies
      of any document that is to be incorporated by reference into a
      Registration Statement or Prospectus to any selling Holders, upon the
      reasonable request of such selling Holder, in connection with such sale,
      if any;

            (vii) with respect to a Shelf Registration Statement, subject to
      appropriate confidentiality agreements being entered into, make available,
      at reasonable times, for inspection by each selling Holder and any
      attorney or accountant retained by such Holders, all financial and other
      records, pertinent corporate documents of the Issuer and the Guarantors
      and cause at reasonable times the Issuer's and the Guarantors' officers,
      directors and employees to supply all information reasonably requested by
      any such Holder, attorney or accountant at reasonable times in connection
      with such Registration Statement or any post-effective amendment thereto
      subsequent to the filing thereof and prior to its effectiveness;

            (viii) with respect to a Shelf Registration Statement, if requested
      by any selling Holders in connection with such sale, promptly include in
      any Registration Statement or Prospectus, pursuant to a supplement or
      post-effective amendment if necessary, such information as such Holders
      may reasonably request to have included therein, including, without
      limitation, information relating to the "Plan of Distribution" of the
      Transfer Restricted Securities; and make all required filings of such
      Prospectus supplement or post-effective amendment as soon as reasonably
      practicable after the Issuer is notified of the matters to be included in
      such Prospectus supplement or post-effective amendment;

            (ix) with respect to a Shelf Registration Statement, furnish to each
      selling Holder in connection with such sale, without charge, at least one
      copy of the Registration Statement, as first filed with the Commission,
      and of each amendment thereto, including all documents incorporated by
      reference therein and all exhibits (including exhibits incorporated
      therein by reference);

            (x) with respect to a Shelf Registration Statement, deliver to each
      selling Holder, without charge, as many copies of the Prospectus
      (including each preliminary prospectus) and any amendment or supplement
      thereto as such Holder reasonably may request; the Issuer and the
      Guarantors hereby consent to the use (in accordance with law, rules,
      regulations and orders) of the Prospectus and any amendment or supplement
      thereto by each selling Holder in connection with the public offering and
      the sale of the Transfer Restricted Securities covered by the Prospectus
      or any amendment or supplement thereto;


                                       11


            (xi) upon the request of any Holders who collectively hold an
      aggregate principal amount of Notes in excess of 20% of the outstanding
      Transferred Securities (the "Requesting Holders") enter into an
      underwriting agreement on one occasion and make such representations and
      warranties and take all such other actions in connection therewith as may
      be reasonable and customary in underwritten offerings in order to expedite
      or facilitate the disposition of the Transfer Restricted Securities
      pursuant to any applicable Registration Statement contemplated by this
      Agreement as may be reasonably requested by any Requesting Holders in
      connection with any sale or resale pursuant to any applicable Registration
      Statement. In such connection, the Issuer and the Guarantors shall:

                  (A) upon request of any Requesting Holders furnish (or in the
            case of paragraphs (2) and (3) below, use their best efforts to
            cause to be furnished) to each Requesting Holder, upon Consummation
            of the Exchange Offer or upon the effectiveness of the Shelf
            Registration Statement, as the case may be:

                        (1) a certificate, dated such date, signed on behalf of
                  Michael Foods and each Guarantor by (x) the President or any
                  Vice President and (y) a principal financial or accounting
                  officer of Michael Foods, and such Guarantor, confirming, as
                  of the date thereof, the matters set forth in Section 5(e) of
                  the Purchase Agreement and such other similar matters as such
                  Holders may reasonably request;

                        (2) an opinion, dated the date of Consummation of the
                  Exchange Offer or the date of effectiveness of the Shelf
                  Registration Statement, as the case may be, of counsel for
                  Michael Foods and the Guarantors, covering matters similar to
                  those set forth in paragraph c of Section 5 of the Purchase
                  Agreement and Exhibit C thereto, subject to the same
                  conditions with respect thereto and to the delivery thereof
                  and such other matter as such Requesting Holder may reasonably
                  request which are customarily covered in Issuer counsel
                  opinions to underwriters in underwritten public offerings, and
                  in any event including a statement to the effect that such
                  counsel has participated in conferences with officers and
                  other representatives of the Issuer, after the Merger, Michael
                  Foods, and the Guarantors, representatives of the independent
                  public accountants for the Issuer, after the Merger, Michael
                  Foods, and the Guarantors and have considered the matters
                  required to be stated therein and the statements contained
                  therein, although such counsel has not independently verified
                  the accuracy, completeness or fairness of such statements; and
                  that such counsel advises that, on the basis of the foregoing
                  (relying as to materiality to the extent such counsel deems
                  appropriate upon the statements of officers and other
                  representatives of the Issuer, after the Merger, Michael
                  Foods, and the Guarantors) and without independent check or
                  verification), no facts came to such counsel's attention that
                  caused such counsel to believe that the applicable
                  Registration Statement, at the time such Registration
                  Statement or any post-effective amendment thereto became
                  effective and, in the case of the Exchange Offer


                                       12


                  Registration Statement, as of the date of Consummation of the
                  Exchange Offer, contained an untrue statement of a material
                  fact or omitted to state a material fact required to be stated
                  therein or necessary to make the statements therein not
                  misleading, or that the Prospectus contained in such
                  Registration Statement as of its date and, in the case of the
                  opinion dated the date of Consummation of the Exchange Offer,
                  as of the date of Consummation, contained an untrue statement
                  of a material fact or omitted to state a material fact
                  necessary in order to make the statements therein, in the
                  light of the circumstances under which they were made, not
                  misleading. Without limiting the foregoing, such counsel may
                  state further that such counsel assumes no responsibility for,
                  and has not independently verified, the accuracy, completeness
                  or fairness of the financial statements, notes and schedules
                  and other financial data and statistical data included in any
                  Registration Statement contemplated by this Agreement or the
                  related Prospectus; and

                        (3) a customary comfort letter, dated the date of
                  Consummation of the Exchange Offer, or as of the date of
                  effectiveness of the Shelf Registration Statement, as the case
                  may be, from the Issuer's independent accountants specified in
                  the Purchase Agreement, in the customary form and covering
                  matters of the type customarily covered in comfort letters to
                  underwriters in connection with underwritten public offerings,
                  and covering the matters set forth in the comfort letters
                  delivered pursuant to Section 5(a) of the Purchase Agreement
                  subject to the same conditions with respect thereto and to the
                  delivery thereof; and

                  (B) deliver such other documents and certificates as may be
            reasonably requested by the selling Holders to evidence compliance
            with the matters covered in clause (A) above and with any customary
            conditions contained in the any agreement entered into by the Issuer
            or Michael Foods and the Guarantors pursuant to this clause (xi);

            (xii) prior to any public offering of Transfer Restricted
      Securities, cooperate with the selling Holders and their counsel in
      connection with the registration and qualification of the Transfer
      Restricted Securities under the securities or Blue Sky laws of such
      jurisdictions as the selling Holders may reasonably request and do any and
      all other acts or things necessary or advisable to enable the disposition
      in such jurisdictions of the Transfer Restricted Securities covered by the
      applicable Registration Statement; provided, however, that neither the
      Issuer nor any Guarantor shall be required to register or qualify as a
      foreign corporation where it is not now so qualified or to take any action
      that would subject it to the service of process in suits or to taxation,
      other than as to matters and transactions relating to the Registration
      Statement, in any jurisdiction where it is not now so subject;

            (xiii) in connection with any sale of Transfer Restricted Securities
      that will result in such securities no longer being Transfer Restricted
      Securities, cooperate with the Holders to facilitate the timely
      preparation and delivery of certificates representing


                                       13


      Transfer Restricted Securities to be sold and not bearing any restrictive
      legends; and to register such Transfer Restricted Securities in such
      denominations and such names as the selling Holders may request at least
      two Business Days prior to any sale of such Transfer Restricted
      Securities;

            (xiv) use their respective reasonable best efforts to cause the
      disposition of the Transfer Restricted Securities covered by the
      Registration Statement to be registered with or approved by such other
      governmental agencies or authorities as may be necessary to enable the
      seller or sellers thereof to consummate the disposition of such Transfer
      Restricted Securities, subject to the proviso contained in clause (xii)
      above;

            (xv) provide a CUSIP number for all Transfer Restricted Securities
      not later than the effective date of a Registration Statement covering
      such Transfer Restricted Securities and provide the Trustee under the
      Indenture with certificates for the Transfer Restricted Securities which
      are in a form eligible for deposit with The Depository Trust Company;

            (xvi) otherwise use their respective reasonable best efforts to
      comply with all applicable rules and regulations of the Commission, and
      make generally available to its security holders with regard to any
      applicable Registration Statement, as soon as practicable, a consolidated
      earnings statement meeting the requirements of Rule 158 (which need not be
      audited) covering a twelve-month period beginning after the effective date
      of the Registration Statement (as such term is defined in paragraph (c) of
      Rule 158 under the Act);

            (xvii) cause the Indenture to be qualified under the TIA not later
      than the effective date of the first Registration Statement required by
      this Agreement and, in connection therewith, cooperate with the Trustee to
      effect such changes to the Indenture as may be required for such Indenture
      to be so qualified in accordance with the terms of the TIA; and execute
      and use its best efforts to cause the Trustee to execute, all documents
      that may be required to effect such changes and all other forms and
      documents required to be filed with the Commission to enable such
      Indenture to be so qualified in a timely manner;

            (xviii) provide promptly to each Holder, upon request, each document
      filed with the Commission pursuant to the requirements of Section 13 or
      Section 15(d) of the Exchange Act if not obtainable from the Commission;
      and

            (xix) the Issuer and the Guarantors will be deemed not to have used
      their reasonable best efforts to cause the Exchange Offer Registration
      Statement or the Shelf Registration Statement, as the case may be, to
      become, or to remain, effective during the requisite period if the Issuer
      or any of the Guarantors voluntarily and knowingly takes any action that
      would, or omits to take any action which omission would, result in any
      such Registration Statement not being declared effective or in the Holders
      of Registrable Securities covered thereby not being able to exchange or
      offer and sell such Registrable Securities during that period as and to
      the extent contemplated hereby, unless (i) such action is required by
      applicable law or (ii) such action is taken by the Issuer and the


                                       14


      Guarantors in good faith and for valid business reasons (but not including
      avoidance of the Issuer's or the Guarantors', as applicable, obligations
      hereunder), including a material corporate transaction, so long as the
      Issuer and the Guarantors promptly comply with the requirements of Section
      6(c)(iv) thereof, if applicable.

            (d) Restrictions on Selling Holders. With respect to a Shelf
Registration Statement, each selling Holder agrees by acquisition of a Transfer
Restricted Security that, upon receipt of the notice referred to in Section
6(c)(iii)(C) or any notice from the Issuer of the existence of any fact or the
happening of any event of the kind described in Section 6(c)(iii)(D) hereof or
the Issuer shall issue a notice pending the announcement of a material corporate
transaction that the Shelf Registration Statement is unusable (in each case, a
"Suspension Notice"), such selling Holder will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable Registration
Statement until (i) such selling Holder has received copies of the supplemented
or amended Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such
selling Holder is advised in writing by the Issuer that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the "Recommencement Date"). Each Holder receiving a Suspension Notice
hereby agrees that it will either (i) destroy any Prospectuses, other than
permanent file copies, then in such Holder's possession which have been replaced
by the Issuer with more recently dated Prospectuses or (ii) deliver to the
Issuer (at the Issuer's expense) all copies, other than permanent file copies,
then in such Holder's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Suspension
Notice. The time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by a number of days equal to the number of days in the period from and including
the date of delivery of the Suspension Notice to the date of delivery of the
Recommencement Date.

            Section 7. Registration Expenses. (a) All expenses incident to the
Issuer's and the Guarantors' performance of or compliance with this Agreement
will be borne, jointly and severally, by the Issuer and the Guarantors,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Exchange Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Issuer and the Guarantors and one counsel for
the Holders of Transfer Restricted Securities chosen by the Holders of a
majority of the outstanding Transfer Restricted Securities; (v) all application
and filing fees in connection with listing the Exchange Notes on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; and (vi) all fees and disbursements of independent certified public
accountants of the Issuer and the Guarantors (including the expenses of any
special audit and comfort letters required by or incident to such performance).

            The Issuer will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Issuer or the Guarantors.


                                       15


            (b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Issuer and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Notes into the Exchange Offer and/or selling or
reselling Notes or Exchange Notes pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more
than one counsel, who shall be Shearman & Sterling unless another firm shall be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.

            Section 8. Indemnification. (a) The Issuer and the Guarantors agree,
jointly and severally, to indemnify and hold harmless each Holder, its
directors, officers, any underwriter in any underwritten public offering of
Transfer Restricted Securities pursuant to a Shelf Registration Statement and
each Person, if any, who controls such Holder or underwriter (within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act), from and against
(i) any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment or
supplement thereto) pursuant to which Transfer Restricted Securities are
registered under the Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in light of the circumstances under which they were made, or arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; (ii) any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, provided that (subject to Section 8(d) below) any such
settlement is effected with the written consent of the Issuer and the
Guarantors; and (iii) any and all expenses whatsoever, as incurred (including
the fees and disbursements of counsel chosen by any indemnified party, subject
to the limitations in Section 8(c) below), reasonably incurred in investigating,
preparing or defending against any litigation or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above; provided, however, that this indemnity
agreement shall not apply to any loss, liability, claim, damage or expense to
the extent arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Issuer and the Guarantors by the Initial
Purchasers, such Holder or such underwriter expressly for use in a Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto); provided, further, that the Issuer will not be liable to
any Initial Purchaser, Holder (in its capacity as Holder) or underwriter (or any
person who controls such party within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) with respect to any such untrue statement or
alleged untrue statement or omission or alleged omission


                                       16


made in any preliminary Prospectus to the extent that the Issuer shall sustain
the burden of proving that any such loss, liability, claim, damage or expense
resulted from the fact that such Initial Purchaser, Holder (in its capacity as
Holder) or underwriter, as the case may be, sold Transfer Restricted Securities
to a Person to whom such Initial Purchaser, Holder (in its capacity as Holder)
or underwriter, as the case may be, failed to send or give, at or prior to the
written confirmation of the sale of such Securities a copy of the final
Prospectus (as amended or supplemented) if the Issuer has previously furnished
copies thereof (sufficiently in advance of the closing of such sale to allow for
distribution of the final Prospectus in a timely manner) to such Initial
Purchaser, Holder (in its capacity as Holder) or underwriter, as the case may
be, and the loss, liability, claim, damage or expense of such Initial Purchaser,
Holder (in its capacity as Holder) or underwriter, as the case may be, resulted
solely from an untrue statement or omission or alleged untrue statement or
omission of a material fact contained in or omitted from such preliminary
Prospectus which was corrected in the final Prospectus.

            (b) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Issuer and the Guarantors,
and their respective directors and officers, and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Issuer, or the Guarantors to the same extent as the foregoing
indemnity from the Issuer and the Guarantors set forth in section (a) above, but
only with reference to information relating to such Holder furnished in writing
to the Issuer by such Holder expressly for use in any Registration Statement. In
no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Holder with respect to its sale of
Transfer Restricted Securities pursuant to a Registration Statement exceeds (i)
the amount paid by such Holder for such Transfer Restricted Securities and (ii)
the amount of any damages that such Holder, its directors, officers or any
Person who controls such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.

            (c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying person") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party within a reasonable period of time after notification by the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised


                                       17


by such counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the indemnifying
party (in which case the indemnifying party shall not have the right to assume
the defense of such action on behalf of the indemnified party). In any such
case, the indemnifying party shall not, in connection with any one action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all indemnified parties and all such fees and expenses
shall be reimbursed promptly following receipt of invoice therefor as they are
incurred. Such firm shall be designated in writing by a majority of the Holders,
in the case of the parties indemnified pursuant to Section 8(a), and by the
Issuer and Guarantors, in the case of parties indemnified pursuant to Section
8(b). The indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final non-appealable judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
8(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the final terms of such proposed settlement as soon as practicable
prior to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.

            (d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Issuer and
the Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Issuer and the Guarantors, on
the one hand, and of the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Issuer and the Guarantors, on the one
hand, and of the Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer or such Guarantor, on the one hand, or by the


                                       18


Holder, on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and judgments referred to above shall be deemed to include,
subject to the limitations set forth in the third sentence of Section 8(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.

            The Issuer, the Guarantors and each Holder agree that it would not
be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any matter,
including any action that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section 8, no
Holder, its directors, its officers or any Person, if any, who controls such
Holder shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the total received by such Holder with respect to the
sale of Transfer Restricted Securities pursuant to a Registration Statement
exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 8(c) are several in proportion to the respective principal amount of
Transfer Restricted Securities held by each Holder hereunder and not joint.

            Section 9. Rule 144a and Rule 144. The Issuer and each Guarantor
agree with each Holder, for so long as any Transfer Restricted Securities remain
outstanding and during any period in which the Issuer (i) is not subject to
Section 13 or 15(d) of the Exchange Act, to make available within a reasonable
period of time, upon written request of any Holder, to such Holder or beneficial
owner of Transfer Restricted Securities in connection with any sale thereof and
any prospective purchaser of such Transfer Restricted Securities designated by
such Holder or beneficial owner, the information required by Rule 144A(d)(4)
under the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A, and (ii) is subject to Section 13 or 15 (d) of the
Exchange Act, to make all filings required thereby in a timely manner in order
to permit resales of such Transfer Restricted Securities pursuant to Rule 144.

            Section 10. Miscellaneous. (a) Remedies. The Issuer and the
Guarantors acknowledge and agree that any failure by the Issuer and/or the
Guarantors to comply with their respective obligations under Sections 3 and 4
hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Issuer's and the Guarantors'
obligations under Sections 3 and 4 hereof.


                                       19


The Issuer and the Guarantors further agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.

            (b) No Inconsistent Agreements. Neither the Issuer nor any Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Issuer nor any Guarantor has previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Issuer's and
the Guarantors' securities under any agreement in effect on the date hereof.

            (c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Issuer has obtained the written consent of
Holders of all outstanding Transfer Restricted Securities and (ii) in the case
of all other provisions hereof, the Issuer has obtained the written consent of
Holders of a majority of the outstanding principal amount of Transfer Restricted
Securities (excluding Transfer Restricted Securities held by the Issuer or its
Affiliates). Notwithstanding the foregoing, a waiver or consent to departure
from the provisions hereof that relates exclusively to the rights of Holders
whose Transfer Restricted Securities are being tendered pursuant to the Exchange
Offer, and that does not affect directly or indirectly the rights of other
Holders whose Transfer Restricted Securities are not being tendered pursuant to
such Exchange Offer, may be given by the Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities subject to such
Exchange Offer.

            (d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Issuer and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.

            (e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:

            (1) if to a Holder, at the address set forth on the records of the
      Registrar under the Indenture, with a copy to the Registrar under the
      Indenture; and

            (2) (i)  If to the Issuer prior to the Merger:

                     Michael Foods Acquisition Corp.
                     c/o Vestar Capital Partners IV, L.P.
                     1225 Seventeenth Street, Suite 1660
                     Denver, CO  80202
                     Attention:  J. Christopher Henderson


                                       20


                (ii) If to the Issuer or the Guarantors after the Merger

                     Michael Foods, Inc.
                     Suite 324
                     Signal Bank Building
                     5353 Wayzata Blvd.
                     Minneapolis, MN  55416
                     Attention:  John D. Reedy

                     With a copy, in either case, to:

                     Kirkland & Ellis
                     Aon Center
                     200 East Randolph Drive
                     Chicago, IL  60601
                     Attention:  Dennis M. Myers

            All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.

            Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

            (f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Person shall be entitled to receive the benefits hereof.

            (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. This Agreement shall
become effective upon the execution of a counterpart by each of the Issuer and
the Initial Purchasers. Upon execution hereof a counterpart by each Guarantor
upon consummation of the Merger, such Guarantor shall, without further action,
become a party hereto and such Guarantor shall be bound by the provisions
hereof.


                                       21


            (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

            (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

            (j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

            (k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.


                                       22


            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

                                   MICHAEL FOODS ACQUISITION CORP.

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


                                   BANC OF AMERICA SECURITIES LLC

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


                                   BEAR, STEARNS & CO. INC.

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



                                   FARM FRESH FOODS, INC.

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


                                   FARM FRESH FOODS OF NEVADA, INC.

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


                                   KOHLER MIX SPECIALTIES OF CONNECTICUT, INC.

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


                                   MICHAEL FOODS OF DELAWARE, INC.

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


                                   CASA TRUCKING, INC.

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



                                   CRYSTAL FARMS REFRIGERATED DISTRIBUTION CO.

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


                                   KOHLER MIX SPECIALTIES, INC

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


                                   MIDWEST MIX, INC.

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


                                   MINNESOTA PRODUCTS, INC.

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


                                   PAPETTI'S HYGRADE EGG PRODUCTS, INC.

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



                                   NORTHERN STAR CO.

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


                                   M.G. WALDBAUM COMPANY

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


                                   PAPETTI ELECTROHEATING
                                   CORPORATION

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


                                   WFC, INC

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


                                   WISCO FARM COOPERATIVE

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



                                                                      SCHEDULE A

                      Subsidiaries of Michael Foods, Inc.

Casa Trucking, Inc.

Crystal Farms Refrigerated Distribution Company

Farm Fresh Foods, Inc.

Farm Fresh Foods of Nevada, Inc.

Kohler Mix Specialties, Inc.

Kohler Mix Specialties of Connecticut, Inc.

M.G. Waldbaum Company

Michael Foods of Delaware, Inc.

Midwest Mix, Inc.

Minnesota Products, Inc.

Northern Star Co.

Papetti Electroheating Corporation

Papetti's Hygrade Egg Products, Inc.

WFC, Inc.

Wisco Farm Cooperative

EX-4.6

                                                                     Exhibit 4.6

                                                                  EXECUTION COPY

================================================================================

                    COLLATERAL PLEDGE AND SECURITY AGREEMENT

                           Dated as of March 27, 2001

                                     Among

                        MICHAEL FOODS ACQUISITION CORP.,

                                  as Pledgor,

                        BANC OF AMERICA SECURITIES LLC,

                           BNY MIDWEST TRUST COMPANY

                                  as Trustee,

                                      and

                           BNY MIDWEST TRUST COMPANY

               as Collateral Agent and as Securities Intermediary

================================================================================



                    COLLATERAL PLEDGE AND SECURITY AGREEMENT

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

                              W I T N E S S E T H

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

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

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

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


                                       2


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

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

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

                                   AGREEMENT

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

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

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

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

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

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

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


                                       3


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

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

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

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

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

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

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

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

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


                                       4


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

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

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

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

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

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

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


                                       5


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

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

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

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

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

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

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

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


                                       6


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

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

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

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

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

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

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

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


                                       7


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

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

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

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


                                       8


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

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

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

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

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

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

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


                                       9


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

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

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

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

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

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


                                       10


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

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

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

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

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

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

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

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


                                       11


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

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

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

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

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

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

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

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

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


                                       12


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

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

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

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

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


                                       13


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

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

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

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

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

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


                                       14


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

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

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

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


                                       15


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

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

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

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

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

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

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

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

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

            SECTION 17. Miscellaneous Provisions.

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


                                       16


                  if to the Pledgor:

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

                  if to the Trustee:

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

                  if to the Collateral Agent:

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

                  if to the Securities Intermediary:

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

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

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

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


                                       17


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

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

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

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

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

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

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


                                       18


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

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

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

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

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


                                       19


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

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

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

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

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

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


                                       20


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

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

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

                    [REMAINDER OF PAGE INTENTIONALLY BLANK]


                                       21


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

                                   Pledgor:

                                   MICHAEL FOODS, ACQUISITION CORP.

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


                                   Trustee:

                                   BNY MIDWEST TRUST COMPANY

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


                                   Collateral Agent:

                                   BNY MIDWEST TRUST COMPANY

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


                                   Securities Intermediary:

                                   BNY MIDWEST TRUST COMPANY

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


                                       22


                                   BANC OF AMERICA SECURITIES LLC

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



                                                                       EXHIBIT A

                           [Form of Vestar Agreement]



                                                                       EXHIBIT B

                     [Form of First Supplemental Indenture]



                                                                       EXHIBIT C

                      [Draft Opinion of Kirkland & Ellis]

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

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

EX-10.1

                                                                EXHIBIT 10.1

                                                                EXECUTION COPY






                                CREDIT AGREEMENT

                           Dated as of April 10, 2001

                                      among

                               MICHAEL FOODS, INC.
                                  as Borrower,

                             M-FOODS HOLDINGS, INC.

                                       and

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

                                   THE LENDERS
                         FROM TIME TO TIME PARTY HERETO,

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

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

                                       and

                              BEAR, STEARNS & CO.,
                              as Syndication Agent








                                TABLE OF CONTENTS

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



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



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







                               SCHEDULES

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

                               EXHIBITS

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






                                CREDIT AGREEMENT

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

                               W I T N E S S E T H

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

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

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


                                    SECTION 1

                                   DEFINITIONS

                  1.1      DEFINITIONS.

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

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

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

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



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

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

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

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

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

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

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

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

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

                                       2





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


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

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


                                       3


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

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

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

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

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

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

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

                                       4


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

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

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

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

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

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

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

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

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

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

                                       5


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

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

                                       6


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

                  "CLOSING DATE" means the date hereof.

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

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

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

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

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

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


                                       7


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

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

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

                                       8


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

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

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

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

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

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

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

                                       9


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

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

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

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

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

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

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

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

                                       10


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

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

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

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

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

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

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

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

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

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

                                       11


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

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

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

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

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

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

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

                                       12


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

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

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

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

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

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

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

                                       13


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

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

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

                                       14


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

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

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

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

                                       15


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

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

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

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

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

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

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

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

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

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

                                       16


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

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

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

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

                                       17


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

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

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

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

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

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

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

                                       18


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

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

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

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

                                       19


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

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

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

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

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

                                       20


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

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

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

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

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

                  "ISSUING LENDER" means Bank of America.

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

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

                                       21


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

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

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

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

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

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

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

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

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

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

                                       22


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

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

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

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

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

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

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

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

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

                                       23


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

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

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

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

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

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

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

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

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

                                       24


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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       25


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

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

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

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

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

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

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

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

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

                                       26


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

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

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

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

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

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

                                       27


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

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

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

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

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

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

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

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

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

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

                                       28


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

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

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

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

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

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

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

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

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

                                       29


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

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

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

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

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

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

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

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

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

                                       30


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

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

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

                  "SWINGLINE LENDER" means Bank of America.

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

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

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

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

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

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


                                       31


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

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

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

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

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

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

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

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

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

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

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


                                       32


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

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

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

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

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

                  1.2      COMPUTATION OF TIME PERIODS.

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

                  1.3      ACCOUNTING TERMS.

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


                                       33


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

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


                                    SECTION 2

                                CREDIT FACILITIES

                  2.1      REVOLVING LOANS.

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


                                       34


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

                  (b)      REVOLVING LOAN BORROWINGS.

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

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

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


                                       35


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

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

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

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

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

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

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

                  2.2      LETTER OF CREDIT SUBFACILITY.

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


                                       36


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

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

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

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


                                       37


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

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


                                       38


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

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

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

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


                                       39


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

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

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

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

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


                                       40


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

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

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

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

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

                  2.3      SWINGLINE LOAN SUBFACILITY.

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


                                       41


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

                  (b)      SWINGLINE LOAN ADVANCES.

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

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

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


                                       42


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

                  (c)      INTEREST ON SWINGLINE LOANS.

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

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

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

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

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

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


                                       43


                  2.4      TRANCHE A TERM LOAN.

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

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

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

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




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

                                      


                                       44


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


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

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

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

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

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


                                       45



                  2.5      TRANCHE B TERM LOAN.

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

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

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

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

                                       46





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


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

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

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

                                       47


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

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


                                    SECTION 3

                 OTHER PROVISIONS RELATING TO CREDIT FACILITIES

                  3.1      DEFAULT RATE.

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

                  3.2      EXTENSION AND CONVERSION.

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

                                       48


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

                  3.3      PREPAYMENTS.

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

                  (b)      MANDATORY PREPAYMENTS.

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

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

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

                                       49


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

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

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

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

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

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

                                       50


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

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

                                       51


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

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

                  3.4      TERMINATION AND REDUCTION OF REVOLVING COMMITTED
         AMOUNT.

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

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

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

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

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

                  3.5      FEES.

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

                                       52


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

                  (b)      LETTER OF CREDIT FEES.

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

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

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

                                       53


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

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

                  3.6      CAPITAL ADEQUACY.

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

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

                  3.7      LIMITATION ON EURODOLLAR LOANS.

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

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

                                       54


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

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

                  3.8      ILLEGALITY.

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

                  3.9      REQUIREMENTS OF LAW.

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

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

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

                                       55


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

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

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

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

                  3.10     TREATMENT OF AFFECTED LOANS.

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

                                       56


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

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

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

                  3.11     TAXES.

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

                                       57


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

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

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

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

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

                                       58


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

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

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

                  3.12     COMPENSATION.

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

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

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

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

                                       59


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

                  3.13     PRO RATA TREATMENT.

         Except to the extent otherwise provided herein:

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

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

                                       60


                  3.14     SHARING OF PAYMENTS.

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

                  3.15     PAYMENTS, COMPUTATIONS, ETC.

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

                                       61


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

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

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

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

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

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

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

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

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

                                       62


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

                  3.16     EVIDENCE OF DEBT.

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

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

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

                  3.17     REPLACEMENT OF AFFECTED LENDERS.

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


                                       63


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

                                    SECTION 4

                                    GUARANTY

                  4.1      THE GUARANTY.

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


                                       64


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

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

                  4.2      OBLIGATIONS UNCONDITIONAL.

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

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

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

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

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

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


                                       65


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

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

                  4.3      REINSTATEMENT.

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

                  4.4      CERTAIN ADDITIONAL WAIVERS.

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

                  4.5      REMEDIES.

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


                                       66


                  4.6      RIGHTS OF CONTRIBUTION.

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


                                       67


                  4.7      GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.

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

                                    SECTION 5

                                   CONDITIONS

                  5.1      CLOSING CONDITIONS.

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

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

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

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

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

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

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


                                       68


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

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

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

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

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

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

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

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

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

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

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

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

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


                                       69


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

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

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

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

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

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


                                       70


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

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

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

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

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

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


                                       71


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

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

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

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


                                       72


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

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

                  5.2      CONDITIONS TO ALL EXTENSIONS OF CREDIT.

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

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

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

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

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

                                    SECTION 6

                         REPRESENTATIONS AND WARRANTIES

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

                  6.1      FINANCIAL CONDITION.

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


                                       73


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

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

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

                  6.2      NO MATERIAL CHANGE.

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


                                       74


                  6.3      ORGANIZATION AND GOOD STANDING.

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

                  6.4      POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.

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

                  6.5      NO CONFLICTS.

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


                                       75


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

                  6.6      NO DEFAULT.

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

                  6.7      OWNERSHIP.

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

                  6.8      INDEBTEDNESS.

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

                  6.9      LITIGATION.

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

                  6.10     TAXES.

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


                                       76


                  6.11     COMPLIANCE WITH LAW.

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

                  6.12     ERISA.

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

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

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

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


                                       77



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

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

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

                  6.13     CORPORATE STRUCTURE; CAPITAL STOCK, ETC.

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

                  6.14     GOVERNMENTAL REGULATIONS, ETC.

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

                                       78


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

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

                  6.15     PURPOSE OF LOANS AND LETTERS OF CREDIT.

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

                  6.16     ENVIRONMENTAL MATTERS.

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

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

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

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

                                       79


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

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

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

                  6.17     INTELLECTUAL PROPERTY.

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

                  6.18     SOLVENCY.

         The Credit Parties are Solvent on a consolidated basis.

                  6.19     INVESTMENTS.

         All Investments of each Consolidated Party are Permitted Investments.

                                       80


                  6.20     BUSINESS LOCATIONS.

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

                  6.21     DISCLOSURE.

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

                  6.22     BROKERS' FEES.

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

                  6.23     LABOR MATTERS.

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

                  6.24     NATURE OF BUSINESS.

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


                                    SECTION 7

                              AFFIRMATIVE COVENANTS

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

                                       81


                  7.1      INFORMATION COVENANTS.

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

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

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

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

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

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

                                       82


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

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

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

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

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

                                       83


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

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

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

                                       84


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

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

                  7.2      PRESERVATION OF EXISTENCE AND FRANCHISES.

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

                  7.3      BOOKS AND RECORDS.

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

                  7.4      COMPLIANCE WITH LAW.

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

                  7.5      PAYMENT OF TAXES AND OTHER CLAIMS.

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

                                       85


                  7.6      INSURANCE.

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

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

                  7.7      MAINTENANCE OF PROPERTY.

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

                                       86


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

                  7.8      USE OF PROCEEDS.

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

                  7.9      AUDITS/INSPECTIONS.

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

                  7.10     FINANCIAL COVENANTS.

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




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


                                       87


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




         ------------------------------------------------------------------------------------------------------------
              FISCAL YEAR             MARCH 31              JUNE 30           SEPTEMBER 30          DECEMBER 31
         ------------------------------------------------------------------------------------------------------------
                                                                                       
                  2001                   NA              2.00 to 1.00         2.00 to 1.00         2.00 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2002              2.00 to 1.00         2.00 to 1.00         2.00 to 1.00         2.00 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2003              2.00 to 1.00         2.00 to 1.00         2.00 to 1.00         2.25 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2004              2.25 to 1.00         2.25 to 1.00         2.25 to 1.00         2.50 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2005              2.50 to 1.00         2.50 to 1.00         2.50 to 1.00         2.75 to 1.00
         ------------------------------------------------------------------------------------------------------------
               THEREAFTER           2.75 to 1.00         2.75 to 1.00         2.75 to 1.00         2.75 to 1.00
         ------------------------------------------------------------------------------------------------------------


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




         ------------------------------------------------------------------------------------------------------------
              FISCAL YEAR             MARCH 31              JUNE 30           SEPTEMBER 30          DECEMBER 31
         ------------------------------------------------------------------------------------------------------------
                                                                                       
                  2001                   NA              1.00 to 1.00         1.00 to 1.00         1.00 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2002              1.00 to 1.00         1.00 to 1.00         1.00 to 1.00         1.00 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2003              1.00 to 1.00         1.00 to 1.00         1.00 to 1.00         1.05 to 1.00
         ------------------------------------------------------------------------------------------------------------
                  2004              1.05 to 1.00         1.05 to 1.00         1.05 to 1.00         1.10 to 1.00
         ------------------------------------------------------------------------------------------------------------
               THEREAFTER           1.10 to 1.00         1.10 to 1.00         1.10 to 1.00         1.10 to 1.00
         ------------------------------------------------------------------------------------------------------------


                  7.11     ADDITIONAL GUARANTORS.

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

                  7.12     PLEDGED ASSETS.

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

                                       88


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

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

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

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

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

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

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

                                       89


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

                  7.13     INTEREST RATE PROTECTION.

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

                  7.14     FURTHERANCE ASSURANCES.

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

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

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

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


                                    SECTION 8

                               NEGATIVE COVENANTS

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

                                       90


                  8.1      INDEBTEDNESS.

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

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

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

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

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

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

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

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

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

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

                                       91


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

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

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

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

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

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

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

                  8.2      LIENS.

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

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

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

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

                                       92


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

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

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

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

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

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

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

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

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

                                       93


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

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

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

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

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

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

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

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

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

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

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

                                       94


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

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

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

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

                  8.3      NATURE OF BUSINESS.

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

                  8.4      CONSOLIDATION, MERGER, DISSOLUTION, ETC.

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

                  8.5      ASSET DISPOSITIONS.

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

                                       95


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

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

                  8.6      INVESTMENTS.

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

                  (a)      Investments consisting of cash and Cash Equivalents;

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

                                       96


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

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

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

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

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

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

                                       97


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

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

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

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

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

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

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

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

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

                                       98


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

                  8.7      RESTRICTED PAYMENTS.

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

                                       99


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

                  8.8      OTHER INDEBTEDNESS.

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

                  8.9      TRANSACTIONS WITH AFFILIATES.

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

                                      100


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

                  8.10     FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; DAIRY
         RESTRUCTURING DOCUMENTS.

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

                  8.11     LIMITATION ON RESTRICTED ACTIONS.

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

                  8.12     OWNERSHIP OF SUBSIDIARIES.

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

                                      101


Subsidiaries except as a result of or in connection with a dissolution, merger,
consolidation or disposition of a Subsidiary not prohibited by Section 8.4 or
Section 8.5, (ii) permit the Credit Parties to own directly or indirectly less
than 90% of the Voting Stock of any of the Foreign Subsidiaries except (A) to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock of
Foreign Subsidiaries or (B) as a result of or in connection with a dissolution,
merger, consolidation or disposition of a Subsidiary not prohibited by Section
8.4 or Section 8.5, (iii) prior to any Asset Disposition of all of the Capital
Stock or all or substantially all of the Property of Dairy LLC, permit any
Person other than the Credit Parties or Dairy Holdco to own any Capital Stock of
Dairy LLC, (iv) prior to any Asset Disposition of all of the Capital Stock or
all or substantially all of the Property of Dairy TXCT LLC, permit any Person
other than the Credit Parties or Dairy Holdco to own any Capital Stock of Dairy
TXCT LLC, (v) except as permitted by Section 8.6, permit any Subsidiary of the
Borrower to issue or have outstanding any shares of preferred Capital Stock
other than Qualified Preferred Stock or (vi) create, incur, assume or suffer to
exist any Lien on any Capital Stock of any Subsidiary of the Borrower required
to pledged to the Agent pursuant to the terms of Section 7.12, except for
Permitted Liens.

                  8.13     SALE LEASEBACKS.

         The Credit Parties will not permit any Consolidated Party to enter into
any Sale and Leaseback Transaction; PROVIDED, HOWEVER, the Borrower and its
Subsidiaries may enter into Sale and Leaseback Transactions so long as the fair
market value of all Properties subject to such transactions occurring on or
after the Closing Date does not exceed $25,000,000.

                  8.14     NO FURTHER NEGATIVE PLEDGES.

         The Credit Parties will not permit any Consolidated Party to enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the existence of any Lien upon any of its Property in favor of the
Agent (for the benefit of the Lenders) for the purpose of securing the Credit
Party Obligations, whether now owned or hereafter acquired, or requiring the
grant of any security for any obligation if such Property is given as security
for the Credit Party Obligations, except (a) in connection with any document or
instrument governing Indebtedness incurred pursuant to Section 8.1(c), PROVIDED
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (b) in connection with any
Permitted Lien or any document or instrument governing any Permitted Lien,
PROVIDED that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien, (c) pursuant to customary restrictions
and conditions contained in any agreement relating to any Permitted Asset
Disposition, pending the consummation of such sale, (d) customary non-assignment
provisions in contracts, (e) the documentation governing or evidencing the
Existing Notes, (f) agreements entered into by to Foreign Subsidiaries or (g)
Property consisting of Capital Stock in Joint Ventures.

                                      102



                                    SECTION 9

                                EVENTS OF DEFAULT


                  9.1      EVENTS OF DEFAULT.

         An Event of Default shall exist upon the occurrence and during the
continuance of any of the following specified events (each an "EVENT OF
DEFAULT"):

                  (a)      PAYMENT.  Any Credit Party shall

                           (i)      default in the payment when due of any
                  principal of any of the Loans or of any reimbursement
                  obligations arising from drawings under Letters of Credit, or

                           (ii)     default, and such default shall continue for
                  five (5) or more Business Days, in the payment when due of any
                  interest on the Loans or of any interest on reimbursement
                  obligations arising from drawings under Letters of Credit, or
                  of any Fees or other amounts owing hereunder, under any of the
                  other Credit Documents or in connection herewith or therewith;
                  or

                  (b)      REPRESENTATIONS. Any representation, warranty or
         statement made or deemed to be made by any Credit Party herein, in any
         of the other Credit Documents, or in any statement or certificate
         delivered or required to be delivered pursuant hereto or thereto shall
         prove untrue in any material respect on the date as of which it was
         deemed to have been made; or

                  (c)      COVENANTS.  Any Credit Party shall

                           (i)      default in the due performance or observance
                  of any term, covenant or agreement contained in Sections 7.2
                  (with respect to corporate existence), 7.8, 7.10, 7.11 or 7.12
                  or Section 8; or

                           (ii)     default in the due performance or observance
                  by it of any term, covenant or agreement (other than those
                  referred to in subsections (a), (b) or (c)(i) of this Section
                  9.1) contained in this Credit Agreement or any other Credit
                  Document and such default shall continue unremedied for a
                  period of at least 30 days after notice thereof by the Agent;
                  or

                  (d)      OTHER CREDIT DOCUMENTS. Except as a result of or in
         connection with a dissolution, merger or disposition of a Subsidiary
         not prohibited by Section 8.4 or Section 8.5, any Credit Document shall
         fail to be in full force and effect (other than in accordance with its
         terms) or to give the Agent and/or the Lenders the Liens, material
         rights, powers and privileges purported to be created thereby, or any
         Credit Party (or, in the case of the Investor Pledge Agreement, Dairy
         Holdco) shall so state in writing; or

                                      103


                  (e)      GUARANTIES. Except as the result of or in connection
         with a dissolution, merger or disposition of a Subsidiary not
         prohibited by Section 8.4 or Section 8.5, the guaranty given by any
         Guarantor hereunder (including any Person after the Closing Date in
         accordance with Section 7.11) or any provision thereof shall cease to
         be in full force and effect, or any Guarantor (including any Person
         after the Closing Date in accordance with Section 7.11) hereunder or
         any Person acting by or on behalf of such Guarantor shall deny or
         disaffirm such Guarantor's obligations under such guaranty, or any
         Guarantor shall default (beyond any applicable grace period) in the due
         performance or observance of any term, covenant or agreement on its
         part to be performed or observed pursuant to any guaranty; or

                  (f)      BANKRUPTCY, ETC. Any Bankruptcy Event shall occur
         with respect to any Consolidated Party; or

                  (g)      DEFAULTS UNDER OTHER INDEBTEDNESS. With respect to
         any Indebtedness (other than Indebtedness outstanding under this Credit
         Agreement and the Existing Notes) in excess of $10,000,000 in the
         aggregate principal amount for the Consolidated Parties taken as a
         whole, (A) either (1) default in any payment shall occur and continue
         (beyond the applicable grace period with respect thereto, if any) with
         respect to any such Indebtedness (other than as a result of
         subordination provisions invoked by the Lenders), or (2) a default in
         the observance or performance relating to such Indebtedness or
         contained in any instrument or agreement evidencing, securing or
         relating thereto, or any other event or condition shall occur or exist,
         the effect of which default or other event or condition is to cause, or
         permit, the holder or holders of such Indebtedness (or trustee or agent
         on behalf of such holders) to cause (determined without regard to
         whether any notice or lapse of time is required), any such Indebtedness
         to become due prior to its stated maturity; or (B) any such
         Indebtedness shall be declared due and payable, or required to be
         prepaid other than by a regularly scheduled required prepayment, prior
         to the stated maturity thereof; or

                  (h)      JUDGMENTS. One or more judgments or decrees shall be
         entered against one or more of the Consolidated Parties involving a
         liability of $10,000,000 or more in the aggregate (to the extent not
         paid or covered by insurance provided by a carrier who has not
         disclaimed coverage and has the ability to perform) and any such
         judgments or decrees shall not have been paid, vacated, discharged or
         stayed or bonded pending appeal within 60 days from the entry thereof;
         or

                  (i)      ERISA. Any of the following events or conditions, if
         such event or condition could reasonably be expected to result in
         liability that would have a Material Adverse Effect: (i) any
         "accumulated funding deficiency," as such term is defined in Section
         302 of ERISA and Section 412 of the Code, whether or not waived, shall
         exist with respect to any Plan, or any lien shall arise on the assets
         of any Consolidated Party or any ERISA Affiliate in favor of the PBGC
         or a Plan; (ii) an ERISA Event shall occur with respect to a Single
         Employer Plan, which is, in the reasonable opinion of the Agent, likely
         to result in the termination of such Plan for purposes of Title IV of
         ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer
         Plan or Multiple Employer Plan, which is, in the reasonable opinion of
         the Agent, likely to result in (A) the termination of such Plan for
         purposes of Title IV of ERISA, or (B) any Consolidated Party or any
         ERISA Affiliate incurring any liability in connection with a withdrawal
         from, reorganization of (within the

                                      104


         meaning of Section 4241 of ERISA), or insolvency (within the meaning of
         Section 4245 of ERISA) of such Plan; or (iv) any prohibited transaction
         (within the meaning of Section 406 of ERISA or Section 4975 of the
         Code) or breach of fiduciary responsibility shall occur which may
         subject any Consolidated Party or any ERISA Affiliate to any liability
         under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
         the Code, or under any agreement or other instrument pursuant to which
         any Consolidated Party or any ERISA Affiliate has agreed or is required
         to indemnify any person against any such liability; or

                  (j)      SUBORDINATED FINANCINGS. (i) There shall occur and be
         continuing any "Event of Default" (or any comparable term) under, and
         as defined in, any Junior Financing Documentation, (ii) any of the
         Credit Party Obligations for any reason shall cease to be "Designated
         Senior Debt" (or any comparable term) under, and as defined in, any
         Junior Financing Documentation, (iii) any Indebtedness other the Credit
         Party Obligations shall constitute "Designated Senior Debt" (or any
         comparable term) under, and as defined in, any Junior Financing
         Documentation or (iv) the subordination provisions set forth in Article
         10 and Section 11.02 of the Subordinated Debt Indenture (or comparable
         provisions in any other Junior Financing Documentation) shall, in whole
         or in part, terminate, cease to be effective or cease to be legally
         valid, binding and enforceable against any holder of the applicable
         Subordinated Debt or Qualified Preferred Stock (other than in
         accordance with their respective terms); or

                  (k)      OWNERSHIP. (i) There shall occur a Change of Control
         or (ii) prior to any Asset Disposition of all of the Capital Stock or
         all or substantially all of the Property of Dairy LLC and Dairy TXCT
         LLC in one or more transactions permitted under Section 8.5, the
         Capital Stock of Dairy Holdco shall fail to be owned, directly or
         indirectly, substantially by the same Persons that own, directly and
         indirectly, the Capital Stock of the Parent.

                  9.2      ACCELERATION; REMEDIES.

         Upon the occurrence and during the continuance of an Event of Default,
the Agent, upon the request and direction of the Required Lenders, shall, by
written notice to the Credit Parties take any of the following actions:

                  (a)      TERMINATION OF COMMITMENTS. Declare the Commitments
         terminated whereupon the Commitments shall be immediately terminated.

                  (b)      ACCELERATION. Declare the Credit Party Obligations to
         be due and payable, whereupon the same shall be immediately due and
         payable without presentment, demand, protest or other notice of any
         kind, all of which are hereby waived by the Credit Parties.

                  (c)      CASH COLLATERAL. Direct the Borrower to pay (and the
         Borrower hereby promises to pay, upon receipt of such notice) to the
         Agent additional cash, to be held by the Agent, for the benefit of the
         Lenders, in a cash collateral account as additional security for the
         LOC Obligations in respect of subsequent drawings under all then
         outstanding Letters of Credit in an amount equal to the maximum
         aggregate amount which may be drawn under all Letters of Credits then
         outstanding.

                                      105


                  (d)      ENFORCEMENT OF RIGHTS. Enforce any and all rights and
         interests created and existing under the Credit Documents including,
         without limitation, all rights and remedies existing under the
         Collateral Documents, all rights and remedies against a Guarantor and
         all rights of set-off.

         Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then, without the
giving of any notice or other action by the Agent or the Lenders, (i) the
Commitments automatically shall terminate, (ii) all of the outstanding Credit
Party Obligations automatically shall immediately become due and payable and
(iii) the Borrower automatically shall be obligated (and hereby promises) to pay
to the Agent additional cash, to be held by the Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then outstanding Letters
of Credit in an amount equal to the maximum aggregate amount which may be drawn
under all Letters of Credits then outstanding.


                                   SECTION 10

                                AGENCY PROVISIONS

                  10.1     APPOINTMENT, POWERS AND IMMUNITIES.

                  (a)      Each Lender hereby irrevocably appoints and
         authorizes the Agent to act as its agent under this Credit Agreement
         and the other Credit Documents with such powers and discretion as are
         specifically delegated to the Agent by the terms of this Credit
         Agreement and the other Credit Documents, together with such other
         powers as are reasonably incidental thereto. The Agent (which term as
         used in this sentence and in Section 10.5 and the first sentence of
         Section 10.6 hereof shall include its Affiliates and its own and its
         Affiliates' officers, directors, employees, and agents): (i) shall not
         have any duties or responsibilities except those expressly set forth in
         this Credit Agreement and shall not be a trustee or fiduciary for any
         Lender; (ii) shall not be responsible to the Lenders for any recital,
         statement, representation, or warranty (whether written or oral) made
         in or in connection with any Credit Document or any certificate or
         other document referred to or provided for in, or received by any of
         them under, any Credit Document, or for the value, validity,
         effectiveness, genuineness, enforceability, or sufficiency of any
         Credit Document, or any other document referred to or provided for
         therein or for any failure by any Credit Party or any other Person to
         perform any of its obligations thereunder; (iii) shall not be
         responsible for or have any duty to ascertain, inquire into, or verify
         the performance or observance of any covenants or agreements by any
         Credit Party or the satisfaction of any condition or to inspect the
         Property (including the books and records) of any Credit Party or any
         of its Subsidiaries or Affiliates; and (iv) shall not be responsible
         for any action taken or omitted to be taken by it under or in
         connection with any Credit Document, except for its own gross
         negligence, bad faith or willful misconduct. The Agent may employ
         agents and attorneys-in-fact and shall not be responsible for the
         negligence or misconduct of any such agents or attorneys-in-fact
         selected by it with reasonable care.

                                      106


                  (b)      The Issuing Lender shall act on behalf of the Lenders
         with respect to any Letters of Credit issued by it and the documents
         associated therewith until such time (and except for so long) as the
         Agent may agree at the request of the Required Lenders to act for the
         Issuing Lender with respect thereto; PROVIDED, HOWEVER, that the
         Issuing Lender shall have all of the benefits and immunities (i)
         provided to the Agent in this Section 10 with respect to any acts taken
         or omissions suffered by the Issuing Lender in connection with Letters
         of Credit issued by it or proposed to be issued by it and the
         application and agreements for letters of credit pertaining to the
         Letters of Credit as fully as if the term "Agent" as used in this
         Section 10 included the Issuing Lender with respect to such acts or
         omissions, and (ii) as additionally provided herein with respect to the
         Issuing Lender.

                  10.2     RELIANCE BY AGENT.

         The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; PROVIDED, HOWEVER,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking any such action.

                  10.3     DEFAULTS.

         The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or a Credit Party specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall (subject to Section 10.2 hereof) take such action with respect to such
Default or Event of Default as shall reasonably be directed by the Required
Lenders (or such other Lenders as required by Section 11.6), PROVIDED THAT,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.

                  10.4     RIGHTS AS A LENDER.

         With respect to its Commitment and the Loans made by it, Bank of
America (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and

                                      107


powers hereunder as any other Lender and may exercise the same as though it were
not acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. Bank
of America (and any successor acting as Agent) and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Credit Party or any of its
Subsidiaries or Affiliates as if it were not acting as Agent, and Bank of
America (and any successor acting as Agent) and its Affiliates may accept fees
and other consideration from any Credit Party or any of its Subsidiaries or
Affiliates for services in connection with this Credit Agreement or otherwise
without having to account for the same to the Lenders.

                  10.5     INDEMNIFICATION.

         The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Credit
Parties under such Section) ratably (in accordance with their respective (i)
Revolving Commitments (or, if the Revolving Commitments have been terminated,
the outstanding Revolving Loans and Participation Interests in Letters of Credit
(including the Participation Interests of the Issuing Lender in Letters of
Credit)), (ii) outstanding Tranche A Term Loans (and Participation Interests
therein) and (iii) outstanding Tranche B Term Loans (and Participation Interests
therein)) for, and hold the Agent harmless from and against, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Agent (including by any Lender) in any way relating to or arising out of any
Credit Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Credit Document; PROVIDED that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence, bad faith or willful misconduct of the Person to be indemnified.
Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs or expenses payable by
the Credit Parties under Section 11.5, to the extent that the Agent is not
promptly reimbursed for such costs and expenses by the Credit Parties. The
agreements in this Section 10.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.

                  10.6     NON-RELIANCE ON AGENT AND OTHER LENDERS.

         Each Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Credit Parties and
their Subsidiaries and decision to enter into this Credit Agreement and that it
will, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under the Credit Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Credit Party or any of its Subsidiaries
or Affiliates that may come into the possession of the Agent or any of its
Affiliates.

                                      108


                  10.7     SUCCESSOR AGENT.

         The Agent may resign at any time by giving 30 days prior notice thereof
to the Lenders and the Credit Parties. Upon any such resignation, the Required
Lenders shall have the right with, if no Event of Default under Section 9.1(a),
(c)(i) or (f) exists, the consent of the Borrower (not to be unreasonably
withheld) to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States having combined capital and surplus of at least $100,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges, and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent. If no
successor administrative agent has accepted appointment as Agent by the date
which is thirty (30) days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided
for above.

                  10.8     SYNDICATION AGENT.

         The Syndication Agent, in its capacity as such, shall have no rights,
powers, duties, liabilities, fiduciary relationships or obligations under this
Credit Agreement or any of the other Credit Documents.

                                   SECTION 11

                                  MISCELLANEOUS

                  11.1     NOTICES.

         Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid (or pursuant to an invoice arrangement) to a
reputable national overnight air courier service, or (d) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case to the respective parties at the address, in the
case of the Credit Parties and the Agent, set forth below, and, in the case of
the Lenders, set forth on SCHEDULE 2.1(a), or at such other address as such
party may specify by written notice to the other parties hereto:

         if to any Credit Party:

                  Michael Foods, Inc.
                  5353 Wayzata Blvd., Suite 324
                  Minneapolis, MN  55416

                                      109


                  Attn:  Gregg Ostrander, President
                  Telephone:  (952) 546-1500
                  Telecopy:    (952) 546-3711

         with copies to:

                  Vestar Capital Partners
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO  80202
                  Attn: Chris Henderson, Managing Director
                  Telephone:  (303) 294-1822
                  Telecopy:  (303) 292-6639

                  and

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, Illinois  60601
                  Attn:  Steve Ritchie
                  Telephone:  (312) 861-2210
                  Telecopy:    (312) 861-2200

         if to the Agent in respect of Notices of Borrowing, payments and
         prepayments:

                  Bank of America, N. A.
                  Independence Center, 15th Floor
                  NC1-001-15-04
                  101 North Tryon Street
                  Charlotte, North Carolina 28255
                  Attn:  Agency Services
                  Telephone:  (704) 386-9046
                  Telecopy:    (704) 409-0026

         if to the Agent in respect of all other communications:

                  Bank of America, N. A.
                  CA5-701-12-09
                  1455 Market Street
                  San Francisco, California  94103
                  Attn: Agency Management, Christine Cordi
                  Telephone:  (415) 436-2790
                  Telecopy:    (415) 436-5004

         in each case with a copy to:

                  Bank of America, N. A.
                  100 North Tryon Street

                                      110


                  NC1-007-13-06
                  Charlotte, NC  28255
                  Attn:  John O'Neill
                  Telephone: (704) 388-5045
                  Telecopy: (704) 386-9607

                  11.2     RIGHT OF SET-OFF; ADJUSTMENTS.

         Upon the occurrence and during the continuance of any Event of Default
under Section 9.1(a), each Lender (and each of its Affiliates) is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final, other than payroll or trust accounts) at any time
held and other indebtedness at any time owing by such Lender (or any of its
Affiliates) to or for the credit or the account of any Credit Party against any
and all of the obligations of such Person then due and owing under this Credit
Agreement or under any other Credit Document, irrespective of whether such
Lender shall have made any demand hereunder or thereunder. Each Lender agrees
promptly to notify in writing any affected Credit Party after any such set-off
and application made by such Lender; PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 11.2 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Lender may have.

                  11.3     BENEFIT OF AGREEMENT.

                  (a)      This Credit Agreement shall be binding upon and inure
         to the benefit of and be enforceable by the respective successors and
         assigns of the parties hereto; PROVIDED that none of the Credit Parties
         may assign or transfer any of its interests and obligations without
         prior written consent of each of the Lenders; PROVIDED FURTHER that the
         rights of each Lender to transfer, assign or grant participations in
         its rights and/or obligations hereunder shall be limited as set forth
         in this Section 11.3.

                  (b)      Each Lender may assign to one or more Eligible
         Assignees all or a portion of its rights and obligations under this
         Credit Agreement (including, without limitation, all or a portion of
         its Loans and its Commitment); PROVIDED, HOWEVER, that

                           (i)      each such assignment shall be to an Eligible
                  Assignee;

                           (ii)     except in the case of an assignment to
                  another Lender, an Affiliate of an existing Lender or, with
                  respect to any Lender that is a fund that invests in bank
                  loans, any other fund that invests in bank loans and is
                  managed or advised by the same investment advisor as such
                  Lender or by an Affiliate of such investment advisor or an
                  assignment of all of a Lender's rights and obligations under
                  this Credit Agreement, any such partial assignment shall be in
                  an amount at least equal to $2,500,000 (or, if less, the
                  remaining amount of the Commitment being assigned by such
                  Lender) or an integral multiple of $1,000,000 in excess
                  thereof;

                                      111


                           (iii)    each such assignment by a Lender of any
                  portion of its Revolving Commitment and its Revolving Loans
                  shall be accompanied by an assignment of a constant, and not
                  varying, percentage of all of such Lender's Tranche A Term
                  Loans, and each such assignment by a Lender of any portion of
                  its Tranche A Term Loans shall be accompanied by an assignment
                  of a constant, and not varying, percentage of all of such
                  Lender's Revolving Commitment and its Revolving Loans; and

                           (iv)     the parties to such assignment shall execute
                  and deliver to the Agent for its acceptance an Assignment and
                  Acceptance in the form of EXHIBIT 11.3(b) (an "ASSIGNMENT AND
                  ACCEPTANCE"), together with a processing fee of $3,500.

         Upon execution, delivery, and acceptance of such Assignment and
         Acceptance, the assignee thereunder shall be a party hereto and, to the
         extent of such assignment, have the obligations, rights, and benefits
         of a Lender hereunder and the assigning Lender shall, to the extent of
         such assignment, relinquish its rights and be released from its
         obligations under this Credit Agreement. Upon the consummation of any
         assignment pursuant to this Section 11.3(b), the assignor, the Agent
         and the Credit Parties shall make appropriate arrangements so that, if
         required, new Notes are issued to the assignor and the assignee. If the
         assignee is not a United States person under Section 7701(a)(30) of the
         Code, it shall deliver to the Credit Parties and the Agent
         certification as to exemption from deduction or withholding of Taxes in
         accordance with Section 3.11.

                  (c)      The Agent shall maintain at its address referred to
         in Section 11.1 a copy of each Assignment and Acceptance delivered to
         and accepted by it and a register for the recordation of the names and
         addresses of the Lenders and the Commitment of, and principal amount of
         the Loans owing to, each Lender from time to time (the "REGISTER"). The
         entries in the Register shall be conclusive and binding for all
         purposes, absent manifest error, and the Credit Parties, the Agent and
         the Lenders may treat each Person whose name is recorded in the
         Register as a Lender hereunder for all purposes of this Credit
         Agreement. The Register shall be available for inspection by the Credit
         Parties or any Lender at any reasonable time and from time to time upon
         reasonable prior notice. Any assignment of any Loan or other Credit
         Party Obligations shall be effective only upon an entry with respect
         thereto being made in the Register.

                  (d)      Upon its receipt of an Assignment and Acceptance
         executed by the parties thereto and payment of the processing fee, the
         Agent shall, if such Assignment and Acceptance has been completed and
         is in substantially the form of Exhibit 11.3(b) hereto, (i) accept such
         Assignment and Acceptance, (ii) record the information contained
         therein in the Register and (iii) give prompt notice thereof to the
         parties thereto.

                  (e)      Each Lender may sell participations to one or more
         Persons in all or a portion of its rights, obligations or rights and
         obligations under this Credit Agreement (including all or a portion of
         its Commitment or its Loans); PROVIDED, HOWEVER, that (i) such Lender's
         obligations under this Credit Agreement shall remain unchanged, (ii)
         such Lender shall remain solely responsible to the other parties hereto
         for the performance of such obligations, (iii) the participant shall be
         entitled to the benefit of the

                                      112


         yield protection provisions contained in Sections 3.6 through 3.12,
         inclusive (but only to the extent that the selling Lender is so
         entitled), and the right of set-off contained in Section 11.2 (provided
         that, in the case of Section 3.11, such participant shall have complied
         with the provisions of said Section (except that any forms required to
         be delivered pursuant to Section 3.11 will be delivered to the Lender
         from whom the participation was purchased) and, provided, further, that
         no participant shall be entitled to receive any greater amount pursuant
         to Sections 3.9, 3.11 or 3.12 than the Lender from whom the
         participation was purchased would have been entitled to receive in
         respect of the amount of the participation transferred by such Lender
         to such participant had no such transfer occurred), and (iv) the Credit
         Parties shall continue to deal solely and directly with such Lender in
         connection with such Lender's rights and obligations under this Credit
         Agreement, and such Lender shall retain the sole right to enforce the
         obligations of the Credit Parties relating to the Credit Party
         Obligations owing to such Lender and to approve any amendment,
         modification, or waiver of any provision of this Credit Agreement
         (other than amendments, modifications, or waivers directly affecting
         such participant (A) decreasing the amount of principal of or the rate
         at which interest is payable on such Loans, (B) extending the Maturity
         Date or any scheduled Principal Amortization Payment Date or date fixed
         for the payment of interest on such Loans or (C) extending its
         Commitment.

                  (f)      Notwithstanding any other provision set forth in this
         Credit Agreement, any Lender may at any time collaterally assign and
         pledge all or any portion of its Loans and its Notes, if any, (i) to
         any Federal Reserve Bank as collateral security pursuant to Regulation
         A and any Operating Circular issued by such Federal Reserve Bank, (ii)
         in the case of any Lender which has made Tranche B Term Loans hereunder
         and is an investment fund, to the trustee under the indenture to which
         such fund is a party in support of its obligations to such trustee for
         the benefit of the applicable trust beneficiaries or (iii) to
         appropriate entities within the Farm Credit System as collateral
         security. No such assignment shall release the assigning Lender from
         its obligations hereunder.

                  (g)      Any Lender may furnish any information concerning the
         Consolidated Parties in the possession of such Lender from time to time
         to assignees and participants (including prospective assignees and
         participants), subject, however, to the provisions of Section 11.14
         hereof.

                  (h)      Notwithstanding anything to the contrary contained in
         any Credit Document, the Master Assignment Agreement shall be deemed to
         be an Assignment and Acceptance executed in compliance with this
         Section 11.3.

                  11.4     NO WAIVER; REMEDIES CUMULATIVE.

         No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Agent or any Lender and any of the
Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not

                                      113


exclusive of any rights or remedies which the Agent or any Lender would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle the Credit Parties to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Agent or the
Lenders to any other or further action in any circumstances without notice or
demand.

                  11.5     EXPENSES; INDEMNIFICATION.

                  (a)      The Credit Parties jointly and severally agree to pay
         on demand all reasonable costs and expenses of the Agent in connection
         with the syndication, preparation, execution, delivery, administration,
         modification, and amendment of this Credit Agreement, the other Credit
         Documents, and the other documents to be delivered hereunder,
         including, without limitation, the reasonable fees and expenses of
         counsel for the Agent with respect thereto and with respect to advising
         the Agent as to its rights and responsibilities under the Credit
         Documents. The Credit Parties further jointly and severally agree to
         pay on demand all reasonable costs and expenses of the Agent and one
         counsel to all of the Lenders, if any, in connection with the
         enforcement (whether through negotiations, legal proceedings, or
         otherwise) of the Credit Documents and the other documents to be
         delivered hereunder, except to the extent such claim, damage, loss,
         liability, cost, or expense results from the gross negligence, bad
         faith, willful misconduct of the Person seeking reimbursement or a
         breach by such Person of its obligations hereunder.

                  (b)      The Credit Parties jointly and severally agree to
         indemnify and hold harmless the Agent and each Lender and each of their
         Affiliates and their respective officers, directors, employees and
         agents (each, an "INDEMNIFIED PARTY") from and against any and all
         claims, damages, actual losses, liabilities, costs, and expenses
         (including, without limitation, reasonable attorneys' fees of the Agent
         and one counsel to all of the Lenders and excluding taxes) that may be
         incurred by or awarded against any Indemnified Party, in each case
         arising out of or in connection with or by reason of (including,
         without limitation, in connection with any investigation, litigation,
         or proceeding or preparation of defense in connection therewith) the
         Credit Documents, any of the transactions contemplated herein or the
         actual or proposed use of the proceeds of the Loans, except to the
         extent such claim, damage, loss, liability, cost, or expense results
         from the gross negligence, bad faith or willful misconduct of such
         Indemnified Party (or any of its Affiliates or any their respective
         officers, directors, employees or agents) or from a breach by such
         Indemnified Party (or any of its Affiliates or any their respective
         officers, directors, employees or agents) of its obligations hereunder.
         In the case of an investigation, litigation or other proceeding to
         which the indemnity in this Section 11.5 applies, such indemnity shall
         be effective whether or not such investigation, litigation or
         proceeding is brought by any of the Credit Parties, their respective
         directors, shareholders or creditors or an Indemnified Party or any
         other Person or any Indemnified Party is otherwise a party thereto and
         whether or not the transactions contemplated hereby are consummated. No
         party hereto shall assert any claim against any other party hereto, any
         of their Affiliates, or any of their respective directors, officers,
         employees, attorneys, agents, and advisers, on any theory of liability,
         for special, indirect, consequential, or punitive damages arising out
         of or otherwise relating to the Credit Documents, any of the
         transactions contemplated herein or the actual or proposed use of the
         proceeds of the Loans.

                                      114


                  (c)      Without prejudice to the survival of any other
         agreement of the Credit Parties hereunder, the agreements and
         obligations of the Credit Parties contained in this Section 11.5 shall
         survive the repayment of the Loans, LOC Obligations and other Credit
         Party Obligations and the termination of the Commitments hereunder.

                  11.6     AMENDMENTS, WAIVERS AND CONSENTS.

         Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, each of the Credit Parties
party thereto and the Required Lenders, PROVIDED, HOWEVER, that:

                  (a)      without the consent of each Lender affected thereby,
         neither this Credit Agreement nor any other Credit Document may be
         amended, changed, waived, discharged or terminated so as to

                           (i)      extend any Commitment or the final maturity
                  of any Loan or of any reimbursement obligation, or any portion
                  thereof, arising from drawings under Letters of Credit, or
                  extend or waive any Principal Amortization Payment of any
                  Loan, or any portion thereof,

                           (ii)     reduce the rate or extend the time of
                  payment of interest on any Loan or of any reimbursement
                  obligation, or any portion thereof, arising from drawings
                  under Letters of Credit (other than as a result of waiving the
                  applicability of any post-default increase in interest rates)
                  or of any Fees,

                           (iii)    reduce or waive the principal amount of any
                  Loan or of any reimbursement obligation, or any portion
                  thereof, arising from drawings under Letters of Credit,

                           (iv)     increase the Commitment of a Lender over the
                  amount thereof in effect (it being understood and agreed that
                  a waiver of any condition precedent set forth in Section 5.2
                  or of any Default or Event of Default or mandatory reduction
                  in the Commitments shall not constitute a change in the terms
                  of any Commitment of any Lender),

                           (v)      except as the result of or in connection
                  with an Asset Disposition not prohibited by Section 8.5,
                  release all or substantially all of the Collateral,

                           (vi)     except as the result of or in connection
                  with a dissolution, merger or disposition of a Consolidated
                  Party not prohibited by Section 8.4 or Section 8.5, release
                  the Borrower or substantially all of the other Credit Parties
                  from its or their obligations under the Credit Documents,

                           (vii)    amend, modify or waive any provision of this
                  Section 11.6 or Section 3.13(a),

                                      115


                           (viii)   reduce any percentage specified in the
                  definition of Required Lenders, or

                           (ix)     consent to the assignment or transfer by the
                  Borrower or all or substantially all of the other Credit
                  Parties of any of its or their rights and obligations under
                  (or in respect of) the Credit Documents except as permitted
                  hereby or thereby;

                  (b)      without the consent of Lenders (other than Defaulting
         Lenders) holding in the aggregate at least a majority of the
         outstanding Tranche A Term Loans (and Participation Interests therein)
         and Lenders (other than Defaulting Lenders) holding in the aggregate at
         least a majority of the outstanding Tranche B Term Loans (and
         Participation Interests therein), Section 3.3(b)(vi) may not be
         amended, changed, waived, discharged or terminated so as to extend the
         time for or change the amount or the manner of application of proceeds
         of any mandatory prepayment required by Section 3.3(b)(ii), (iii), (iv)
         or (v) hereof;

                  (c)      without the consent of the Agent, no provision of
         Section 10 may be amended, changed, waived, discharged or terminated;

                  (d)      without the consent of the Issuing Lender, no
         provision of Section 2.2 may be amended, changed, waived, discharged or
         terminated and

                  (e)      without the consent of the Swingline Lender, no
         provision of Section 2.3 may be amended.

         Notwithstanding the fact that the consent of all the Lenders is
         required in certain circumstances as set forth above, (x) each Lender
         is entitled to vote as such Lender sees fit on any bankruptcy
         reorganization plan that affects the Loans, and each Lender
         acknowledges that the provisions of Section 1126(c) of the Bankruptcy
         Code supersedes the unanimous consent provisions set forth herein and
         (y) the Required Lenders shall determine whether or not to allow a
         Credit Party to use cash collateral in the context of a bankruptcy or
         insolvency proceeding and such determination shall be binding on all of
         the Lenders.

                  11.7     COUNTERPARTS.

         This Credit Agreement may be executed in any number of counterparts,
each of which when so executed shall be an original, but all of which shall
constitute one and the same instrument. It shall not be necessary in making
proof of this Credit Agreement to produce or account for more than one such
counterpart for each of the parties hereto. Delivery by facsimile by any of the
parties hereto of an executed counterpart of this Credit Agreement shall be as
effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.

                  11.8     HEADINGS.

         The headings of the sections hereof are provided for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Credit Agreement.

                                      116


                  11.9     SURVIVAL.

         All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive until this Credit Agreement shall be terminated in
accordance with the terms of Section 11.13(b).

                  11.10    GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.

                  (a)      THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY
         PROVIDED THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
         OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
         BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
         STATE OF NEW YORK. Any legal action or proceeding with respect to this
         Credit Agreement or any other Credit Document may be brought in the
         courts of the State of New York in New York County, or of the United
         States for the Southern District of New York, and, by execution and
         delivery of this Credit Agreement, each of the Credit Parties hereby
         irrevocably accepts for itself and in respect of its property,
         generally and unconditionally, the nonexclusive jurisdiction of such
         courts. Each of the Credit Parties further irrevocably consents to the
         service of process out of any of the aforementioned courts in any such
         action or proceeding by the mailing of copies thereof by registered or
         certified mail, postage prepaid, to it at the address set out for
         notices pursuant to Section 11.1, such service to become effective
         three (3) days after such mailing. Nothing herein shall affect the
         right of the Agent or any Lender to serve process in any other manner
         permitted by law or to commence legal proceedings or to otherwise
         proceed against any Credit Party in any other jurisdiction.

                  (b)      Each of the Credit Parties hereby irrevocably waives
         any objection which it may now or hereafter have to the laying of venue
         of any of the aforesaid actions or proceedings arising out of or in
         connection with this Credit Agreement or any other Credit Document
         brought in the courts referred to in subsection (a) above and hereby
         further irrevocably waives and agrees not to plead or claim in any such
         court that any such action or proceeding brought in any such court has
         been brought in an inconvenient forum.

                  (c)      TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT,
         THE LENDERS, EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL
         RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
         ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER
         CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                  11.11    SEVERABILITY.

         If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in

                                      117


full force and effect and shall be construed without giving effect to the
illegal, invalid or unenforceable provisions.

                  11.12    ENTIRETY.

         This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.

                  11.13    BINDING EFFECT; TERMINATION.

                  (a)      This Credit Agreement shall become effective at such
         time on or after the Closing Date when it shall have been executed by
         each Credit Party and the Agent, and the Agent shall have received
         copies hereof (telefaxed or otherwise) which, when taken together, bear
         the signatures of each Lender, and thereafter this Credit Agreement
         shall be binding upon and inure to the benefit of each Credit Party,
         the Agent and each Lender and their respective successors and assigns.

                  (b)      The term of this Credit Agreement shall be until the
         Credit Party Obligations are Fully Satisfied.

                  11.14    CONFIDENTIALITY.

         The Agent and each Lender (each, a "LENDING PARTY") agrees to keep
confidential any information furnished or made available to it by or on behalf
of the Credit Parties pursuant to this Credit Agreement; PROVIDED that nothing
herein shall prevent any Lending Party from disclosing such information (a) to
any other Lending Party or any Affiliate of any Lending Party, or any officer,
director, employee, agent, or advisor of any Lending Party or Affiliate of any
Lending Party, provided in each case that such Person is informed of the
confidential nature of such information, (b) to any other Person if reasonably
incidental to the administration of the Credit Facilities, provided in each case
that such Person is informed of the confidential nature of such information, (c)
as required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Lending Party, (f) that is or becomes
available to the public or that is or becomes available to any Lending Party
other than as a result of a disclosure by any Lending Party or other Person
bound by this Section 11.14 prohibited by this Credit Agreement, (g) in
connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, PROVIDED, such Lending Party will, to the extent
practical, use reasonable efforts to notify the Borrower prior to such
disclosure, (h) to the extent necessary in connection with the exercise of any
remedy under this Credit Agreement or any other Credit Document, (i) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender, (j) to any direct or indirect contractual counterparty
in swap agreements or such contractual counterparty's professional advisor (so
long as such contractual counterparty or professional advisor to such
contractual counterparty (i) has been approved in writing by the Borrower and
(ii) agrees in a writing enforceable by the Borrower to be bound by the
provisions of this Section 11.14) and

                                      118


(k) subject to provisions substantially similar to those contained in this
Section 11.14, to any actual or proposed participant or assignee.

                  11.15    SOURCE OF FUNDS.

         Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:

                  (a)      no part of such funds constitutes assets allocated to
         any separate account maintained by such Lender in which any employee
         benefit plan (or its related trust) has any interest;

                  (b)      to the extent that any part of such funds constitutes
         assets allocated to any separate account maintained by such Lender,
         such Lender has disclosed to the Borrower the name of each employee
         benefit plan whose assets in such account exceed 10% of the total
         assets of such account as of the date of such purchase (and, for
         purposes of this clause (b), all employee benefit plans maintained by
         the same employer or employee organization are deemed to be a single
         plan);

                  (c)      to the extent that any part of such funds constitutes
         assets of an insurance company's general account, such insurance
         company has complied with all of the requirements of the regulations
         issued under Section 401(c)(1)(A) of ERISA; or

                  (d)      such funds constitute assets of one or more specific
         benefit plans which such Lender has identified in writing to the
         Borrower.

As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.

                  11.16    REGULATION D.

         Each of the Lenders hereby represents and warrants to the Borrower that
it is a commercial lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires or loans in
the ordinary course of business and that it will make or acquire Loans for its
own account in the ordinary course of business.

                  11.17    CONFLICT.

         To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.




                           [Signature Pages to Follow]

                                      119




         IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.

BORROWER:                  MICHAEL FOODS, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------


PARENT:                    M-FOODS HOLDINGS, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------


SUBSIDIARY
GUARANTORS:                CRYSTAL FARMS REFRIGERATED
                           DISTRIBUTION COMPANY

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           NORTHERN STAR CO.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           KOHLER MIX SPECIALTIES, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           KOHLER MIX SPECIALTIES OF
                           CONNECTICUT, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------


                           [Signatures Continued]



                           M.G. WALDBAUM COMPANY

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           PAPETTI'S HYGRADE EGG PRODUCTS, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           CASA TRUCKING, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           WISCO FARM COOPERATIVE

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           WFC, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           FARM FRESH FOODS, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           MICHAEL FOODS OF DELAWARE, INC.


                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------



                           [Signatures Continued]



                           MIDWEST MIX, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           MINNESOTA PRODUCTS, INC.

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           PAPETTI ELECTROHEATING CORPORATION

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           M-FOODS DAIRY, LLC

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

                           M-FOODS DAIRY TXCT, LLC

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------


                           [Signatures Continued]





AGENT:                     BANK OF AMERICA, N. A.,
                           in its capacity as Agent

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------


SYNDICATION AGENT:         BEAR, STEARNS & CO.,
                           in its capacity as Syndication Agent

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------


LENDERS:                   BANK OF AMERICA, N. A.,

                           By:
                              -----------------------------------------
                           Name:
                                ---------------------------------------
                           Title:
                                 --------------------------------------

EX-10.2

                                                               EXHIBIT 10.2

                                  EXHIBIT 1.1A

                        FORM OF INVESTOR PLEDGE AGREEMENT

         THIS PLEDGE AGREEMENT (this "PLEDGE AGREEMENT") is entered into as of
April 10, 2001 among M-FOODS DAIRY HOLDINGS, LLC, a Delaware limited liability
company (the "OBLIGOR") and BANK OF AMERICA, N.A., in its capacity as agent (in
such capacity, the "AGENT") for the lenders from time to time party to the
Credit Agreement described below (the "LENDERS").

                                    RECITALS

         WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "CREDIT AGREEMENT") among Michael Foods, Inc., a Minnesota corporation (the
"Borrower"), M-Foods Holdings, Inc., a Delaware corporation (the "PARENT") and
certain Subsidiaries of the Parent (individually a "GUARANTOR", and collectively
the "GUARANTORS"), the Lenders, the Agent and Bear, Stearns & Co., as
Syndication Agent, the Lenders have agreed to make Loans and issue or
participate in Letters of Credit upon the terms and subject to the conditions
set forth therein; and

         WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue Letters of Credit under the Credit Agreement that the Obligor shall
have executed and delivered this Pledge Agreement to the Agent for the ratable
benefit of the Lenders.

         NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

         1.       DEFINITIONS. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
For purposes of this Pledge Agreement, the term "Lender" shall include, as of
any date of determination, any Affiliate of any Lender which is party to a
Hedging Agreement with any Credit Party.

         2.       PLEDGE AND GRANT OF SECURITY INTEREST. To secure the prompt
payment and performance in full when due, whether by lapse of time or otherwise,
of the Obligor Obligations (as defined in Section 3 hereof), the Obligor hereby
pledges and assigns to the Agent, for the ratable benefit of the Lenders, and
grants to the Agent, for the ratable benefit of the Lenders, a continuing
security interest in any and all right, title and interest of the Obligor in and
to the following, whether now owned or existing or owned, acquired, or arising
hereafter (collectively, the "PLEDGED COLLATERAL"):

                  (a)      PLEDGED SHARES. (i) 100% (or, if less, the full
         amount owned by the Obligor) of the issued and outstanding shares of
         Capital Stock of Dairy LLC, and (ii) 100% (or, if less, the full amount
         owned by the Obligor) of the issued and outstanding shares of Capital
         Stock of Dairy TXCT LLC, in each case, together with the certificates





         (or other agreements or instruments), if any, representing such Capital
         Stock, and all options and other rights, contractual or otherwise, with
         respect thereto (collectively, together with the shares of Capital
         Stock described in Section 2(b) below, the "PLEDGED SHARES"),
         including, but not limited to, the following:

                           (y)      all shares or securities representing a
                  dividend on any of the Pledged Shares, or representing a
                  distribution or return of capital upon or in respect of the
                  Pledged Shares, or resulting from a stock split, revision,
                  reclassification or other exchange therefor, and any
                  subscriptions, warrants, rights or options issued to the
                  holder of, or otherwise in respect of, the Pledged Shares; and

                           (z)      without affecting the obligations of the
                  Obligor under any provision prohibiting such action hereunder
                  or under the Credit Agreement, in the event of any
                  consolidation or merger involving the issuer of any Pledged
                  Shares and in which such issuer is not the surviving
                  corporation, all shares of each class of the Capital Stock of
                  the successor resulting from such consolidation or merger
                  payable to or received by the Obligor as consideration for
                  such merger.

                  (b)      PROCEEDS. All proceeds and products of the foregoing,
         however and whenever acquired and in whatever form.

         Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that the Obligor may from time to time
hereafter deliver additional Capital Stock to the Agent as collateral security
for the Obligor Obligations. Upon delivery to the Agent, such additional Capital
Stock shall be deemed to be part of the Pledged Collateral of the Obligor and
shall be subject to the terms of this Pledge Agreement.

         3.       SECURITY FOR OBLIGOR OBLIGATIONS. The security interest
created hereby in the Pledged Collateral of the Obligor constitutes continuing
collateral security for all of the Credit Party Obligations, now existing or
hereafter arising pursuant to the Credit Documents, owing from the Borrower or
any other Credit Party to any Lender or the Agent, howsoever evidenced, created,
incurred or acquired, whether primary, secondary, direct, contingent, or joint
and several, including, without limitation, all liabilities arising under
Hedging Agreements between any Credit Party and any Lender and all obligations
and liabilities incurred in connection with collecting and enforcing the
foregoing (collectively, the "OBLIGOR OBLIGATIONS").

         4.       DELIVERY OF THE PLEDGED COLLATERAL. The Obligor hereby agrees
that:

                  (a)      The Obligor shall deliver to the Agent (i)
         simultaneously with or prior to the execution and delivery of this
         Pledge Agreement, all certificates representing the Pledged Shares of
         such Obligor and (ii) promptly upon the receipt thereof by or on behalf
         of the Obligor, all other certificates and instruments constituting
         Pledged Collateral of the Obligor. Prior to delivery to the Agent, all
         such certificates and instruments constituting Pledged Collateral of
         the Obligor shall be held in trust by the Obligor for the benefit of
         the Agent pursuant hereto. All such certificates shall be delivered in
         suitable form for


                                       2



         transfer by delivery or shall be accompanied by duly executed
         instruments of transfer or assignment in blank, substantially in the
         form provided in EXHIBIT 4(a) attached hereto.

                  (b)      ADDITIONAL SECURITIES. If the Obligor shall receive
         by virtue of its being or having been the owner of any Pledged
         Collateral, any (i) stock certificate, including without limitation,
         any certificate representing a stock dividend or distribution in
         connection with any increase or reduction of capital, reclassification,
         merger, consolidation, sale of assets, combination of equity interests,
         stock splits, spin-off or split-off, promissory notes or other
         instrument; (ii) option or right, whether as an addition to,
         substitution for, or an exchange for, any Pledged Collateral or
         otherwise; (iii) dividends payable in securities; or (iv) distributions
         of securities in connection with a partial or total liquidation,
         dissolution or reduction of capital, capital surplus or paid-in
         surplus, then the Obligor shall receive such stock certificate,
         instrument, option, right or distribution in trust for the benefit of
         the Agent, shall segregate it from the Obligor's other property and
         shall deliver it forthwith to the Agent in the exact form received
         together with any necessary endorsement and/or appropriate stock power
         duly executed in blank, substantially in the form provided in EXHIBIT
         4(a), to be held by the Agent as Pledged Collateral and as further
         collateral security for the Obligor Obligations.

                  (c)      FINANCING STATEMENTS. The Obligor shall execute and
         deliver to the Agent such UCC or other applicable financing statements
         as may be reasonably requested by the Agent in order to perfect and
         protect the security interest created hereby in the Pledged Collateral
         of the Obligor.

         5.       REPRESENTATIONS AND WARRANTIES. The Obligor hereby represents
and warrants to the Agent, for the benefit of the Lenders, that:

                  (a)      AUTHORIZATION OF PLEDGED SHARES. The Pledged Shares
         are duly authorized and validly issued, are fully paid and (to the
         extent such concept is applicable) nonassessable and are not subject to
         the preemptive rights of any Person. All other Capital Stock
         constituting Pledged Collateral will be duly authorized and validly
         issued, fully paid and (to the extent such concept is applicable)
         nonassessable and not subject to the preemptive rights of any Person.

                  (b)      TITLE. The Obligor has good and indefeasible title to
         the Pledged Collateral of the Obligor and will at all times be the
         legal and beneficial owner of such Pledged Collateral free and clear of
         any Lien, other than Permitted Liens. There exists no "adverse claim"
         within the meaning of Section 8-302 of the Uniform Commercial Code as
         in effect in the State of New York as of the date hereof (the "UCC")
         with respect to the Pledged Shares of the Obligor.

                  (c)      EXERCISING OF RIGHTS. Subject to compliance with
         applicable laws affecting the offering and sale of securities, the
         exercise by the Agent of its rights and remedies hereunder will not
         violate any material law or governmental regulation or any material
         contractual restriction binding on or affecting the Obligor or any of
         its property.


                                       3



                  (d)      OBLIGOR'S AUTHORITY. No authorization, approval or
         action by, and no notice or filing with any Governmental Authority or
         with the issuer of any Pledged Stock is required either (i) for the
         pledge made by the Obligor or for the granting of the security interest
         by the Obligor pursuant to this Pledge Agreement or (ii) for the
         exercise by the Agent or the Lenders of their non-judicial foreclosure
         rights and remedies hereunder (except as may be required by laws
         affecting the offering and sale of securities). This Pledge Agreement
         has been duly executed and delivered on behalf of the Obligor. This
         Pledge Agreement constitutes a legal, valid and binding obligation of
         the Obligor enforceable in accordance with its terms, except as
         enforceability may be limited by applicable bankruptcy, fraudulent
         conveyance, insolvency, reorganization, moratorium or similar laws
         affecting the enforcement of creditors' rights generally and by general
         equitable principles (whether enforcement is sought by proceedings in
         equity or at law) and by an implied covenant of good faith and fair
         dealing.

                  (e)      SECURITY INTEREST/PRIORITY. This Pledge Agreement
         creates a valid security interest in favor of the Agent, for the
         ratable benefit of the Lenders, in the Pledged Collateral. The taking
         possession by the Agent of the certificates representing any
         certificated Pledged Shares and all other certificates and instruments
         constituting Pledged Collateral will perfect and establish the first
         priority of the Agent's security interest in such Pledged Shares and,
         when properly perfected by filing or registration, in all other Pledged
         Collateral securing the Obligor Obligations. Except as set forth in
         this Section 5(e), no action is necessary to perfect or otherwise
         protect such security interest.

                  (f)      NO OTHER SHARES. As of the Closing Date, the Obligor
         owns no other Captial Stock of Dairy LLC or Dairy TXCT LLC other than
         as set forth on SCHEDULE 5(f) attached hereto.


                  (g)      PARTNERSHIP AND LIMITED LIABILITY COMPANY INTERESTS.
         Except as previously disclosed to the Agent, none of the Pledged Shares
         (i) is dealt in or traded on a securities exchange or in a securities
         market, (ii) by its terms expressly provides that it is a security
         governed by Article 8 of the UCC, (iii) is an investment company
         security or (iv) is held in a securities account.

                  (h)      ORGANIZATION AND GOOD STANDING. The Obligor (i) is
         duly organized, validly existing and is in good standing under the laws
         of the jurisdiction of its organization, (ii) has the necessary power
         and authority, and the legal right, to own and operate its property and
         to conduct the business in which it is currently engaged and (iii) is
         duly qualified as a foreign entity and in good standing under the laws
         of each jurisdiction where its ownership, lease or operation of
         property or the conduct of its business requires such qualification,
         other than in such jurisdictions where the failure to be so qualified
         and in good standing would not have a Material Adverse Effect.

                  (i)      NO CONFLICTS. Neither the execution and delivery of
         this Pledge Agreement, nor the consummation of the transactions
         contemplated therein, nor performance of and compliance with the terms
         and provisions thereof by the Obligor will (i) violate or conflict with
         any provision of its articles or certificate of formation, operating


                                       4



         agreement or other organizational or governing documents, (ii) violate,
         contravene or materially conflict with any material Requirement of Law
         or any other material law, regulation (including, without limitation,
         Regulation U or Regulation X), order, writ, judgment, injunction,
         decree or permit applicable to it, (iii) violate, contravene or
         conflict with contractual provisions of, or cause an event of default
         under, any indenture, loan agreement, mortgage, deed of trust, contract
         or other agreement or instrument to which it is a party or by which it
         may be bound, the violation of which could reasonably be expected to
         have a Material Adverse Effect, or (iv) result in or require the
         creation of any Lien (other than those contemplated in or created in
         connection with the Credit Documents) upon or with respect to its
         properties.

         6.       COVENANTS. The Obligor hereby covenants that, until such time
as this Pledge Agreement has been terminated in accordance with the terms of
Section 14(a), the Obligor shall:

                  (a)      BOOKS AND RECORDS. Mark its books and records (and
         shall cause the issuer of the Pledged Shares of the Obligor to mark its
         books and records) to reflect the security interest granted to the
         Agent, for the ratable benefit of the Lenders, pursuant to this Pledge
         Agreement.

                  (b)      DEFENSE OF TITLE. Warrant and defend title to and
         ownership of the Pledged Collateral of the Obligor at the expense of
         the Borrower against the claims and demands of all other parties
         claiming an interest therein, keep the Pledged Collateral free from all
         Liens, except for Liens of the same type as Permitted Liens, and not
         sell, exchange, transfer, assign, lease or otherwise dispose of Pledged
         Collateral of the Obligor or any interest therein, except as permitted
         under the Credit Agreement and the other Credit Documents.

                  (c)      FURTHER ASSURANCES. Promptly execute and deliver at
         its expense all further instruments and documents and take all further
         action that may be reasonably necessary or that the Agent may
         reasonably request in order to (i) perfect and protect the security
         interest created hereby in the Pledged Collateral of the Obligor
         (including without limitation any and all actions necessary to satisfy
         the Agent that the Agent has obtained a first priority perfected
         security interest in any Pledged Shares); (ii) enable the Agent to
         exercise and enforce its rights and remedies hereunder in respect of
         the Pledged Collateral of the Obligor; and (iii) otherwise effect the
         purposes of this Pledge Agreement.

                  (d)      AMENDMENTS. Not make or consent to any amendment or
         other modification or waiver with respect to any of the Pledged
         Collateral of the Obligor or enter into any agreement or allow to exist
         any restriction with respect to any of the Pledged Collateral of the
         Obligor other than pursuant hereto or as may be permitted under the
         Credit Agreement.

                  (e)      COMPLIANCE WITH SECURITIES LAWS. File all reports and
         other information now or hereafter required to be filed by the Obligor
         with the United States Securities and


                                       5



         Exchange Commission and any other state, federal or foreign agency in
         connection with the ownership of the Pledged Collateral of the Obligor.

                  (f)      CERTAIN MONIES TO BE HELD IN TRUST. In the event that
         the Obligor receives (i) any Net Cash Proceeds from an Asset
         Disposition of (A) the Capital Stock of Dairy LLC or Dairy TXCT LLC or
         (B) any of the Property of Dairy LLC or Dairy TXCT LLC which are not
         immediately distributed to a Credit Party or (ii) any Restricted
         Payment from Dairy LLC or Dairy TXCT LLC in violation of the Credit
         Agreement, such Net Cash Proceeds or Restricted Payment, as applicable,
         shall (i) unless a Bankruptcy Event shall have occurred with respect to
         any Consolidated Party, be distributed to the Credit Parties in the
         manner specified in Section 8.7 of the Credit Agreement or (ii) if a
         Bankruptcy Event shall have occurred with respect to any Consolidated
         Party, be held by the Obligor in trust for the benefit of, and shall be
         paid forthwith over and delivered, upon written request, to the Agent,
         for application to the payment of the Credit Party Obligations in
         accordance with the terms of the Credit Agreement.

         7.       ADVANCES BY LENDERS. On failure of the Obligor to perform any
of the covenants and agreements contained herein and upon written notice to the
Obligor, the Agent may, at its sole option and in its sole discretion, perform
the same and in so doing may expend such sums as the Agent may reasonably deem
advisable in the performance thereof, including, without limitation, the payment
of any insurance premiums, the payment of any taxes, a payment to obtain a
release of a Lien or potential Lien (other than Permitted Liens), expenditures
made in defending against any adverse claim and all other expenditures which the
Agent or the Lenders may make for the protection of the security hereof or which
may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Borrower promptly upon timely notice thereof
and demand therefor, shall constitute additional Obligor Obligations and shall
bear interest from the date said amounts are expended at the default rate
specified in SECTION 3.1 of the Credit Agreement for Revolving Loans that are
Base Rate Loans. No such performance of any covenant or agreement by the Agent
or the Lenders on behalf of the Obligor, and no such advance or expenditure
therefor, shall relieve the Obligor of any default under the terms of this
Pledge Agreement. The Agent may make any payment hereby authorized in accordance
with any bill, statement or estimate procured from the appropriate public office
or holder of the claim to be discharged without inquiry into the accuracy of
such bill, statement or estimate or into the validity of any tax assessment,
sale, forfeiture, tax lien, title or claim except to the extent such payment is
being contested in good faith by the Obligor or the Borrower in appropriate
proceedings and against which adequate reserves are being maintained in
accordance with GAAP.

         8.       EVENTS OF DEFAULT. The occurrence of an event which under the
Credit Agreement would constitute an Event of Default shall be an Event of
Default hereunder (an "EVENT OF DEFAULT").

         9.       REMEDIES.

                  (a)      GENERAL REMEDIES. Upon the occurrence of an Event of
         Default and during the continuation thereof, the Agent and the Lenders
         shall have, in respect of the Pledged Collateral of the Obligor, in
         addition to the rights and remedies provided herein,


                                       6



         in the Credit Documents, in any Hedging Agreement between any Credit
         Party and any Lender, or by law, the rights and remedies of a secured
         party under the UCC or any other applicable law.

                  (b)      SALE OF PLEDGED COLLATERAL. Upon the occurrence of an
         Event of Default and during the continuation thereof, without limiting
         the generality of this Section and without notice, the Agent may, at
         the direction of the Required Lenders, sell or otherwise dispose of or
         realize upon the Pledged Collateral, or any part thereof, in one or
         more parcels, at public or private sale, at any exchange or broker's
         board or elsewhere, at such price or prices and on such other terms as
         the Agent may deem commercially reasonable, for cash, credit or for
         future delivery or otherwise in accordance with applicable law. To the
         extent permitted by law, any Lender may in such event, bid for the
         purchase of such securities. The Obligor agrees that, to the extent
         notice of sale shall be required by law and has not been waived by the
         Obligor, any requirement of reasonable notice shall be met if notice,
         specifying the place of any public sale or the time after which any
         private sale is to be made, is personally served on or mailed, postage
         prepaid, to the Borrower and the Obligor, in accordance with the notice
         provisions of Section 17 hereof at least 10 days before the time of
         such sale (or such longer period as may be required under applicable
         law). The Agent shall not be obligated to make any sale of Pledged
         Collateral of the Obligor regardless of notice of sale having been
         given. The Agent may adjourn any public or private sale from time to
         time by announcement at the time and place fixed therefor, and such
         sale may, without further notice, be made at the time and place to
         which it was so adjourned.

                  (c)      PRIVATE SALE. Upon the occurrence of an Event of
         Default and during the continuation thereof, the Obligor recognizes
         that the Agent may deem it impracticable to effect a public sale of all
         or any part of the Pledged Shares or any of the securities constituting
         Pledged Collateral and that the Agent may at the direction of the
         Required Lenders, therefore, determine to make one or more private
         sales of any such securities to a restricted group of purchasers who
         will be obligated to agree, among other things, to acquire such
         securities for their own account, for investment and not with a view to
         the distribution or resale thereof. The Obligor acknowledges that any
         such private sale may be at prices and on terms less favorable to the
         seller than the prices and other terms which might have been obtained
         at a public sale and, notwithstanding the foregoing, agrees that such
         private sale shall be deemed to have been made in a commercially
         reasonable manner and that the Agent shall have no obligation to delay
         sale of any such securities for the period of time necessary to permit
         the issuer of such securities to register such securities for public
         sale under the Securities Act of 1933, as amended. The Obligor further
         acknowledges and agrees that any offer to sell such securities which
         has been (i) publicly advertised on a bona fide basis in a newspaper or
         other publication of general circulation in the financial community of
         New York, New York (to the extent that such offer may be advertised
         without prior registration under the Securities Act of 1933), or (ii)
         made privately in the manner described above shall be deemed to involve
         a "public sale" under the UCC, notwithstanding that such sale may not
         constitute a "public offering" under the Securities Act of 1933, and
         the Agent may, in such event, bid for the purchase of such securities.


                                       7



                  (d)      RETENTION OF PLEDGED COLLATERAL. In addition to the
         rights and remedies hereunder, upon the occurrence and during the
         continuance of an Event of Default, the Agent may, at the direction of
         the Required Lenders, after providing the notices required by Section
         9-505(2) of the UCC or otherwise complying with the requirements of
         applicable law of the relevant jurisdiction, retain all or any portion
         of the Pledged Collateral in satisfaction of the Obligor Obligations.
         Unless and until the Agent shall have provided such notices, however,
         the Agent shall not be deemed to have retained any Pledged Collateral
         in satisfaction of any Obligor Obligations for any reason.

                  (e)      MANNER OF EXERCISE OF REMEDIES. (i) Notwithstanding
         anything herein to the contrary and to the extent not prohibited by
         applicable law, the Agent shall not foreclose on, sell or pursue any
         remedies in respect of any Capital Stock of Dairy LLC pledged to the
         Agent (all of such Capital Stock, the "Total Pledged Dairy LLC
         Collateral") by the pledgors (collectively, the "Dairy LLC Pledgors")
         under or pursuant to either of the Investor Pledge Agreement and the
         Pledge Agreement (as defined in the Credit Agreement) (collectively,
         the "Pledge Agreements") unless the Agent sells, forecloses on, or
         pursues remedies in respect of all of such Total Pledged Dairy LLC
         Collateral. To the extent not prohibited by applicable law, the Agent
         shall not foreclose on or sell any portion of the Total Pledged Dairy
         LLC Collateral of a particular class owned by a particular Dairy LLC
         Pledgor unless the Agent forecloses on or sells the Total Pledged Dairy
         LLC Collateral of such class (based upon the number of shares owned by
         a particular Dairy LLC Pledgor and the total number of shares of such
         class which are pledged to the Agent) owned by all Dairy LLC Pledgors
         on a pro rata basis.

                  (ii)     Notwithstanding anything herein to the contrary and
         to the extent not prohibited by applicable law, the Agent shall not
         foreclose on, sell or pursue any remedies in respect of any Capital
         Stock of Dairy TXCT LLC pledged to the Agent (all of such Capital
         Stock, the "Total Pledged Dairy TXCT LLC Collateral") by the pledgors
         (collectively, the " Dairy TXCT LLC Pledgors") under or pursuant to
         either of the Pledge Agreements unless the Agent sells, forecloses on,
         or pursues remedies in respect of all of such Total Pledged Dairy TXCT
         LLC Collateral. To the extent not prohibited by applicable law, the
         Agent shall not foreclose on or sell any portion of the Total Pledged
         Dairy TXCT LLC Collateral of a particular class owned by a particular
         Dairy TXCT LLC Pledgor unless the Agent forecloses on or sells the
         Total Pledged Dairy TXCT LLC Collateral of such class (based upon the
         number of shares owned by a particular Dairy TXCT LLC Pledgor and the
         total number of shares of such class which are pledged to the Agent)
         owned by all Dairy TXCT LLC Pledgors on a pro rata basis.

                  (f)      NO DEFICIENCY; LIMITATION ON RECOURSE. EXCEPT AS
         OTHERWISE PROVIDED IN SECTION 6(f), NOTWITHSTANDING ANY OTHER PROVISION
         TO THE CONTRARY CONTAINED IN THIS PLEDGE AGREEMENT OR ELSEWHERE, THE
         AGENT'S AND THE LENDERS' RIGHTS PURSUANT TO THIS PLEDGE AGREEMENT ARE
         LIMITED TO THE PLEDGED COLLATERAL, AND THE AGENT'S AND THE LENDERS'
         SOLE RECOURSE WITH RESPECT TO THE OBLIGOR TO SATISFY THE


                                       8



         OBLIGOR OBLIGATIONS SHALL BE TO EXERCISE REMEDIES WITH RESPECT TO THE
         PLEDGED COLLATERAL. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING
         THE OBLIGOR SHALL NOT BE LIABLE FOR ANY DEFICIENCY IF THE PROCEEDS OF
         ANY DISPOSITION OF THE PLEDGED COLLATERAL IS INSUFFICIENT TO SATISFY
         THE OBLIGOR OBLIGATIONS. Except as otherwise provided in Section 6(f),
         the Obligor shall have no personal liability under this Pledge
         Agreement or any other Credit Documents or any other document for the
         Obligor Obligations, and no recourse (except as provided in Section
         6(f) and the first sentence of this paragraph) for the payment of any
         amount due under this Pledge Agreement, for the Obligor Obligations or
         for any claim arising out of this Pledge Agreement or the Credit
         Documents, whether for failure to pay, perform or discharge any
         monetary or non-monetary obligation, breaches of representations,
         warranties or covenants, the occurrence of defaults or otherwise, shall
         be had against (i) the Obligor, (ii) any past, present or future
         equityholder, officer, director or Affiliate (other than Consolidated
         Parties), as such, of (A) the Obligor, or (B) any successor to the
         Obligor, (iii) any direct or indirect parent of the Obligor, (iv) any
         other Subsidiary or Affiliate of any such direct or indirect parent
         (other than Consolidated Parties), or (v) any incorporator, member,
         equityholder, officer or director, as such, of any such parent or other
         Subsidiary or Affiliate (other than Consolidated Parties). Any surplus
         remaining after the full payment and satisfaction of the Obligor
         Obligations shall be returned to the Obligor or to whomsoever a court
         of competent jurisdiction shall determine to be entitled thereto.

         10.      RIGHTS OF THE AGENT.

                  (a)      POWER OF ATTORNEY. In addition to other powers of
         attorney contained herein, the Obligor hereby designates and appoints
         the Agent, on behalf of the Lenders, and each of its designees or
         agents as attorney-in-fact of the Obligor, irrevocably and with power
         of substitution, with authority to take any or all of the following
         actions upon the occurrence and during the continuance of an Event of
         Default and subject to clause (d) below with respect to voting rights:

                           (i)      to demand, collect, settle, compromise,
                  adjust and give discharges and releases concerning the Pledged
                  Collateral of the Obligor, all as the Agent may reasonably
                  determine;

                           (ii)     to commence and prosecute any actions at any
                  court for the purposes of collecting any of the Pledged
                  Collateral of the Obligor and enforcing any other right in
                  respect thereof;

                           (iii)    to defend, settle or compromise any action
                  or proceeding brought and, in connection therewith, give such
                  discharges or releases as the Agent may deem reasonably
                  appropriate;


                                       9



                           (iv)     to pay or discharge taxes, liens, security
                  interests, or other encumbrances levied or placed on or
                  threatened against the Pledged Collateral of the Obligor;

                           (v)      to direct any parties liable for any payment
                  under any of the Pledged Collateral to make payment of any and
                  all monies due and to become due thereunder directly to the
                  Agent or as the Agent shall direct;

                           (vi)     to receive payment of and receipt for any
                  and all monies, claims, and other amounts due and to become
                  due at any time in respect of or arising out of any Pledged
                  Collateral of the Obligor;

                           (vii)    to sign and endorse any drafts, assignments,
                  proxies, stock powers, verifications, notices and other
                  documents relating to the Pledged Collateral of the Obligor;

                           (viii)   execute and deliver all assignments,
                  conveyances, statements, financing statements, renewal
                  financing statements, pledge agreements, affidavits, notices
                  and other agreements, instruments and documents that the Agent
                  may reasonably determine necessary in order to perfect and
                  maintain the security interests and liens granted in this
                  Pledge Agreement and in order to fully consummate all of the
                  transactions contemplated therein;

                           (ix)     to exchange any of the Pledged Collateral of
                  the Obligor or other property upon any merger, consolidation,
                  reorganization, recapitalization or other readjustment of the
                  issuer thereof and, in connection therewith, deposit any of
                  the Pledged Collateral of the Obligor with any committee,
                  depository, transfer agent, registrar or other designated
                  agency upon such terms as the Agent may reasonably determine;

                           (x)      to vote for a shareholder resolution, or to
                  sign an instrument in writing, sanctioning the transfer of any
                  or all of the Pledged Shares of the Obligor into the name of
                  the Agent or one or more of the Lenders or into the name of
                  any transferee to whom the Pledged Shares of the Obligor or
                  any part thereof may be sold pursuant to Section 10 hereof;
                  and

                           (xi)     to do and perform all such other acts and
                  things as the Agent may reasonably deem to be necessary,
                  proper or convenient in connection with the Pledged Collateral
                  of the Obligor.

         This power of attorney is a power coupled with an interest and shall be
         irrevocable until this Pledge Agreement has been terminated in
         accordance with the term of Section 14(a). The Agent shall be under no
         duty to exercise or withhold the exercise of any of the rights, powers,
         privileges and options expressly or implicitly granted to the Agent in
         this Pledge Agreement, and shall not be liable for any failure to do so
         or any delay in doing so. The Agent shall not be liable for any act or
         omission or for any error of judgment or any


                                       10



         mistake of fact or law in its individual capacity or its capacity as
         attorney-in-fact except acts or omissions resulting from its gross
         negligence, bad faith or willful misconduct. This power of attorney is
         conferred on the Agent solely to protect, preserve and realize upon its
         security interest in Pledged Collateral.

                  (b)      ASSIGNMENT BY THE AGENT. The Agent may from time to
         time assign the Obligor Obligations and the Pledged Collateral to any
         successor Agent appointed in accordance with SECTION 10.7 of the Credit
         Agreement, and the assignee shall be entitled to all of the rights and
         remedies of the Agent under this Pledge Agreement in relation thereto.

                  (c)      THE AGENT'S DUTY OF CARE. Other than the exercise of
         reasonable care to assure the safe custody of the Pledged Collateral
         while being held by the Agent hereunder and the accounting of monies
         actually received hereunder, the Agent shall have no duty or liability
         to preserve rights pertaining thereto, it being understood and agreed
         that Obligor shall be responsible for preservation of all rights in the
         Pledged Collateral of the Obligor, and the Agent shall be relieved of
         all responsibility for Pledged Collateral upon surrendering it or
         tendering the surrender of it to the Obligor. The Agent shall be deemed
         to have exercised reasonable care in the custody and preservation of
         the Pledged Collateral in its possession if such Pledged Collateral is
         accorded treatment substantially equal to that which the Agent accords
         its own property, which shall be no less than the treatment employed by
         a reasonable and prudent agent in the industry, it being understood
         that the Agent shall not have responsibility for (i) ascertaining or
         taking action with respect to calls, conversions, exchanges,
         maturities, tenders or other matters relating to any Pledged
         Collateral, whether or not the Agent has or is deemed to have knowledge
         of such matters; or (ii) taking any necessary steps to preserve rights
         against any parties with respect to any Pledged Collateral.

                  (d)      VOTING RIGHTS IN RESPECT OF THE PLEDGED COLLATERAL.

                           (i)      So long as no Event of Default shall have
                  occurred and be continuing, to the extent permitted by law,
                  the Obligor may exercise any and all voting and other
                  consensual rights pertaining to the Pledged Collateral of the
                  Obligor or any part thereof for any purpose not inconsistent
                  with the terms of this Pledge Agreement or the Credit
                  Agreement; and

                           (ii)     Upon the occurrence and during the
                  continuance of an Event of Default, all rights of the Obligor
                  to exercise the voting and other consensual rights which it
                  would otherwise be entitled to exercise pursuant to paragraph
                  (i) of this Section upon written notice to the Borrower and
                  the Obligor shall cease and all such rights shall thereupon
                  become vested in the Agent which shall then have the sole
                  right to exercise such voting and other consensual rights.

                  (e)      DIVIDEND RIGHTS IN RESPECT OF THE PLEDGED COLLATERAL.


                                       11


                           (i)      Subject to subclause (ii) below and subject
                  to Section 4(b) hereof, the Obligor may receive and retain any
                  and all dividends (other than stock dividends and other
                  dividends constituting Pledged Collateral which are addressed
                  hereinabove) or interest paid in respect of the Pledged
                  Collateral to the extent they are allowed under the Credit
                  Agreement.

                           (ii)     Upon the occurrence and during the
                  continuance of an Event of Default (but subject to the
                  provisions of the Credit Agreement):

                                    (A)      all rights of the Obligor to
                           receive the dividends and interest payments which it
                           would otherwise be authorized to receive and retain
                           pursuant to paragraph (i) of this Section upon
                           written notice to the Borrower and the Obligor shall
                           cease and all such rights shall thereupon be vested
                           in the Agent which shall then have the sole right to
                           receive and hold as Pledged Collateral such dividends
                           and interest payments; and

                                    (B)      all dividends and interest payments
                           which are received by the Obligor contrary to the
                           provisions of paragraph (A) of this Section shall be
                           received in trust for the benefit of the Agent, shall
                           be segregated from other property or funds of the
                           Obligor, and shall be forthwith paid over to the
                           Agent as Pledged Collateral in the exact form
                           received, to be held by the Agent as Pledged
                           Collateral and as further collateral security for the
                           Obligor Obligations.

                  (f)      RELEASE OF PLEDGED COLLATERAL. The Agent may release
         any of the Pledged Collateral from this Pledge Agreement or may
         substitute any of the Pledged Collateral for other Pledged Collateral
         without altering, varying or diminishing in any way the force, effect,
         lien, pledge or security interest of this Pledge Agreement as to any
         Pledged Collateral not expressly released or substituted.

         11.      RIGHTS OF REQUIRED LENDERS. To the extent (i) the Agent has
refused to exercise any of its rights hereunder at the direction of the Required
Lenders or (ii) the Agent has resigned or has been removed pursuant to Section
10.7 of the Credit Agreement and no successor Agent has been appointed, all
rights of the Agent hereunder may be exercised by the Required Lenders.

         12.      APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Obligor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Obligor Obligations in the order set forth in SECTION 3.15(b)
of the Credit Agreement, and the Obligor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Agent shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds in the Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.


                                       12



         13.      EXPENSES. The Borrower agrees to promptly pay upon demand any
and all reasonable documented costs and expenses of the Agent or the Lenders as
necessary to protect the Pledged Collateral or to exercise any rights or
remedies under this Pledge Agreement or with respect to any Pledged Collateral,
subject to the same terms and conditions applicable to Credit Parties under
SECTION 11.5 of the Credit Agreement.

         14.      CONTINUING AGREEMENT.

                  (a)      This Pledge Agreement shall be a continuing agreement
         in every respect and shall remain in full force and effect until the
         earlier of (i) such time as the Credit Party Obligations are Fully
         Satisfied or (ii) such time as all of Net Cash Proceeds from the sales
         of the Capital Stock of Dairy LLC and Dairy TXCT LLC to one or more
         Persons who are not Affiliates of the Borrower pursuant to Permitted
         Asset Dispositions have been irrevocably delivered to the Credit
         Parties. At such time, this Pledge Agreement and the liens and security
         interests created hereunder shall automatically terminate and the Agent
         and the Lenders shall, at the expense of the Obligor, redeliver all
         Pledged Shares to the Obligor and shall execute and deliver all UCC
         termination statements and/or other documents reasonably requested by
         the Obligor evidencing such termination. Any other releases of Pledged
         Collateral prior to the termination of this Pledge Agreement shall be
         made pursuant to Section 8.5 of the Credit Agreement. Notwithstanding
         the foregoing all indemnities provided hereunder shall survive
         termination of this Pledge Agreement.

                  (b)      This Pledge Agreement shall continue to be effective
         or be automatically reinstated, as the case may be, if at any time
         payment, in whole or in part, of any of the Obligor Obligations is
         rescinded or must otherwise be restored or returned by the Agent or any
         Lender as a preference, fraudulent conveyance or otherwise under any
         bankruptcy, insolvency or similar law, all as though such payment had
         not been made; PROVIDED that in the event payment of all or any part of
         the Obligor Obligations is rescinded or must be restored or returned,
         all reasonable costs and expenses (including without limitation any
         reasonable legal fees and disbursements) incurred by the Agent in
         defending and enforcing such reinstatement shall be deemed to be
         included as a part of the Obligor Obligations.

         15.      AMENDMENTS; WAIVERS; MODIFICATIONS. This Pledge Agreement and
the provisions hereof may not be amended, waived, modified, changed, discharged
or terminated unless such amendment, waiver, modification, change, discharge or
termination is in writing entered into, or approved in writing, by the Agent and
the Obligor.

         16.      SUCCESSORS IN INTEREST. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon the
Obligor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their successors and permitted assigns; PROVIDED, HOWEVER,
that the Obligor may not assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Credit Agreement.


                                       13



         17.      NOTICES. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (a) when delivered, (b) when transmitted via telecopy (or other
facsimile device) to the number set out below, (c) the Business Day following
the day on which the same has been delivered prepaid (or pursuant to an invoice
arrangement) to a reputable national overnight air courier service, or (d) the
third Business Day following the day on which the same is sent by certified or
registered mail, postage prepaid, in each case to the respective parties at the
address, in the case of the Obligor, set forth below, and, in the case of the
Agent, set forth on SECTION 11.1 of the Credit Agreement, or at such other
address as such party may specify by written notice to the other parties hereto:

         if to the Obligor:

                  Vestar Capital Partners
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO  80202
                  Attn: Chris Henderson, Managing Director
                  Telephone:  (303) 294-1822
                  Telecopy:  (303) 292-6639

                  and

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, Illinois  60601
                  Attn:  Steve Ritchie
                  Telephone:  (312) 861-2210
                  Telecopy:    (312) 861-2200.

         18.      COUNTERPARTS. This Pledge Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.

         19.      HEADINGS. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.


                                       14



         20.      GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.

                  (a)      THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
         OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
         INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
         legal action or proceeding with respect to this Pledge Agreement may be
         brought in the courts of the State of New York in New York County, or
         of the United States for the Southern District of New York, and, by
         execution and delivery of this Pledge Agreement, the Obligor hereby
         irrevocably accepts for itself and in respect of its property,
         generally and unconditionally, the jurisdiction of such courts. Each
         Obligor further irrevocably consents to the service of process out of
         any of the aforementioned courts in any such action or proceeding by
         the mailing of copies thereof by registered or certified mail, postage
         prepaid, to it at the address for notices pursuant to Section 17
         hereof, such service to become effective 30 days after such mailing.
         Nothing herein shall affect the right of the Agent to serve process in
         any other manner permitted by law or to commence legal proceedings or
         to otherwise proceed against the Obligor in any other jurisdiction.

                  (b)      The Obligor hereby irrevocably waives any objection
         which it may now or hereafter have to the laying of venue of any of the
         aforesaid actions or proceedings arising out of or in connection with
         this Pledge Agreement brought in the courts referred to in subsection
         (a) hereof and hereby further irrevocably waives and agrees not to
         plead or claim in any such court that any such action or proceeding
         brought in any such court has been brought in an inconvenient forum.

         21.      WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

         22.      SEVERABILITY. If any provision of any of the Pledge Agreement
is determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.

         23.      ENTIRETY. This Pledge Agreement represents the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any.

         24.      SURVIVAL. All representations and warranties of the Obligor
hereunder shall survive the execution and delivery of this Pledge Agreement.

         25.      OTHER SECURITY. To the extent that any of the Obligor
Obligations are now or hereafter secured by property other than the Pledged
Collateral (including, without limitation, real and other personal property
owned by the Obligor), or by a guarantee, endorsement or property of any other
Person, then the Agent and the Lenders shall have the right to proceed


                                       15



against such other property, guarantee or endorsement upon the occurrence and
during the continuance of any Event of Default, and the Agent and the Lenders
have the right, in their sole discretion, to determine which rights, security,
liens, security interests or remedies the Agent and the Lenders shall at any
time pursue, relinquish, subordinate, modify or take with respect thereto,
without in any way modifying or affecting any of them or any of the Agent's and
the Lenders' rights or the Obligor Obligations under this Pledge Agreement,
under any other of the Credit Documents or under any Hedging Agreement between
any Credit Party and any Lender.

                  [remainder of page intentionally left blank]


                                       16



         Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.

OBLIGOR:                            M-FOODS DAIRY HOLDINGS, LLC

                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------


Acknowledged and consented to as of the date first above written.

M-FOODS DAIRY, LLC

By:
   -----------------------------------------
Name:    John D. Reedy
Title:   V.P. - Finance and C.F.O.

M-FOODS DAIRY TXCT, LLC

By:
   -----------------------------------------
Name:    John D. Reedy
Title:   V.P. - Finance and C.F.O.

Acknowledged and agreed to as of the date first above written.

MICHAEL FOODS, INC.

By:
   -----------------------------------------
Name:    John D. Reedy
Title:   E.V.P.,  C.F.O. and Treasurer


                                       17



Accepted and agreed to as of the date first above written.

BANK OF AMERICA, N.A., as Agent

By:
   -----------------------------------------
Name:
     ---------------------------------------
Title:
      --------------------------------------


                                       18



                                  EXHIBIT 4(a)

                                       to

                            Investor Pledge Agreement

                           dated as of April 10, 2001

                        in favor of Bank of America, N.A.

                                    as Agent

                             IRREVOCABLE STOCK POWER

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
to



the following shares of Capital Stock of ____________________, a _____________
corporation:

                 NO. OF SHARES                     CERTIFICATE NO.
                 -------------                     ---------------

and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such Capital Stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.

                                   ---------------------------------------

                                   By:
                                      ------------------------------------
                                   Name:
                                        ----------------------------------
                                   Title:
                                         ---------------------------------


                                       19



                                  SCHEDULE 5(f)

                                       to

                            Investor Pledge Agreement

                           dated as of April 10, 2001

                        in favor of Bank of America, N.A.

                                    as Agent

                                  PLEDGED STOCK

                               NUMBER OF      CERTIFICATE        PERCENTAGE
ISSUER                           SHARES          NUMBER          OWNERSHIP
- ------                           ------          ------          ---------

M-Foods Dairy, LLC

M-Foods Dairy TXCT, LLC


                                       20

EX-10.5

                                                                    Exhibit 10.5

                                                                [Execution Copy]

                              EMPLOYMENT AGREEMENT

            AGREEMENT, dated as of the 10th day of April, 2001, by and among
Michael Foods, Inc., a Minnesota corporation having its principal executive
offices in Minneapolis, Minnesota (the "Company"), Gregg A. Ostrander (the
"Executive"), and for the purposes of Section 6 hereof, M-Foods Holdings, Inc.,
a Delaware corporation and controlling entity of the Company ("Holdings").

            WHEREAS, Executive currently serves as a senior executive officer of
the Company;

            WHEREAS, the Company recognizes the Executive's substantial
contribution to the growth and success of the Company, desires to provide for
the continued employment of the Executive and to make certain changes in the
Executive's employment arrangements with the Company, which the Board has
determined will reinforce and encourage the continued attention and dedication
to the Company of the Executive as a member of the Company's senior management
in the best interests of the Company and its shareholders;

            WHEREAS, the Executive is willing to continue to serve the Company
on the terms and conditions set forth below;

            NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

            1. Employment Period. Subject to the terms and conditions of this
Agreement, including Section 3, the Company hereby agrees to continue to employ
the Executive, and the Executive hereby agrees to continue in the employ of the
Company, for the period commencing on the date hereof (the "Effective Date") and
ending on the second anniversary of such Effective Date (the "Employment
Period"), provided, however, that commencing on the first anniversary of the
Effective Date and each subsequent anniversary thereafter, the Employment Period
shall automatically be extended for one additional year.

            2. Terms of Employment.

                  (a) Position and Duties.

                        (i) During the Employment Period, the Executive shall
      serve as Chairman of the Board of Directors, President and Chief Executive
      Officer of the Company with the appropriate authority, duties and
      responsibilities attendant to such positions. Executive shall also serve,
      at the request of the Company, as a Director of the Company and each of
      its subsidiaries.

                        (ii) During the Employment Period, and excluding any
      periods of vacation and sick leave to which the Executive is entitled, the
      Executive agrees to devote substantially all of his attention and time
      during his normal business hours to the business


      and affairs of the Company and, to the extent necessary to discharge the
      responsibilities assigned to the Executive hereunder, to use the
      Executive's reasonable best efforts to perform faithfully and efficiently
      such responsibilities.

                  (b) Compensation.

                        (i) Annual Base Salary. Effective immediately, and
      during the Employment Period, the Executive shall receive an annual base
      salary ("Annual Base Salary") of at least $595,000, the competitiveness of
      which shall be periodically reviewed and adjusted in accordance with
      Company policy. Any increase in Annual Base Salary shall not serve to
      limit or reduce any other obligation to the Executive under this
      Agreement. Annual Base Salary shall not be reduced after any such increase
      and the term Annual Base Salary as utilized in this Agreement shall refer
      to Annual Base Salary as so increased.

                        (ii) Annual Bonus. During the Employment Period, the
      Executive shall participate in such bonus arrangements as may be approved
      by the Compensation Committee of the Board (the "Compensation Committee")
      (the aggregate of all payments made under such bonus arrangements being
      herein referred to as the "Annual Bonus"). Executive's aggregate bonus
      opportunity will be no less than 100% of Annual Base Salary and the
      "Target Bonus" will be no less than 62.5% of Annual Base Salary or greater
      as determined by the Compensation Committee. The Annual Bonus shall be
      paid within two and one-half months of the end of the fiscal year of the
      Company to which it relates. If a Change in Control occurs, the Executive
      shall be paid at least the Target Bonus for the year in which such Change
      in Control occurs and in each subsequent year of continuing employment
      until the end of the Employment Period.

                        (iii) Long-Term Incentive Plans. The Executive shall
      participate in long-term incentive plans including all stock option plans
      and other long-term incentive plans the Company may adopt from time to
      time on a basis no less favorable than that provided to any other
      executive officer of the Company.

                        (iv) Other Employee Benefit Plans. During the Employment
      Period, except as otherwise expressly provided herein, the Executive shall
      be entitled to participate in all compensation, incentive, employee
      benefit, welfare and other plans, practices, policies and programs and
      fringe benefits on a basis no less favorable than that provided to any
      other executive officer of the Company.

            3. Termination of Employment.

                  (a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
If the Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written


                                       -2-


notice in accordance with Section 11(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean a determination by the Company in its sole discretion
that Executive is unable to perform his job responsibilities as a result of
chronic illness, physical, mental or any other disability for a period of six
months or more.

                  (b) With or Without Cause. The Company may terminate the
Executive's employment during the Employment Period with or without Cause. For
purposes of this Agreement, "Cause" shall mean:

                        (i) the continued failure of the Executive to perform
      substantially the Executive's duties with the Company or one of its
      affiliates (other than any such failure resulting from incapacity due to
      physical or mental illness), after a written demand for substantial
      performance is delivered to the Executive by the Board which specifically
      identifies the manner in which the Board believes that the Executive has
      not substantially performed the Executive's duties, or

                        (ii) the willful engaging by the Executive in illegal
      conduct or gross misconduct which is materially and demonstrably injurious
      to the Company, or

                        (iii) conviction of a felony or guilty or nolo
      contendere plea by the Executive with respect thereto.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer
(while the Executive does not serve as such) or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than 75% of the
entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i),
(ii) or (iii) above, and specifying the particulars thereof in detail.


                                       -3-


                  (c) Good Reason. The Executive's employment may be terminated
by the Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean in the absence of a written consent of the Executive:

                        (i) the assignment to the Executive of any duties
      inconsistent with the Executive's title and position (including status,
      offices and reporting requirements), authority, duties or responsibilities
      as contemplated by Section 2(a)(i) of this Agreement, or any other action
      by the Company which results in a diminution in such position, authority,
      duties or responsibilities, excluding for this purpose an isolated,
      insubstantial and inadvertent action not taken in bad faith and which is
      remedied by the Company promptly after receipt of notice thereof given by
      the Executive; provided that it is specifically understood that within six
      months of a Change in Control the Company shall have the flexibility to
      appoint the Executive to a reporting relationship different from that
      which existed prior to the Change in Control, to make an immaterial change
      in Executive's duties, or to change the Executive's title provided that
      Executive shall not have a stature less than that of a Divisional
      President, and it is understood that equivalent positions may have
      different titles;

                        (ii) any failure by the Company to comply with any of
      the provisions of Section 2(b) of this Agreement or the failure by the
      Company to increase such base salary each year after a Change in Control
      by an amount which at least equals on a percentage basis, the mean average
      percentage increase in base salary for all employees similarly situated
      during the two (2) full calendar years immediately preceding a Change in
      Control, other than an isolated, insubstantial and inadvertent failure not
      occurring in bad faith and which is remedied by the Company promptly after
      receipt of notice thereof given by the Executive;

                        (iii) the failure of the Company upon a Change in
      Control to (A) continue in effect any employee benefit plan, compensation
      plan, welfare benefit plan or material fringe benefit plan in which
      Executive is participating immediately prior to such Change in Control or
      the taking of any action by the Company which would adversely affect
      Executive's participation in or reduce Executive's benefits under any such
      plan, unless Executive is permitted to participate in other plans
      providing Executive with substantially equivalent benefits, or (B) provide
      Executive with paid vacation in accordance with the most favorable past
      practice of the Company as in effect for Executive immediately prior to
      such Change in Control;

                        (iv) any purported termination by the Company of the
      Executive's employment otherwise than as expressly permitted by this
      Agreement for Cause, death or Disability;

                        (v) any failure by the Company to comply with and
      satisfy Section 10(c) of this Agreement;


                                       -4-


                        (vi) any requirement that the Executive (A) be based
      anywhere more than fifty (50) miles from the office where the Executive is
      currently located or (B) travel on Company business to an extent
      substantially greater than the Executive's current travel obligations; or

                        (vii) any failure of the Executive to be elected to, or
      to remain a member of, the Company's Board of Directors; provided,
      however, that after a Change in Control, failure of the Executive to be
      nominated to the Board of Directors of a successor that is a publicly
      traded company shall not constitute Good Reason.

                  (d) Notice of Termination. Any termination by the Company or
by the Executive shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 11(b) of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.

                  (e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company other than for
Disability, the date of receipt of the Notice of Termination or any later date
specified therein within 30 days of such notice, (ii) if the Executive's
employment is terminated by reason of death or Disability, the date of death of
the Executive or the Disability Effective Date, as the case may be, and (iii) if
the Executive's employment is terminated by the Executive, thirty days after the
giving of such notice by the Executive provided that the Company may elect to
place the Executive on paid leave for all or any part of such 30-day period.

                  (f) Change in Control. "Change in Control" means the
consummation of a transaction, whether in a single transaction or in a series of
related transactions that are consummated contemporaneously (or consummated
pursuant to contemporaneous agreements), with any other party or parties on an
arm's-length basis, pursuant to which (a) such party or parties, directly or
indirectly, acquire (whether by merger, stock purchase, recapitalization,
reorganization, redemption, issuance of capital stock or otherwise) more than
50% of the voting stock of the Company, (b) such party or parties, directly or
indirectly, acquire assets constituting all or substantially all of the assets
of the Company and its subsidiaries on a consolidated basis, or (c) prior to an
initial public offering of the Company Common Stock pursuant to an offering
registered under the 1933 Act, Vestar Capital Partners IV, L.P. a Delaware
limited partnership and its affiliates cease


                                       -5-


to have the ability to elect, directly or indirectly, a majority of the Board of
Directors of the Company.

            4. Obligations of the Company upon Termination.

                  (a) Death or Disability. If, during the Employment Period, the
Executive's employment shall terminate on account of death or Disability:

                        (i) the Company shall pay to the Executive or his estate
      or beneficiaries in a lump sum in cash within 30 days after the Date of
      Termination the sum of (x) the Executive's Annual Base Salary through the
      Date of Termination to the extent not theretofore paid, and (y) the
      product of (1) the Target Bonus and (2) a fraction, the numerator of which
      is the number of whole and partial months in the fiscal year in which the
      Date of Termination occurs through the Date of Termination and the
      denominator of which is 12, to the extent not theretofore paid (the sum of
      the amounts described in clauses (x) and (y) shall be hereinafter referred
      to as the "Accrued Obligations");

                        (ii) to the extent not theretofore paid or provided, the
      Company shall timely pay or provide to the Executive or his estate or
      beneficiaries any other amounts or benefits required to be paid or
      provided or which the Executive is eligible to receive under any plan,
      program, policy or practice of or contract or agreement with the Company
      and its affiliated companies through the Date of Termination (such other
      amounts and benefits shall be hereinafter referred to as the "Other
      Benefits"); and

                        (iii) the Company shall pay to the Executive or his
      estate or beneficiaries in a lump sum in cash within 30 days after the
      Date of Termination an amount equal to the product of (x) three (3) and
      (y) the sum of the Executive's current Annual Base Salary and Target
      Bonus.

                  (b) By the Company for Cause; By the Executive Other than for
Good Reason. If the Executive's employment is terminated for Cause or the
Executive terminates his employment without Good Reason during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (i) his Annual Base
Salary through the Date of Termination to the extent theretofore unpaid and (ii)
the Other Benefits.

                  (c) By the Company Other than for Cause, Death or Disability;
By the Executive for Good Reason. If, during the Employment Period, the
Executive's employment is terminated by the Executive for Good Reason or by the
Company other than for Cause and other than on account of death or Disability:

                        (i) the Company shall pay to the Executive in a lump sum
      in cash within 30 days after the Date of Termination the sum of:


                                       -6-


                              (A) the Accrued Obligations; and

                              (B) the amount equal to the product of (x) three
            (3) and (y) the sum of the Executive's current Annual Base Salary
            and Target Bonus;

                        (ii) the Company shall provide the Executive with the
      Other Benefits; and

                        (iii) for a period of three (3) years following
      Executive's Date of Termination the Company shall continue to provide
      medical, dental and life insurance benefits to the Executive, his spouse
      and children under age 25 on the same basis, including without limitation
      employee contributions, as such benefits are then currently provided to
      the Executive ("Welfare Benefits"); provided that the provision of such
      Welfare Benefits shall cease in the event Executive becomes eligible to
      receive comparable benefits from another employer (either because he
      becomes employed by, or becomes an independent contractor with respect to
      such employer).

            5. Noncompetition and Nonsolicitation. Executive acknowledges that
in the course of his employment with the Company he will become familiar with
the Company's and its subsidiaries' trade secrets and other confidential
information concerning the Company and such subsidiaries and that his services
will be of special, unique and extraordinary value to the Company and its
subsidiaries. Therefore, Executive agrees that:

                  (a) Noncompetition. During the period commencing on the
Effective Date and ending on the second anniversary of the date Executive's
employment with the Company terminates (such period the "Restricted Period"),
Executive shall not, for himself or on behalf of any other person, firm,
partnership, corporation, or other entity, engage, directly or indirectly, as an
executive, agent, representative, consultant, partner, shareholder or holder of
any other financial interest, in any business that competes with the Company in
the business of the production, distribution or sales of eggs or egg products (a
"Competing Business"), it being understood and agreed that Executive shall not
be in violation of this restriction where Executive is employed by a person,
firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, so long as Executive is not
engaged in or responsible for the Competing Business of such entity. Nothing
herein shall prohibit Executive from being a passive owner of not more than 2%
of the outstanding publicly traded stock of any class of a Competing Business so
long as Executive has no active participation in the business of such entity,
except to the extent permitted above. Executive acknowledges that this
Agreement, and specifically, this Section 5, does not preclude Executive from
earning a livelihood, nor does it unreasonably impose limitations on Executive's
ability to earn a living. In addition, Executive agrees and acknowledges that
the potential harm to the Company of its non-enforcement outweighs any harm to
Executive of its enforcement by injunction or otherwise.


                                       -7-


                  (b) Nonsolicitation. During the Restricted Period, Executive
shall not directly or indirectly through another entity (i) induce or attempt to
induce any employee of the Company or its subsidiaries to leave the employ of
the Company or its subsidiaries, or in any way interfere with the relationship
between the Company or any of its subsidiaries and any employee thereof, (ii)
knowingly hire any person who was an employee of the Company or any of its
subsidiaries within 180 days prior to the time such employee was hired by
Executive, (iii) induce or attempt to induce any customer, supplier, licensee or
other business relation of the Company or any of its subsidiaries to cease doing
business with the Company or its subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary or (iv) directly or indirectly acquire or
attempt to acquire an interest in any business relating to the business of the
Company or any of its subsidiaries and with which the Company or any of its
subsidiaries has entertained discussions or has requested and received
information relating to the acquisition of such business by the Company or its
subsidiaries in the one-year period immediately preceding Executive's
termination of employment with the Company.

                  (c) Enforcement. The parties to this Agreement hereby agree
and stipulate that (i) the restrictions contained in this Agreement are
reasonable and necessary in order to protect the Company's and its subsidiaries'
legitimate business interests and (ii) in the event of any breach or violation
of this Agreement or of any provision hereof by Executive, the Company and its
subsidiaries will have no adequate remedy at law and will suffer irreparable
loss and damage thereby. The parties hereby further agree and stipulate that in
the event of any such breach or violation, either threatened or actual, the
Company's and its subsidiaries' rights shall include, in addition to any and all
other rights available to the Company and its subsidiaries at law or in equity,
the right to seek and obtain any and all injunctive relief or restraining orders
available to it in courts of proper jurisdiction, so as to prohibit, bar, and
restrain any and all such breaches or violations by Executive. The prevailing
party to any legal action, arbitration or other proceeding commenced in
connection with enforcing any provision of this Section 5, including without
limitation, obtaining the injunctive relief provided by this Section 5 shall be
entitled to recover all court costs, reasonable attorneys' fees, and related
expenses incurred by such party. Executive further agrees that no bond need be
filed in connection with any request by the Company and its subsidiaries for a
temporary restraining order or for temporary or preliminary injunctive relief.

                  (d) Additional Acknowledgments. Executive acknowledges that
the provisions of this Section 5 are in consideration of: (i) employment with
the Company, (ii) the issuance by M-Foods Investors, LLC, a Delaware corporation
and affiliate of the Company ("Investors"), to Executive of Investors' Class B
Units (the "Class B Units") and Investors' Class C Units pursuant to the terms
of that certain Management Stock Purchase and Unit Subscription Agreement, dated
as of the date hereof, by and between Investors and Executive (the "Management
Stock Purchase and Unit Subscription Agreement"), and (iii) additional good and
valuable consideration as set forth in this Agreement. In addition, Executive
acknowledges (i) that the business of the Company and its subsidiaries is
national in scope and without geographical limitation and (ii) notwithstanding
the state of incorporation or principal office of the Company or any of its
subsidiaries, or any of their respective executives or employees (including the
Executive), it is


                                       -8-


expected that the Company will have business activities and have valuable
business relationships within its industry throughout the United States.
Executive acknowledges that he has carefully read this Agreement and has given
careful consideration to the restraints imposed upon Executive by this
Agreement, and is in full accord as to their necessity for the reasonable and
proper protection of confidential and proprietary information of the Company and
its subsidiaries now existing or to be developed in the future. Executive
expressly acknowledges and agrees that each and every restraint imposed by this
Agreement is reasonable with respect to subject matter, time period and
geographical area.

            6. Deferral of Certain Compensation. In connection with the
Executive's agreement to cancel all of his options to acquire Company Common
Stock pursuant to the terms of that certain Option Cancellation Agreement, dated
as of the date hereof, by and between the Executive and the Company, the Company
shall (a) pay to Executive an amount equal to $602,659 (the "Cancellation
Payment") and (b) rollover an amount equal to $4,032,000 (the "Deferred Amount")
to an unfunded, unsecured nonqualified deferred compensation arrangement
established for this purpose (the "Deferred Account"). Each of the Executive,
the Company and Holdings agrees that Holdings, through an intercompany transfer,
shall assume all obligations associated with the Deferred Amount. The
Cancellation Payment shall be paid by the Company to the Executive on the
Effective Date, or as soon as reasonably practicable thereafter.

      With respect to the Deferred Account, the Deferred Amount shall be deemed
to be invested (i.e., an actual investment will not be made), as of the
Effective Date, in (A) 40,320 Class A Units of Investors (the "Investors A
Units") and (B) 40,320 Class A Units (the "Dairy A Units") of M-Foods Dairy
Holdings, LLC, a Delaware limited liability company ("Dairy Holdings"). Holdings
shall credit Executive's Deferred Account with certain of the distributions that
would be received by the Deferred Account if such Deferred Account were actually
invested in the manner set forth in the preceding sentence in Investors A Units
and Dairy A Units, the extent of such crediting to be in accordance with the
calculations set forth in the following two paragraphs. All amounts in the
Executive's Deferred Account shall be subject to the claims of the creditors of
Holdings.

      With respect to the Investors A Units, Holdings shall credit Executive's
Deferred Account with any distributions made in respect of such Investors A
Units pursuant to or in accordance with Sections 4.4(a)(i) and 4.4(a)(ii) of the
Investors' Amended and Restated Limited Liability Company Agreement, dated April
10, 2001 (the "Investors LLC Agreement"). In the event Investors distributes
non-cash property to holders of Investors A Units pursuant to Sections 4.4(a)(i)
or 4.4(a)(ii) of the Investors LLC Agreement, Holdings shall credit Executive's
Deferred Account in an amount equal to the fair market value of such property,
as determined by the Management Committee of Investors. Executive's Deferred
Account shall not be credited with any distributions made in respect of
Investors A Units pursuant to or in accordance with any subsections of Section
4.4 of the Investors LLC Agreement other than Sections 4.4(a)(i) and 4.4(a)(ii)
thereof. In the event that Investors A Units are sold by one or more holders of
Investors A Units to a buyer unrelated on the date hereof to the holders of
Investors A Units, Holdings shall credit Executive's Deferred Account with an
amount equal to the result of (x) the percentage of outstanding Investors A
Units


                                       -9-


being purchased by an unrelated buyer (including, for purposes of this
percentage calculation, the number of Investors A Units deemed held by the
Deferred Account and any other unfunded, unsecured nonqualified deferred
compensation arrangements similarly established to be deemed to hold Investors A
Units) multiplied by (y) the number of Investors A Units deemed held in the
Deferred Account multiplied by (z) the lesser of (i) the amount of cash or fair
market value of any property, as determined by the Management Committee of
Investors, received by holders of Investors A Units in exchange for an Investors
A Unit and (ii) the sum of the Unreturned Capital and Unpaid Preferred Return
(as such terms are defined in the Investors LLC Agreement) of an Investors A
Unit (assuming such Investors A Unit was issued on the Closing Date, as such
term is defined in the Executive's Management Stock Purchase and Unit
Subscription Agreement); it being understood and agreed that any distribution
made pursuant to this sentence shall, with respect to future distributions,
reduce the number of Investors A Units deemed held by the Deferred Account by
the percentage described in subclause (x) of this sentence.

      With respect to the Dairy A Units, Holdings shall credit Executive's
Deferred Account with any distributions made in respect of such Dairy A Units
pursuant to or in accordance with Sections 4.4(a)(ii) and 4.4(a)(iii) of the
Limited Liability Company Agreement of Dairy Holdings, dated April 10, 2001 (the
"Dairy Holdings LLC Agreement"). In the event Dairy Holdings distributes
non-cash property to holders of Dairy A Units pursuant to Sections 4.4(a)(ii) or
4.4(a)(iii) of the Dairy Holdings LLC Agreement, Holdings shall credit
Executive's Deferred Account in an amount equal to the fair market value of such
property, as determined by the Management Committee of Dairy Holdings.
Executive's Deferred Account shall not be credited with any distributions made
in respect of Dairy A Units pursuant to or in accordance with any subsections of
Section 4.4 of the Dairy Holdings LLC Agreement other than Sections 4.4(a)(ii)
and 4.4(a)(iii) thereof. In the event that Dairy A Units are sold by one or more
holders of Dairy A Units to a buyer unrelated on the date hereof to the holders
of Dairy A Units, Holdings shall credit Executive's Deferred Account with an
amount equal to the result of (x) the percentage of outstanding Dairy A Units
being purchased by an unrelated buyer (including, for purposes of this
percentage calculation, the number of Dairy A Units deemed held by the Deferred
Account and any other unfunded, unsecured nonqualified deferred compensation
arrangements similarly established to be deemed to hold Dairy A Units)
multiplied by (y) the number of Dairy A Units deemed held in the Deferred
Account multiplied by (z) the lesser of (i) the amount of cash or fair market
value of any property, as determined by the Management Committee of Dairy
Holdings, received by holders of Dairy A Units in exchange for a Dairy A Unit
and (ii) the sum of the Unreturned Capital and Unpaid Preferred Return (as such
terms are defined in the Dairy Holdings LLC Agreement) of a Dairy A Unit
(assuming such Dairy A Unit was issued on the Closing Date, as such term is
defined in the Dairy Unit Subscription Agreement, dated as of the date hereof,
between Dairy Holdings and the Executive (the "Dairy Unit Subscription
Agreement")); it being understood and agreed that any distribution made pursuant
to this sentence shall, with respect to future distributions, reduce the number
of Dairy A Units deemed held by the Deferred Account by the percentage described
in subclause (x) of this sentence.

      Executive shall receive from Holdings distributions from his Deferred
Account, in the amount indicated, upon the occurrence of the following events:
(i) upon a Change in Control,


                                      -10-


Executive shall receive a total distribution of the amount then deemed held in
the Deferred Account; (ii) upon the tenth anniversary of the date hereof,
Executive shall receive a total distribution of the amount then deemed held in
the Deferred Account; (iii) upon the purchase by Investors of any of Executive's
Class B Units pursuant to Section 7.2 of the Executive's Management Stock
Purchase and Unit Subscription Agreement, Executive shall receive a distribution
from the Deferred Account equal to the result of (x) the percentage of
Executive's Class B Units being purchased by Investors multiplied by (y) the
number of Investors A Units deemed held in the Deferred Account multiplied by
(z) the lesser of (A) the fair market value of an Investors A Unit, as
determined by the Management Committee of Investors and (B) the sum of the
Unreturned Capital and Unpaid Preferred Return (as such terms are defined in the
Investors LLC Agreement) of an Investors A Unit (assuming such Investors A Unit
was issued on the Closing Date, as such term is defined in the Executive's
Management Stock Purchase and Unit Subscription Agreement); it being understood
and agreed that any distribution made pursuant to clause (iii) of this sentence
shall, with respect to future distributions, reduce the number of Investors A
Units deemed held by the Deferred Account by the percentage described in
subclause (x) of such clause (iii); and (iv) upon the purchase by Dairy Holdings
of any of Executive's Class B Units pursuant to Section 7.2 of the Executive's
Dairy Unit Subscription Agreement, Executive shall receive a distribution from
the Deferred Account equal to the result of (x) the percentage of Executive's
Class B Units being purchased by Dairy Holdings multiplied by (y) the number of
Dairy A Units deemed held in the Deferred Account multiplied by (z) the lesser
of (A) the fair market value of a Diary A Unit, as determined by the Management
Committee of Dairy Holdings and (B) the sum of the Unreturned Capital and Unpaid
Preferred Return (as such terms are defined in the Dairy Holdings LLC Agreement)
of a Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as
such term is defined in the Executive's Dairy Unit Subscription Agreement); it
being understood and agreed that any distribution made pursuant to clause (iv)
of this sentence shall, with respect to future distributions, reduce the number
of Dairy A Units deemed held by the Deferred Account by the percentage described
in subclause (x) of such clause (iv). The form of payment made with respect to
any of the foregoing distributions shall be a cash payment except that (1) in
the event of a Change in Control in which the consideration effecting such
Change in Control is non-cash consideration, such distribution may be made in
the form of such non-cash consideration, the fair market value of which shall be
determined by the Management Committee of Investors, and (2) in the event of a
distribution of the type described in clause (iii) or (iv) above, if, with
respect to Holdings, any of the Cash Deferral Conditions (as such term is
defined in the Executive's Management Stock Purchase and Unit Subscription
Agreement) exists, the portion of the cash payment so affected may be made by
the delivery of Holdings' unfunded and unsecured promise to pay Executive the
portion of the cash payment so affected in cash, together with interest, at the
first date on which the Cash Deferral Conditions no longer exist. The interest
on such delayed cash payment will accrue annually at the "prime rate" published
by The Wall Street Journal on the date Holdings delivers its unfunded and
unsecured promise.

            7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor shall


                                      -11-


anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice, program, contract or agreement except as explicitly
modified by this Agreement; provided that the Executive shall not be eligible
for severance benefits under any other program or policy of the Company.

            8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) pursued or defended against in
good faith by the Executive regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.

            9. Certain Additional Payments by the Company.

      Notwithstanding anything in this Agreement to the contrary, this Section 9
shall be limited in its application solely to the change in ownership that will
occur as a result of the consummation of the transactions set forth in that
certain Agreement and Plan of Merger, dated December 21, 2000, by and among the
Company, Holdings, and Protein Acquisition Corp:

                  (a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 9) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an


                                      -12-


amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. For purposes of this Agreement, the term "Reduced Amount" shall mean
the greatest amount that could be paid to the Executive such that the receipt of
Payments would not give rise to any Excise Tax. Notwithstanding the foregoing
provisions of this Section 9(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Payments do not exceed 120% of the
Reduced Amount, then no Gross-Up Payment shall be made to the Executive and the
Payments, in the aggregate, shall be reduced to the Reduced Amount.

                  (b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the Company's independent auditors or such other certified public accounting
firm reasonably acceptable to the Executive as may be designated by the Company
(the "Accounting Firm") which shall provide detailed supporting calculations
both to the Company and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time as
is requested by the Company. All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 9, shall be paid by the Company to the Executive not later than the
due date for the payment of any Excise Tax. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

                  (c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

                        (i) give the Company any information reasonably
      requested by the Company relating to such claim,

                        (ii) take such action in connection with contesting such
      claim as the Company shall reasonably request in writing from time to
      time, including, without


                                      -13-


      limitation, accepting legal representation with respect to such claim by
      an attorney reasonably selected by the Company,

                        (iii) cooperate with the Company in good faith in order
      to effectively contest such claim, and

                        (iv) permit the Company to participate in any
      proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

                  (d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall promptly
pay to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.


                                      -14-


            10. Successors.

                  (a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.

                  (b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.

                  (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid.

            11. Miscellaneous.

                  (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

                  (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

                  If to the Executive:

                  Gregg A. Ostrander
                  21520 Fairview Street
                  Greenwood, Minnesota 55331


                                      -15-


                  If to the Company:

                  Michael Foods, Inc.
                  324 Park National Bank Building
                  5353 Wayzata Boulevard
                  Minneapolis, Minnesota 55416
                  Telecopy Number: (612) 546-3711
                  Attention:  Secretary

                  with a copy to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue
                  41st Floor
                  New York, NY 10167
                  Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                  (c) Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

                  (d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.

                  (e) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including; without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 3(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

                  (f) From and after the Effective Date this Agreement shall
supersede any other employment agreement between the parties with respect to the
subject matter hereof.


                                      -16-


                  (g) Subject to the provisions of Section 3(d), there shall be
no limitation on the ability of the Company to terminate the Executive at any
time with or without Cause.

                                * * * * * * * * *


                                      -17-


            IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.

                                          _____________________________
                                          Gregg A. Ostrander


                                          MICHAEL FOODS, INC.

                                          By:___________________________

                                          Title:________________________


                                          M-FOODS HOLDINGS, INC.

                                          By:___________________________

                                          Title:________________________

EX-10.6

                                                                    Exhibit 10.6

                                                                [Execution Copy]

                              EMPLOYMENT AGREEMENT

            AGREEMENT, dated as of the 10th day of April, 2001, by and among
Michael Foods, Inc., a Minnesota corporation having its principal executive
offices in Minneapolis, Minnesota (the "Company"), John D. Reedy (the
"Executive"), and for the purposes of Section 6 hereof, M-Foods Holdings, Inc.,
a Delaware corporation and controlling entity of the Company ("Holdings").

            WHEREAS, Executive currently serves as a senior executive officer of
the Company;

            WHEREAS, the Company recognizes the Executive's substantial
contribution to the growth and success of the Company, desires to provide for
the continued employment of the Executive and to make certain changes in the
Executive's employment arrangements with the Company, which the Board has
determined will reinforce and encourage the continued attention and dedication
to the Company of the Executive as a member of the Company's senior management
in the best interests of the Company and its shareholders;

            WHEREAS, the Executive is willing to continue to serve the Company
on the terms and conditions set forth below;

            NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

            1. Employment Period. Subject to the terms and conditions of this
Agreement, including Section 3, the Company hereby agrees to continue to employ
the Executive, and the Executive hereby agrees to continue in the employ of the
Company, for the period commencing on the date hereof (the "Effective Date") and
ending on the second anniversary of such Effective Date (the "Employment
Period"), provided, however, that commencing on the first anniversary of the
Effective Date and each subsequent anniversary thereafter, the Employment Period
shall automatically be extended for one additional year.

            2. Terms of Employment.

                  (a) Position and Duties.

                        (i) During the Employment Period, the Executive shall
      serve as Vice President-Finance, Treasurer and Chief Financial Officer of
      the Company with the appropriate authority, duties and responsibilities
      attendant to such positions. Executive shall also serve, at the request of
      the Company, as a Director of the Company and each of its subsidiaries.

                        (ii) During the Employment Period, and excluding any
      periods of vacation and sick leave to which the Executive is entitled, the
      Executive agrees to devote substantially all of his attention and time
      during his normal business hours to the business


                                       -1-


      and affairs of the Company and, to the extent necessary to discharge the
      responsibilities assigned to the Executive hereunder, to use the
      Executive's reasonable best efforts to perform faithfully and efficiently
      such responsibilities.

                  (b) Compensation.

                        (i) Annual Base Salary. Effective immediately, and
      during the Employment Period, the Executive shall receive an annual base
      salary ("Annual Base Salary") of at least $275,000, the competitiveness of
      which shall be periodically reviewed and adjusted in accordance with
      Company policy. Any increase in Annual Base Salary shall not serve to
      limit or reduce any other obligation to the Executive under this
      Agreement. Annual Base Salary shall not be reduced after any such increase
      and the term Annual Base Salary as utilized in this Agreement shall refer
      to Annual Base Salary as so increased.

                        (ii) Annual Bonus. During the Employment Period, the
      Executive shall participate in such bonus arrangements as may be approved
      by the Compensation Committee of the Board (the "Compensation Committee")
      (the aggregate of all payments made under such bonus arrangements being
      herein referred to as the "Annual Bonus"). Executive's aggregate bonus
      opportunity will be no less than 100% of Annual Base Salary and the
      "Target Bonus" will be no less than 62.5% of Annual Base Salary or greater
      as determined by the Compensation Committee. The Annual Bonus shall be
      paid within two and one-half months of the end of the fiscal year of the
      Company to which it relates. If a Change in Control occurs, the Executive
      shall be paid at least the Target Bonus for the year in which such Change
      in Control occurs and in each subsequent year of continuing employment
      until the end of the Employment Period.

                        (iii) Long-Term Incentive Plans. The Executive shall
      participate in long-term incentive plans including all stock option plans
      and other long-term incentive plans the Company may adopt from time to
      time on a basis no less favorable than that provided to any other
      executive officer of the Company.

                        (iv) Other Employee Benefit Plans. During the Employment
      Period, except as otherwise expressly provided herein, the Executive shall
      be entitled to participate in all compensation, incentive, employee
      benefit, welfare and other plans, practices, policies and programs and
      fringe benefits on a basis no less favorable than that provided to any
      other executive officer of the Company.

            3. Termination of Employment.

                  (a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
If the Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written


                                       -2-


notice in accordance with Section 11(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean a determination by the Company in its sole discretion
that Executive is unable to perform his job responsibilities as a result of
chronic illness, physical, mental or any other disability for a period of six
months or more.

                  (b) With or Without Cause. The Company may terminate the
Executive's employment during the Employment Period with or without Cause. For
purposes of this Agreement, "Cause" shall mean:

                        (i) the continued failure of the Executive to perform
      substantially the Executive's duties with the Company or one of its
      affiliates (other than any such failure resulting from incapacity due to
      physical or mental illness), after a written demand for substantial
      performance is delivered to the Executive by the Board which specifically
      identifies the manner in which the Board believes that the Executive has
      not substantially performed the Executive's duties, or

                        (ii) the willful engaging by the Executive in illegal
      conduct or gross misconduct which is materially and demonstrably injurious
      to the Company, or

                        (iii) conviction of a felony or guilty or nolo
      contendere plea by the Executive with respect thereto.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer
(while the Executive does not serve as such) or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than 75% of the
entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i),
(ii) or (iii) above, and specifying the particulars thereof in detail.


                                       -3-


                  (c) Good Reason. The Executive's employment may be terminated
by the Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean in the absence of a written consent of the Executive:

                        (i) the assignment to the Executive of any duties
      inconsistent with the Executive's title and position (including status,
      offices and reporting requirements), authority, duties or responsibilities
      as contemplated by Section 2(a)(i) of this Agreement, or any other action
      by the Company which results in a diminution in such position, authority,
      duties or responsibilities, excluding for this purpose an isolated,
      insubstantial and inadvertent action not taken in bad faith and which is
      remedied by the Company promptly after receipt of notice thereof given by
      the Executive; provided that it is specifically understood that within six
      months of a Change in Control the Company shall have the flexibility to
      appoint the Executive to a reporting relationship different from that
      which existed prior to the Change in Control, to make an immaterial change
      in Executive's duties, or to change the Executive's title provided that
      Executive shall not have a stature less than that of Chief Financial
      Officer of a business unit of the size of the Company, and it is
      understood that equivalent positions may have different titles;

                        (ii) any failure by the Company to comply with any of
      the provisions of Section 2(b) of this Agreement or the failure by the
      Company to increase such base salary each year after a Change in Control
      by an amount which at least equals on a percentage basis, the mean average
      percentage increase in base salary for all employees similarly situated
      during the two (2) full calendar years immediately preceding a Change in
      Control, other than an isolated, insubstantial and inadvertent failure not
      occurring in bad faith and which is remedied by the Company promptly after
      receipt of notice thereof given by the Executive;

                        (iii) the failure of the Company upon a Change in
      Control to (A) continue in effect any employee benefit plan, compensation
      plan, welfare benefit plan or material fringe benefit plan in which
      Executive is participating immediately prior to such Change in Control or
      the taking of any action by the Company which would adversely affect
      Executive's participation in or reduce Executive's benefits under any such
      plan, unless Executive is permitted to participate in other plans
      providing Executive with substantially equivalent benefits, or (B) provide
      Executive with paid vacation in accordance with the most favorable past
      practice of the Company as in effect for Executive immediately prior to
      such Change in Control;

                        (iv) any purported termination by the Company of the
      Executive's employment otherwise than as expressly permitted by this
      Agreement for Cause, death or Disability;

                        (v) any failure by the Company to comply with and
      satisfy Section 10(c) of this Agreement; or


                                       -4-


                        (vi) any requirement that the Executive (A) be based
      anywhere more than fifty (50) miles from the office where the Executive is
      currently located or (B) travel on Company business to an extent
      substantially greater than the Executive's current travel obligations.

                  (d) Notice of Termination. Any termination by the Company or
by the Executive shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 11(b) of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.

                  (e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company other than for
Disability, the date of receipt of the Notice of Termination or any later date
specified therein within 30 days of such notice, (ii) if the Executive's
employment is terminated by reason of death or Disability, the date of death of
the Executive or the Disability Effective Date, as the case may be, and (iii) if
the Executive's employment is terminated by the Executive, thirty days after the
giving of such notice by the Executive provided that the Company may elect to
place the Executive on paid leave for all or any part of such 30-day period.

                  (f) Change in Control. "Change in Control" means the
consummation of a transaction, whether in a single transaction or in a series of
related transactions that are consummated contemporaneously (or consummated
pursuant to contemporaneous agreements), with any other party or parties on an
arm's-length basis, pursuant to which (a) such party or parties, directly or
indirectly, acquire (whether by merger, stock purchase, recapitalization,
reorganization, redemption, issuance of capital stock or otherwise) more than
50% of the voting stock of the Company, (b) such party or parties, directly or
indirectly, acquire assets constituting all or substantially all of the assets
of the Company and its subsidiaries on a consolidated basis, or (c) prior to an
initial public offering of the Company Common Stock pursuant to an offering
registered under the 1933 Act, Vestar Capital Partners IV, L.P. a Delaware
limited partnership and its affiliates cease to have the ability to elect,
directly or indirectly, a majority of the Board of Directors of the Company.

            4. Obligations of the Company upon Termination.


                                       -5-


                  (a) Death or Disability. If, during the Employment Period, the
Executive's employment shall terminate on account of death or Disability:

                        (i) the Company shall pay to the Executive or his estate
      or beneficiaries in a lump sum in cash within 30 days after the Date of
      Termination the sum of (x) the Executive's Annual Base Salary through the
      Date of Termination to the extent not theretofore paid, and (y) the
      product of (1) the Target Bonus and (2) a fraction, the numerator of which
      is the number of whole and partial months in the fiscal year in which the
      Date of Termination occurs through the Date of Termination and the
      denominator of which is 12, to the extent not theretofore paid (the sum of
      the amounts described in clauses (x) and (y) shall be hereinafter referred
      to as the "Accrued Obligations");

                        (ii) to the extent not theretofore paid or provided, the
      Company shall timely pay or provide to the Executive or his estate or
      beneficiaries any other amounts or benefits required to be paid or
      provided or which the Executive is eligible to receive under any plan,
      program, policy or practice of or contract or agreement with the Company
      and its affiliated companies through the Date of Termination (such other
      amounts and benefits shall be hereinafter referred to as the "Other
      Benefits"); and

                        (iii) the Company shall pay to the Executive or his
      estate or beneficiaries in a lump sum in cash within 30 days after the
      Date of Termination an amount equal to the product of (x) two (2) and (y)
      the sum of the Executive's current Annual Base Salary and Target Bonus.

                  (b) By the Company for Cause; By the Executive Other than for
Good Reason. If the Executive's employment is terminated for Cause or the
Executive terminates his employment without Good Reason during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (i) his Annual Base
Salary through the Date of Termination to the extent theretofore unpaid and (ii)
the Other Benefits.

                  (c) By the Company Other than for Cause, Death or Disability;
By the Executive for Good Reason. If, during the Employment Period the
Executive's employment is terminated by the Executive for Good Reason or by the
Company other than for Cause and other than on account of death or Disability:

                        (i) the Company shall pay to the Executive in a lump sum
      in cash within 30 days after the Date of Termination the sum of:

                              (A) the Accrued Obligations; and


                                       -6-


                              (B) the amount equal to the product of (x) two (2)
            and (y) the sum of the Executive's current Annual Base Salary and
            Target Bonus;

                        (ii) the Company shall provide the Executive with the
      Other Benefits; and

                        (iii) for a period of two (2) years following
      Executive's Date of Termination the Company shall continue to provide
      medical, dental and life insurance benefits to the Executive, his spouse
      and children under age 25 on the same basis, including without limitation
      employee contributions, as such benefits are then currently provided to
      the Executive ("Welfare Benefits"); provided that the provision of such
      Welfare Benefits shall cease in the event Executive becomes eligible to
      receive comparable benefits from another employer (either because he
      becomes employed by, or becomes an independent contractor with respect to
      such employer).

            5. Noncompetition and Nonsolicitation. Executive acknowledges that
in the course of his employment with the Company he will become familiar with
the Company's and its subsidiaries' trade secrets and other confidential
information concerning the Company and such subsidiaries and that his services
will be of special, unique and extraordinary value to the Company and its
subsidiaries. Therefore, Executive agrees that:

                  (a) Noncompetition. During the period commencing on the
Effective Date and ending on the second anniversary of the date Executive's
employment with the Company terminates (such period the "Restricted Period"),
Executive shall not, for himself or on behalf of any other person, firm,
partnership, corporation, or other entity, engage, directly or indirectly, as an
executive, agent, representative, consultant, partner, shareholder or holder of
any other financial interest, in any business that competes with the Company in
the business of the production, distribution or sales of eggs or egg products (a
"Competing Business"), it being understood and agreed that Executive shall not
be in violation of this restriction where Executive is employed by a person,
firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, so long as Executive is not
engaged in or responsible for the Competing Business of such entity. Nothing
herein shall prohibit Executive from being a passive owner of not more than 2%
of the outstanding publicly traded stock of any class of a Competing Business so
long as Executive has no active participation in the business of such entity,
except to the extent permitted above. Executive acknowledges that this
Agreement, and specifically, this Section 5 does not preclude Executive from
earning a livelihood, nor does it unreasonably impose limitations on Executive's
ability to earn a living. In addition, Executive agrees and acknowledges that
the potential harm to the Company of its non-enforcement outweighs any harm to
Executive of its enforcement by injunction or otherwise.

                  (b) Nonsolicitation. During the Restricted Period, Executive
shall not directly or indirectly through another entity (i) induce or attempt to
induce any employee of the Company or its subsidiaries to leave the employ of
the Company or its subsidiaries, or in any way


                                       -7-


interfere with the relationship between the Company or any of its subsidiaries
and any employee thereof, (ii) knowingly hire any person who was an employee of
the Company or any of its subsidiaries within 180 days prior to the time such
employee was hired by Executive, (iii) induce or attempt to induce any customer,
supplier, licensee or other business relation of the Company or any of its
subsidiaries to cease doing business with the Company or its subsidiaries or in
any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company or any subsidiary or (iv) directly
or indirectly acquire or attempt to acquire an interest in any business relating
to the business of the Company or any of its subsidiaries and with which the
Company or any of its subsidiaries has entertained discussions or has requested
and received information relating to the acquisition of such business by the
Company or its subsidiaries in the one-year period immediately preceding
Executive's termination of employment with the Company.

                  (c) Enforcement. The parties to this Agreement hereby agree
and stipulate that (i) the restrictions contained in this Agreement are
reasonable and necessary in order to protect the Company's and its subsidiaries'
legitimate business interests and (ii) in the event of any breach or violation
of this Agreement or of any provision hereof by Executive, the Company and its
subsidiaries will have no adequate remedy at law and will suffer irreparable
loss and damage thereby. The parties hereby further agree and stipulate that in
the event of any such breach or violation, either threatened or actual, the
Company's and its subsidiaries' rights shall include, in addition to any and all
other rights available to the Company and its subsidiaries at law or in equity,
the right to seek and obtain any and all injunctive relief or restraining orders
available to it in courts of proper jurisdiction, so as to prohibit, bar, and
restrain any and all such breaches or violations by Executive. The prevailing
party to any legal action, arbitration or other proceeding commenced in
connection with enforcing any provision of this Section 5, including without
limitation, obtaining the injunctive relief provided by this Section 5 shall be
entitled to recover all court costs, reasonable attorneys' fees, and related
expenses incurred by such party. Executive further agrees that no bond need be
filed in connection with any request by the Company and its subsidiaries for a
temporary restraining order or for temporary or preliminary injunctive relief.

                  (d) Additional Acknowledgments. Executive acknowledges that
the provisions of this Section 5 are in consideration of: (i) employment with
the Company, (ii) the issuance by M-Foods Investors, LLC, a Delaware corporation
and affiliate of the Company ("Investors"), to Executive of Investors' Class B
Units (the "Class B Units") and Investors' Class C Units pursuant to the terms
of that certain Management Stock Purchase and Unit Subscription Agreement, dated
as of the date hereof, by and between Investors and Executive (the "Management
Stock Purchase and Unit Subscription Agreement"), and (iii) additional good and
valuable consideration as set forth in this Agreement. In addition, Executive
acknowledges (i) that the business of the Company and its subsidiaries is
national in scope and without geographical limitation and (ii) notwithstanding
the state of incorporation or principal office of the Company or any of its
subsidiaries, or any of their respective executives or employees (including the
Executive), it is expected that the Company will have business activities and
have valuable business relationships within its industry throughout the United
States. Executive acknowledges that he has carefully read this Agreement and has
given careful consideration to the restraints imposed upon Executive by this


                                       -8-


Agreement, and is in full accord as to their necessity for the reasonable and
proper protection of confidential and proprietary information of the Company and
its subsidiaries now existing or to be developed in the future. Executive
expressly acknowledges and agrees that each and every restraint imposed by this
Agreement is reasonable with respect to subject matter, time period and
geographical area.

            6. Deferral of Certain Compensation. In connection with the
Executive's agreement to cancel all of his options to acquire Company Common
Stock pursuant to the terms of that certain Option Cancellation Agreement, dated
as of the date hereof, by and between the Executive and the Company, the Company
shall (a) pay to Executive an amount equal to $22,576.40 (the "Cancellation
Payment") and (b) rollover an amount equal to $1,440,000 (the "Deferred Amount")
to an unfunded, unsecured nonqualified deferred compensation arrangement
established for this purpose (the "Deferred Account"). Each of the Executive,
the Company and Holdings agrees that Holdings, through an intercompany transfer,
shall assume all obligations associated with the Deferred Amount. The
Cancellation Payment shall be paid by the Company to the Executive on the
Effective Date, or as soon as reasonably practicable thereafter.

      With respect to the Deferred Account, the Deferred Amount shall be deemed
to be invested (i.e., an actual investment will not be made), as of the
Effective Date, in (A) 14,400 Class A Units of Investors (the "Investors A
Units") and (B) 14,400 Class A Units (the "Dairy A Units") of M-Foods Dairy
Holdings, LLC, a Delaware limited liability company ("Dairy Holdings"). Holdings
shall credit Executive's Deferred Account with certain of the distributions that
would be received by the Deferred Account if such Deferred Account were actually
invested in the manner set forth in the preceding sentence in Investors A Units
and Dairy A Units, the extent of such crediting to be in accordance with the
calculations set forth in the following two paragraphs. All amounts in the
Executive's Deferred Account shall be subject to the claims of the creditors of
Holdings.

      With respect to the Investors A Units, Holdings shall credit Executive's
Deferred Account with any distributions made in respect of such Investors A
Units pursuant to or in accordance with Sections 4.4(a)(i) and 4.4(a)(ii) of the
Investors' Amended and Restated Limited Liability Company Agreement, dated April
10, 2001 (the "Investors LLC Agreement"). In the event Investors distributes
non-cash property to holders of Investors A Units pursuant to Sections 4.4(a)(i)
or 4.4(a)(ii) of the Investors LLC Agreement, Holdings shall credit Executive's
Deferred Account in an amount equal to the fair market value of such property,
as determined by the Management Committee of Investors. Executive's Deferred
Account shall not be credited with any distributions made in respect of
Investors A Units pursuant to or in accordance with any subsections of Section
4.4 of the Investors LLC Agreement other than Sections 4.4(a)(i) and 4.4(a)(ii)
thereof. In the event that Investors A Units are sold by one or more holders of
Investors A Units to a buyer unrelated on the date hereof to the holders of
Investors A Units, Holdings shall credit Executive's Deferred Account with an
amount equal to the result of (x) the percentage of outstanding Investors A
Units being purchased by an unrelated buyer (including, for purposes of this
percentage calculation, the number of Investors A Units deemed held by the
Deferred Account and any other unfunded, unsecured nonqualified deferred
compensation arrangements similarly established to be deemed to


                                       -9-


hold Investors A Units) multiplied by (y) the number of Investors A Units deemed
held in the Deferred Account multiplied by (z) the lesser of (i) the amount of
cash or fair market value of any property, as determined by the Management
Committee of Investors, received by holders of Investors A Units in exchange for
an Investors A Unit and (ii) the sum of the Unreturned Capital and Unpaid
Preferred Return (as such terms are defined in the Investors LLC Agreement) of
an Investors A Unit (assuming such Investors A Unit was issued on the Closing
Date, as such term is defined in the Executive's Management Stock Purchase and
Unit Subscription Agreement); it being understood and agreed that any
distribution made pursuant to this sentence shall, with respect to future
distributions, reduce the number of Investors A Units deemed held by the
Deferred Account by the percentage described in subclause (x) of this sentence.

      With respect to the Dairy A Units, Holdings shall credit Executive's
Deferred Account with any distributions made in respect of such Dairy A Units
pursuant to or in accordance with Sections 4.4(a)(ii) and 4.4(a)(iii) of the
Limited Liability Company Agreement of Dairy Holdings, dated April 10, 2001 (the
"Dairy Holdings LLC Agreement"). In the event Dairy Holdings distributes
non-cash property to holders of Dairy A Units pursuant to Sections 4.4(a)(ii) or
4.4(a)(iii) of the Dairy Holdings LLC Agreement, Holdings shall credit
Executive's Deferred Account in an amount equal to the fair market value of such
property, as determined by the Management Committee of Dairy Holdings.
Executive's Deferred Account shall not be credited with any distributions made
in respect of Dairy A Units pursuant to or in accordance with any subsections of
Section 4.4 of the Dairy Holdings LLC Agreement other than Sections 4.4(a)(ii)
and 4.4(a)(iii) thereof. In the event that Dairy A Units are sold by one or more
holders of Dairy A Units to a buyer unrelated on the date hereof to the holders
of Dairy A Units, Holdings shall credit Executive's Deferred Account with an
amount equal to the result of (x) the percentage of outstanding Dairy A Units
being purchased by an unrelated buyer (including, for purposes of this
percentage calculation, the number of Dairy A Units deemed held by the Deferred
Account and any other unfunded, unsecured nonqualified deferred compensation
arrangements similarly established to be deemed to hold Dairy A Units)
multiplied by (y) the number of Dairy A Units deemed held in the Deferred
Account multiplied by (z) the lesser of (i) the amount of cash or fair market
value of any property, as determined by the Management Committee of Dairy
Holdings, received by holders of Dairy A Units in exchange for a Dairy A Unit
and (ii) the sum of the Unreturned Capital and Unpaid Preferred Return (as such
terms are defined in the Dairy Holdings LLC Agreement) of a Dairy A Unit
(assuming such Dairy A Unit was issued on the Closing Date, as such term is
defined in the Dairy Unit Subscription Agreement, dated as of the date hereof,
between Dairy Holdings and the Executive (the "Dairy Unit Subscription
Agreement")); it being understood and agreed that any distribution made pursuant
to this sentence shall, with respect to future distributions, reduce the number
of Dairy A Units deemed held by the Deferred Account by the percentage described
in subclause (x) of this sentence.

      Executive shall receive from Holdings distributions from his Deferred
Account, in the amount indicated, upon the occurrence of the following events:
(i) upon a Change in Control, Executive shall receive a total distribution of
the amount then deemed held in the Deferred Account; (ii) upon the tenth
anniversary of the date hereof, Executive shall receive a total distribution of
the amount then deemed held in the Deferred Account; (iii) upon the purchase by
Investors of any of


                                      -10-


Executive's Class B Units pursuant to Section 7.2 of the Executive's Management
Stock Purchase and Unit Subscription Agreement, Executive shall receive a
distribution from the Deferred Account equal to the result of (x) the percentage
of Executive's Class B Units being purchased by Investors multiplied by (y) the
number of Investors A Units deemed held in the Deferred Account multiplied by
(z) the lesser of (A) the fair market value of an Investors A Unit, as
determined by the Management Committee of Investors and (B) the sum of the
Unreturned Capital and Unpaid Preferred Return (as such terms are defined in the
Investors LLC Agreement) of an Investors A Unit (assuming such Investors A Unit
was issued on the Closing Date, as such term is defined in the Executive's
Management Stock Purchase and Unit Subscription Agreement); it being understood
and agreed that any distribution made pursuant to clause (iii) of this sentence
shall, with respect to future distributions, reduce the number of Investors A
Units deemed held by the Deferred Account by the percentage described in
subclause (x) of such clause (iii); and (iv) upon the purchase by Dairy Holdings
of any of Executive's Class B Units pursuant to Section 7.2 of the Executive's
Dairy Unit Subscription Agreement, Executive shall receive a distribution from
the Deferred Account equal to the result of (x) the percentage of Executive's
Class B Units being purchased by Dairy Holdings multiplied by (y) the number of
Dairy A Units deemed held in the Deferred Account multiplied by (z) the lesser
of (A) the fair market value of a Diary A Unit, as determined by the Management
Committee of Dairy Holdings and (B) the sum of the Unreturned Capital and Unpaid
Preferred Return (as such terms are defined in the Dairy Holdings LLC Agreement)
of a Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as
such term is defined in the Executive's Dairy Unit Subscription Agreement); it
being understood and agreed that any distribution made pursuant to clause (iv)
of this sentence shall, with respect to future distributions, reduce the number
of Dairy A Units deemed held by the Deferred Account by the percentage described
in subclause (x) of such clause (iv). The form of payment made with respect to
any of the foregoing distributions shall be a cash payment except that (1) in
the event of a Change in Control in which the consideration effecting such
Change in Control is non-cash consideration, such distribution may be made in
the form of such non-cash consideration, the fair market value of which shall be
determined by the Management Committee of Investors, and (2) in the event of a
distribution of the type described in clause (iii) or (iv) above, if, with
respect to Holdings, any of the Cash Deferral Conditions (as such term is
defined in the Executive's Management Stock Purchase and Unit Subscription
Agreement) exists, the portion of the cash payment so affected may be made by
the delivery of Holdings' unfunded and unsecured promise to pay Executive the
portion of the cash payment so affected in cash, together with interest, at the
first date on which the Cash Deferral Conditions no longer exist. The interest
on such delayed cash payment will accrue annually at the "prime rate" published
by The Wall Street Journal on the date Holdings delivers its unfunded and
unsecured promise.

            7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or


                                      -11-


program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice, program, contract or
agreement except as explicitly modified by this Agreement; provided that the
Executive shall not be eligible for severance benefits under any other program
or policy of the Company.

            8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) pursued or defended against in
good faith by the Executive regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.

            9. Certain Additional Payments by the Company.

      Notwithstanding anything in this Agreement to the contrary, this Section 9
shall be limited in its application solely to the change in ownership that will
occur as a result of the consummation of the transactions set forth in that
certain Agreement and Plan of Merger, dated December 21, 2000, by and among the
Company, Holdings, and Protein Acquisition Corp:

                  (a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 9) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments. For purposes
of this Agreement, the term "Reduced Amount" shall mean the greatest amount that
could be paid


                                      -12-


to the Executive such that the receipt of Payments would not give rise to any
Excise Tax. Notwithstanding the foregoing provisions of this Section 9(a), if it
shall be determined that the Executive is entitled to a Gross-Up Payment, but
that the Payments do not exceed 120% of the Reduced Amount, then no Gross-Up
Payment shall be made to the Executive and the Payments, in the aggregate, shall
be reduced to the Reduced Amount.

                  (b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the Company's independent auditors or such other certified public accounting
firm reasonably acceptable to the Executive as may be designated by the Company
(the "Accounting Firm") which shall provide detailed supporting calculations
both to the Company and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time as
is requested by the Company. All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 9, shall be paid by the Company to the Executive not later than the
due date for the payment of any Excise Tax. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

                  (c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

                        (i) give the Company any information reasonably
      requested by the Company relating to such claim,

                        (ii) take such action in connection with contesting such
      claim as the Company shall reasonably request in writing from time to
      time, including, without limitation, accepting legal representation with
      respect to such claim by an attorney reasonably selected by the Company,


                                      -13-


                        (iii) cooperate with the Company in good faith in order
      to effectively contest such claim, and

                        (iv) permit the Company to participate in any
      proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

                  (d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall promptly
pay to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

            10. Successors.


                                      -14-


                  (a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.

                  (b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.

                  (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid.

            11. Miscellaneous.

                  (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

                  (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

                  If to the Executive:

                  John D. Reedy
                  7262 Gordon Drive
                  Eden Prairie, Minnesota 55346

                  If to the Company:

                  Michael Foods, Inc.
                  324 Park National Bank Building
                  5353 Wayzata Boulevard
                  Minneapolis, Minnesota 55416
                  Telecopy Number: (612) 546-3711
                  Attention:  Secretary

                  with a copy to:


                                      -15-


                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue
                  41st Floor
                  New York, NY 10167
                  Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                  (c) Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

                  (d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.

                  (e) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including; without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 3(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

                  (f) From and after the Effective Date this Agreement shall
supersede any other employment agreement between the parties with respect to the
subject matter hereof.

                  (g) Subject to the provisions of Section 3(d), there shall be
no limitation on the ability of the Company to terminate the Executive at any
time with or without Cause.

                                * * * * * * * * *


                                      -16-


            IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.

                                          ______________________________
                                          John D. Reedy


                                          MICHAEL FOODS, INC.

                                          By:___________________________

                                          Title:________________________


                                          M-FOODS HOLDINGS, INC.

                                          By:___________________________

                                          Title:________________________

EX-10.7

                                                                    Exhibit 10.7

                                                                [Execution Copy]

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT made and entered into as of the 10th day of April, 2001, by
and among MICHAEL FOODS, INC., a Minnesota corporation (the "Company") JAMES D.
CLARKSON (the "Executive") and for the purposes of Section 8 hereof, M-Foods
Holdings, Inc., a Delaware corporation and controlling entity of the Company
("Holdings").

      WHEREAS, Executive has served as President of an operating company
subsidiary of Michael Foods, Inc.; and

      WHEREAS, Company and Executive have agreed to enter into this Agreement
effective as of the date hereof.

      NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:

      1. Employment and Duties. Company shall employ Executive to serve as
President of Northern Star Company and President of Kohler Mix Specialties, Inc.
and in such capacities Executive shall perform such duties as the bylaws provide
and as the CEO of the Company may from time to time determine.

      2. Term. This Agreement shall be effective as of the date hereof (the
"Effective Date") and shall continue until the second anniversary of a Change in
Control (as defined below), unless earlier terminated as provided herein (the
"Employment Period"). The Employment Period may be extended thereafter upon the
written agreement of the parties hereto.

      3. Annual Base Salary. For all services by Executive, the Company agrees
to pay to Executive an annual base salary of at least $250,000 (the "Annual Base
Salary").

      4. Additional Benefits and Working Facilities.

            a. Annual Bonus. During the Employment Period, the Executive shall
      participate in such bonus arrangements as may be approved by the
      Compensation Committee of the Board (the "Compensation Committee") (the
      aggregate of all payments made under such bonus arrangements being herein
      referred to as the "Annual Bonus"). Executive's aggregate bonus
      opportunity will be no less than 100% of Annual Base Salary and the
      "Target Bonus" will be no less than 62.5% of Annual Base Salary or greater
      as determined by the Compensation Committee. The Annual Bonus shall be
      paid within two and one-half months of the end of the fiscal year of the
      Company to which it relates.

            b. Other Benefits. Executive shall be entitled to participate in all
      compensation, incentive, employee benefit, welfare and other plans,
      practices, policies and programs and


      fringe benefits, including vacation policy (collectively, "Employee
      Benefit Plans") on a basis no less favorable than that provided to any
      other executive officer of the Company.

            c. Expenses. The Company shall reimburse Executive for all
      reasonable expenses incurred by Executive in connection with the Company's
      business, including but not limited to, expenses of travel and
      entertainment, upon presentation of itemized statements therefor.

      5. Termination of Employment.

            a. Death or Disability. The Executive's employment shall terminate
      automatically upon the Executive's death during the Employment Period. If
      the Company determines in good faith that the Disability of the Executive
      has occurred during the Employment Period (pursuant to the definition of
      Disability set forth below), it may give to the Executive written notice
      in accordance with Section 12 of this Agreement of its intention to
      terminate the Executive's employment. In such event, the Executive's
      employment with the Company shall terminate effective on the 30th day
      after receipt of such notice by the Executive (the "Disability Effective
      Date"), provided that, within the 30 days after such receipt, the
      Executive shall not have returned to full-time performance of the
      Executive's duties. For purposes of this Agreement, "Disability" shall
      mean a determination by the Company in its sole discretion that Executive
      is unable to perform his job responsibilities as a result of chronic
      illness, physical, mental or any other disability for a period of six
      months or more.

            b. With or Without Cause. The Company may terminate the Executive's
      employment during the Employment Period with or without Cause. For
      purposes of this Agreement, "Cause" shall mean:

                  (i) the continued failure of the Executive to perform
            substantially the Executive's duties with the Company or one of its
            affiliates (other than any such failure resulting from incapacity
            due to physical or mental illness), after a written demand for
            substantial performance is delivered to the Executive by the Board
            which specifically identifies the manner in which the Board believes
            that the Executive has not substantially performed the Executive's
            duties, or

                  (ii) the willful engaging by the Executive in illegal conduct
            or gross misconduct which is materially and demonstrably injurious
            to the Company, or

                  (iii) conviction of a felony or guilty or nolo contendere plea
            by the Executive with respect thereto.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without


                                       -2-


reasonable belief that the Executive's action or omission was in the best
interests of the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer (while the Executive does not serve as such) or
based upon the advice of counsel for the Company shall be conclusively presumed
to be done, or omitted to be done, by the Executive in good faith and in the
best interests of the Company. The cessation of employment of the Executive
shall not be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than 75%of the entire membership of the Board
(excluding the Executive) at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, the Executive is guilty of
the conduct described in subparagraph (i), (ii) or (iii) above, and specifying
the particulars thereof in detail.

            c. Good Reason. The Executive's employment may be terminated by the
      Executive for Good Reason. For purposes of this Agreement, "Good Reason"
      shall mean in the absence of a written consent of the Executive:

                  (i) upon, or in anticipation of, a Change in Control, the
            assignment to the Executive of any duties inconsistent with the
            Executive's title and position (including status, offices and
            reporting requirements), authority, duties or responsibilities as
            contemplated by Section 1 of this Agreement, or any other action by
            the Company which results in a diminution in such position,
            authority, duties or responsibilities, excluding for this purpose an
            isolated, insubstantial and inadvertent action not taken in bad
            faith and which is remedied by the Company promptly after receipt of
            notice thereof given by the Executive; provided that after a Change
            in Control the Company shall have the flexibility to appoint the
            Executive to a reporting relationship different from that which
            existed prior to the Change in Control, to make an immaterial change
            in Executive's duties, or to change the Executive's title provided
            that Executive shall not have a stature less than that of an
            operating company President, and it is understood that equivalent
            positions may have different titles;

                  (ii) any failure by the Company to comply with any of the
            provisions of Section 3 of this Agreement or the failure by the
            Company to increase such Annual Base Salary each year after a Change
            in Control by an amount which at least equals on a percentage basis,
            the mean average percentage increase in base salary for all
            employees similarly situated during the two full calendar years
            immediately preceding a Change in Control, other than an isolated,
            insubstantial and inadvertent failure not occurring in bad faith and
            which is remedied by the Company promptly after receipt of notice
            thereof given by the Executive;

                  (iii) the failure of the Company upon a Change in Control to
            (A) continue in effect any employee benefit plan, compensation plan,
            welfare benefit plan or


                                       -3-


            material fringe benefit plan in which Executive is participating
            immediately prior to such Change in Control or the taking of any
            action by the Company which would adversely affect Executive's
            participation in or reduce Executive's benefits under any such plan,
            unless Executive is permitted to participate in other plans
            providing Executive with substantially equivalent benefits, or (B)
            provide Executive with paid vacation in accordance with the most
            favorable past practice of the Company as in effect for Executive
            immediately prior to such Change in Control;

                  (iv) after, or in anticipation of, a Change in Control, any
            purported termination by the Company of the Executive's employment
            otherwise than as expressly permitted by this Agreement for Cause,
            death or Disability;

                  (v) any failure by the Company to comply with and satisfy
            Section 11(c) of this Agreement; or

                  (vi) after, or in anticipation of, a Change in Control, any
            requirement that the Executive (A) be based anywhere more than 50
            miles from the office where the Executive is currently located or
            (B) travel on Company business to an extent substantially greater
            than the Executive's current travel obligations.

            d. Notice of Termination. Any termination by the Company or by the
      Executive shall be communicated by Notice of Termination to the other
      party hereto given in accordance with Section 12(b) of this Agreement. For
      purposes of this Agreement, a "Notice of Termination" means a written
      notice which (i) indicates the specific termination provision in this
      Agreement relied upon, (ii) to the extent applicable, sets forth in
      reasonable detail the facts and circumstances claimed to provide a basis
      for termination of the Executive's employment under the provisions so
      indicated and (iii) if the Date of Termination (as defined below) is other
      than the date of receipt of such notice, specifies the termination date
      (which date shall be not more than 30 days after the giving of such
      notice). The failure by the Executive or the Company to set forth in the
      Notice of Termination any fact or circumstance which contributes to a
      showing of Good Reason or Cause shall not waive any right of the Executive
      or the Company, respectively, hereunder or preclude the Executive or the
      Company, respectively, from asserting such fact or circumstance in
      enforcing the Executive's or the Company's rights hereunder.

            e. Date of Termination. "Date of Termination" means (i) if the
      Executive's employment is terminated by the Company other than for
      Disability, the date of receipt of the Notice of Termination or any later
      date specified therein within 30 days of such notice, (ii) if the
      Executive's employment is terminated by reason of death or Disability, the
      date of death of the Executive or the Disability Effective Date, as the
      case may be, and (iii) if the Executive's employment is terminated by the
      Executive, 30 days after the giving of such notice by the Executive
      provided that the Company may elect to place the Executive on paid leave
      for all or any part of such 30-day period.


                                       -4-


            f. Change in Control. "Change in Control" means the consummation of
      a transaction, whether in a single transaction or in a series of related
      transactions that are consummated contemporaneously (or consummated
      pursuant to contemporaneous agreements), with any other party or parties
      on an arm's-length basis, pursuant to which (a) such party or parties,
      directly or indirectly, acquire (whether by merger, stock purchase,
      recapitalization, reorganization, redemption, issuance of capital stock or
      otherwise) more than 50% of the voting stock of the Company, (b) such
      party or parties, directly or indirectly, acquire assets constituting all
      or substantially all of the assets of the Company and its subsidiaries on
      a consolidated basis, or (c) prior to an initial public offering of the
      Company Common Stock pursuant to an offering registered under the 1933
      Act, Vestar Capital Partners IV, L.P. a Delaware limited partnership and
      its affiliates cease to have the ability to elect, directly or indirectly,
      a majority of the Board of Directors of the Company.

      6. Obligations of the Company upon Termination.

            a. Death or Disability. If, during the Employment Period the
      Executive's employment shall terminate on account of death or Disability:

                  (i) the Company shall pay to the Executive or his estate or
            beneficiaries in a lump sum in cash within 30 days after the Date of
            Termination the sum of (x) the Executive's Annual Base Salary
            through the Date of Termination to the extent not theretofore paid,
            and (y) the product of (1) the Target Bonus and (2) a fraction, the
            numerator of which is the number of whole and partial months in the
            fiscal year in which the Date of Termination occurs through the Date
            of Termination and the denominator of which is 12, to the extent not
            theretofore paid (the sum of the amounts described in clauses (x)
            and (y) shall be hereinafter referred to as the "Accrued
            Obligations");

                  (ii) to the extent not theretofore paid or provided, the
            Company shall timely pay or provide to the Executive or his estate
            or beneficiaries any other amounts or benefits required to be paid
            or provided or which the Executive is eligible to receive under any
            plan, program, policy or practice of or contract or agreement with
            the Company and its affiliated companies through the Date of
            Termination (such other amounts and benefits shall be hereinafter
            referred to as the "Other Benefits"); and

                  (iii) the Company shall pay to the Executive or his estate or
            beneficiaries in a lump sum in cash within 30 days after the Date of
            Termination an amount equal to the Executive's current Annual Base
            Salary.

            b. By the Company for Cause; By the Executive Other than for Good
      Reason.


                                       -5-


      If the Executive's employment is terminated for Cause or the Executive
      terminates his employment without Good Reason during the Employment
      Period, this Agreement shall terminate without further obligations to the
      Executive other than the obligation to pay to the Executive (i) his Annual
      Base Salary through the Date of Termination to the extent theretofore
      unpaid and (ii) the Other Benefits.

            c. By the Company Other than for Cause, Death or Disability; By the
      Executive for Good Reason. If, during the Employment Period, but prior to
      a Change in Control, the Executive's employment is terminated by the
      Executive for Good Reason or by the Company other than for Cause, and
      other than on account of death or Disability:

                  (i) the Company shall pay to the Executive in a lump sum in
            cash within 30 days after the Date of Termination the sum of:

                        (A) the amount of Executive's Annual Base Salary through
                  the Date of Termination to the extent not theretofore paid;
                  and

                        (B) an amount equal to the Executive's current Annual
                  Base Salary; and

                  (ii) the Company shall provide the Executive with the Other
            Benefits.

            d. After, or in Anticipation of a Change in Control By the Company
      Other than for Cause or By the Executive for Good Reason. If the
      Executive's employment shall be terminated by the Company other than for
      Cause or the Executive terminates his employment for Good Reason in
      anticipation of or within two years following a Change in Control:

                  (i) the Company shall pay to the Executive in a lump sum in
            cash within 30 days after the Date of Termination the sum of:

                        (A) the Accrued Obligations; and

                        (B) an amount equal to the product of (x) two and (y)
                  Executive's current Annual Base Salary; and

                  (ii) the Company shall provide the Executive with the Other
            Benefits.

      7. Noncompetition and Nonsolicitation. Executive acknowledges that in the
course of his employment with the Company he will become familiar with the
Company's and its subsidiaries' trade secrets and other confidential information
concerning the Company and such subsidiaries and that his services will be of
special, unique and extraordinary value to the Company and its subsidiaries.
Therefore, Executive agrees that:


                                       -6-


            a. Noncompetition. During the period commencing on the Effective
      Date and ending on the second anniversary of the date Executive's
      employment with the Company terminates (such period the "Restricted
      Period"), Executive shall not, for himself or on behalf of any other
      person, firm, partnership, corporation, or other entity, engage, directly
      or indirectly, as an executive, agent, representative, consultant,
      partner, shareholder or holder of any other financial interest, in any
      business that competes with the Company in the business of the production,
      distribution or sales of refrigerated potato products or specialty dairy
      products and mixes (a "Competing Business"), it being understood and
      agreed that Executive shall not be in violation of this restriction where
      Executive is employed by a person, firm, partnership, corporation, or
      other entity engaged in a variety of activities, including the Competing
      Business, so long as Executive is not engaged in or responsible for the
      Competing Business of such entity. Nothing herein shall prohibit Executive
      from being a passive owner of not more than 2% of the outstanding publicly
      traded stock of any class of a Competing Business so long as Executive has
      no active participation in the business of such entity, except to the
      extent permitted above. Executive acknowledges that this Agreement, and
      specifically, this Section 7, does not preclude Executive from earning a
      livelihood, nor does it unreasonably impose limitations on Executive's
      ability to earn a living. In addition, Executive agrees and acknowledges
      that the potential harm to the Company of its non-enforcement outweighs
      any harm to Executive of its enforcement by injunction or otherwise.

            b. Nonsolicitation. During the Restricted Period, Executive shall
      not directly or indirectly through another entity (i) induce or attempt to
      induce any employee of the Company or its subsidiaries to leave the employ
      of the Company or its subsidiaries, or in any way interfere with the
      relationship between the Company or any of its subsidiaries and any
      employee thereof, (ii) knowingly hire any person who was an employee of
      the Company or any of its subsidiaries within 180 days prior to the time
      such employee was hired by Executive, (iii) induce or attempt to induce
      any customer, supplier, licensee or other business relation of the Company
      or any of its subsidiaries to cease doing business with the Company or its
      subsidiaries or in any way interfere with the relationship between any
      such customer, supplier, licensee or business relation and the Company or
      any subsidiary or (iv) directly or indirectly acquire or attempt to
      acquire an interest in any business relating to the business of the
      Company or any of its subsidiaries and with which the Company or any of
      its subsidiaries has entertained discussions or has requested and received
      information relating to the acquisition of such business by the Company or
      its subsidiaries in the one-year period immediately preceding Executive's
      termination of employment with the Company.

            c. Enforcement. The parties to this Agreement hereby agree and
      stipulate that (i) the restrictions contained in this Agreement are
      reasonable and necessary in order to protect the Company's and its
      subsidiaries' legitimate business interests and (ii) in the event of any
      breach or violation of this Agreement or of any provision hereof by
      Executive, the Company and its subsidiaries will have no adequate remedy
      at law and will suffer irreparable loss and damage thereby. The parties
      hereby further agree and stipulate that in the event of


                                       -7-


      any such breach or violation, either threatened or actual, the Company's
      and its subsidiaries' rights shall include, in addition to any and all
      other rights available to the Company and its subsidiaries at law or in
      equity, the right to seek and obtain any and all injunctive relief or
      restraining orders available to it in courts of proper jurisdiction, so as
      to prohibit, bar, and restrain any and all such breaches or violations by
      Executive. The prevailing party to any legal action, arbitration or other
      proceeding commenced in connection with enforcing any provision of this
      Section 7, including without limitation, obtaining the injunctive relief
      provided by this Section 7 shall be entitled to recover all court costs,
      reasonable attorneys' fees, and related expenses incurred by such party.
      Executive further agrees that no bond need be filed in connection with any
      request by the Company and its subsidiaries for a temporary restraining
      order or for temporary or preliminary injunctive relief.

            d. Additional Acknowledgments. Executive acknowledges that the
      provisions of this Section 7 are in consideration of: (i) employment with
      the Company, (ii) the issuance by M-Foods Investors, LLC, a Delaware
      corporation and affiliate of the Company ("Investors"), to Executive of
      Investors' Class B Units (the "Class B Units") and Investors' Class C
      Units pursuant to the terms of that certain Management Stock Purchase and
      Unit Subscription Agreement, dated as of the date hereof, by and between
      Investors and Executive (the "Management Stock Purchase and Unit
      Subscription Agreement"), and (iii) additional good and valuable
      consideration as set forth in this Agreement. In addition, Executive
      acknowledges (i) that the business of the Company and its subsidiaries is
      national in scope and without geographical limitation and (ii)
      notwithstanding the state of incorporation or principal office of the
      Company or any of its subsidiaries, or any of their respective executives
      or employees (including the Executive), it is expected that the Company
      will have business activities and have valuable business relationships
      within its industry throughout the United States. Executive acknowledges
      that he has carefully read this Agreement and has given careful
      consideration to the restraints imposed upon Executive by this Agreement,
      and is in full accord as to their necessity for the reasonable and proper
      protection of confidential and proprietary information of the Company and
      its subsidiaries now existing or to be developed in the future. Executive
      expressly acknowledges and agrees that each and every restraint imposed by
      this Agreement is reasonable with respect to subject matter, time period
      and geographical area.

      8. Deferral of Certain Compensation. In connection with the Executive's
agreement to cancel all of his options to acquire Company Common Stock pursuant
to the terms of that certain Option Cancellation Agreement, dated as of the date
hereof, by and between the Executive and the Company, the Company shall (a) pay
to Executive an amount equal to $64,448.50 (the "Cancellation Payment") and (b)
rollover an amount equal to $1,152,000 (the "Deferred Amount") to an unfunded,
unsecured nonqualified deferred compensation arrangement established for this
purpose (the "Deferred Account"). Each of the Executive, the Company and
Holdings agrees that Holdings, through an intercompany transfer, shall assume
all obligations associated with the Deferred Amount. The Cancellation Payment
shall be paid by the Company to the Executive on the Effective Date, or as soon
as reasonably practicable thereafter.


                                       -8-


      With respect to the Deferred Account, the Deferred Amount shall be deemed
to be invested (i.e., an actual investment will not be made), as of the
Effective Date, in (A) 11,520 Class A Units of Investors (the "Investors A
Units") and (B) 11,520 Class A Units (the "Dairy A Units") of M-Foods Dairy
Holdings, LLC, a Delaware limited liability company ("Dairy Holdings"). Holdings
shall credit Executive's Deferred Account with certain of the distributions that
would be received by the Deferred Account if such Deferred Account were actually
invested in the manner set forth in the preceding sentence in Investors A Units
and Dairy A Units, the extent of such crediting to be in accordance with the
calculations set forth in the following two paragraphs. All amounts in the
Executive's Deferred Account shall be subject to the claims of the creditors of
Holdings.

      With respect to the Investors A Units, Holdings shall credit Executive's
Deferred Account with any distributions made in respect of such Investors A
Units pursuant to or in accordance with Sections 4.4(a)(i) and 4.4(a)(ii) of the
Investors' Amended and Restated Limited Liability Company Agreement, dated April
10, 2001 (the "Investors LLC Agreement"). In the event Investors distributes
non-cash property to holders of Investors A Units pursuant to Sections 4.4(a)(i)
or 4.4(a)(ii) of the Investors LLC Agreement, Holdings shall credit Executive's
Deferred Account in an amount equal to the fair market value of such property,
as determined by the Management Committee of Investors. Executive's Deferred
Account shall not be credited with any distributions made in respect of
Investors A Units pursuant to or in accordance with any subsections of Section
4.4 of the Investors LLC Agreement other than Sections 4.4(a)(i) and 4.4(a)(ii)
thereof. In the event that Investors A Units are sold by one or more holders of
Investors A Units to a buyer unrelated on the date hereof to the holders of
Investors A Units, Holdings shall credit Executive's Deferred Account with an
amount equal to the result of (x) the percentage of outstanding Investors A
Units being purchased by an unrelated buyer (including, for purposes of this
percentage calculation, the number of Investors A Units deemed held by the
Deferred Account and any other unfunded, unsecured nonqualified deferred
compensation arrangements similarly established to be deemed to hold Investors A
Units) multiplied by (y) the number of Investors A Units deemed held in the
Deferred Account multiplied by (z) the lesser of (i) the amount of cash or fair
market value of any property, as determined by the Management Committee of
Investors, received by holders of Investors A Units in exchange for an Investors
A Unit and (ii) the sum of the Unreturned Capital and Unpaid Preferred Return
(as such terms are defined in the Investors LLC Agreement) of an Investors A
Unit (assuming such Investors A Unit was issued on the Closing Date, as such
term is defined in the Executive's Management Stock Purchase and Unit
Subscription Agreement); it being understood and agreed that any distribution
made pursuant to this sentence shall, with respect to future distributions,
reduce the number of Investors A Units deemed held by the Deferred Account by
the percentage described in subclause (x) of this sentence.

      With respect to the Dairy A Units, Holdings shall credit Executive's
Deferred Account with any distributions made in respect of such Dairy A Units
pursuant to or in accordance with Sections 4.4(a)(ii) and 4.4(a)(iii) of the
Limited Liability Company Agreement of Dairy Holdings, dated April 10, 2001 (the
"Dairy Holdings LLC Agreement"). In the event Dairy Holdings distributes
non-cash property to holders of Dairy A Units pursuant to Sections 4.4(a)(ii) or
4.4(a)(iii) of the Dairy


                                       -9-


Holdings LLC Agreement, Holdings shall credit Executive's Deferred Account in an
amount equal to the fair market value of such property, as determined by the
Management Committee of Dairy Holdings. Executive's Deferred Account shall not
be credited with any distributions made in respect of Dairy A Units pursuant to
or in accordance with any subsections of Section 4.4 of the Dairy Holdings LLC
Agreement other than Sections 4.4(a)(ii) and 4.4(a)(iii) thereof. In the event
that Dairy A Units are sold by one or more holders of Dairy A Units to a buyer
unrelated on the date hereof to the holders of Dairy A Units, Holdings shall
credit Executive's Deferred Account with an amount equal to the result of (x)
the percentage of outstanding Dairy A Units being purchased by an unrelated
buyer (including, for purposes of this percentage calculation, the number of
Dairy A Units deemed held by the Deferred Account and any other unfunded,
unsecured nonqualified deferred compensation arrangements similarly established
to be deemed to hold Dairy A Units) multiplied by (y) the number of Dairy A
Units deemed held in the Deferred Account multiplied by (z) the lesser of (i)
the amount of cash or fair market value of any property, as determined by the
Management Committee of Dairy Holdings, received by holders of Dairy A Units in
exchange for a Dairy A Unit and (ii) the sum of the Unreturned Capital and
Unpaid Preferred Return (as such terms are defined in the Dairy Holdings LLC
Agreement) of a Dairy A Unit (assuming such Dairy A Unit was issued on the
Closing Date, as such term is defined in the Dairy Unit Subscription Agreement,
dated as of the date hereof, between Dairy Holdings and the Executive (the
"Dairy Unit Subscription Agreement")); it being understood and agreed that any
distribution made pursuant to this sentence shall, with respect to future
distributions, reduce the number of Dairy A Units deemed held by the Deferred
Account by the percentage described in subclause (x) of this sentence.

      Executive shall receive from Holdings distributions from his Deferred
Account, in the amount indicated, upon the occurrence of the following events:
(i) upon a Change in Control, Executive shall receive a total distribution of
the amount then deemed held in the Deferred Account; (ii) upon the tenth
anniversary of the date hereof, Executive shall receive a total distribution of
the amount then deemed held in the Deferred Account; (iii) upon the purchase by
Investors of any of Executive's Class B Units pursuant to Section 7.2 of the
Executive's Management Stock Purchase and Unit Subscription Agreement, Executive
shall receive a distribution from the Deferred Account equal to the result of
(x) the percentage of Executive's Class B Units being purchased by Investors
multiplied by (y) the number of Investors A Units deemed held in the Deferred
Account multiplied by (z) the lesser of (A) the fair market value of an
Investors A Unit, as determined by the Management Committee of Investors and (B)
the sum of the Unreturned Capital and Unpaid Preferred Return (as such terms are
defined in the Investors LLC Agreement) of an Investors A Unit (assuming such
Investors A Unit was issued on the Closing Date, as such term is defined in the
Executive's Management Stock Purchase and Unit Subscription Agreement); it being
understood and agreed that any distribution made pursuant to clause (iii) of
this sentence shall, with respect to future distributions, reduce the number of
Investors A Units deemed held by the Deferred Account by the percentage
described in subclause (x) of such clause (iii); and (iv) upon the purchase by
Dairy Holdings of any of Executive's Class B Units pursuant to Section 7.2 of
the Executive's Dairy Unit Subscription Agreement, Executive shall receive a
distribution from the Deferred Account equal to the result of (x) the percentage
of Executive's Class B Units being purchased by Dairy Holdings multiplied by (y)
the number of Dairy A Units deemed held in the Deferred Account multiplied by


                                      -10-


(z) the lesser of (A) the fair market value of a Diary A Unit, as determined by
the Management Committee of Dairy Holdings and (B) the sum of the Unreturned
Capital and Unpaid Preferred Return (as such terms are defined in the Dairy
Holdings LLC Agreement) of a Dairy A Unit (assuming such Dairy A Unit was issued
on the Closing Date, as such term is defined in the Executive's Dairy Unit
Subscription Agreement); it being understood and agreed that any distribution
made pursuant to clause (iv) of this sentence shall, with respect to future
distributions, reduce the number of Dairy A Units deemed held by the Deferred
Account by the percentage described in subclause (x) of such clause (iv). The
form of payment made with respect to any of the foregoing distributions shall be
a cash payment except that (1) in the event of a Change in Control in which the
consideration effecting such Change in Control is non-cash consideration, such
distribution may be made in the form of such non-cash consideration, the fair
market value of which shall be determined by the Management Committee of
Investors, and (2) in the event of a distribution of the type described in
clause (iii) or (iv) above, if, with respect to Holdings, any of the Cash
Deferral Conditions (as such term is defined in the Executive's Management Stock
Purchase and Unit Subscription Agreement) exists, the portion of the cash
payment so affected may be made by the delivery of Holdings' unfunded and
unsecured promise to pay Executive the portion of the cash payment so affected
in cash, together with interest, at the first date on which the Cash Deferral
Conditions no longer exist. The interest on such delayed cash payment will
accrue annually at the "prime rate" published by The Wall Street Journal on the
date Holdings delivers its unfunded and unsecured promise.

      9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliated companies. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice,
program, contract or agreement except as explicitly modified by this Agreement;
provided that the Executive shall not be eligible for severance benefits under
any other program or policy of the Company.

      10. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) pursued or defended against in
good faith by the Executive regarding the validity or enforceability of, or
liability under, any provision of this


                                      -11-


Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code.

      11. Successors.

            a. This Agreement is personal to the Executive and without the prior
      written consent of the Company shall not be assignable by the Executive
      otherwise than by will or the laws of descent and distribution. This
      Agreement shall inure to the benefit of and be enforceable by the
      Executive's legal representatives.

            b. This Agreement shall inure to the benefit of and be binding upon
      the Company and its successors and assigns.

            c. The Company will require any successor (whether direct or
      indirect, by purchase, merger, consolidation or otherwise) to all or
      substantially all of the business and/or assets of the Company to assume
      expressly and agree to perform this Agreement in the same manner and to
      the same extent that the Company would be required to perform it if no
      such succession had taken place. As used in this Agreement, "Company"
      shall mean the Company as hereinbefore defined and any successor to its
      business and/or assets as aforesaid.

      12. Miscellaneous.

            a. This Agreement shall be governed by and construed in accordance
      with the laws of the State of Minnesota, without reference to principles
      of conflict of laws. The captions of this Agreement are not part of the
      provisions hereof and shall have no force or effect. This Agreement may
      not be amended or modified otherwise than by a written agreement executed
      by the parties hereto or their respective successors and legal
      representatives.

            b. All notices and other communications hereunder shall be in
      writing and shall be given by hand delivery to the other party or by
      registered or certified mail, return receipt requested, postage prepaid,
      addressed as follows:

                        If to the Executive:

                        James D. Clarkson
                        18783 The Pines
                        Eden Prairie, MN 55441

                        If to the Company:


                                      -12-


                        Michael Foods, Inc.
                        5353 Wayzata Boulevard
                        324 Park National Bank Building
                        Minneapolis, Minnesota 55416
                        Attention: Secretary

                        with a copy to:

                        Vestar Capital Partners IV, L.P.
                        245 Park Avenue
                        41st Floor
                        New York, NY 10167
                        Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

            c. Whenever possible, each provision of this Agreement will be
      interpreted in such manner as to be effective and valid under applicable
      law, but if any provision of this Agreement is held to be invalid, illegal
      or unenforceable in any respect under any applicable law or rule in any
      jurisdiction, such invalidity, illegality or unenforceability will not
      affect any other provision or any other jurisdiction, but this Agreement
      will be reformed, construed and enforced in such jurisdiction as if such
      invalid, illegal or unenforceable provision had never been contained
      herein.

            d. The Company may withhold from any amounts payable under this
      Agreement such Federal, state, local or foreign taxes as shall be required
      to be withheld pursuant to any applicable law or regulation.

            e. The Executive's or the Company's failure to insist upon strict
      compliance with any provision of this Agreement or the failure to assert
      any right the Executive or the Company may have hereunder, including,
      without limitation, the right of the Executive to terminate employment for
      Good Reason pursuant to Section 5(c) of this Agreement, shall not be
      deemed to be a waiver of such provision or right or any other provision or
      right of this Agreement.

            f. From and after the Effective Date this Agreement shall supersede
      any other employment agreement between the parties with respect to the
      subject matter hereof.

            g. Subject to the provisions of Section 5(d), there shall be no
      limitation on the ability of the Company to terminate the Executive at any
      time with or without Cause.


                                      -13-


                                  * * * * *


                                      -14-


      IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

                                    _______________________________________
                                    James D. Clarkson


                                    MICHAEL FOODS, INC.


                                    By: ___________________________________

                                    Title:_________________________________


                                    M-FOODS HOLDINGS, INC.


                                    By: ___________________________________

                                    Title: ________________________________

EX-10.8

                                                                    Exhibit 10.8

                                                                [Execution Copy]

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT made and entered into as of the 10th day of April, 2001, by
and among MICHAEL FOODS, INC., a Minnesota corporation (the "Company") BILL L.
GOUCHER (the "Executive") and for the purposes of Section 8 hereof, M-Foods
Holdings, Inc., a Delaware corporation and controlling entity of the Company
("Holdings").

      WHEREAS, Executive has served as President of an operating company
subsidiary of Michael Foods, Inc.; and

      WHEREAS, Company and Executive have agreed to enter into this Agreement
effective as of the date hereof.

      NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:

      1. Employment and Duties. Company shall employ Executive to serve as
President of M.G. Waldbaum Company and in such capacity Executive shall perform
such duties as the bylaws provide and as the CEO of the Company may from time to
time determine.

      2. Term. This Agreement shall be effective as of the date hereof (the
"Effective Date") and shall continue until the second anniversary of a Change in
Control (as defined below), unless earlier terminated as provided herein (the
"Employment Period"). The Employment Period may be extended thereafter upon the
written agreement of the parties hereto.

      3. Annual Base Salary. For all services by Executive, the Company agrees
to pay to Executive an annual base salary of at least $275,000 (the "Annual Base
Salary").

      4. Additional Benefits and Working Facilities.

            a. Annual Bonus. During the Employment Period, the Executive shall
      participate in such bonus arrangements as may be approved by the
      Compensation Committee of the Board (the "Compensation Committee") (the
      aggregate of all payments made under such bonus arrangements being herein
      referred to as the "Annual Bonus"). Executive's aggregate bonus
      opportunity will be no less than 100% of Annual Base Salary and the
      "Target Bonus" will be no less than 62.5% of Annual Base Salary or greater
      as determined by the Compensation Committee. The Annual Bonus shall be
      paid within two and one-half months of the end of the fiscal year of the
      Company to which it relates.

            b. Other Benefits. Executive shall be entitled to participate in all
      compensation, incentive, employee benefit, welfare and other plans,
      practices, policies and programs and fringe benefits, including vacation
      policy (collectively, "Employee Benefit Plans") on a basis



      no less favorable than that provided to any other executive officer of the
      Company.

            c. Expenses. The Company shall reimburse Executive for all
      reasonable expenses incurred by Executive in connection with the Company's
      business, including but not limited to, expenses of travel and
      entertainment, upon presentation of itemized statements therefor.

      5. Termination of Employment.

            a. Death or Disability. The Executive's employment shall terminate
      automatically upon the Executive's death during the Employment Period. If
      the Company determines in good faith that the Disability of the Executive
      has occurred during the Employment Period (pursuant to the definition of
      Disability set forth below), it may give to the Executive written notice
      in accordance with Section 12 of this Agreement of its intention to
      terminate the Executive's employment. In such event, the Executive's
      employment with the Company shall terminate effective on the 30th day
      after receipt of such notice by the Executive (the "Disability Effective
      Date"), provided that, within the 30 days after such receipt, the
      Executive shall not have returned to full-time performance of the
      Executive's duties. For purposes of this Agreement, "Disability" shall
      mean a determination by the Company in its sole discretion that Executive
      is unable to perform his job responsibilities as a result of chronic
      illness, physical, mental or any other disability for a period of six
      months or more.

            b. With or Without Cause. The Company may terminate the Executive's
      employment during the Employment Period with or without Cause. For
      purposes of this Agreement, "Cause" shall mean:

                  (i) the continued failure of the Executive to perform
            substantially the Executive's duties with the Company or one of its
            affiliates (other than any such failure resulting from incapacity
            due to physical or mental illness), after a written demand for
            substantial performance is delivered to the Executive by the Board
            which specifically identifies the manner in which the Board believes
            that the Executive has not substantially performed the Executive's
            duties, or

                  (ii) the willful engaging by the Executive in illegal conduct
            or gross misconduct which is materially and demonstrably injurious
            to the Company, or

                  (iii) conviction of a felony or guilty or nolo contendere plea
            by the Executive with respect thereto.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company.


                                       -2-


Any act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer (while the Executive does not serve as such) or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive shall not be deemed to be
for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than 75%of
the entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i),
(ii) or (iii) above, and specifying the particulars thereof in detail.

            c. Good Reason. The Executive's employment may be terminated by the
      Executive for Good Reason. For purposes of this Agreement, "Good Reason"
      shall mean in the absence of a written consent of the Executive:

                  (i) upon, or in anticipation of, a Change in Control, the
            assignment to the Executive of any duties inconsistent with the
            Executive's title and position (including status, offices and
            reporting requirements), authority, duties or responsibilities as
            contemplated by Section 1 of this Agreement, or any other action by
            the Company which results in a diminution in such position,
            authority, duties or responsibilities, excluding for this purpose an
            isolated, insubstantial and inadvertent action not taken in bad
            faith and which is remedied by the Company promptly after receipt of
            notice thereof given by the Executive; provided that after a Change
            in Control the Company shall have the flexibility to appoint the
            Executive to a reporting relationship different from that which
            existed prior to the Change in Control, to make an immaterial change
            in Executive's duties, or to change the Executive's title provided
            that Executive shall not have a stature less than that of an
            operating company President, and it is understood that equivalent
            positions may have different titles;

                  (ii) any failure by the Company to comply with any of the
            provisions of Section 3 of this Agreement or the failure by the
            Company to increase such Annual Base Salary each year after a Change
            in Control by an amount which at least equals on a percentage basis,
            the mean average percentage increase in base salary for all
            employees similarly situated during the two full calendar years
            immediately preceding a Change in Control, other than an isolated,
            insubstantial and inadvertent failure not occurring in bad faith and
            which is remedied by the Company promptly after receipt of notice
            thereof given by the Executive;

                  (iii) the failure of the Company upon a Change in Control to
            (A) continue in effect any employee benefit plan, compensation plan,
            welfare benefit plan or material fringe benefit plan in which
            Executive is participating immediately prior to


                                      -3-


            such Change in Control or the taking of any action by the Company
            which would adversely affect Executive's participation in or reduce
            Executive's benefits under any such plan, unless Executive is
            permitted to participate in other plans providing Executive with
            substantially equivalent benefits, or (B) provide Executive with
            paid vacation in accordance with the most favorable past practice of
            the Company as in effect for Executive immediately prior to such
            Change in Control;

                  (iv) after, or in anticipation of, a Change in Control, any
            purported termination by the Company of the Executive's employment
            otherwise than as expressly permitted by this Agreement for Cause,
            death or Disability;

                  (v) any failure by the Company to comply with and satisfy
            Section 11(c) of this Agreement; or

                  (vi) after, or in anticipation of, a Change in Control, any
            requirement that the Executive (A) be based anywhere more than 50
            miles from the office where the Executive is currently located or
            (B) travel on Company business to an extent substantially greater
            than the Executive's current travel obligations.

            d. Notice of Termination. Any termination by the Company or by the
      Executive shall be communicated by Notice of Termination to the other
      party hereto given in accordance with Section 12(b) of this Agreement. For
      purposes of this Agreement, a "Notice of Termination" means a written
      notice which (i) indicates the specific termination provision in this
      Agreement relied upon, (ii) to the extent applicable, sets forth in
      reasonable detail the facts and circumstances claimed to provide a basis
      for termination of the Executive's employment under the provisions so
      indicated and (iii) if the Date of Termination (as defined below) is other
      than the date of receipt of such notice, specifies the termination date
      (which date shall be not more than 30 days after the giving of such
      notice). The failure by the Executive or the Company to set forth in the
      Notice of Termination any fact or circumstance which contributes to a
      showing of Good Reason or Cause shall not waive any right of the Executive
      or the Company, respectively, hereunder or preclude the Executive or the
      Company, respectively, from asserting such fact or circumstance in
      enforcing the Executive's or the Company's rights hereunder.

            e. Date of Termination. "Date of Termination" means (i) if the
      Executive's employment is terminated by the Company other than for
      Disability, the date of receipt of the Notice of Termination or any later
      date specified therein within 30 days of such notice, (ii) if the
      Executive's employment is terminated by reason of death or Disability, the
      date of death of the Executive or the Disability Effective Date, as the
      case may be, and (iii) if the Executive's employment is terminated by the
      Executive, 30 days after the giving of such notice by the Executive
      provided that the Company may elect to place the Executive on paid leave
      for all or any part of such 30-day period.


                                      -4-


            f. Change in Control. "Change in Control" means the consummation of
      a transaction, whether in a single transaction or in a series of related
      transactions that are consummated contemporaneously (or consummated
      pursuant to contemporaneous agreements), with any other party or parties
      on an arm's-length basis, pursuant to which (a) such party or parties,
      directly or indirectly, acquire (whether by merger, stock purchase,
      recapitalization, reorganization, redemption, issuance of capital stock or
      otherwise) more than 50% of the voting stock of the Company, (b) such
      party or parties, directly or indirectly, acquire assets constituting all
      or substantially all of the assets of the Company and its subsidiaries on
      a consolidated basis, or (c) prior to an initial public offering of the
      Company Common Stock pursuant to an offering registered under the 1933
      Act, Vestar Capital Partners IV, L.P. a Delaware limited partnership and
      its affiliates cease to have the ability to elect, directly or indirectly,
      a majority of the Board of Directors of the Company.

      6. Obligations of the Company upon Termination.

            a. Death or Disability. If, during the Employment Period the
      Executive's employment shall terminate on account of death or Disability:

                  (i) the Company shall pay to the Executive or his estate or
            beneficiaries in a lump sum in cash within 30 days after the Date of
            Termination the sum of (x) the Executive's Annual Base Salary
            through the Date of Termination to the extent not theretofore paid,
            and (y) the product of (1) the Target Bonus and (2) a fraction, the
            numerator of which is the number of whole and partial months in the
            fiscal year in which the Date of Termination occurs through the Date
            of Termination and the denominator of which is 12, to the extent not
            theretofore paid (the sum of the amounts described in clauses (x)
            and (y) shall be hereinafter referred to as the "Accrued
            Obligations");

                  (ii) to the extent not theretofore paid or provided, the
            Company shall timely pay or provide to the Executive or his estate
            or beneficiaries any other amounts or benefits required to be paid
            or provided or which the Executive is eligible to receive under any
            plan, program, policy or practice of or contract or agreement with
            the Company and its affiliated companies through the Date of
            Termination (such other amounts and benefits shall be hereinafter
            referred to as the "Other Benefits"); and

                  (iii) the Company shall pay to the Executive or his estate or
            beneficiaries in a lump sum in cash within 30 days after the Date of
            Termination an amount equal to the Executive's current Annual Base
            Salary.

            b. By the Company for Cause; By the Executive Other than for Good
      Reason. If the Executive's employment is terminated for Cause or the
      Executive terminates his


                                      -5-


      employment without Good Reason during the Employment Period, this
      Agreement shall terminate without further obligations to the Executive
      other than the obligation to pay to the Executive (i) his Annual Base
      Salary through the Date of Termination to the extent theretofore unpaid
      and (ii) the Other Benefits.

            c. By the Company Other than for Cause, Death or Disability; By the
      Executive for Good Reason. If, during the Employment Period, but prior to
      a Change in Control, the Executive's employment is terminated by the
      Executive for Good Reason or by the Company other than for Cause, and
      other than on account of death or Disability:

                  (i) the Company shall pay to the Executive in a lump sum in
            cash within 30 days after the Date of Termination the sum of:

                        (A) the amount of Executive's Annual Base Salary through
                  the Date of Termination to the extent not theretofore paid;
                  and

                        (B) an amount equal to the Executive's current Annual
                  Base Salary; and

                  (ii) the Company shall provide the Executive with the Other
            Benefits.

            d. After, or in Anticipation of a Change in Control By the Company
      Other than for Cause or By the Executive for Good Reason. If the
      Executive's employment shall be terminated by the Company other than for
      Cause or the Executive terminates his employment for Good Reason in
      anticipation of or within two years following a Change in Control:

                  (i) the Company shall pay to the Executive in a lump sum in
            cash within 30 days after the Date of Termination the sum of:

                        (A) the Accrued Obligations; and

                        (B) an amount equal to the product of (x) two and (y)
                  Executive's current Annual Base Salary; and

                  (ii) the Company shall provide the Executive with the Other
            Benefits.

      7. Noncompetition and Nonsolicitation. Executive acknowledges that in the
course of his employment with the Company he will become familiar with the
Company's and its subsidiaries' trade secrets and other confidential information
concerning the Company and such subsidiaries and that his services will be of
special, unique and extraordinary value to the Company and its subsidiaries.
Therefore, Executive agrees that:

            a. Noncompetition. During the period commencing on the Effective
      Date and


                                      -6-


      ending on the second anniversary of the date Executive's employment with
      the Company terminates (such period the "Restricted Period"), Executive
      shall not, for himself or on behalf of any other person, firm,
      partnership, corporation, or other entity, engage, directly or indirectly,
      as an executive, agent, representative, consultant, partner, shareholder
      or holder of any other financial interest, in any business that competes
      with the Company in the business of the production, distribution or sales
      of eggs or egg products (a "Competing Business"), it being understood and
      agreed that Executive shall not be in violation of this restriction where
      Executive is employed by a person, firm, partnership, corporation, or
      other entity engaged in a variety of activities, including the Competing
      Business, so long as Executive is not engaged in or responsible for the
      Competing Business of such entity. Nothing herein shall prohibit Executive
      from being a passive owner of not more than 2% of the outstanding publicly
      traded stock of any class of a Competing Business so long as Executive has
      no active participation in the business of such entity, except to the
      extent permitted above. Executive acknowledges that this Agreement, and
      specifically, this Section 7, does not preclude Executive from earning a
      livelihood, nor does it unreasonably impose limitations on Executive's
      ability to earn a living. In addition, Executive agrees and acknowledges
      that the potential harm to the Company of its non-enforcement outweighs
      any harm to Executive of its enforcement by injunction or otherwise.

            b. Nonsolicitation. During the Restricted Period, Executive shall
      not directly or indirectly through another entity (i) induce or attempt to
      induce any employee of the Company or its subsidiaries to leave the employ
      of the Company or its subsidiaries, or in any way interfere with the
      relationship between the Company or any of its subsidiaries and any
      employee thereof, (ii) knowingly hire any person who was an employee of
      the Company or any of its subsidiaries within 180 days prior to the time
      such employee was hired by Executive, (iii) induce or attempt to induce
      any customer, supplier, licensee or other business relation of the Company
      or any of its subsidiaries to cease doing business with the Company or its
      subsidiaries or in any way interfere with the relationship between any
      such customer, supplier, licensee or business relation and the Company or
      any subsidiary or (iv) directly or indirectly acquire or attempt to
      acquire an interest in any business relating to the business of the
      Company or any of its subsidiaries and with which the Company or any of
      its subsidiaries has entertained discussions or has requested and received
      information relating to the acquisition of such business by the Company or
      its subsidiaries in the one-year period immediately preceding Executive's
      termination of employment with the Company.

            c. Enforcement. The parties to this Agreement hereby agree and
      stipulate that (i) the restrictions contained in this Agreement are
      reasonable and necessary in order to protect the Company's and its
      subsidiaries' legitimate business interests and (ii) in the event of any
      breach or violation of this Agreement or of any provision hereof by
      Executive, the Company and its subsidiaries will have no adequate remedy
      at law and will suffer irreparable loss and damage thereby. The parties
      hereby further agree and stipulate that in the event of any such breach or
      violation, either threatened or actual, the Company's and its
      subsidiaries' rights shall include, in addition to any and all other
      rights available to the Company and its


                                      -7-


      subsidiaries at law or in equity, the right to seek and obtain any and all
      injunctive relief or restraining orders available to it in courts of
      proper jurisdiction, so as to prohibit, bar, and restrain any and all such
      breaches or violations by Executive. The prevailing party to any legal
      action, arbitration or other proceeding commenced in connection with
      enforcing any provision of this Section 7, including without limitation,
      obtaining the injunctive relief provided by this Section 7 shall be
      entitled to recover all court costs, reasonable attorneys' fees, and
      related expenses incurred by such party. Executive further agrees that no
      bond need be filed in connection with any request by the Company and its
      subsidiaries for a temporary restraining order or for temporary or
      preliminary injunctive relief.

            d. Additional Acknowledgments. Executive acknowledges that the
      provisions of this Section 7 are in consideration of: (i) employment with
      the Company, (ii) the issuance by M- Foods Investors, LLC, a Delaware
      corporation and affiliate of the Company ("Investors"), to Executive of
      Investors' Class B Units (the "Class B Units") and Investors' Class C
      Units pursuant to the terms of that certain Management Stock Purchase and
      Unit Subscription Agreement, dated as of the date hereof, by and between
      Investors and Executive (the "Management Stock Purchase and Unit
      Subscription Agreement"), and (iii) additional good and valuable
      consideration as set forth in this Agreement. In addition, Executive
      acknowledges (i) that the business of the Company and its subsidiaries is
      national in scope and without geographical limitation and (ii)
      notwithstanding the state of incorporation or principal office of the
      Company or any of its subsidiaries, or any of their respective executives
      or employees (including the Executive), it is expected that the Company
      will have business activities and have valuable business relationships
      within its industry throughout the United States. Executive acknowledges
      that he has carefully read this Agreement and has given careful
      consideration to the restraints imposed upon Executive by this Agreement,
      and is in full accord as to their necessity for the reasonable and proper
      protection of confidential and proprietary information of the Company and
      its subsidiaries now existing or to be developed in the future. Executive
      expressly acknowledges and agrees that each and every restraint imposed by
      this Agreement is reasonable with respect to subject matter, time period
      and geographical area.

      8. Deferral of Certain Compensation. In connection with the Executive's
agreement to cancel all of his options to acquire Company Common Stock pursuant
to the terms of that certain Option Cancellation Agreement, dated as of the date
hereof, by and between the Executive and the Company, the Company shall (a) pay
to Executive an amount equal to $394,052.60 (the "Cancellation Payment") and (b)
rollover an amount equal to $1,440,000 (the "Deferred Amount") to an unfunded,
unsecured nonqualified deferred compensation arrangement established for this
purpose (the "Deferred Account"). Each of the Executive, the Company and
Holdings agrees that Holdings, through an intercompany transfer, shall assume
all obligations associated with the Deferred Amount. The Cancellation Payment
shall be paid by the Company to the Executive on the Effective Date, or as soon
as reasonably practicable thereafter.

      With respect to the Deferred Account, the Deferred Amount shall be deemed
to be invested


                                      -8-


(i.e., an actual investment will not be made), as of the Effective Date, in (A)
14,400 Class A Units of Investors (the "Investors A Units") and (B) 14,400 Class
A Units (the "Dairy A Units") of M-Foods Dairy Holdings, LLC, a Delaware limited
liability company ("Dairy Holdings"). Holdings shall credit Executive's Deferred
Account with certain of the distributions that would be received by the Deferred
Account if such Deferred Account were actually invested in the manner set forth
in the preceding sentence in Investors A Units and Dairy A Units, the extent of
such crediting to be in accordance with the calculations set forth in the
following two paragraphs. All amounts in the Executive's Deferred Account shall
be subject to the claims of the creditors of Holdings.

      With respect to the Investors A Units, Holdings shall credit Executive's
Deferred Account with any distributions made in respect of such Investors A
Units pursuant to or in accordance with Sections 4.4(a)(i) and 4.4(a)(ii) of the
Investors' Amended and Restated Limited Liability Company Agreement, dated April
10, 2001 (the "Investors LLC Agreement"). In the event Investors distributes
non-cash property to holders of Investors A Units pursuant to Sections 4.4(a)(i)
or 4.4(a)(ii) of the Investors LLC Agreement, Holdings shall credit Executive's
Deferred Account in an amount equal to the fair market value of such property,
as determined by the Management Committee of Investors. Executive's Deferred
Account shall not be credited with any distributions made in respect of
Investors A Units pursuant to or in accordance with any subsections of Section
4.4 of the Investors LLC Agreement other than Sections 4.4(a)(i) and 4.4(a)(ii)
thereof. In the event that Investors A Units are sold by one or more holders of
Investors A Units to a buyer unrelated on the date hereof to the holders of
Investors A Units, Holdings shall credit Executive's Deferred Account with an
amount equal to the result of (x) the percentage of outstanding Investors A
Units being purchased by an unrelated buyer (including, for purposes of this
percentage calculation, the number of Investors A Units deemed held by the
Deferred Account and any other unfunded, unsecured nonqualified deferred
compensation arrangements similarly established to be deemed to hold Investors A
Units) multiplied by (y) the number of Investors A Units deemed held in the
Deferred Account multiplied by (z) the lesser of (i) the amount of cash or fair
market value of any property, as determined by the Management Committee of
Investors, received by holders of Investors A Units in exchange for an Investors
A Unit and (ii) the sum of the Unreturned Capital and Unpaid Preferred Return
(as such terms are defined in the Investors LLC Agreement) of an Investors A
Unit (assuming such Investors A Unit was issued on the Closing Date, as such
term is defined in the Executive's Management Stock Purchase and Unit
Subscription Agreement); it being understood and agreed that any distribution
made pursuant to this sentence shall, with respect to future distributions,
reduce the number of Investors A Units deemed held by the Deferred Account by
the percentage described in subclause (x) of this sentence.

      With respect to the Dairy A Units, Holdings shall credit Executive's
Deferred Account with any distributions made in respect of such Dairy A Units
pursuant to or in accordance with Sections 4.4(a)(ii) and 4.4(a)(iii) of the
Limited Liability Company Agreement of Dairy Holdings, dated April 10, 2001 (the
"Dairy Holdings LLC Agreement"). In the event Dairy Holdings distributes
non-cash property to holders of Dairy A Units pursuant to Sections 4.4(a)(ii) or
4.4(a)(iii) of the Dairy Holdings LLC Agreement, Holdings shall credit
Executive's Deferred Account in an amount equal to the fair market value of such
property, as determined by the Management Committee of Dairy


                                      -9-


Holdings. Executive's Deferred Account shall not be credited with any
distributions made in respect of Dairy A Units pursuant to or in accordance with
any subsections of Section 4.4 of the Dairy Holdings LLC Agreement other than
Sections 4.4(a)(ii) and 4.4(a)(iii) thereof. In the event that Dairy A Units are
sold by one or more holders of Dairy A Units to a buyer unrelated on the date
hereof to the holders of Dairy A Units, Holdings shall credit Executive's
Deferred Account with an amount equal to the result of (x) the percentage of
outstanding Dairy A Units being purchased by an unrelated buyer (including, for
purposes of this percentage calculation, the number of Dairy A Units deemed held
by the Deferred Account and any other unfunded, unsecured nonqualified deferred
compensation arrangements similarly established to be deemed to hold Dairy A
Units) multiplied by (y) the number of Dairy A Units deemed held in the Deferred
Account multiplied by (z) the lesser of (i) the amount of cash or fair market
value of any property, as determined by the Management Committee of Dairy
Holdings, received by holders of Dairy A Units in exchange for a Dairy A Unit
and (ii) the sum of the Unreturned Capital and Unpaid Preferred Return (as such
terms are defined in the Dairy Holdings LLC Agreement) of a Dairy A Unit
(assuming such Dairy A Unit was issued on the Closing Date, as such term is
defined in the Dairy Unit Subscription Agreement, dated as of the date hereof,
between Dairy Holdings and the Executive (the "Dairy Unit Subscription
Agreement")); it being understood and agreed that any distribution made pursuant
to this sentence shall, with respect to future distributions, reduce the number
of Dairy A Units deemed held by the Deferred Account by the percentage described
in subclause (x) of this sentence.

      Executive shall receive from Holdings distributions from his Deferred
Account, in the amount indicated, upon the occurrence of the following events:
(i) upon a Change in Control, Executive shall receive a total distribution of
the amount then deemed held in the Deferred Account; (ii) upon the tenth
anniversary of the date hereof, Executive shall receive a total distribution of
the amount then deemed held in the Deferred Account; (iii) upon the purchase by
Investors of any of Executive's Class B Units pursuant to Section 7.2 of the
Executive's Management Stock Purchase and Unit Subscription Agreement, Executive
shall receive a distribution from the Deferred Account equal to the result of
(x) the percentage of Executive's Class B Units being purchased by Investors
multiplied by (y) the number of Investors A Units deemed held in the Deferred
Account multiplied by (z) the lesser of (A) the fair market value of an
Investors A Unit, as determined by the Management Committee of Investors and (B)
the sum of the Unreturned Capital and Unpaid Preferred Return (as such terms are
defined in the Investors LLC Agreement) of an Investors A Unit (assuming such
Investors A Unit was issued on the Closing Date, as such term is defined in the
Executive's Management Stock Purchase and Unit Subscription Agreement); it being
understood and agreed that any distribution made pursuant to clause (iii) of
this sentence shall, with respect to future distributions, reduce the number of
Investors A Units deemed held by the Deferred Account by the percentage
described in subclause (x) of such clause (iii); and (iv) upon the purchase by
Dairy Holdings of any of Executive's Class B Units pursuant to Section 7.2 of
the Executive's Dairy Unit Subscription Agreement, Executive shall receive a
distribution from the Deferred Account equal to the result of (x) the percentage
of Executive's Class B Units being purchased by Dairy Holdings multiplied by (y)
the number of Dairy A Units deemed held in the Deferred Account multiplied by
(z) the lesser of (A) the fair market value of a Diary A Unit, as determined by
the Management Committee of Dairy Holdings and (B) the sum of the Unreturned
Capital and Unpaid Preferred


                                      -10-


Return (as such terms are defined in the Dairy Holdings LLC Agreement) of a
Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as such
term is defined in the Executive's Dairy Unit Subscription Agreement); it being
understood and agreed that any distribution made pursuant to clause (iv) of this
sentence shall, with respect to future distributions, reduce the number of Dairy
A Units deemed held by the Deferred Account by the percentage described in
subclause (x) of such clause (iv). The form of payment made with respect to any
of the foregoing distributions shall be a cash payment except that (1) in the
event of a Change in Control in which the consideration effecting such Change in
Control is non-cash consideration, such distribution may be made in the form of
such non-cash consideration, the fair market value of which shall be determined
by the Management Committee of Investors, and (2) in the event of a distribution
of the type described in clause (iii) or (iv) above, if, with respect to
Holdings, any of the Cash Deferral Conditions (as such term is defined in the
Executive's Management Stock Purchase and Unit Subscription Agreement) exists,
the portion of the cash payment so affected may be made by the delivery of
Holdings' unfunded and unsecured promise to pay Executive the portion of the
cash payment so affected in cash, together with interest, at the first date on
which the Cash Deferral Conditions no longer exist. The interest on such delayed
cash payment will accrue annually at the "prime rate" published by The Wall
Street Journal on the date Holdings delivers its unfunded and unsecured promise.

      9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliated companies. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice,
program, contract or agreement except as explicitly modified by this Agreement;
provided that the Executive shall not be eligible for severance benefits under
any other program or policy of the Company.

      10. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) pursued or defended against in
good faith by the Executive regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest


                                      -11-


on any delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.

      11. Successors.

            a. This Agreement is personal to the Executive and without the prior
      written consent of the Company shall not be assignable by the Executive
      otherwise than by will or the laws of descent and distribution. This
      Agreement shall inure to the benefit of and be enforceable by the
      Executive's legal representatives.

            b. This Agreement shall inure to the benefit of and be binding upon
      the Company and its successors and assigns.

            c. The Company will require any successor (whether direct or
      indirect, by purchase, merger, consolidation or otherwise) to all or
      substantially all of the business and/or assets of the Company to assume
      expressly and agree to perform this Agreement in the same manner and to
      the same extent that the Company would be required to perform it if no
      such succession had taken place. As used in this Agreement, "Company"
      shall mean the Company as hereinbefore defined and any successor to its
      business and/or assets as aforesaid.

      12. Miscellaneous.

            a. This Agreement shall be governed by and construed in accordance
      with the laws of the State of Minnesota, without reference to principles
      of conflict of laws. The captions of this Agreement are not part of the
      provisions hereof and shall have no force or effect. This Agreement may
      not be amended or modified otherwise than by a written agreement executed
      by the parties hereto or their respective successors and legal
      representatives.

            b. All notices and other communications hereunder shall be in
      writing and shall be given by hand delivery to the other party or by
      registered or certified mail, return receipt requested, postage prepaid,
      addressed as follows:

                   If to the Executive:

                   Bill L. Goucher
                   3060 Quinwood Lane
                   Plymouth, MN 55441

                   If to the Company:

                   Michael Foods, Inc.
                   5353 Wayzata Boulevard


                                      -12-


                   324 Park National Bank Building
                   Minneapolis, Minnesota 55416
                   Attention: Secretary

                   with a copy to:

                   Vestar Capital Partners IV, L.P.
                   245 Park Avenue
                   41st Floor
                   New York, NY 10167
                   Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

            c. Whenever possible, each provision of this Agreement will be
      interpreted in such manner as to be effective and valid under applicable
      law, but if any provision of this Agreement is held to be invalid, illegal
      or unenforceable in any respect under any applicable law or rule in any
      jurisdiction, such invalidity, illegality or unenforceability will not
      affect any other provision or any other jurisdiction, but this Agreement
      will be reformed, construed and enforced in such jurisdiction as if such
      invalid, illegal or unenforceable provision had never been contained
      herein.

            d. The Company may withhold from any amounts payable under this
      Agreement such Federal, state, local or foreign taxes as shall be required
      to be withheld pursuant to any applicable law or regulation.

            e. The Executive's or the Company's failure to insist upon strict
      compliance with any provision of this Agreement or the failure to assert
      any right the Executive or the Company may have hereunder, including,
      without limitation, the right of the Executive to terminate employment for
      Good Reason pursuant to Section 5(c) of this Agreement, shall not be
      deemed to be a waiver of such provision or right or any other provision or
      right of this Agreement.

            f. From and after the Effective Date this Agreement shall supersede
      any other employment agreement between the parties with respect to the
      subject matter hereof.

            g. Subject to the provisions of Section 5(d), there shall be no
      limitation on the ability of the Company to terminate the Executive at any
      time with or without Cause.

                                    * * * * *


                                      -13-


      IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.


                                  ______________________________________________
                                  Bill L. Goucher

                                  MICHAEL FOODS, INC.

                                  By:___________________________________________

                                  Title:________________________________________


                                  M-FOODS HOLDINGS, INC.

                                  By:___________________________________________

                                  Title:________________________________________

EX-10.9

                                                                    Exhibit 10.9

                                                                [Execution Copy]

                               MICHAEL FOODS, INC.

                                  SEVERANCE AND
                              DEFERRED COMPENSATION
                                    AGREEMENT

      AGREEMENT, made effective April 10, 2001, by and among Michael Foods,
Inc., a Minnesota corporation (the "Company"), James Mohr ("Employee") and, for
purposes of Section 4 hereof, M-Foods Holdings, Inc., a Delaware corporation
("Holdings").

                             Preliminary Statements:

1.    The Company considers the establishment and maintenance of a sound and
      vital management team essential to protecting and enhancing its best
      interest and the best interests of the Company's shareholders.

2.    In this connection, the Company recognizes that the possibility of a
      change in control of the Company exists and that such possibility and the
      uncertainty and questions which it may raise among management personnel,
      may result in the departure or distraction of such personnel to the
      detriment of the Company and the Company's shareholders.

3.    Accordingly, the Company has adopted a Severance Plan for Eligible
      Employees of Michael Foods, Inc. and its subsidiaries, as amended (the
      "Plan"), and the Board of Directors of the Company ("Board") has directed
      management of the Company to implement such Plan.

4.    In addition, the Company recognizes the Employee's substantial
      contribution to the growth and success of the Company and for this reason
      has decided to make certain changes in the Employee's compensation
      arrangements, which the Board has determined will reinforce and encourage
      the continued attention and dedication to the Company of the Employee as a
      member of the Company's senior management in the best interests of the
      Company and its shareholders.

NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and in order to induce Employee to remain in the Company's
employ, the parties hereto hereby agree as follows:

1.    Participation in Plan. Employee is hereby designated a "Key Employee" for
      purposes of the Plan and is eligible for the severance benefits provided
      therein. Such benefits shall be in lieu of any further salary payments to
      Employee for periods subsequent to termination of employment, to the
      extent Employee becomes eligible for such severance payments by reason of
      termination of employment.



2.    Term. This Agreement shall commence on the date hereof and shall continue
      in effect until the Plan has been terminated. From and after the date
      hereof, this Agreement shall supersede any other agreement between the
      parties hereto with respect to the subject matter hereof.

3.    Plan. This Agreement hereby incorporates by reference the terms(1) and
      conditions of the Plan which shall be binding upon Employee.

4.    Deferral of Certain Compensation. In connection with the Employee's
      agreement to cancel all of his options to acquire Company Common Stock
      pursuant to the terms of that certain Option Cancellation Agreement, dated
      as of the date hereof, by and between the Employee and the Company, the
      Company shall (a) pay to Employee an amount equal to $129,990 (the
      "Cancellation Payment") and (b) rollover an amount equal to $384,000 (the
      "Deferred Amount") to an unfunded, unsecured nonqualified deferred
      compensation arrangement established for this purpose (the "Deferred
      Account"). Each of the Employee, the Company and Holdings agrees that
      Holdings, through an intercompany transfer, shall assume all obligations
      associated with the Deferred Amount. The Cancellation Payment shall be
      paid by the Company to the Employee on the Effective Date, or as soon as
      reasonably practicable thereafter.

      With respect to the Deferred Account, the Deferred Amount shall be deemed
      to be invested (i.e., an actual investment will not be made), as of the
      Effective Date, in (A) 3,840 Class A Units (the "Investors A Units") of
      M-Foods Investors, LLC, a Delaware limited liability company ("Investors")
      and (B) 3,840 Class A Units (the "Dairy A Units") of M-Foods Dairy
      Holdings, LLC, a Delaware limited liability company ("Dairy Holdings").
      Holdings shall credit Employee's Deferred Account with certain of the
      distributions that would be received by the Deferred Account if such
      Deferred Account were actually invested in the manner set forth in the
      preceding sentence in Investors A Units and Dairy A Units, the extent of
      such crediting to be in accordance with the calculations set forth in the
      following two paragraphs. All amounts in the Employee's Deferred Account
      shall be subject to the claims of the creditors of Holdings.

      With respect to the Investors A Units, Holdings shall credit Employee's
      Deferred Account with any distributions made in respect of such Investors
      A Units pursuant to or in accordance with Sections 4.4(a)(i) and
      4.4(a)(ii) of the Investors' Amended and Restated Limited Liability
      Company Agreement, dated April 10, 2001 (the "Investors LLC Agreement").
      In the event Investors distributes non-cash property to holders of
      Investors A Units pursuant to Sections 4.4(a)(i) or 4.4(a)(ii) of the
      Investors LLC Agreement, Holdings shall credit Employee's Deferred Account
      in an amount equal to the fair market value of such property, as
      determined by the Management Committee of Investors. Employee's Deferred
      Account shall not be credited with any distributions made in respect of
      Investors A Units pursuant to or in accordance with any subsections of
      Section 4.4 of the Investors LLC Agreement other than Sections 4.4(a)(i)
      and 4.4(a)(ii) thereof. In the event that Investors A Units are sold by

- ------------

(1) All definitions contained herein will be conformed to substantially mirror,
as appropriate, the definitions contained in (the "Management Stock Purchase and
Unit Subscription Agreement").



      one or more holders of Investors A Units to a buyer unrelated on the date
      hereof to the holders of Investors A Units, Holdings shall credit
      Employee's Deferred Account with an amount equal to the result of (x) the
      percentage of outstanding Investors A Units being purchased by an
      unrelated buyer (including, for purposes of this percentage calculation,
      the number of Investors A Units deemed held by the Deferred Account and
      any other unfunded, unsecured nonqualified deferred compensation
      arrangements similarly established to be deemed to hold Investors A Units)
      multiplied by (y) the number of Investors A Units deemed held in the
      Deferred Account multiplied by (z) the lesser of (i) the amount of cash or
      fair market value of any property, as determined by the Management
      Committee of Investors, received by holders of Investors A Units in
      exchange for an Investors A Unit and (ii) the sum of the Unreturned
      Capital and Unpaid Preferred Return (as such terms are defined in the
      Investors LLC Agreement) of an Investors A Unit (assuming such Investors A
      Unit was issued on the Closing Date, as such term is defined in the
      Employee's Management Stock Purchase and Unit Subscription Agreement,
      dated as of the date hereof, by and between the Employee and Investors
      (the "Management Stock Purchase and Unit Subscription Agreement")); it
      being understood and agreed that any distribution made pursuant to this
      sentence shall, with respect to future distributions, reduce the number of
      Investors A Units deemed held by the Deferred Account by the percentage
      described in subclause (x) of this sentence.

      With respect to the Dairy A Units, Holdings shall credit Employee's
      Deferred Account with any distributions made in respect of such Dairy A
      Units pursuant to or in accordance with Sections 4.4(a)(ii) and
      4.4(a)(iii) of the Limited Liability Company Agreement of Dairy Holdings,
      dated April 10, 2001 (the "Dairy Holdings LLC Agreement"). In the event
      Dairy Holdings distributes non-cash property to holders of Dairy A Units
      pursuant to Sections 4.4(a)(ii) or 4.4(a)(iii) of the Dairy Holdings LLC
      Agreement, Holdings shall credit Employee's Deferred Account in an amount
      equal to the fair market value of such property, as determined by the
      Management Committee of Dairy Holdings. Employee's Deferred Account shall
      not be credited with any distributions made in respect of Dairy A Units
      pursuant to or in accordance with any subsections of Section 4.4 of the
      Dairy Holdings LLC Agreement other than Sections 4.4(a)(ii) and
      4.4(a)(iii) thereof. In the event that Dairy A Units are sold by one or
      more holders of Dairy A Units to a buyer unrelated on the date hereof to
      the holders of Dairy A Units, Holdings shall credit Employee's Deferred
      Account with an amount equal to the result of (x) the percentage of
      outstanding Dairy A Units being purchased by an unrelated buyer
      (including, for purposes of this percentage calculation, the number of
      Dairy A Units deemed held by the Deferred Account and any other unfunded,
      unsecured nonqualified deferred compensation arrangements similarly
      established to be deemed to hold Dairy A Units) multiplied by (y) the
      number of Dairy A Units deemed held in the Deferred Account multiplied by
      (z) the lesser of (i) the amount of cash or fair market value of any
      property, as determined by the Management Committee of Dairy Holdings,
      received by holders of Dairy A Units in exchange for a Dairy A Unit and
      (ii) the sum of the Unreturned Capital and Unpaid Preferred Return (as
      such terms are defined in the Dairy Holdings LLC Agreement) of a Dairy A
      Unit (assuming such Dairy A Unit was issued on the Closing Date, as such
      term is defined in the Dairy Unit Subscription Agreement, dated as of the
      date hereof, between Dairy Holdings and the Employee (the "Dairy Unit
      Subscription



      Agreement")); it being understood and agreed that any distribution made
      pursuant to this sentence shall, with respect to future distributions,
      reduce the number of Dairy A Units deemed held by the Deferred Account by
      the percentage described in subclause (x) of this sentence.

      Employee shall receive from Holdings distributions from his Deferred
      Account, in the amount indicated, upon the occurrence of the following
      events: (i) upon a Change in Control, Employee shall receive a total
      distribution of the amount then deemed held in the Deferred Account; (ii)
      upon the tenth anniversary of the date hereof, Employee shall receive a
      total distribution of the amount then deemed held in the Deferred Account;
      (iii) upon the purchase by Investors of any of Employee's Class B Units
      pursuant to Section 7.2 of the Employee's Management Stock Purchase and
      Unit Subscription Agreement, Employee shall receive a distribution from
      the Deferred Account equal to the result of (x) the percentage of
      Employee's Class B Units being purchased by Investors multiplied by (y)
      the number of Investors A Units deemed held in the Deferred Account
      multiplied by (z) the lesser of (A) the fair market value of an Investors
      A Unit, as determined by the Management Committee of Investors and (B) the
      sum of the Unreturned Capital and Unpaid Preferred Return (as such terms
      are defined in the Investors LLC Agreement) of an Investors A Unit
      (assuming such Investors A Unit was issued on the Closing Date, as such
      term is defined in the Employee's Management Stock Purchase and Unit
      Subscription Agreement); it being understood and agreed that any
      distribution made pursuant to clause (iii) of this sentence shall, with
      respect to future distributions, reduce the number of Investors A Units
      deemed held by the Deferred Account by the percentage described in
      subclause (x) of such clause (iii); and (iv) upon the purchase by Dairy
      Holdings of any of Employee's Class B Units pursuant to Section 7.2 of the
      Employee's Dairy Unit Subscription Agreement, Employee shall receive a
      distribution from the Deferred Account equal to the result of (x) the
      percentage of Employee's Class B Units being purchased by Dairy Holdings
      multiplied by (y) the number of Dairy A Units deemed held in the Deferred
      Account multiplied by (z) the lesser of (A) the fair market value of a
      Diary A Unit, as determined by the Management Committee of Dairy Holdings
      and (B) the sum of the Unreturned Capital and Unpaid Preferred Return (as
      such terms are defined in the Dairy Holdings LLC Agreement) of a Dairy A
      Unit (assuming such Dairy A Unit was issued on the Closing Date, as such
      term is defined in the Employee's Dairy Unit Subscription Agreement); it
      being understood and agreed that any distribution made pursuant to clause
      (iv) of this sentence shall, with respect to future distributions, reduce
      the number of Dairy A Units deemed held by the Deferred Account by the
      percentage described in subclause (x) of such clause (iv). The form of
      payment made with respect to any of the foregoing distributions shall be a
      cash payment except that (1) in the event of a Change in Control in which
      the consideration effecting such Change in Control is non-cash
      consideration, such distribution may be made in the form of such non-cash
      consideration, the fair market value of which shall be determined by the
      Management Committee of Investors, and (2) in the event of a distribution
      of the type described in clause (iii) or (iv) above, if, with respect to
      Holdings, any of the Cash Deferral Conditions (as such term is defined in
      the Employee's Management Stock Purchase and Unit Subscription Agreement)
      exists, the portion of the cash payment so affected may be made by the
      delivery of Holdings' unfunded and unsecured promise to pay Employee the
      portion of the cash payment so affected in cash,



      together with interest, at the first date on which the Cash Deferral
      Conditions no longer exist. The interest on such delayed cash payment will
      accrue annually at the "prime rate" published by The Wall Street Journal
      on the date Holdings delivers its unfunded and unsecured promise.

5.    Binding Agreement. This Agreement shall inure to the benefit of and be
      enforceable by the Employee's personal or legal representatives,
      executors, administrators, successors, heirs, distributes, devisees and
      legatees. If the Employee should die while any amounts would still be
      payable to the Employee hereunder if the Employee had continued to live,
      all such amounts, unless otherwise provided herein, shall be paid in
      accordance with the terms of this Agreement to the Employee's devisee,
      legatee, or other designee or, if there be no such designee, to the
      Employee's estate.

6.    Notice. For the purpose of this Agreement, notices and all other
      communications provided for herein shall be in writing and shall be deemed
      to have been duly given when personally delivered, telecopied (with
      confirmation of receipt), one day after deposit with a reputable overnight
      delivery service (charges prepaid) and three days after deposit in the
      U.S. Mail (postage prepaid and return receipt requested) to, if to the
      Company, the address then- provided by the Company as its corporate
      headquarters and, if to the Employee, the address shown on the unit
      register of Investors.

7.    Employee at Will. Nothing in this Agreement or in the Plan shall be
      construed as to make the Employee anything other than an Employee at Will
      of the Company. The Company may terminate the Employee's employment with
      or without cause, however defined, either before or after a Change in
      Control as defined in the Plan.

8.    Miscellaneous. No provisions of this Agreement may be modified, waived, or
      discharged unless such waiver, modification or discharge is agreed to in
      writing and signed by the Employee and such officer as may be authorized
      by the Board. No waiver by either party hereto, at any time of any breach
      by the other party hereto of or compliance with any condition or provision
      of this Agreement to be performed by such other party, shall be deemed a
      waiver of similar or dissimilar provisions or conditions at the same, or
      at any prior or subsequent, time. No agreements or representations, oral
      or otherwise, express or implied, with respect to the subject matter
      hereof have been made by either party which are not set forth expressly in
      this Agreement. It is intended that the benefits payable hereunder shall
      be considered paid to the Employee for the Employee's past services to the
      Company and continuing services from the date hereof.

9.    Validity. The invalidity or unenforceability of any provisions of this
      Agreement shall not affect the validity or enforceability of any other
      provisions of this Agreement, which shall remain in full force and effect.
      The validity of this Agreement and the interpretation thereof shall be
      governed by and construed in accordance with the laws of the State of
      Minnesota.



      IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first written above.


                                       MICHAEL FOODS, INC.

                                       By: _____________________________________

                                       Its: ____________________________________


                                       M-FOODS HOLDINGS, INC.

                                       By: _____________________________________

                                       Its: ____________________________________

                                       _________________________________________
                                                      James Mohr

EX-10.10

                                                                   EXHIBIT 10.10


                                                                [EXECUTION COPY]

                               MICHAEL FOODS, INC.

                                  SEVERANCE AND
                              DEFERRED COMPENSATION
                                    AGREEMENT

        AGREEMENT, made effective April 10, 2001, by and among Michael Foods,
Inc., a Minnesota corporation (the "Company"), Harold D. Sprinkle ("Employee")
and, for purposes of Section 4 hereof, M-Foods Holdings, Inc., a Delaware
corporation ("Holdings").

                             Preliminary Statements:

1.  The Company considers the establishment and maintenance of a sound and vital
    management team essential to protecting and enhancing its best interest and
    the best interests of the Company's shareholders.

2.  In this connection, the Company recognizes that the possibility of a change
    in control of the Company exists and that such possibility and the
    uncertainty and questions which it may raise among management personnel, may
    result in the departure or distraction of such personnel to the detriment of
    the Company and the Company's shareholders.

3.  Accordingly, the Company has adopted a Severance Plan for Eligible Employees
    of Michael Foods, Inc. and its subsidiaries, as amended (the "Plan"), and
    the Board of Directors of the Company ("Board") has directed management of
    the Company to implement such Plan.

4.  In addition, the Company recognizes the Employee's substantial contribution
    to the growth and success of the Company and for this reason has decided to
    make certain changes in the Employee's compensation arrangements, which the
    Board has determined will reinforce and encourage the continued attention
    and dedication to the Company of the Employee as a member of the Company's
    senior management in the best interests of the Company and its shareholders.

NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and in order to induce Employee to remain in the Company's
employ, the parties hereto hereby agree as follows:

1.  PARTICIPATION IN PLAN. Employee is hereby designated a "Key Employee" for
    purposes of the Plan and is eligible for the severance benefits provided
    therein. Such benefits shall be in lieu of any further salary payments to
    Employee for periods subsequent to termination of employment, to the extent
    Employee becomes eligible for such severance payments by reason of
    termination of employment.





2.  TERM. This Agreement shall commence on the date hereof and shall continue in
    effect until the Plan has been terminated. From and after the date hereof,
    this Agreement shall supersede any other agreement between the parties
    hereto with respect to the subject matter hereof.

3.  PLAN. This Agreement hereby incorporates by reference the terms(1) and
    conditions of the Plan which shall be binding upon Employee.

4.  DEFERRAL OF CERTAIN COMPENSATION In connection with the Employee's agreement
    to cancel all of his options to acquire Company Common Stock pursuant to the
    terms of that certain Option Cancellation Agreement, dated as of the date
    hereof, by and between the Employee and the Company, the Company shall (a)
    pay to Employee an amount equal to $15,757.50 (the "Cancellation Payment")
    and (b) rollover an amount equal to $384,000 (the "Deferred Amount") to an
    unfunded, unsecured nonqualified deferred compensation arrangement
    established for this purpose (the "Deferred Account"). Each of the Employee,
    the Company and Holdings agrees that Holdings, through an intercompany
    transfer, shall assume all obligations associated with the Deferred Amount.
    The Cancellation Payment shall be paid by the Company to the Employee on the
    Effective Date, or as soon as reasonably practicable thereafter.

    With respect to the Deferred Account, the Deferred Amount shall be deemed to
    be invested (i.e., an actual investment will not be made), as of the
    Effective Date, in (A) 3,840 Class A Units (the "Investors A Units") of
    M-Foods Investors, LLC, a Delaware limited liability company ("Investors")
    and (B) 3,840 Class A Units (the "Dairy A Units") of M-Foods Dairy Holdings,
    LLC, a Delaware limited liability company ("Dairy Holdings"). Holdings shall
    credit Employee's Deferred Account with certain of the distributions that
    would be received by the Deferred Account if such Deferred Account were
    actually invested in the manner set forth in the preceding sentence in
    Investors A Units and Dairy A Units, the extent of such crediting to be in
    accordance with the calculations set forth in the following two paragraphs.
    All amounts in the Employee's Deferred Account shall be subject to the
    claims of the creditors of Holdings.

    With respect to the Investors A Units, Holdings shall credit Employee's
    Deferred Account with any distributions made in respect of such Investors A
    Units pursuant to or in accordance with Sections 4.4(a)(i) and 4.4(a)(ii) of
    the Investors' Amended and Restated Limited Liability Company Agreement,
    dated April 10, 2001 (the "Investors LLC Agreement"). In the event Investors
    distributes non-cash property to holders of Investors A Units pursuant to
    Sections 4.4(a)(i) or 4.4(a)(ii) of the Investors LLC Agreement, Holdings
    shall credit Employee's Deferred Account in an amount equal to the fair
    market value of such property, as determined by the Management Committee of
    Investors. Employee's Deferred Account shall not be credited with any
    distributions made in respect of Investors A Units pursuant to or in
    accordance with any subsections of Section 4.4 of the Investors LLC
    Agreement other than Sections 4.4(a)(i) and 4.4(a)(ii) thereof. In the event
    that Investors A Units are sold by

- ---------------

    (1) All definitions contained herein will be conformed to substantially
mirror, as appropriate, the definitions contained in (the "Management Stock
Purchase and Unit Subscription Agreement").





    one or more holders of Investors A Units to a buyer unrelated on the date
    hereof to the holders of Investors A Units, Holdings shall credit Employee's
    Deferred Account with an amount equal to the result of (x) the percentage of
    outstanding Investors A Units being purchased by an unrelated buyer
    (including, for purposes of this percentage calculation, the number of
    Investors A Units deemed held by the Deferred Account and any other
    unfunded, unsecured nonqualified deferred compensation arrangements
    similarly established to be deemed to hold Investors A Units) multiplied by
    (y) the number of Investors A Units deemed held in the Deferred Account
    multiplied by (z) the lesser of (i) the amount of cash or fair market value
    of any property, as determined by the Management Committee of Investors,
    received by holders of Investors A Units in exchange for an Investors A Unit
    and (ii) the sum of the Unreturned Capital and Unpaid Preferred Return (as
    such terms are defined in the Investors LLC Agreement) of an Investors A
    Unit (assuming such Investors A Unit was issued on the Closing Date, as such
    term is defined in the Employee's Management Stock Purchase and Unit
    Subscription Agreement, dated as of the date hereof, by and between the
    Employee and Investors (the "Management Stock Purchase and Unit Subscription
    Agreement")); it being understood and agreed that any distribution made
    pursuant to this sentence shall, with respect to future distributions,
    reduce the number of Investors A Units deemed held by the Deferred Account
    by the percentage described in subclause (x) of this sentence.

    With respect to the Dairy A Units, Holdings shall credit Employee's Deferred
    Account with any distributions made in respect of such Dairy A Units
    pursuant to or in accordance with Sections 4.4(a)(ii) and 4.4(a)(iii) of the
    Limited Liability Company Agreement of Dairy Holdings, dated April 10, 2001
    (the "Dairy Holdings LLC Agreement"). In the event Dairy Holdings
    distributes non-cash property to holders of Dairy A Units pursuant to
    Sections 4.4(a)(ii) or 4.4(a)(iii) of the Dairy Holdings LLC Agreement,
    Holdings shall credit Employee's Deferred Account in an amount equal to the
    fair market value of such property, as determined by the Management
    Committee of Dairy Holdings. Employee's Deferred Account shall not be
    credited with any distributions made in respect of Dairy A Units pursuant to
    or in accordance with any subsections of Section 4.4 of the Dairy Holdings
    LLC Agreement other than Sections 4.4(a)(ii) and 4.4(a)(iii) thereof. In the
    event that Dairy A Units are sold by one or more holders of Dairy A Units to
    a buyer unrelated on the date hereof to the holders of Dairy A Units,
    Holdings shall credit Employee's Deferred Account with an amount equal to
    the result of (x) the percentage of outstanding Dairy A Units being
    purchased by an unrelated buyer (including, for purposes of this percentage
    calculation, the number of Dairy A Units deemed held by the Deferred Account
    and any other unfunded, unsecured nonqualified deferred compensation
    arrangements similarly established to be deemed to hold Dairy A Units)
    multiplied by (y) the number of Dairy A Units deemed held in the Deferred
    Account multiplied by (z) the lesser of (i) the amount of cash or fair
    market value of any property, as determined by the Management Committee of
    Dairy Holdings, received by holders of Dairy A Units in exchange for a Dairy
    A Unit and (ii) the sum of the Unreturned Capital and Unpaid Preferred
    Return (as such terms are defined in the Dairy Holdings LLC Agreement) of a
    Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as
    such term is defined in the Dairy Unit Subscription Agreement, dated as of
    the date hereof, between Dairy Holdings and the Employee (the "Dairy Unit
    Subscription





    Agreement")); it being understood and agreed that any distribution made
    pursuant to this sentence shall, with respect to future distributions,
    reduce the number of Dairy A Units deemed held by the Deferred Account by
    the percentage described in subclause (x) of this sentence.

    Employee shall receive from Holdings distributions from his Deferred
    Account, in the amount indicated, upon the occurrence of the following
    events: (i) upon a Change in Control, Employee shall receive a total
    distribution of the amount then deemed held in the Deferred Account; (ii)
    upon the tenth anniversary of the date hereof, Employee shall receive a
    total distribution of the amount then deemed held in the Deferred Account;
    (iii) upon the purchase by Investors of any of Employee's Class B Units
    pursuant to Section 7.2 of the Employee's Management Stock Purchase and Unit
    Subscription Agreement, Employee shall receive a distribution from the
    Deferred Account equal to the result of (x) the percentage of Employee's
    Class B Units being purchased by Investors multiplied by (y) the number of
    Investors A Units deemed held in the Deferred Account multiplied by (z) the
    lesser of (A) the fair market value of an Investors A Unit, as determined by
    the Management Committee of Investors and (B) the sum of the Unreturned
    Capital and Unpaid Preferred Return (as such terms are defined in the
    Investors LLC Agreement) of an Investors A Unit (assuming such Investors A
    Unit was issued on the Closing Date, as such term is defined in the
    Employee's Management Stock Purchase and Unit Subscription Agreement); it
    being understood and agreed that any distribution made pursuant to clause
    (iii) of this sentence shall, with respect to future distributions, reduce
    the number of Investors A Units deemed held by the Deferred Account by the
    percentage described in subclause (x) of such clause (iii); and (iv) upon
    the purchase by Dairy Holdings of any of Employee's Class B Units pursuant
    to Section 7.2 of the Employee's Dairy Unit Subscription Agreement, Employee
    shall receive a distribution from the Deferred Account equal to the result
    of (x) the percentage of Employee's Class B Units being purchased by Dairy
    Holdings multiplied by (y) the number of Dairy A Units deemed held in the
    Deferred Account multiplied by (z) the lesser of (A) the fair market value
    of a Diary A Unit, as determined by the Management Committee of Dairy
    Holdings and (B) the sum of the Unreturned Capital and Unpaid Preferred
    Return (as such terms are defined in the Dairy Holdings LLC Agreement) of a
    Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as
    such term is defined in the Employee's Dairy Unit Subscription Agreement);
    it being understood and agreed that any distribution made pursuant to clause
    (iv) of this sentence shall, with respect to future distributions, reduce
    the number of Dairy A Units deemed held by the Deferred Account by the
    percentage described in subclause (x) of such clause (iv). The form of
    payment made with respect to any of the foregoing distributions shall be a
    cash payment except that (1) in the event of a Change in Control in which
    the consideration effecting such Change in Control is non-cash
    consideration, such distribution may be made in the form of such non-cash
    consideration, the fair market value of which shall be determined by the
    Management Committee of Investors, and (2) in the event of a distribution of
    the type described in clause (iii) or (iv) above, if, with respect to
    Holdings, any of the Cash Deferral Conditions (as such term is defined in
    the Employee's Management Stock Purchase and Unit Subscription Agreement)
    exists, the portion of the cash payment so affected may be made by the
    delivery of Holdings' unfunded and unsecured promise to pay Employee the
    portion of the cash payment so affected in cash,





    together with interest, at the first date on which the Cash Deferral
    Conditions no longer exist. The interest on such delayed cash payment will
    accrue annually at the "prime rate" published by The Wall Street Journal on
    the date Holdings delivers its unfunded and unsecured promise.

5.  BINDING AGREEMENT. This Agreement shall inure to the benefit of and be
    enforceable by the Employee's personal or legal representatives, executors,
    administrators, successors, heirs, distributes, devisees and legatees. If
    the Employee should die while any amounts would still be payable to the
    Employee hereunder if the Employee had continued to live, all such amounts,
    unless otherwise provided herein, shall be paid in accordance with the terms
    of this Agreement to the Employee's devisee, legatee, or other designee or,
    if there be no such designee, to the Employee's estate.

6.  NOTICE. For the purpose of this Agreement, notices and all other
    communications provided for herein shall be in writing and shall be deemed
    to have been duly given when personally delivered, telecopied (with
    confirmation of receipt), one day after deposit with a reputable overnight
    delivery service (charges prepaid) and three days after deposit in the U.S.
    Mail (postage prepaid and return receipt requested) to, if to the Company,
    the address then- provided by the Company as its corporate headquarters and,
    if to the Employee, the address shown on the unit register of Investors.

7.  EMPLOYEE AT WILL. Nothing in this Agreement or in the Plan shall be
    construed as to make the Employee anything other than an Employee at Will of
    the Company. The Company may terminate the Employee's employment with or
    without cause, however defined, either before or after a Change in Control
    as defined in the Plan.

8.  MISCELLANEOUS. No provisions of this Agreement may be modified, waived, or
    discharged unless such waiver, modification or discharge is agreed to in
    writing and signed by the Employee and such officer as may be authorized by
    the Board. No waiver by either party hereto, at any time of any breach by
    the other party hereto of or compliance with any condition or provision of
    this Agreement to be performed by such other party, shall be deemed a waiver
    of similar or dissimilar provisions or conditions at the same, or at any
    prior or subsequent, time. No agreements or representations, oral or
    otherwise, express or implied, with respect to the subject matter hereof
    have been made by either party which are not set forth expressly in this
    Agreement. It is intended that the benefits payable hereunder shall be
    considered paid to the Employee for the Employee's past services to the
    Company and continuing services from the date hereof.

9.  VALIDITY. The invalidity or unenforceability of any provisions of this
    Agreement shall not affect the validity or enforceability of any other
    provisions of this Agreement, which shall remain in full force and effect.
    The validity of this Agreement and the interpretation thereof shall be
    governed by and construed in accordance with the laws of the State of
    Minnesota.





        IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first written above.

                                       MICHAEL FOODS, INC.


                                       By:
                                          ------------------------------------
                                       Its:
                                           ------------------------------------

                                       M-FOODS HOLDINGS, INC.


                                       By:
                                          ------------------------------------
                                       Its:
                                           ------------------------------------

                                           ------------------------------------
                                                     Harold D. Sprinkle

EX-10.11

                                                                   EXHIBIT 10.11

                                                                [Execution Copy]

                              MICHAEL FOODS, INC.

                                 SEVERANCE AND
                             DEFERRED COMPENSATION
                                   AGREEMENT

        AGREEMENT, made effective April 10, 2001, by and among Michael Foods,
Inc., a Minnesota corporation (the "Company"), Max R. Hoffmann ("Employee") and,
for purposes of Section 4 hereof, M-Foods Holdings, Inc., a Delaware corporation
("Holdings").


                             Preliminary Statements:

1.  The Company considers the establishment and maintenance of a sound and vital
    management team essential to protecting and enhancing its best interest and
    the best interests of the Company's shareholders.

2.  In this connection, the Company recognizes that the possibility of a change
    in control of the Company exists and that such possibility and the
    uncertainty and questions which it may raise among management personnel, may
    result in the departure or distraction of such personnel to the detriment of
    the Company and the Company's shareholders.

3.  Accordingly, the Company has adopted a Severance Plan for Eligible Employees
    of Michael Foods, Inc. and its subsidiaries, as amended (the "Plan"), and
    the Board of Directors of the Company ("Board") has directed management of
    the Company to implement such Plan.

4.  In addition, the Company recognizes the Employee's substantial contribution
    to the growth and success of the Company and for this reason has decided to
    make certain changes in the Employee's compensation arrangements, which the
    Board has determined will reinforce and encourage the continued attention
    and dedication to the Company of the Employee as a member of the Company's
    senior management in the best interests of the Company and its shareholders.

NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and in order to induce Employee to remain in the Company's
employ, the parties hereto hereby agree as follows:

1.  PARTICIPATION IN PLAN. Employee is hereby designated a "Key Employee" for
    purposes of the Plan and is eligible for the severance benefits provided
    therein. Such benefits shall be in lieu of any further salary payments to
    Employee for periods subsequent to termination of employment, to the extent
    Employee becomes eligible for such severance payments by reason of
    termination of employment.





2.  TERM. This Agreement shall commence on the date hereof and shall continue in
    effect until the Plan has been terminated. From and after the date hereof,
    this Agreement shall supersede any other agreement between the parties
    hereto with respect to the subject matter hereof.

3.  PLAN. This Agreement hereby incorporates by reference the terms and
    conditions of the Plan which shall be binding upon Employee.

4.  DEFERRAL OF CERTAIN COMPENSATION. In connection with the Employee's
    agreement to cancel all of his options to acquire Company Common Stock
    pursuant to the terms of that certain Option Cancellation Agreement, dated
    as of the date hereof, by and between the Employee and the Company, the
    Company shall rollover an amount equal to $293,661 (the "Deferred Amount")
    to an unfunded, unsecured nonqualified deferred compensation arrangement
    established for this purpose (the "Deferred Account"). Each of the Employee,
    the Company and Holdings agrees that Holdings, through an intercompany
    transfer, shall assume all obligations associated with the Deferred Amount.

    With respect to the Deferred Account, the Deferred Amount shall be deemed to
    be invested (i.e., an actual investment will not be made), as of the
    Effective Date, in (A) 2,936.61 Class A Units (the "Investors A Units") of
    M-Foods Investors, LLC, a Delaware limited liability company ("Investors")
    and (B) 2,936.61 Class A Units (the "Dairy A Units") of M-Foods Dairy
    Holdings, LLC, a Delaware limited liability company ("Dairy Holdings").
    Holdings shall credit Employee's Deferred Account with certain of the
    distributions that would be received by the Deferred Account if such
    Deferred Account were actually invested in the manner set forth in the
    preceding sentence in Investors A Units and Dairy A Units, the extent of
    such crediting to be in accordance with the calculations set forth in the
    following two paragraphs. All amounts in the Employee's Deferred Account
    shall be subject to the claims of the creditors of Holdings.

    With respect to the Investors A Units, Holdings shall credit Employee's
    Deferred Account with any distributions made in respect of such Investors A
    Units pursuant to or in accordance with Sections 4.4(a)(i) and 4.4(a)(ii) of
    the Investors' Amended and Restated Limited Liability Company Agreement,
    dated April 10, 2001 (the "Investors LLC Agreement"). In the event Investors
    distributes non-cash property to holders of Investors A Units pursuant to
    Sections 4.4(a)(i) or 4.4(a)(ii) of the Investors LLC Agreement, Holdings
    shall credit Employee's Deferred Account in an amount equal to the fair
    market value of such property, as determined by the Management Committee of
    Investors. Employee's Deferred Account shall not be credited with any
    distributions made in respect of Investors A Units pursuant to or in
    accordance with any subsections of Section 4.4 of the Investors LLC
    Agreement other than Sections 4.4(a)(i) and 4.4(a)(ii) thereof. In the event
    that Investors A Units are sold by one or more holders of Investors A Units
    to a buyer unrelated on the date hereof to the holders of Investors A Units,
    Holdings shall credit Employee's Deferred Account with an amount equal to
    the result of (x) the percentage of outstanding Investors A Units being
    purchased by an unrelated buyer (including, for purposes of this percentage
    calculation, the number of Investors A Units deemed held by the Deferred
    Account and any other unfunded, unsecured nonqualified deferred compensation
    arrangements similarly established to be





    deemed to hold Investors A Units) multiplied by (y) the number of Investors
    A Units deemed held in the Deferred Account multiplied by (z) the lesser of
    (i) the amount of cash or fair market value of any property, as determined
    by the Management Committee of Investors, received by holders of Investors A
    Units in exchange for an Investors A Unit and (ii) the sum of the Unreturned
    Capital and Unpaid Preferred Return (as such terms are defined in the
    Investors LLC Agreement) of an Investors A Unit (assuming such Investors A
    Unit was issued on the Closing Date, as such term is defined in the
    Employee's Management Stock Purchase and Unit Subscription Agreement, dated
    as of the date hereof, by and between the Employee and Investors (the
    "Management Stock Purchase and Unit Subscription Agreement")); it being
    understood and agreed that any distribution made pursuant to this sentence
    shall, with respect to future distributions, reduce the number of Investors
    A Units deemed held by the Deferred Account by the percentage described in
    subclause (x) of this sentence.

    With respect to the Dairy A Units, Holdings shall credit Employee's Deferred
    Account with any distributions made in respect of such Dairy A Units
    pursuant to or in accordance with Sections 4.4(a)(ii) and 4.4(a)(iii) of the
    Limited Liability Company Agreement of Dairy Holdings, dated April 10, 2001
    (the "Dairy Holdings LLC Agreement"). In the event Dairy Holdings
    distributes non-cash property to holders of Dairy A Units pursuant to
    Sections 4.4(a)(ii) or 4.4(a)(iii) of the Dairy Holdings LLC Agreement,
    Holdings shall credit Employee's Deferred Account in an amount equal to the
    fair market value of such property, as determined by the Management
    Committee of Dairy Holdings. Employee's Deferred Account shall not be
    credited with any distributions made in respect of Dairy A Units pursuant to
    or in accordance with any subsections of Section 4.4 of the Dairy Holdings
    LLC Agreement other than Sections 4.4(a)(ii) and 4.4(a)(iii) thereof. In the
    event that Dairy A Units are sold by one or more holders of Dairy A Units to
    a buyer unrelated on the date hereof to the holders of Dairy A Units,
    Holdings shall credit Employee's Deferred Account with an amount equal to
    the result of (x) the percentage of outstanding Dairy A Units being
    purchased by an unrelated buyer (including, for purposes of this percentage
    calculation, the number of Dairy A Units deemed held by the Deferred Account
    and any other unfunded, unsecured nonqualified deferred compensation
    arrangements similarly established to be deemed to hold Dairy A Units)
    multiplied by (y) the number of Dairy A Units deemed held in the Deferred
    Account multiplied by (z) the lesser of (i) the amount of cash or fair
    market value of any property, as determined by the Management Committee of
    Dairy Holdings, received by holders of Dairy A Units in exchange for a Dairy
    A Unit and (ii) the sum of the Unreturned Capital and Unpaid Preferred
    Return (as such terms are defined in the Dairy Holdings LLC Agreement) of a
    Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as
    such term is defined in the Dairy Unit Subscription Agreement, dated as of
    the date hereof, between Dairy Holdings and the Employee (the "Dairy Unit
    Subscription Agreement")); it being understood and agreed that any
    distribution made pursuant to this sentence shall, with respect to future
    distributions, reduce the number of Dairy A Units deemed held by the
    Deferred Account by the percentage described in subclause (x) of this
    sentence.





    Employee shall receive from Holdings distributions from his Deferred
    Account, in the amount indicated, upon the occurrence of the following
    events: (i) upon a Change in Control, Employee shall receive a total
    distribution of the amount then deemed held in the Deferred Account; (ii)
    upon the tenth anniversary of the date hereof, Employee shall receive a
    total distribution of the amount then deemed held in the Deferred Account;
    (iii) upon the purchase by Investors of any of Employee's Class B Units
    pursuant to Section 7.2 of the Employee's Management Stock Purchase and Unit
    Subscription Agreement, Employee shall receive a distribution from the
    Deferred Account equal to the result of (x) the percentage of Employee's
    Class B Units being purchased by Investors multiplied by (y) the number of
    Investors A Units deemed held in the Deferred Account multiplied by (z) the
    lesser of (A) the fair market value of an Investors A Unit, as determined by
    the Management Committee of Investors and (B) the sum of the Unreturned
    Capital and Unpaid Preferred Return (as such terms are defined in the
    Investors LLC Agreement) of an Investors A Unit (assuming such Investors A
    Unit was issued on the Closing Date, as such term is defined in the
    Employee's Management Stock Purchase and Unit Subscription Agreement); it
    being understood and agreed that any distribution made pursuant to clause
    (iii) of this sentence shall, with respect to future distributions, reduce
    the number of Investors A Units deemed held by the Deferred Account by the
    percentage described in subclause (x) of such clause (iii); and (iv) upon
    the purchase by Dairy Holdings of any of Employee's Class B Units pursuant
    to Section 7.2 of the Employee's Dairy Unit Subscription Agreement, Employee
    shall receive a distribution from the Deferred Account equal to the result
    of (x) the percentage of Employee's Class B Units being purchased by Dairy
    Holdings multiplied by (y) the number of Dairy A Units deemed held in the
    Deferred Account multiplied by (z) the lesser of (A) the fair market value
    of a Diary A Unit, as determined by the Management Committee of Dairy
    Holdings and (B) the sum of the Unreturned Capital and Unpaid Preferred
    Return (as such terms are defined in the Dairy Holdings LLC Agreement) of a
    Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as
    such term is defined in the Employee's Dairy Unit Subscription Agreement);
    it being understood and agreed that any distribution made pursuant to clause
    (iv) of this sentence shall, with respect to future distributions, reduce
    the number of Dairy A Units deemed held by the Deferred Account by the
    percentage described in subclause (x) of such clause (iv). The form of
    payment made with respect to any of the foregoing distributions shall be a
    cash payment except that (1) in the event of a Change in Control in which
    the consideration effecting such Change in Control is non-cash
    consideration, such distribution may be made in the form of such non-cash
    consideration, the fair market value of which shall be determined by the
    Management Committee of Investors, and (2) in the event of a distribution of
    the type described in clause (iii) or (iv) above, if, with respect to
    Holdings, any of the Cash Deferral Conditions (as such term is defined in
    the Employee's Management Stock Purchase and Unit Subscription Agreement)
    exists, the portion of the cash payment so affected may be made by the
    delivery of Holdings' unfunded and unsecured promise to pay Employee the
    portion of the cash payment so affected in cash, together with interest, at
    the first date on which the Cash Deferral Conditions no longer exist. The
    interest on such delayed cash payment will accrue annually at the "prime
    rate" published by The Wall Street Journal on the date Holdings delivers its
    unfunded and unsecured promise.





5.  BINDING AGREEMENT. This Agreement shall inure to the benefit of and be
    enforceable by the Employee's personal or legal representatives, executors,
    administrators, successors, heirs, distributes, devisees and legatees. If
    the Employee should die while any amounts would still be payable to the
    Employee hereunder if the Employee had continued to live, all such amounts,
    unless otherwise provided herein, shall be paid in accordance with the terms
    of this Agreement to the Employee's devisee, legatee, or other designee or,
    if there be no such designee, to the Employee's estate.

6.  NOTICE. For the purpose of this Agreement, notices and all other
    communications provided for herein shall be in writing and shall be deemed
    to have been duly given when personally delivered, telecopied (with
    confirmation of receipt), one day after deposit with a reputable overnight
    delivery service (charges prepaid) and three days after deposit in the U.S.
    Mail (postage prepaid and return receipt requested) to, if to the Company,
    the address then- provided by the Company as its corporate headquarters and,
    if to the Employee, the address shown on the unit register of Investors.

7.  EMPLOYEE AT WILL. Nothing in this Agreement or in the Plan shall be
    construed as to make the Employee anything other than an Employee at Will of
    the Company. The Company may terminate the Employee's employment with or
    without cause, however defined, either before or after a Change in Control
    as defined in the Plan.

8.  MISCELLANEOUS. No provisions of this Agreement may be modified, waived, or
    discharged unless such waiver, modification or discharge is agreed to in
    writing and signed by the Employee and such officer as may be authorized by
    the Board. No waiver by either party hereto, at any time of any breach by
    the other party hereto of or compliance with any condition or provision of
    this Agreement to be performed by such other party, shall be deemed a waiver
    of similar or dissimilar provisions or conditions at the same, or at any
    prior or subsequent, time. No agreements or representations, oral or
    otherwise, express or implied, with respect to the subject matter hereof
    have been made by either party which are not set forth expressly in this
    Agreement. It is intended that the benefits payable hereunder shall be
    considered paid to the Employee for the Employee's past services to the
    Company and continuing services from the date hereof.

9.  VALIDITY. The invalidity or unenforceability of any provisions of this
    Agreement shall not affect the validity or enforceability of any other
    provisions of this Agreement, which shall remain in full force and effect.
    The validity of this Agreement and the interpretation thereof shall be
    governed by and construed in accordance with the laws of the State of
    Minnesota.





        IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first written above.

                                      MICHAEL FOODS, INC.


                                      By:
                                         ------------------------------------
                                      Its:
                                          ------------------------------------

                                      M-FOODS HOLDINGS, INC.


                                      By:
                                         ------------------------------------
                                      Its:
                                          ------------------------------------

                                          ------------------------------------
                                                      Max R. Hoffmann

EX-10.12

                                                                   EXHIBIT 10.12

                                                                [Execution Copy]

                               MICHAEL FOODS, INC.

                                  SEVERANCE AND
                              DEFERRED COMPENSATION
                                    AGREEMENT

        AGREEMENT, made effective April 10, 2001, by and among Michael Foods,
Inc., a Minnesota corporation (the "Company"), Bradley Cook ("Employee") and,
for purposes of Section 4 hereof, M-Foods Holdings, Inc., a Delaware corporation
("Holdings").

                             Preliminary Statements:

1.  The Company considers the establishment and maintenance of a sound and vital
    management team essential to protecting and enhancing its best interest and
    the best interests of the Company's shareholders.

2.  In this connection, the Company recognizes that the possibility of a change
    in control of the Company exists and that such possibility and the
    uncertainty and questions which it may raise among management personnel, may
    result in the departure or distraction of such personnel to the detriment of
    the Company and the Company's shareholders.

3.  Accordingly, the Company has adopted a Severance Plan for Eligible Employees
    of Michael Foods, Inc. and its subsidiaries, as amended (the "Plan"), and
    the Board of Directors of the Company ("Board") has directed management of
    the Company to implement such Plan.

4.  In addition, the Company recognizes the Employee's substantial contribution
    to the growth and success of the Company and for this reason has decided to
    make certain changes in the Employee's compensation arrangements, which the
    Board has determined will reinforce and encourage the continued attention
    and dedication to the Company of the Employee as a member of the Company's
    senior management in the best interests of the Company and its shareholders.

NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and in order to induce Employee to remain in the Company's
employ, the parties hereto hereby agree as follows:

1.  PARTICIPATION IN PLAN. Employee is hereby designated a "Key Employee" for
    purposes of the Plan and is eligible for the severance benefits provided
    therein. Such benefits shall be in lieu of any further salary payments to
    Employee for periods subsequent to termination of employment, to the extent
    Employee becomes eligible for such severance payments by reason of
    termination of employment.





2.  TERM. This Agreement shall commence on the date hereof and shall continue in
    effect until the Plan has been terminated. From and after the date hereof,
    this Agreement shall supersede any other agreement between the parties
    hereto with respect to the subject matter hereof.

3.  PLAN. This Agreement hereby incorporates by reference the terms and
    conditions of the Plan which shall be binding upon Employee.

4.  DEFERRAL OF CERTAIN COMPENSATION. In connection with the Employee's
    agreement to cancel all of his options to acquire Company Common Stock
    pursuant to the terms of that certain Option Cancellation Agreement, dated
    as of the date hereof, by and between the Employee and the Company, the
    Company shall (a) pay to Employee an amount equal to $103,920 (the
    "Cancellation Payment") and (b) rollover an amount equal to $384,000 (the
    "Deferred Amount") to an unfunded, unsecured nonqualified deferred
    compensation arrangement established for this purpose (the "Deferred
    Account"). Each of the Employee, the Company and Holdings agrees that
    Holdings, through an intercompany transfer, shall assume all obligations
    associated with the Deferred Amount. The Cancellation Payment shall be paid
    by the Company to the Employee on the Effective Date, or as soon as
    reasonably practicable thereafter.

    With respect to the Deferred Account, the Deferred Amount shall be deemed to
    be invested (i.e., an actual investment will not be made), as of the
    Effective Date, in (A) 3,840 Class A Units (the "Investors A Units") of
    M-Foods Investors, LLC, a Delaware limited liability company ("Investors")
    and (B) 3,840 Class A Units (the "Dairy A Units") of M-Foods Dairy Holdings,
    LLC, a Delaware limited liability company ("Dairy Holdings"). Holdings shall
    credit Employee's Deferred Account with certain of the distributions that
    would be received by the Deferred Account if such Deferred Account were
    actually invested in the manner set forth in the preceding sentence in
    Investors A Units and Dairy A Units, the extent of such crediting to be in
    accordance with the calculations set forth in the following two paragraphs.
    All amounts in the Employee's Deferred Account shall be subject to the
    claims of the creditors of Holdings.

    With respect to the Investors A Units, Holdings shall credit Employee's
    Deferred Account with any distributions made in respect of such Investors A
    Units pursuant to or in accordance with Sections 4.4(a)(i) and 4.4(a)(ii) of
    the Investors' Amended and Restated Limited Liability Company Agreement,
    dated April 10, 2001 (the "Investors LLC Agreement"). In the event Investors
    distributes non-cash property to holders of Investors A Units pursuant to
    Sections 4.4(a)(i) or 4.4(a)(ii) of the Investors LLC Agreement, Holdings
    shall credit Employee's Deferred Account in an amount equal to the fair
    market value of such property, as determined by the Management Committee of
    Investors. Employee's Deferred Account shall not be credited with any
    distributions made in respect of Investors A Units pursuant to or in
    accordance with any subsections of Section 4.4 of the Investors LLC
    Agreement other than Sections 4.4(a)(i) and 4.4(a)(ii) thereof. In the event
    that Investors A Units are sold by one or more holders of Investors A Units
    to a buyer unrelated on the date hereof to the holders of Investors A Units,
    Holdings shall credit Employee's Deferred Account with an amount equal to
    the result of (x) the percentage of outstanding Investors A Units being
    purchased by an unrelated buyer (including, for purposes of this percentage
    calculation, the number of Investors A Units deemed held by the Deferred
    Account and any other unfunded, unsecured nonqualified deferred compensation





    arrangements similarly established to be deemed to hold Investors A Units)
    multiplied by (y) the number of Investors A Units deemed held in the
    Deferred Account multiplied by (z) the lesser of (i) the amount of cash or
    fair market value of any property, as determined by the Management Committee
    of Investors, received by holders of Investors A Units in exchange for an
    Investors A Unit and (ii) the sum of the Unreturned Capital and Unpaid
    Preferred Return (as such terms are defined in the Investors LLC Agreement)
    of an Investors A Unit (assuming such Investors A Unit was issued on the
    Closing Date, as such term is defined in the Employee's Management Stock
    Purchase and Unit Subscription Agreement, dated as of the date hereof, by
    and between the Employee and Investors (the "Management Stock Purchase and
    Unit Subscription Agreement")); it being understood and agreed that any
    distribution made pursuant to this sentence shall, with respect to future
    distributions, reduce the number of Investors A Units deemed held by the
    Deferred Account by the percentage described in subclause (x) of this
    sentence.

    With respect to the Dairy A Units, Holdings shall credit Employee's Deferred
    Account with any distributions made in respect of such Dairy A Units
    pursuant to or in accordance with Sections 4.4(a)(ii) and 4.4(a)(iii) of the
    Limited Liability Company Agreement of Dairy Holdings, dated April 10, 2001
    (the "Dairy Holdings LLC Agreement"). In the event Dairy Holdings
    distributes non-cash property to holders of Dairy A Units pursuant to
    Sections 4.4(a)(ii) or 4.4(a)(iii) of the Dairy Holdings LLC Agreement,
    Holdings shall credit Employee's Deferred Account in an amount equal to the
    fair market value of such property, as determined by the Management
    Committee of Dairy Holdings. Employee's Deferred Account shall not be
    credited with any distributions made in respect of Dairy A Units pursuant to
    or in accordance with any subsections of Section 4.4 of the Dairy Holdings
    LLC Agreement other than Sections 4.4(a)(ii) and 4.4(a)(iii) thereof. In the
    event that Dairy A Units are sold by one or more holders of Dairy A Units to
    a buyer unrelated on the date hereof to the holders of Dairy A Units,
    Holdings shall credit Employee's Deferred Account with an amount equal to
    the result of (x) the percentage of outstanding Dairy A Units being
    purchased by an unrelated buyer (including, for purposes of this percentage
    calculation, the number of Dairy A Units deemed held by the Deferred Account
    and any other unfunded, unsecured nonqualified deferred compensation
    arrangements similarly established to be deemed to hold Dairy A Units)
    multiplied by (y) the number of Dairy A Units deemed held in the Deferred
    Account multiplied by (z) the lesser of (i) the amount of cash or fair
    market value of any property, as determined by the Management Committee of
    Dairy Holdings, received by holders of Dairy A Units in exchange for a Dairy
    A Unit and (ii) the sum of the Unreturned Capital and Unpaid Preferred
    Return (as such terms are defined in the Dairy Holdings LLC Agreement) of a
    Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as
    such term is defined in the Dairy Unit Subscription Agreement, dated as of
    the date hereof, between Dairy Holdings and the Employee (the "Dairy Unit
    Subscription Agreement")); it being understood and agreed that any
    distribution made pursuant to this sentence shall, with respect to future
    distributions, reduce the number of Dairy A Units deemed held by the
    Deferred Account by the percentage described in subclause (x) of this
    sentence.

    Employee shall receive from Holdings distributions from his Deferred
    Account, in the amount indicated, upon the occurrence of the following
    events: (i) upon a Change in Control, Employee shall receive a total
    distribution of the amount then deemed held in the Deferred Account; (ii)





    upon the tenth anniversary of the date hereof, Employee shall receive a
    total distribution of the amount then deemed held in the Deferred Account;
    (iii) upon the purchase by Investors of any of Employee's Class B Units
    pursuant to Section 7.2 of the Employee's Management Stock Purchase and Unit
    Subscription Agreement, Employee shall receive a distribution from the
    Deferred Account equal to the result of (x) the percentage of Employee's
    Class B Units being purchased by Investors multiplied by (y) the number of
    Investors A Units deemed held in the Deferred Account multiplied by (z) the
    lesser of (A) the fair market value of an Investors A Unit, as determined by
    the Management Committee of Investors and (B) the sum of the Unreturned
    Capital and Unpaid Preferred Return (as such terms are defined in the
    Investors LLC Agreement) of an Investors A Unit (assuming such Investors A
    Unit was issued on the Closing Date, as such term is defined in the
    Employee's Management Stock Purchase and Unit Subscription Agreement); it
    being understood and agreed that any distribution made pursuant to clause
    (iii) of this sentence shall, with respect to future distributions, reduce
    the number of Investors A Units deemed held by the Deferred Account by the
    percentage described in subclause (x) of such clause (iii); and (iv) upon
    the purchase by Dairy Holdings of any of Employee's Class B Units pursuant
    to Section 7.2 of the Employee's Dairy Unit Subscription Agreement, Employee
    shall receive a distribution from the Deferred Account equal to the result
    of (x) the percentage of Employee's Class B Units being purchased by Dairy
    Holdings multiplied by (y) the number of Dairy A Units deemed held in the
    Deferred Account multiplied by (z) the lesser of (A) the fair market value
    of a Diary A Unit, as determined by the Management Committee of Dairy
    Holdings and (B) the sum of the Unreturned Capital and Unpaid Preferred
    Return (as such terms are defined in the Dairy Holdings LLC Agreement) of a
    Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as
    such term is defined in the Employee's Dairy Unit Subscription Agreement);
    it being understood and agreed that any distribution made pursuant to clause
    (iv) of this sentence shall, with respect to future distributions, reduce
    the number of Dairy A Units deemed held by the Deferred Account by the
    percentage described in subclause (x) of such clause (iv). The form of
    payment made with respect to any of the foregoing distributions shall be a
    cash payment except that (1) in the event of a Change in Control in which
    the consideration effecting such Change in Control is non-cash
    consideration, such distribution may be made in the form of such non-cash
    consideration, the fair market value of which shall be determined by the
    Management Committee of Investors, and (2) in the event of a distribution of
    the type described in clause (iii) or (iv) above, if, with respect to
    Holdings, any of the Cash Deferral Conditions (as such term is defined in
    the Employee's Management Stock Purchase and Unit Subscription Agreement)
    exists, the portion of the cash payment so affected may be made by the
    delivery of Holdings' unfunded and unsecured promise to pay Employee the
    portion of the cash payment so affected in cash, together with interest, at
    the first date on which the Cash Deferral Conditions no longer exist. The
    interest on such delayed cash payment will accrue annually at the "prime
    rate" published by The Wall Street Journal on the date Holdings delivers its
    unfunded and unsecured promise.

5.  BINDING AGREEMENT. This Agreement shall inure to the benefit of and be
    enforceable by the Employee's personal or legal representatives, executors,
    administrators, successors, heirs, distributes, devisees and legatees. If
    the Employee should die while any amounts would still be payable to the
    Employee hereunder if the Employee had continued to live, all such amounts,
    unless otherwise provided herein, shall be paid in accordance with the terms
    of this Agreement





    to the Employee's devisee, legatee, or other designee or, if there be no
    such designee, to the Employee's estate.

6.  NOTICE. For the purpose of this Agreement, notices and all other
    communications provided for herein shall be in writing and shall be deemed
    to have been duly given when personally delivered, telecopied (with
    confirmation of receipt), one day after deposit with a reputable overnight
    delivery service (charges prepaid) and three days after deposit in the U.S.
    Mail (postage prepaid and return receipt requested) to, if to the Company,
    the address then-provided by the Company as its corporate headquarters and,
    if to the Employee, the address shown on the unit register of Investors.

7.  EMPLOYEE AT WILL. Nothing in this Agreement or in the Plan shall be
    construed as to make the Employee anything other than an Employee at Will of
    the Company. The Company may terminate the Employee's employment with or
    without cause, however defined, either before or after a Change in Control
    as defined in the Plan.

8.  MISCELLANEOUS. No provisions of this Agreement may be modified, waived, or
    discharged unless such waiver, modification or discharge is agreed to in
    writing and signed by the Employee and such officer as may be authorized by
    the Board. No waiver by either party hereto, at any time of any breach by
    the other party hereto of or compliance with any condition or provision of
    this Agreement to be performed by such other party, shall be deemed a waiver
    of similar or dissimilar provisions or conditions at the same, or at any
    prior or subsequent, time. No agreements or representations, oral or
    otherwise, express or implied, with respect to the subject matter hereof
    have been made by either party which are not set forth expressly in this
    Agreement. It is intended that the benefits payable hereunder shall be
    considered paid to the Employee for the Employee's past services to the
    Company and continuing services from the date hereof.

9.  VALIDITY. The invalidity or unenforceability of any provisions of this
    Agreement shall not affect the validity or enforceability of any other
    provisions of this Agreement, which shall remain in full force and effect.
    The validity of this Agreement and the interpretation thereof shall be
    governed by and construed in accordance with the laws of the State of
    Minnesota.





        IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first written above.

                                       MICHAEL FOODS, INC.


                                       By:
                                          ------------------------------------
                                       Its:
                                           ------------------------------------


                                       M-FOODS HOLDINGS, INC.


                                       By:
                                          ------------------------------------
                                       Its:
                                           ------------------------------------

                                           ------------------------------------
                                                        Bradley Cook

EX-10.13

                                                                   EXHIBIT 10.13


                                                                [EXECUTION COPY]


================================================================================

                      ------------------------------------

                             M-FOODS INVESTORS, LLC

                      A Delaware Limited Liability Company

                      ------------------------------------

                              AMENDED AND RESTATED
                       LIMITED LIABILITY COMPANY AGREEMENT

                           Dated as of April 10, 2001

THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT
BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT
EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND
COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH
HEREIN.

THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE
SECURITYHOLDERS AGREEMENT, DATED AS OF THE DATE HEREOF, AS AMENDED OR MODIFIED
FROM TIME TO TIME, AMONG THE COMPANY AND CERTAIN INVESTORS, AND THE COMPANY
RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH INTERESTS UNTIL SUCH TRANSFER
IS IN COMPLIANCE WITH SUCH SECURITYHOLDERS AGREEMENT. A COPY OF THE
SECURITYHOLDERS AGREEMENT SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER OF
SUCH INTERESTS UPON WRITTEN REQUEST AND WITHOUT CHARGE.

================================================================================





                                TABLE OF CONTENTS



                                                                                   PAGE
                                                                                   ----
                                                                              
ARTICLE I   ..........................................................................1
            DEFINITIONS...............................................................1
                    SECTION 1.1 Definitions...........................................1
                    SECTION 1.2 Terms Generally......................................12

ARTICLE II  .........................................................................12
            GENERAL PROVISIONS.......................................................12
                    SECTION 2.1 Formation............................................12
                    SECTION 2.2 Name.................................................13
                    SECTION 2.3 Term.................................................13
                    SECTION 2.4 Purpose; Powers......................................13
                    SECTION 2.5 Foreign Qualification................................14
                    SECTION 2.6 Registered Office; Registered Agent; Principal
                    Office; Other Offices............................................14
                    SECTION 2.7 No State-Law Partnership.............................14
                    SECTION 2.8 Amendment and Restatement............................14
                    SECTION 2.9 Issuance of Additional Units.........................14

ARTICLE III .........................................................................15
            MANAGEMENT...............................................................15
                    SECTION 3.1 The Management Committee; Delegation of
                    Authority and Duties.............................................15
                    SECTION 3.2 Establishment of Management Committee................16
                    SECTION 3.3 Management Committee Meetings........................17
                    SECTION 3.4 Chairman.............................................18
                    SECTION 3.5 Approval or Ratification of Acts or Contracts........18
                    SECTION 3.6 Action by Written Consent or Telephone
                    Conference.......................................................18
                    SECTION 3.7 Officers.............................................19
                    SECTION 3.8 Management Matters...................................21
                    SECTION 3.9 Securities in Holdings...............................22
                    SECTION 3.10 Liability of Unitholders............................22
                    SECTION 3.11 Indemnification by the Company......................22

ARTICLE IV  .........................................................................24
            CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS........................24
                    SECTION 4.1 Capital Contributions................................24
                    SECTION 4.2 Capital Accounts.....................................24
                    SECTION 4.3 Allocations of Net Income and Net Loss...............24








                                                                              
                    SECTION 4.4 Distributions........................................28
                    SECTION 4.5 Security Interest and Right of Set-Off...............31

ARTICLE V   .........................................................................31
            WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP
            INTERESTS; ADMISSION OF NEW MEMBERS......................................31
                    SECTION 5.1 Unitholder Withdrawal................................31
                    SECTION 5.2 Dissolution..........................................31
                    SECTION 5.3 Transfer by Unitholders..............................32
                    SECTION 5.4 Admission or Substitution of New Members.............33
                    SECTION 5.5 Compliance with Law..................................33

ARTICLE VI  .........................................................................33
            REPORTS TO MEMBERS; TAX MATTERS..........................................33
                    SECTION 6.1 Books of Account.....................................33
                    SECTION 6.2 Reports..............................................34
                    SECTION 6.3 Fiscal Year..........................................35
                    SECTION 6.4 Certain Tax Matters..................................35

ARTICLE VII .........................................................................36
            MISCELLANEOUS............................................................36
                    SECTION 7.1 Schedules............................................36
                    SECTION 7.2 Governing Law........................................37
                    SECTION 7.3 Successors and Assigns...............................37
                    SECTION 7.4 Confidentiality......................................37
                    SECTION 7.5 Amendments...........................................37
                    SECTION 7.6 Notices..............................................38
                    SECTION 7.7 Counterparts.........................................38
                    SECTION 7.8 Power of Attorney....................................38
                    SECTION 7.9 Entire Agreement.....................................39
                    SECTION 7.10 Section Titles......................................39






                              AMENDED AND RESTATED
                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                             M-FOODS INVESTORS, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY

               THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of
M-Foods Investors, LLC, dated and effective as of April 10, 2001 (this
"AGREEMENT"), is adopted, executed and agreed to, for good and valuable
consideration, by and among Vestar Capital Partners IV, L.P., a Delaware limited
partnership ("VCP"), the Persons listed on SCHEDULE A attached hereto as of the
date hereof upon their execution of this Agreement, and each other Person who at
any time becomes a Member in accordance with the terms of this Agreement and the
Act. Any reference in this Agreement to VCP or any other Member shall include
such Member's Successors in Interest to the extent such Successors in Interest
have become Substitute Members in accordance with the provisions of this
Agreement.

               WHEREAS, on December 13, 2000, VCP formed the Company as a
limited liability company under the Delaware Limited Liability Company Act,
Title 6, ss.ss. 18-101, et seq, as it may be amended from time to time (the
"ACT"), by executing the Limited Liability Company Agreement of M-Foods
Investors, LLC (the "ORIGINAL AGREEMENT") and filing a Certificate of Formation
with respect thereto with the Delaware Secretary of State; and

               WHEREAS, VCP desires to amend and restate the Original Agreement
for the purpose of setting forth the agreements governing the relations among
the Members and to admit additional members.

               NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto, each intending to be legally
bound, agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

               SECTION 1.1        DEFINITIONS.

               Unless the context otherwise requires, the following terms shall
have the following meanings for purposes of this Agreement:

                "ACT" has the meaning set forth in the preamble above.

               "ADDITIONAL MEMBER" means any Person that has been admitted to
the Company as a Member pursuant to SECTION 5.4 by virtue of having received its
Membership Interest from the Company and not from any other Member or Assignee.





               "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any
Unitholder, the deficit balance, if any, in such Unitholder's Capital Account as
of the end of the relevant fiscal year, after giving effect to the following
adjustments:

                           (i)      credit to such Capital Account any amounts
                that such Unitholder is obligated to restore pursuant to this
                Agreement or is deemed to be obligated to restore pursuant to
                Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate
                sentence of each of Regulations Sections 1.704-2(i)(5) and
                1.704-2(g)(1); and

                        (ii)    debit to such Capital Account the items
                described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5)
                and (6).

The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted and applied by the Management Committee consistently therewith.

               "AFFILIATE" when used with reference to another Person means any
Person (other than the Company), directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control with, such
other Person. In addition, Affiliates of a Member shall include all partners,
officers, employees and former partners, officers or employees of, all
consultants or advisors to, and all other Persons who directly or indirectly
receive compensation from, such Member.

               "ASSIGNEE" means any transferee to which a Member or another
Assignee has transferred its interest in the Company in accordance with the
terms of this Agreement, but who is not a Member.

               "BANKRUPTCY" means, with respect to any Person, the occurrence of
any of the following events: (i) the filing of an application by such Person
for, or a consent to, the appointment of a trustee or custodian of his assets;
(ii) the filing by such Person of a voluntary petition in Bankruptcy or the
seeking of relief under Title 11 of the United States Code, as now constituted
or hereafter amended, or the filing of a pleading in any court of record
admitting in writing his inability to pay his debts as they become due; (iii)
the failure of such Person to pay his debts as such debts become due; (iv) the
making by such Person of a general assignment for the benefit of creditors; (v)
the filing by such Person of an answer admitting the material allegations of, or
his consenting to, or defaulting in answering, a Bankruptcy petition filed
against him in any Bankruptcy proceeding or petition seeking relief under Title
11 of the United States Code, as now constituted or as hereafter amended; or
(vi) the entry of an order, judgment or decree by any court of competent
jurisdiction adjudicating such Person a bankrupt or insolvent or for relief in
respect of such Person or appointing a trustee or custodian of his assets and
the continuance of such order, judgment or decree unstayed and in effect for a
period of 60 consecutive days.


                                        2



               "CAPITAL ACCOUNT" means, with respect to any Unitholder, the
account maintained for such Unitholder in accordance with the following
provisions:

                        (a)     To each Unitholder's Capital Account there shall
        be added such Unitholder's Capital Contributions, such Unitholder's
        allocable share of Net Income and any items in the nature of income or
        gain which are specially allocated to such Unitholder pursuant to
        SECTION 4.3(c) hereof, and the amount of any Company liabilities assumed
        by such Unitholder or which are secured by any property distributed to
        such Unitholder.

                        (b)     To each Unitholder's Capital Account there shall
        be subtracted the amount of cash and the Gross Asset Value of any
        property distributed to such Unitholder pursuant to any provision of
        this Agreement, such Unitholder's allocable share of Net Losses and any
        items in the nature of expenses or losses which are specially allocated
        to such Unitholder pursuant to SECTION 4.3(c) hereof, and the amount of
        any liabilities of such Unitholder assumed by the Company or which are
        secured by any property contributed by such Unitholder to the Company.

                        (c)     In the event any interest in the Company is
        transferred in accordance with the terms of this Agreement, the
        transferee shall succeed to the Capital Account of the transferor to the
        extent it relates to the transferred interest.

                        (d)     In determining the amount of any liability for
        purposes of subparagraphs (a) and (b) hereof and SECTION 4.3(b) hereof,
        there shall be taken into account Code Section 752(c) and any other
        applicable provisions of the Code and Regulations.

                        (e)     The foregoing provisions and the other
        provisions of this Agreement relating to the maintenance of Capital
        Accounts are intended to comply with Code Section 704(b) and the
        Regulations promulgated thereunder, and shall be interpreted and applied
        by the Management Committee in a manner consistent with such
        Regulations.

               "CAPITAL CONTRIBUTION" means, with respect to any Unitholder, the
amount of cash and the initial Gross Asset Value of any property (other than
money) contributed from time to time to the Company by such Unitholder (it being
understood that the Gross Asset Value with respect to property in respect of a
Unitholder's Initial Capital Contribution shall be as set forth on EXHIBIT I
hereto).

               "CERTIFICATE" has the meaning set forth in SECTION 2.1.

               "CLASS A UNITS" means the Class A Units of the Company.

               "CLASS B UNITS" means the Class B Units of the Company.


                                        3



               "CLASS C FRACTION" means the lesser of (A) one and (B) a
fraction, the numerator of which is the number of Class C Units outstanding at
the date of any such determination and the denominator of which is the number of
Class C Units outstanding on the date of the Initial Capital Contribution after
giving effect to the Initial Capital Contribution (i.e., 100,000), as each of
the numerator and denominator may be adjusted in the event of a
recapitalization, split, dividend, or other reclassification affecting the Class
C Units.

               "CLASS C UNITS" means the Class C Units of the Company.

               "CODE" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute. Any reference herein to a particular
provision of the Code shall mean, where appropriate, the corresponding provision
in any successor statute.

               "COMPANY" means M-Foods Investors, LLC, a Delaware limited
liability company.

               "COMPANY MINIMUM GAIN" has the meaning set forth in Regulations
Section 1.704- 2(d).

               "COMBINED UNITS" means the Target Holders' Class A Units and
Dairy A Units.

               "CONTROL" when used with reference to any Person means the power
to direct the management or policies of such Person, directly or indirectly, by
or through stock or other equity ownership, agency or otherwise, or pursuant to
or in connection with an agreement, arrangement or other understanding (written
or oral); and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.

               "DAIRY A UNITS" has the meaning of a "Class A Unit" as such term
is defined in the Dairy Holdings LLC Agreement.

               "DAIRY HOLDINGS LLC" means M-Foods Dairy Holdings, LLC, a
Delaware limited liability company.

               "DAIRY HOLDINGS LLC AGREEMENT" means that certain Limited
Liability Company Agreement of Dairy Holdings LLC, dated as of April __, 2001,
by and among VCP and the Persons listed on SCHEDULE A thereto.

               "DAIRY HOLDINGS LLC CAPITAL CONTRIBUTION" has the meaning of a
"Capital Contribution" as such term is defined in the Dairy Holdings LLC
Agreement.

               "DEPRECIATION" means, for each fiscal year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, Depreciation


                                        4



shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization or other cost
recovery deduction for such year or other period bears to such beginning
adjusted tax basis; PROVIDED, HOWEVER, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year is
zero, Depreciation shall be calculated with reference to such beginning Gross
Asset Value using any reasonable method selected by the Management Committee.

               "DISTRIBUTABLE ASSETS" means, with respect to any fiscal period,
all cash receipts (including from any operating, investing, and financing
activities) and (if distribution thereof is determined to be necessary by a
majority of the Management Committee) other assets of the Company from any and
all sources, reduced by operating cash expenses, contributions of capital to
subsidiaries of the Company and payments (if any) required to be made in
connection with any loan to the Company and any reserve for contingencies or
escrow required, in the good faith judgment of the Management Committee, in
connection therewith.

               "ECONOMIC INTEREST" means a Member's or Assignee's share of the
Company's net profits, net losses and distributions pursuant to this Agreement
and the Act, but shall not include any right to participate in the management or
affairs of the Company, including the right to vote in the election of
Representatives, vote on, consent to or otherwise participate in any decision of
the Members or Representatives, or any right to receive information concerning
the business and affairs of the Company, in each case except as expressly
otherwise provided in this Agreement or required by the Act.

               "FIRST PERFORMANCE HURDLE" means, that the Target Holders shall
have received (i) on or prior to the first anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 150% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (ii) on or prior to the second anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 175% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (iii) on or prior to the third anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 200% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (iv) on or prior to the fourth anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 225% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (v) on or prior to the fifth anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 249% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders or (vi) at any time after the fifth anniversary of the date of
this Agreement, aggregate distributions (pursuant to this Agreement and the
Dairy Holdings LLC Agreement) with respect to Combined Units equal to an amount
that would produce a Target Holders' IRR equal to or in excess


                                        5



of 20%; it being understood that the terms contained in clauses (i) through (vi)
of this definition shall remain constant and in effect throughout the periods
indicated.

               "GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

                        (a)     The initial Gross Asset Value of any asset
        contributed by a Unitholder to the Company shall be the gross fair
        market value of such asset on the date of the contribution, as
        determined by the contributing Unitholder and the Company.

                        (b)     The Gross Asset Values of all Company assets
        shall be adjusted to equal their respective gross fair market values, as
        determined by the Management Committee, as of the following times:

                                (i)     the acquisition of an additional
                interest in the Company after the date hereof by a new or
                existing Unitholder in exchange for more than a de minimis
                Capital Contribution, if the Management Committee reasonably
                determines that such adjustment is necessary or appropriate to
                reflect the relative Economic Interests of the Unitholders in
                the Company;

                                (ii)    the distribution by the Company to a
                Unitholder of more than a de minimis amount of Company property
                as consideration for an interest in the Company, if the
                Management Committee reasonably determines that such adjustment
                is necessary or appropriate to reflect the relative Economic
                Interests of the Unitholders in the Company;

                                (iii)   the liquidation of the Company within
                the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and

                                (iv)    such other times as the Management
                Committee shall reasonably determine necessary or advisable in
                order to comply with Regulations Sections 1.704-1(b) and
                1.704-2.

                        (c)     The Gross Asset Value of any Company asset
        distributed to a Unitholder shall be the gross fair market value of such
        asset on the date of distribution, as reasonably determined by the
        Management Committee taking into account the following proviso; PROVIDED
        that, in the case of such assets which are securities, the fair market
        value thereof shall be reduced (a) if and to the extent that a block
        sale of all of such securities is reasonably likely, in the good faith
        judgment of a registered broker-dealer affiliated with a reputable,
        nationally recognized brokerage house, to depress the trading price of
        such securities, (b) if and to the extent appropriate, in the good faith
        judgment of the Management Committee, due to illiquidity of such
        securities and (c) for any sales or other commissions reasonably likely
        to be incurred or applied in a sale of such securities.


                                        6



                (d)     The Gross Asset Values of Company assets shall be
        increased (or decreased) to reflect any adjustments to the adjusted
        basis of such assets pursuant to Code Section 734(b) or Code Section
        743(b), but only to the extent that such adjustments are taken into
        account in determining Capital Accounts pursuant to Regulations Section
        1.704-1(b)(2)(iv)(m); PROVIDED, however, that Gross Asset Values shall
        not be adjusted pursuant to this subparagraph (d) to the extent that the
        Management Committee determines that an adjustment pursuant to
        subparagraph (b) of this definition of Gross Asset Value is necessary or
        appropriate in connection with a transaction that would otherwise result
        in an adjustment pursuant to this subparagraph (d).

               "HOLDINGS" means M-Foods Holdings, Inc., a Delaware corporation.

               "INITIAL CAPITAL CONTRIBUTION" has the meaning set forth in
SECTION 4.1.

               "MANAGEMENT COMMITTEE" means the Management Committee established
pursuant to SECTION 3.2.

               "MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENTS" has
the meaning set forth in SECTION 2.9.

               "MARATHON" means Marathon Fund Limited Partnership IV, a Delaware
limited partnership.

               "MEMBER" means VCP, Marathon, Gregg A. Ostrander, the Persons
listed on SCHEDULE A attached hereto and each other Person who is hereafter
admitted as a Member in accordance with the terms of this Agreement and the Act.
The Members shall constitute the "members" (as that term is defined in the Act)
of the Company. Except as otherwise set forth herein or in the Act, the Members
shall constitute a single class or group of members of the Company for all
purposes of the Act and this Agreement.

               "MEMBER MINIMUM GAIN" means minimum gain attributable to Member
Nonrecourse Debt determined in accordance with Regulations Section 1.704- 2(i).

               "MEMBER NONRECOURSE DEBT" has the meaning set forth in
Regulations Section 1.704-2(b)(4).

               "MEMBER NONRECOURSE DEDUCTION" has the meaning set forth in
Regulations Section 1.704- 2(i)(2).

               "MEMBERSHIP INTEREST" means, with respect to each Member, such
Member's Economic Interest and rights as a Member.


                                        7



               "MICHAEL FOODS" means Michael Foods, Inc., a Minnesota
corporation.

               "NET INCOME" or "NET LOSS" means for each fiscal year of the
Company, an amount equal to the Company's taxable income or loss for such fiscal
year, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:

                        (a)     Any income of the Company that is exempt from
        federal income tax and not otherwise taken into account in computing Net
        Income or Net Loss pursuant to this definition of Net Income or Net Loss
        shall be added to such taxable income or loss;

                        (b)     Any expenditures of the Company described in
        Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
        expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and
        not otherwise taken into account in computing Net Income or Net Loss
        pursuant to this definition of Net Income or Net Loss shall be
        subtracted from such taxable income or loss;

                        (c)     In the event the Gross Asset Value of any
        Company asset is adjusted pursuant to subparagraph (b) or (c) of the
        definition of Gross Asset Value, the amount of such adjustment shall be
        taken into account as gain (if the adjustment increases the Gross Asset
        Value of the asset) or loss (if the adjustment decreases the Gross Asset
        Value of the asset) from the disposition of such asset for purposes of
        computing Net Income or Net Loss;

                        (d)     Gain or loss resulting from any disposition of
        property with respect to which gain or loss is recognized for federal
        income tax purposes shall be computed by reference to the Gross Asset
        Value of the property disposed of, notwithstanding that the adjusted tax
        basis of such property differs from its Gross Asset Value;

                        (e)     In lieu of the depreciation, amortization, and
        other cost recovery deductions taken into account in computing such
        taxable income or loss, Depreciation shall be taken into account for
        such fiscal year;

                        (f)     To the extent an adjustment to the adjusted tax
        basis of any Company asset pursuant to Code Section 734(b) or 743(b) is
        required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) to be
        taken into account in determining Capital Accounts as a result of a
        distribution other than in liquidation of a Unitholder's interest in the
        Company, the amount of such adjustment shall be treated as an item of
        gain (if the adjustment increases the basis of the asset) or loss (if
        the adjustment decreases the basis of the asset) from the disposition of
        the asset and shall be taken into account for purposes of computing Net
        Income or Net Loss; and


                                        8



                        (g)     Notwithstanding any other provision of this
        definition of Net Income or Net Loss, any items which are specially
        allocated pursuant to SECTION 4.3(c) hereof shall not be taken into
        account in computing Net Income or Net Loss. The amounts of the items of
        Company income, gain, loss, or deduction available to be specially
        allocated pursuant to SECTION 4.3(c) hereof shall be determined by
        applying rules analogous to those set forth in this definition of Net
        Income or Net Loss.

               "NONRECOURSE DEDUCTIONS" has the meaning set forth in Regulations
Section 1.704- 2(b).

               "OFFICER" means each Person designated as an officer of the
Company pursuant to and in accordance with the provisions of SECTION 3.7,
subject to any resolution of the Management Committee appointing such Person as
an officer or relating to such appointment.

               "ORIGINAL AGREEMENT" has the meaning set forth in the preamble
above.

               "PREFERRED RETURN" with respect to each holder of Class A Units
means an amount, accrued on a daily basis and, beginning July 1, 2001,
compounded quarterly on April 1, July 1, October 1 and January 1 of each year,
from the day on which such Unitholder makes a Capital Contribution through the
date of distribution equal to 8% per annum of THE EXCESS, if any, of (i) such
Unitholder's aggregate Capital Contribution plus the aggregate amount compounded
pursuant to this definition through the end of the previous quarter on each day
during such period OVER (ii) the aggregate amount of all distributions made on
or prior to such day to such Unitholder. For purposes of computing the Preferred
Return, each Capital Contribution shall be treated as having been made on the
last day of the calendar month in which such Capital Contribution is received by
the Company (except for the Initial Capital Contribution, which shall be deemed
to have been made on the date hereof), and distributions shall be deemed to have
been made on the last day of the month in which they are made.

               "PROCEEDING" has the meaning set forth in SECTION 3.11.

               "REGULATIONS" means the Income Tax Regulations, including
temporary Regulations, promulgated under the Code, as such Regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).

               "REGULATORY ALLOCATIONS" has the meaning set forth in SECTION
4.3(c) of this Agreement.

               "REPRESENTATIVE" has the meaning set forth in SECTION 3.2(a) of
this Agreement.

               "SALE OF THE COMPANY" shall mean a "Sale of the Company" (as
defined in the Securityholders Agreement) or a dissolution of the Company in
accordance with this Agreement


                                        9



(other than transactions effected for the purpose of changing, directly or
indirectly, the form of organization or the organizational structure of the
Company and/or any of its subsidiaries).

               "SECOND PERFORMANCE HURDLE" means that the Target Holders shall
have received (i) on or prior to the first anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 200% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (ii) on or prior to the second anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 225% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (iii) on or prior to the third anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 250% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (iv) on or prior to the fourth anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 275% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (v) on or prior to the fifth anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 305% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders or (vi) at any time after the fifth anniversary of the date of
this Agreement, aggregate distributions (pursuant to this Agreement and the
Dairy Holdings LLC Agreement) with respect to Combined Units equal to an amount
that would produce a Target Holders' IRR equal to or in excess of 25%; it being
understood that the terms contained in clauses (i) through (vi) of this
definition shall remain constant and in effect throughout the periods indicated.

               "SECURITIES" means any debt or equity securities of any issuer,
including common and preferred stock and interests in limited liability
companies (including warrants, rights, put and call options and other options
relating thereto or any combination thereof), notes, bonds, debentures, trust
receipts and other obligations, instruments or evidences of indebtedness, other
property or interests commonly regarded as securities, interests in real
property, whether improved or unimproved, interests in oil and gas properties
and mineral properties, short-term investments commonly regarded as money market
investments, bank deposits and interests in personal property of all kinds,
whether tangible or intangible.

               "SECURITYHOLDERS AGREEMENT" means the Securityholders Agreement
dated as of the date hereof among the Company and each Member, as it may be
amended or supplemented from time to time.

               "SUBSTITUTE MEMBER" means any Person that has been admitted to
the Company as a Member pursuant to SECTION 5.4 by virtue of such Person
receiving all or a portion of a Membership Interest from a Member or its
Assignee and not from the Company.


                                       10



               "SUCCESSOR IN INTEREST" means any (i) trustee, custodian,
receiver or other Person acting in any Bankruptcy or reorganization proceeding
with respect to; (ii) assignee for the benefit of the creditors of; (iii)
trustee or receiver, or current or former officer, director or partner, or other
fiduciary acting for or with respect to the dissolution, liquidation or
termination of; or (iv) other executor, administrator, committee, legal
representative or other successor or assign of, any Unitholder, whether by
operation of law or otherwise.

               "TARGET HOLDERS" means the holders of Class A Units.

               "TARGET HOLDERS' IRR" shall mean the cumulative internal rate of
return of the Target Holders (calculated as provided below), as of any date,
where the internal rate of return for such Target Holders shall be the annually
compounded rate of return which results in the following amount having a net
present value equal to zero: (i) the aggregate amount of cash and Gross Asset
Value of any assets distributed to such Target Holders pursuant to SECTIONS 4.4
and 5.2 of this Agreement and SECTIONS 4.4 and 5.2 of the Dairy Holdings LLC
Agreement from time to time on a cumulative basis through such date (PROVIDED
that, in no circumstances shall any fees paid to such Target Holders or expenses
reimbursed to such Target Holders from time to time under this Agreement, the
Dairy Holdings LLC Agreement or otherwise be included in this clause (i)), minus
(ii) the aggregate amount of the Capital Contributions and Dairy Holdings LLC
Capital Contributions made by such Target Holders from time to time on a
cumulative basis through such date. In determining the Target Holders' IRR, the
following shall apply: (a) Capital Contributions and Dairy Holdings LLC Capital
Contributions shall be deemed to have been made on the last day of the month in
which they are made (except for the Initial Capital Contribution (as such term
is defined herein and in the Dairy Holdings LLC Agreement), which shall be
deemed to have been made on the date hereof and/or the date of the Dairy
Holdings LLC Agreement, as applicable); (b) distributions shall be deemed to
have been made on the last day of the month in which they are made; (c) all
distributions shall be based on the amount distributed prior to the application
of any U.S. federal, state, local, or foreign income taxation to the Target
Holders; and (d) the rates of return shall be per annum rates and all amounts
shall be calculated on an annually compounded basis, and on the basis of a
365-day year.

               "TAX MATTERS MEMBER" has the meaning set forth in SECTION 6.4(b).

               "THIRD PERFORMANCE HURDLE" means that the Target Holders shall
have received (i) on or prior to the first anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 300% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (ii) on or prior to the second anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 325% of the
aggregate Capital Contributions and Dairy Holdings LLC Capital Contributions of
Target Holders, (iii) on or prior to the third anniversary of the date of this
Agreement, aggregate distributions (pursuant to this Agreement and the Dairy
Holdings LLC Agreement) with respect to Combined Units equal to 350% of the
aggregate Capital Contributions


                                       11



and Dairy Holdings LLC Capital Contributions of Target Holders, (iv) on or prior
to the fourth anniversary of the date of this Agreement, aggregate distributions
(pursuant to this Agreement and the Dairy Holdings LLC Agreement) with respect
to Combined Units equal to 375% of the aggregate Capital Contributions and Dairy
Holdings LLC Capital Contributions of Target Holders, (v) on or prior to the
fifth anniversary of the date of this Agreement, aggregate distributions
(pursuant to this Agreement and the Dairy Holdings LLC Agreement) with respect
to Combined Units equal to 448% of the aggregate Capital Contributions and Dairy
Holdings LLC Capital Contributions of Target Holders or (vi) at any time after
the fifth anniversary of the date of this Agreement, aggregate distributions
(pursuant to this Agreement and the Dairy Holdings LLC Agreement) with respect
to Combined Units equal to an amount that would produce a Target Holders' IRR
equal to or in excess of 35%; it being understood that the terms contained in
clauses (i) through (vi) of this definition shall remain constant and in effect
throughout the periods indicated.

               "UNITHOLDER" means a Member or Assignee who holds an Economic
Interest in Class A Units, Class B Units or Class C Units.

               "UNPAID PREFERRED RETURN" with respect to each holder of Class A
Units means THE EXCESS, if any, of (i) such Unitholder's Preferred Return as of
the date of any such determination OVER (ii) the aggregate amount of all
distributions made to such Unitholder pursuant to or in accordance with SECTION
4.4(a)(ii).

               "UNRETURNED CAPITAL" with respect to each Unitholder means THE
EXCESS, if any, of (i) such Unitholder's aggregate Capital Contributions OVER
(ii) the aggregate amount of all distributions made to such Unitholder pursuant
to or in accordance with SECTION 4.4(a)(i).

               SECTION 1.2        TERMS GENERALLY. The definitions in
SECTION 1.1 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The term "person" or
"Person" includes individuals, partnerships (whether general or limited), joint
ventures, corporations, limited liability companies, trusts, estates,
custodians, nominees, governments (or agencies or political subdivisions
thereof) and other associations, entities or groups (as defined in the
Securities Exchange Act of 1934, as amended). The words "include," "includes"
and "including" shall be deemed to be followed by the phrase "without
limitation." All terms herein that relate to accounting matters shall be
interpreted in accordance with generally accepted accounting principles from
time to time in effect. All references to "SECTIONS" and "ARTICLES" shall refer
to Sections and Articles of this Agreement unless otherwise specified. The words
"hereof" and "herein" and similar terms shall relate to this Agreement.

                                   ARTICLE II
                               GENERAL PROVISIONS

               SECTION 2.1        FORMATION.  The Company has been organized as
a Delaware limited liability company by the execution and filing of a
Certificate of Formation (the "CERTIFICATE")


                                       12



by VCP, as an initial Member, under and pursuant to the Act. The rights, powers,
duties, obligations and liabilities of the Members shall be determined pursuant
to the Act and this Agreement. To the extent that the rights, powers, duties,
obligations and liabilities of any Member are different by reason of any
provision of this Agreement than they would be in the absence of such provision,
this Agreement shall, to the extent permitted by the Act, control.

               SECTION 2.2 NAME.  The name of the Company is "M-Foods
Investors, LLC," and all Company business shall be conducted in that name or in
such other names that comply with applicable law as the Management Committee may
select from time to time.

               SECTION 2.3 TERM.    The term of the Company commenced on the
date the Certificate was filed with the office of the Secretary of State of the
State of Delaware and shall continue in existence perpetually until termination
or dissolution in accordance with the provisions of SECTION 5.2.

               SECTION 2.4        PURPOSE; POWERS.

                       (a)        GENERAL POWERS. The nature of the business
        or purposes to be conducted or promoted by the Company is to engage in
        any lawful act or activity for which limited liability companies may be
        organized under the Act. The Company may engage in any and all
        activities necessary, desirable or incidental to the accomplishment of
        the foregoing. Notwithstanding anything herein to the contrary, nothing
        set forth herein shall be construed as authorizing the Company to
        possess any purpose or power, or to do any act or thing, forbidden by
        law to a limited liability company organized under the laws of the State
        of Delaware.

                       (b)        COMPANY ACTION. Subject to the provisions of
        this Agreement and except as prohibited by applicable law (i) the
        Company may, with the approval of the Management Committee, enter into
        and perform any and all documents, agreements and instruments
        contemplated thereby, all without any further act, vote or approval of
        any Member and (ii) the Management Committee may authorize any Person
        (including any Member or Officer) to enter into and perform any document
        on behalf of the Company.

                       (c)        MERGER. Subject to the provisions of this
        Agreement, the Company may, with the approval of the Management
        Committee and without the need for any further act, vote or approval of
        any Member, merge with, or consolidate into, another limited liability
        company (organized under the laws of Delaware or any other state), a
        corporation (organized under the laws of Delaware or any other state) or
        other business entity (as defined in Section 18-209(a) of the Act),
        regardless of whether the Company is the survivor of such merger or
        consolidation; PROVIDED THAT, to the extent applicable in connection
        with any transaction described in this SECTION 2.4(c), each Unitholder
        shall be afforded any rights to which it is entitled to pursuant to
        ARTICLE IV of the Securityholders Agreement.


                                       13



               SECTION 2.5        FOREIGN QUALIFICATION. Prior to the
Company's conducting business in any jurisdiction other than Delaware, the
Management Committee shall cause the Company to comply, to the extent procedures
are available and those matters are reasonably within the control of the
Officers, with all requirements necessary to qualify the Company as a foreign
limited liability company in that jurisdiction.

               SECTION 2.6        REGISTERED OFFICE; REGISTERED AGENT;
PRINCIPAL OFFICE; OTHER OFFICES. The registered office of the Company required
by the Act to be maintained in the State of Delaware shall be the office of the
initial registered agent named in the Certificate or such other office (which
need not be a place of business of the Company) as the Management Committee may
designate from time to time in the manner provided by law. The registered agent
of the Company in the State of Delaware shall be the initial registered agent
named in the Certificate or such other Person or Persons as the Management
Committee may designate from time to time in the manner provided by law. The
principal office of the Company shall be at such place as the Management
Committee may designate from time to time, which need not be in the State of
Delaware, and the Company shall maintain records at such place. The Company may
have such other offices as the Management Committee may designate from time to
time.

               SECTION 2.7        NO STATE-LAW PARTNERSHIP. The Unitholders
intend that the Company shall not be a partnership (including a limited
partnership) or joint venture, and that no Unitholder, Representative or Officer
shall be a partner or joint venturer of any other Unitholder, Representative or
Officer by virtue of this Agreement, for any purposes other than as set forth in
the last sentence of this SECTION 2.7, and this Agreement shall not be construed
to the contrary. The Unitholders intend that the Company shall be treated as a
partnership for federal and, if applicable, state or local income tax purposes,
and each Unitholder and the Company shall file all tax returns and shall
otherwise take all tax and financial reporting positions in a manner consistent
with such treatment.

               SECTION 2.8        AMENDMENT AND RESTATEMENT. This Agreement
amends, restates and supersedes in its entirety the Original Agreement.

               SECTION 2.9        ISSUANCE OF ADDITIONAL UNITS. The Management
Committee shall have the right to cause the Company to create and issue
preferred units in connection with the exercise of the Company's rights and/or
obligations to purchase Class A Units, Class B Units and Class C Units from
certain Members each of whom is also a party to a Management Stock Purchase and
Unit Subscription Agreement, dated as of the date hereof, by and between such
Member and the Company (collectively, the "MANAGEMENT STOCK PURCHASE AND UNIT
SUBSCRIPTION AGREEMENTS"). Subject to the provisions of the Management Stock
Purchase and Unit Subscription Agreement, the Management Committee shall
determine the terms and conditions governing the issuance of any of such
preferred units. In addition, the Management Committee shall have the right to
issue Class B Units and Class C Units; PROVIDED THAT, the Management Committee
shall not authorize the issuance of either Class B Units or Class C Units in
excess of the number of such Class B Units and Class C Units, as the case may
be, issued as of the date hereof (it being understood that any Class B Units


                                       14



or Class C Units repurchased by the Company shall no longer be considered
"issued" for purposes hereof) unless (A) for so long as he serves as Chief
Executive Officer of Michael Foods, Gregg A. Ostrander provides his written
consent to such issuance or (B) if Gregg A. Ostrander shall cease to be the
Chief Executive Officer of Michael Foods, the holders of a majority of the
outstanding Class B Units or Class C Units, as the case may be, approve such
issuance. In addition, the holders of a majority of Class A Units shall have the
right to cause the Company to create and issue additional units, PROVIDED that
no such issuance shall adversely affect the relationship among the Class A
Units, Class B Units and Class C Units as set forth herein.

                                   ARTICLE III
                                   MANAGEMENT

               SECTION 3.1        THE MANAGEMENT COMMITTEE; DELEGATION OF
AUTHORITY AND DUTIES.

                (a)     MEMBERS AND MANAGEMENT COMMITTEE. The Members shall
        possess all rights and powers as provided in the Act and otherwise by
        law. Except as otherwise expressly provided for herein, the Members
        hereby consent to the exercise by the Management Committee of all such
        powers and rights conferred on them by the Act with respect to the
        management and control of the Company. Notwithstanding the foregoing and
        except as explicitly set forth in this Agreement, if a vote, consent or
        approval of the Members is required by the Act or other applicable law
        with respect to any act to be taken by the Company or matter considered
        by the Management Committee, each Member agrees that it shall be deemed
        to have consented to or approved such act or voted on such matter in
        accordance with a vote of the Management Committee on such act or
        matter. No Member, in its capacity as a Member, shall have any power to
        act for, sign for or do any act that would bind the Company. The
        Members, acting through the Management Committee, shall devote such time
        and effort to the affairs of the Company as they may deem appropriate
        for the oversight of the management and affairs of the Company. Each
        Member acknowledges and agrees that no Member shall, in its capacity as
        a Member, be bound to devote all of such Member's business time to the
        affairs of the Company, and that each Member and such Member's
        Affiliates do and will continue to engage for such Member's own account
        and for the account of others in other business ventures.

                (b)     DELEGATION BY MANAGEMENT COMMITTEE. The Management
        Committee shall have the power and authority to delegate to one or more
        other Persons the Management Committee's rights and powers to manage and
        control the business and affairs of the Company, including to delegate
        to agents and employees of a Member, a Representative or the Company
        (including Officers), and to delegate by a management agreement or
        another agreement with, or otherwise to, other Persons. The Management
        Committee may authorize any Person (including, without limitation, any
        Member, Officer or Representative) to enter into and perform under any
        document on behalf of the Company.


                                       15



                (c)     COMMITTEES. The Management Committee may, from time to
        time, designate one or more committees, each of which shall be comprised
        of at least two Representatives. Any such committee, to the extent
        provided in the enabling resolution and until dissolved by the
        Management Committee, shall have and may exercise any or all of the
        authority of the Management Committee. At every meeting of any such
        committee, the presence of a majority of all the representatives thereof
        shall constitute a quorum, and the affirmative vote of a majority of the
        representatives present shall be necessary for the adoption of any
        resolution. The Management Committee may dissolve any committee at any
        time, unless otherwise provided in the Certificate or this Agreement.

               SECTION 3.2        ESTABLISHMENT OF MANAGEMENT COMMITTEE.

                (a)     REPRESENTATIVES. There shall be established a Management
        Committee composed of up to nine (9) Persons all of whom shall be
        individuals ("REPRESENTATIVES") who shall be elected by a majority vote
        of the holders of Class A Units and Class B Units, voting together as a
        single class, and each such Member shall have one vote for each Class A
        Unit and/or Class B Unit held by such Member. Any Representative may be
        removed from the Management Committee at any time by the holders of a
        majority of the total voting power of the outstanding Class A Units and
        Class B Units. Each Representative shall remain in office until his or
        her death, resignation or removal, and in the event of death,
        resignation or removal of a Representative, the party or parties, as
        applicable, which designated such Representative shall fill the vacancy
        created.

                (b)     DUTIES. The Representatives, in the performance of their
        duties, shall owe to the Company and the Members duties of loyalty and
        due care of the type owed by the directors of a corporation to such
        corporation and its stockholders under the laws of the State of
        Delaware.

                (c)     ABSENCE. A Representative may, in isolated instances
        arising from exigent circumstances, designate a Person to act as his or
        her substitute and in his or her place at any meeting of the Management
        Committee. Such Person shall have all power of the absent
        Representative, and references herein to a "Representative" at a meeting
        shall be deemed to include his or her substitute. Notwithstanding
        anything in this Agreement to the contrary, Representatives, in their
        capacities as such, shall not be deemed to be "members" or "managers"
        (as such terms are defined in the Act) of the Company; PROVIDED THAT,
        for the purpose of clarity and the avoidance of doubt, nothing contained
        in this sentence shall relieve or diminish any Representative's duties
        under SECTION 3.2(b) hereof.

                (d)     NO INDIVIDUAL AUTHORITY. No Representative has the
        authority or power to act for or on behalf of the Company, to do any act
        that would be binding on the Company or to make any expenditures or
        incur any obligations on behalf of the Company or authorize any of the
        foregoing, other than acts that are expressly authorized by the
        Management Committee.


                                       16



                (e)     CONFLICT. Each provision of this SECTION 3.2 is subject
        to the terms and provisions of the Securityholders Agreement, and to the
        extent any such provisions apply, they are then to be construed as being
        incorporated in this Agreement and made a part hereof.

               SECTION 3.3        MANAGEMENT COMMITTEE MEETINGS.

                (a)     QUORUM. A majority of the total number of
        Representatives shall constitute a quorum for the transaction of
        business of the Management Committee and, except as otherwise provided
        in this Agreement, the act of a majority of the Representatives present
        at a meeting of the Management Committee at which a quorum is present
        shall be the act of the Management Committee. A Representative who is
        present at a meeting of the Management Committee at which action on any
        matter is taken shall be presumed to have assented to the action unless
        his dissent shall be entered in the minutes of the meeting or unless he
        shall file his written dissent to such action with the Person acting as
        secretary of the meeting before the adjournment thereof or shall deliver
        such dissent to the Company immediately after the adjournment of the
        meeting. Such right to dissent shall not apply to a Representative who
        voted in favor of such action.

                (b)     PLACE, WAIVER OF NOTICE. Meetings of the Management
        Committee may be held at such place or places as shall be determined
        from time to time by resolution of the Management Committee. At all
        meetings of the Management Committee, business shall be transacted in
        such order as shall from time to time be determined by resolution of the
        Management Committee. Attendance of a Representative at a meeting shall
        constitute a waiver of notice of such meeting, except where a
        Representative attends a meeting for the express purpose of objecting to
        the transaction of any business on the ground that the meeting is not
        lawfully called or convened.

                (c)     REGULAR MEETINGS. Regular meetings of the Management
        Committee shall be held at such times and places as shall be designated
        from time to time by resolution of the Management Committee. Notice of
        such meetings shall not be required.

                (d)     SPECIAL MEETINGS. Special meetings of the Management
        Committee may be called on at least 24 hours notice to each
        Representative by the chairman or any two Representatives. Such notice
        need not state the purpose or purposes of, nor the business to be
        transacted at, such meeting, except as may otherwise be required by law
        or provided for in this Agreement.

                (e)     NOTICE. Notice of any special meeting of the Management
        Committee or other committee may be given personally, by mail,
        facsimile, courier or other means and, if other than personally, shall
        be deemed given when written notice is delivered


                                       17



        to the office of the Representative at the address of the Representative
        in the books and records of the Company.

               SECTION 3.4        CHAIRMAN.  The Management Committee shall
designate a Representative to serve as chairman. The chairman shall preside at
all meetings of the Management Committee. If the chairman is absent at any
meeting of the Management Committee, a majority of the Representatives present
shall designate another Representative to serve as interim chairman for that
meeting. The chairman shall have no authority or power to act for or on behalf
of the Company, to do any act that would be binding on the Company or to make
any expenditure or incur any obligations on behalf of the Company or authorize
any of the foregoing. The chairman shall initially be Gregg A. Ostrander and
shall continue to be Mr. Ostrander during the period during which he is the
Chief Executive Officer of Michael Foods.

               SECTION 3.5        APPROVAL OR RATIFICATION OF ACTS OR CONTRACTS.
Any act or contract that shall be approved or be ratified by the Management
Committee shall be as valid and as binding upon the Company and upon all the
Members (in their capacity as Members) as if it shall have been approved or
ratified by every Member of the Company; PROVIDED, HOWEVER, the Management
Committee shall not permit the Company or its subsidiaries to engage in any act
or enter into any contract or other arrangement involving the payment by the
Company or its subsidiaries of any fees or compensation to VCP or its Affiliates
(excluding from this proviso any fees or compensation payable pursuant to that
certain Management Agreement, dated as of the date hereof, by and among the
Company, Vestar Capital Partners and the other parties named therein) unless a
majority of the Representatives (excluding the Vestar Directors (as such term is
defined in the Securityholders Agreement)) provide written consent to such
action, contract or other arrangement.

               SECTION 3.6        ACTION BY WRITTEN CONSENT OR TELEPHONE
CONFERENCE. Any action permitted or required by the Act, the Certificate or this
Agreement to be taken at a meeting of the Management Committee or any committee
designated by the Management Committee may be taken without a meeting if a
consent in writing, setting forth the action to be taken, is signed by a
majority of the Representatives or representatives of such other committee, as
the case may be. Such consent shall have the same force and effect as a vote at
a meeting and may be stated as such in any document or instrument filed with the
Secretary of State of the State of Delaware, and the execution of such consent
shall constitute attendance or presence in person at a meeting of the Management
Committee or any such other committee, as the case may be. Subject to the
requirements of this Agreement for notice of meetings, the Representatives, or
representatives of any other committee designated by the Management Committee,
may participate in and hold a meeting of the Management Committee or any such
other committee, as the case may be, by means of a conference telephone or
similar communications equipment by means of which all Persons participating in
the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person at such meeting, except where a
Person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.


                                       18



               SECTION 3.7        OFFICERS.

                (a)     DESIGNATION AND APPOINTMENT. The Management Committee
        may, from time to time, employ and retain Persons as may be necessary or
        appropriate for the conduct of the Company's business (subject to the
        supervision and control of the Management Committee), including
        employees, agents and other Persons (any of whom may be a Member or
        Representative) who may be designated as Officers of the Company, with
        titles including "chief executive officer," "chairman," "president,"
        "vice president," "treasurer," "secretary," "general manager,"
        "director" and "chief financial officer," as and to the extent
        authorized by the Management Committee. Any number of offices may be
        held by the same Person. In its discretion, the Management Committee may
        choose not to fill any office for any period as it may deem advisable.
        Officers need not be residents of the State of Delaware or Members. Any
        Officers so designated shall have such authority and perform such duties
        as the Management Committee may, from time to time, delegate to them.
        The Management Committee may assign titles to particular Officers. Each
        Officer shall hold office until his successor shall be duly designated
        and shall qualify or until his death or until he shall resign or shall
        have been removed in the manner hereinafter provided. The salaries or
        other compensation, if any, of the Officers of the Company shall be
        fixed from time to time by the Management Committee.

                (b)     RESIGNATION/REMOVAL. Any Officer may resign as such at
        any time. Such resignation shall be made in writing and shall take
        effect at the time specified therein, or if no time is specified, at the
        time of its receipt by the Management Committee. The acceptance of a
        resignation shall not be necessary to make it effective, unless
        expressly so provided in the resignation. Subject to clauses (d), (e)
        and (f) of this SECTION 3.7, any Officer may be removed as such, either
        with or without cause at any time by the Management Committee.
        Designation of an Officer shall not of itself create any contractual or
        employment rights.

                (c)     DUTIES OF OFFICERS GENERALLY. The Officers, in the
        performance of their duties as such, shall owe to the Company duties of
        loyalty and due care of the type owed by the officers of a corporation
        to such corporation and its stockholders under the laws of the State of
        Delaware.

                (d)     CHIEF EXECUTIVE OFFICER. Subject to the powers of the
        Management Committee, the chief executive officer of the Company shall
        be in general and active charge of the entire business and affairs of
        the Company, and shall be its chief policy making officer. The chief
        executive officer shall initially be Gregg A. Ostrander and shall
        continue to be Mr. Ostrander during the period during which he is the
        Chief Executive Officer of Michael Foods.

                (e)     PRESIDENT. The president shall, subject to the powers of
        the Management Committee and chief executive officer, have general and
        active management


                                       19



        of the business of the Company; and shall see that all orders and
        resolutions of the Management Committee are carried into effect. The
        president shall have such other powers and perform such other duties as
        may be prescribed by the chief executive officer or the Management
        Committee. The president shall initially be Gregg A. Ostrander and shall
        continue to be Mr. Ostrander during the period during which he is the
        Chief Executive Officer of Michael Foods.

                (f)     CHIEF FINANCIAL OFFICER. The chief financial officer
        shall keep and maintain, or cause to be kept and maintained, adequate
        and correct books and records of accounts of the properties and business
        transactions of the Company, including accounts of its assets,
        liabilities, receipts, disbursements, gains, losses and capital. The
        chief financial officer shall have the custody of the funds and
        securities of the Company, and shall keep full and accurate accounts of
        receipts and disbursements in books belonging to the Company, and shall
        deposit all moneys and other valuable effects in the name and to the
        credit of the Company in such depositories as may be designated by the
        Management Committee. The chief financial officer shall have such other
        powers and perform such other duties as may from time to time be
        prescribed by the chief executive officer or the Management Committee.
        The chief financial officer shall initially be John D. Reedy and shall
        continue to be Mr. Reedy during the period during which he is the Chief
        Financial Officer of Michael Foods.

                (g)     VICE PRESIDENT(S). The vice president(s) shall perform
        such duties and have such other powers as the chief executive officer or
        the Management Committee may from time to time prescribe. The Vice
        Presidents shall initially be James P. Kelley and Christopher Henderson.

                       (h)        SECRETARY.

                                  (i) The secretary shall attend all meetings of
               the Management Committee, and shall record all the proceedings of
               the meetings in a book to be kept for that purpose, and shall
               perform like duties for the standing committees of the Management
               Committee when required. The secretary shall initially be Jack M.
               Feder.

                                  (ii) The secretary shall keep all documents
               described in ARTICLE VI and such other documents as may be
               required under the Act. The secretary shall perform such other
               duties and have such other authority as may be prescribed
               elsewhere in this Agreement or from time to time by the chief
               executive officer or the Management Committee. The secretary
               shall have the general duties, powers and responsibilities of a
               secretary of a corporation.

                                  (iii)      If the Management Committee chooses
                to appoint an assistant secretary or assistant secretaries, the
                assistant secretaries, in the order of


                                       20



               their seniority, in the absence, disability or inability to act
               of the secretary, shall perform the duties and exercise the
               powers of the secretary, and shall perform such other duties as
               the chief executive officer or the Management Committee may from
               time to time prescribe.

               SECTION 3.8        MANAGEMENT MATTERS.

                (a)     TRANSFER OF PROPERTY. All property owned by the Company
        shall be registered in the Company's name, in the name of a nominee or
        in "street name" as the Management Committee may from time to time
        determine. Any corporation, brokerage firm or transfer agent called upon
        to transfer any Securities to or from the name of the Company shall be
        entitled to rely on instructions or assignments signed or purported to
        be signed by any Officer or Representative without inquiry as to the
        authority of the Person signing or purporting to sign such instructions
        or assignments or as to the validity of any transfer to or from the name
        of the Company. At the time of any such transfer, any such corporation,
        brokerage firm or transfer agent shall be entitled to assume that (i)
        the Company is then in existence and (ii) that this Agreement is in full
        force and effect and has not been amended, in each case unless such
        corporation, brokerage firm or transfer agent shall have received
        written notice to the contrary.

                (b)     EXISTENCE AND GOOD STANDING. The Management Committee
        may take all action which may be necessary or appropriate (i) for the
        continuation of the Company's valid existence as a limited liability
        company under the laws of the State of Delaware (and of each other
        jurisdiction in which such existence is necessary to enable the Company
        to conduct the business in which it is engaged) and (ii) for the
        maintenance, preservation and operation of the business of the Company
        in accordance with the provisions of this Agreement and applicable laws
        and regulations. The Management Committee may file or cause to be filed
        for recordation in the office of the appropriate authorities of the
        State of Delaware, and in the proper office or offices in each other
        jurisdiction in which the Company is formed or qualified, such
        certificates (including certificates of limited liability companies and
        fictitious name certificates) and other documents as are required by the
        applicable statutes, rules or regulations of any such jurisdiction or as
        are required to reflect the identity of the Members and the amounts of
        their respective capital contributions.

                (c)     INVESTMENT COMPANY ACT. The Management Committee shall
        use its best efforts to assure that the Company shall not be subject to
        registration as an investment company pursuant to the Investment Company
        Act of 1940, as amended.

                (d)     NO UBTI;ECI. The Company shall not, directly or through
        any pass-through entity in which it holds an interest, engage in any
        transaction or activity that shall cause its Unitholders, or any of such
        Unitholder's limited partners, which, in the case of clause (i), are
        exempt from income taxation under Section 501(a) of the Code, or, in the
        case of clause (ii), are non-U.S. persons, to recognize (i) unrelated
        business taxable income,


                                       21



        as defined in Section 512 and Section 514 of the Code, that is taxable
        to such Persons under Section 511 of the Code or (ii) income that is
        "effectively connected" with a U.S. trade or business, as defined in
        Section 864(b) of the Code.

                SECTION 3.9       SECURITIES IN HOLDINGS. The Company shall vote
all of the securities it holds in Holdings as directed by the Management
Committee.

               SECTION 3.10       LIABILITY OF UNITHOLDERS.

                        (a)     NO PERSONAL LIABILITY. Except as otherwise
        required by applicable law and as expressly set forth in this Agreement,
        no Unitholder shall have any personal liability whatsoever in such
        Person's capacity as a Unitholder, whether to the Company, to any of the
        other Unitholders, to the creditors of the Company or to any other third
        party, for the debts, liabilities, commitments or any other obligations
        of the Company or for any losses of the Company. Each Unitholder shall
        be liable only to make such Unitholder's Initial Capital Contribution to
        the Company, if applicable, and the other payments provided expressly
        herein.

                        (b)     RETURN OF DISTRIBUTIONS. In accordance with the
        Act and the laws of the State of Delaware, a member of a limited
        liability company may, under certain circumstances, be required to
        return amounts previously distributed to such member. It is the intent
        of the Members that no distribution to any Member pursuant to ARTICLE V
        hereof shall be deemed a return of money or other property paid or
        distributed in violation of the Act. The payment of any such money or
        distribution of any such property to a Member shall be deemed to be a
        compromise within the meaning of the Act, and the Member receiving any
        such money or property shall not be required to return to any Person any
        such money or property. However, if any court of competent jurisdiction
        holds that, notwithstanding the provisions of this Agreement, any Member
        is obligated to make any such payment, such obligation shall be the
        obligation of such Member and not of any Representative or other Member.

               SECTION 3.11       INDEMNIFICATION BY THE COMPANY. Subject to the
limitations and conditions provided in this SECTION 3.11, each Person who was or
is made a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or arbitrative (hereinafter a "PROCEEDING"), or any
appeal in such a Proceeding or any inquiry or investigation that could lead to
such a Proceeding, by reason of the fact that he, she, or it, or a Person of
which he, she or it is the legal representative, is or was a Unitholder, Officer
or Representative shall be indemnified by the Company to the fullest extent
permitted by applicable law, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights than said law
permitted the Company to provide prior to such amendment) against all judgments,
penalties (including excise and similar taxes and punitive damages), fines,
settlements and reasonable expenses (including reasonable attorneys' fees and


                                       22



expenses) actually incurred by such Person in connection with such Proceeding,
appeal, inquiry or investigation if such Person acted in Good Faith, and
indemnification under this SECTION 3.11 shall continue as to a Person who has
ceased to serve in the capacity which initially entitled such Person to
indemnity hereunder. The rights granted pursuant to this SECTION 3.11 shall be
deemed contract rights, and no amendment, modification or repeal of this SECTION
3.11 shall have the effect of limiting or denying any such rights with respect
to actions taken or Proceedings, appeals, inquiries or investigations arising
prior to any amendment, modification or repeal. It is expressly acknowledged
that the indemnification provided in this SECTION 3.11 could involve
indemnification for negligence or under theories of strict liability. "GOOD
FAITH" shall mean a Person having acted in good faith and in a manner such
Person reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to a criminal proceeding, having had no reasonable
cause to believe such Person's conduct was unlawful.


                                       23



                                   ARTICLE IV
                CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS

               SECTION 4.1        CAPITAL CONTRIBUTIONS. The Members listed on
SCHEDULE A hereto have made initial Capital Contributions to the Company in the
amounts and of the type set forth in EXHIBIT I hereto (with respect to each
Member, an "INITIAL CAPITAL CONTRIBUTION").

               SECTION 4.2        CAPITAL ACCOUNTS.

                        (a)       CREATION. There shall be established for each
        Unitholder on the books of the Company a Capital Account which shall be
        increased or decreased in the manner set forth in this Agreement.

                        (b)       NEGATIVE BALANCE.  A Unitholder shall not have
        any obligation to the Company or to any other Unitholder to restore any
        negative balance in the Capital Account of such Unitholder.

               SECTION 4.3        ALLOCATIONS OF NET INCOME AND NET LOSS.

                        (a)     TIMING AND AMOUNT OF ALLOCATIONS OF NET INCOME
        AND NET LOSS. Net Income and Net Loss of the Company shall be determined
        and allocated with respect to each fiscal year of the Company as of the
        end of each such year or as circumstances otherwise require or allow.
        Subject to the other provisions of this SECTION 4.3, an allocation to a
        Unitholder of a share of Net Income or Net Loss shall be treated as an
        allocation of the same share of each item of income, gain, loss or
        deduction that is taken into account in computing Net Income or Net
        Loss.

                       (b)        GENERAL ALLOCATIONS.

                                (i)     NET INCOME AND NET LOSS. After giving
                effect to the special allocations provided in SECTIONS 4.3(c)
                and 4.3(d), and except as provided in SECTION 4.3(f), all Net
                Income and Net Loss of the Company for a fiscal year shall be
                allocated to the Unitholders as follows:

                                      (A)    FIRST, Net Income will be
                        allocated to the Unitholders having deficit balances in
                        their Capital Accounts (computed after giving effect to
                        all contributions, distributions, allocations and other
                        Capital Account adjustments for all taxable years (other
                        than the items comprising the Net Income or Net Loss of
                        the Company being allocated to the Unitholders for the
                        current fiscal year), after adding back each
                        Unitholder's share of Company Minimum Gain and Member
                        Minimum Gain as provided in Regulations Sections
                        1.704-2(g) and 1.704-2(i)(5)), to the extent of, and in
                        proportion to, those deficits, unless satisfied by
                        allocations under SECTION 4.3(c) hereof; and


                                       24



                                      (B)    SECOND, Net Income and Net Loss not
                        allocated under SECTION 4.3(b)(i)(A) will be allocated
                        so as to cause the credit balance in each Unitholder's
                        Capital Account (computed in the same manner as provided
                        parenthetically in SECTION 4.3(b)(i)(A) hereof) to
                        equal, as nearly as possible, the amount such Unitholder
                        would receive if the Company sold all of its assets for
                        the Gross Asset Value of each such asset and distributed
                        the proceeds thereof (after satisfaction of any
                        liabilities of the Company) in accordance with the
                        provisions of SECTION 4.4 hereof (and assuming that
                        Dairy Holdings LLC simultaneously sold all of its assets
                        for the Gross Asset Value (as such term is defined in
                        the Dairy Holdings LLC Agreement) of each such asset and
                        distributed the proceeds thereof (after satisfaction of
                        any liabilities of Dairy Holdings LLC) in accordance
                        with the provisions of Section 4.4 of the Dairy Holdings
                        LLC Agreement).

                        (c)    ADDITIONAL ALLOCATION PROVISIONS.
        Notwithstanding the foregoing provisions of this SECTION 4.3:

                              (i)
                                      (A)    If there is a net decrease in
                        Company Minimum Gain or Member Minimum Gain during any
                        fiscal year, the Unitholders shall be allocated items of
                        Company income and gain for such fiscal year (and, if
                        necessary, for subsequent fiscal years) in accordance
                        with Regulations Section 1.704-2(f) or 1.704-2(i)(4), as
                        applicable. It is intended that this SECTION
                        4.3(c)(i)(A) qualify and be construed as a "minimum gain
                        chargeback" and a "chargeback of partner nonrecourse
                        debt minimum gain" within the meaning of such
                        Regulations, which shall be controlling in the event of
                        a conflict between such Regulations and this SECTION
                        4.3(c)(i)(A).

                                      (B)    Any Nonrecourse Deductions for any
                        fiscal year shall be specially allocated to the holders
                        of Class A Units in accordance with the number of Class
                        A Units held by each such Unitholder. Any Member
                        Nonrecourse Deductions for any fiscal year shall be
                        specially allocated to the Unitholder(s) who bears the
                        economic risk of loss with respect to the Member
                        Nonrecourse Debt to which such Member Nonrecourse
                        Deductions are attributable, in accordance with
                        Regulations Section 1.704- 2(i).

                                      (C)    If any Unitholder unexpectedly
                        receives an adjustment, allocation or distribution
                        described in Regulations Section 1.704-
                        1(b)(2)(ii)(d)(4), (5) or (6), items of Company income
                        and gain shall be allocated, in accordance with
                        Regulations Section 1.704- 1(b)(2)(ii) (d), to the
                        Unitholder in an amount and manner sufficient to
                        eliminate, to the extent by such Regulations, the
                        Adjusted Capital Account Deficit of the Unitholder


                                       25



                        as quickly as possible. It is intended that this SECTION
                        4.3(c)(i)(C) qualify and be construed as a "qualified
                        income offset" within the meaning of Regulations 1.704-
                        1(b)(2)(ii)(d), which shall be controlling in the event
                        of a conflict between such Regulations and this SECTION
                        4.3(c)(i)(C).

                                      (D)    The allocations set forth in
                        SECTIONS 4.3(c)(i)(A), (B) and (C) (the "REGULATORY
                        ALLOCATIONS") are intended to comply with certain
                        regulatory requirements, including the requirements of
                        Regulations Sections 1.704-1(b) and 1.704-2.
                        Notwithstanding the provisions of SECTION 4.3(b), the
                        Regulatory Allocations shall be taken into account in
                        allocating other items of income, gain, loss and
                        deduction among the Unitholders so that, to the extent
                        possible, the net amount of such allocations of other
                        items and the Regulatory Allocations to each Unitholder
                        shall be equal to the net amount that would have been
                        allocated to each such Unitholder if the Regulatory
                        Allocations had not occurred.

                              (ii)  For any fiscal year during which a
               Unitholder's interest in the Company is assigned by such
               Unitholder, the portion of the Net Income and Net Loss of the
               Company that is allocable in respect of such Unitholder's
               interest shall be apportioned between the assignor and the
               assignee of such Unitholder's interest using any permissible
               method under Code Section 706 and the Regulations thereunder, as
               determined by the Management Committee.

                              (iii) In the event that any amount claimed by the
               Company to constitute a deductible expense in any fiscal year is
               treated for federal income tax purposes as a distribution made to
               a Unitholder in its capacity as a partner of the Company and not
               a payment to a Unitholder not acting in its capacity as a partner
               under Code Section 707(a), then the Unitholder who is deemed to
               have received such distribution shall first be allocated an
               amount of Company gross income equal to such payment, its Capital
               Account shall be reduced to reflect the distribution, and for
               purposes of SECTION 4.3, Net Income and Net Loss shall be
               determined after making the allocation required by this SECTION
               4.3(c)(iii).

                              (iv)  In the event that any amount claimed by the
               Company to constitute a distribution made to a Unitholder in its
               capacity as a partner of the Company is treated for federal
               income tax purposes as a deductible expense of the Company for a
               payment to a Unitholder not acting in its capacity as a partner
               of the Company, then the Unitholder who is deemed to have
               received such payment shall first be allocated the Company
               expense item attributable to such payment, its Capital Account
               shall be reduced to reflect the allocation, and for purposes of
               SECTION 4.3, Net Income and Net Loss shall be determined after
               making the allocation required by this SECTION 4.3(c)(iv).


                                       26



                        (d)     REQUIRED TAX ALLOCATIONS. All items of income,
       gain, loss, deduction and credit for federal income tax purposes shall be
       allocated to each Unitholder in the same manner as the Net Income or Net
       Loss (and each item of income, gain, loss and deduction related thereto)
       that is allocated to such Unitholder pursuant to SECTION 4.3(a), (b) and
       (c) to which such tax items relate. Notwithstanding the foregoing
       provisions of this SECTION 4.3, income, gain, loss, deduction, and
       credits with respect to property contributed to the Company by a
       Unitholder shall be allocated among the Unitholders for federal and state
       income tax purposes pursuant to Regulations promulgated under Section
       704(c) of the Code, so as to take account of the variation, if any,
       between the adjusted basis for federal income tax purposes of the
       property to the Company and its initial Gross Asset Value at the time of
       contribution. In the event the Gross Asset Value of any Company asset is
       adjusted pursuant to subparagraph (b), (c), or (d) of the definition of
       Gross Asset Value, subsequent allocations of income, gain, loss,
       deduction, and credits with respect to such asset shall take account of
       the variation, if any, between the adjusted basis of such asset for
       federal income tax purposes and its Gross Asset Value in the same manner
       as under Code Section 704(c) and the applicable Regulations consistent
       with the requirements of Treasury Regulation Section
       1.704-1(b)(2)(iv)(g). Allocations pursuant to this SECTION 4.3(d) are
       solely for purposes of federal, state and local income taxes and shall
       not affect, or in any way be taken into account in computing, any
       Unitholder's Capital Account or share of Net Income, Net Loss, other tax
       items or distributions pursuant to any provision of this Agreement.

                     (e)    UNITHOLDERS' TAX REPORTING. The Unitholders
       acknowledge and are aware of the income tax consequences of the
       allocations made by this SECTION 4.3 and, except as may otherwise be
       required by applicable law or regulatory requirements, hereby agree to be
       bound by the provisions of SECTION 4.3 in reporting their shares of
       Company income, gain, loss, deductions, and credits for federal, state
       and local income tax purposes.

                     (f)    WITHHOLDING. Each Unitholder hereby authorizes the
       Company to withhold and to pay over any taxes payable by the Company or
       any of its Affiliates as a result of the participation by such Unitholder
       (or any Assignee of, or Successor in Interest to, such Unitholder) in the
       Company; PROVIDED THAT, prior to withholding any amount in respect of
       Minnesota income taxes from any Unitholder, the Company shall provide
       such Unitholder a reasonable opportunity to provide the Company an
       exemption certificate, or its equivalent, to exonerate the Company from
       any obligation to withhold such tax. If and to the extent that the
       Company shall be required to withhold any taxes, such Unitholder shall be
       deemed for all purposes of this Agreement to have received a payment from
       the Company as of the time such withholding is required to be paid, which
       payment shall be deemed to be a distribution to such Unitholder under
       SECTION 4.4(a) or SECTION 5.2 to the extent that the Unitholder is
       entitled to receive a distribution and shall be taken into account in
       determining the amount of future distributions to such Unitholder. To the
       extent that the aggregate of such payments to a Unitholder for any period
       exceeds the distributions to which such Unitholder is entitled for such
       period, the amount of such excess shall be considered a demand loan from
       the Company to such Unitholder, with interest at an interest rate of 9%
       compounded annually,


                                       27



       which interest shall be treated as an item of Company income until
       discharged by such Unitholder by repayment, which may be made in the sole
       discretion of the Management Committee out of distributions to which such
       Unitholder would otherwise be subsequently entitled. The withholdings
       referred to in this SECTION 4.3 shall be made at the maximum applicable
       statutory rate under applicable tax law unless the Management Committee
       receives documentation, satisfactory to the Management Committee, to the
       effect that a lower rate is applicable, or that no withholding is
       applicable.

               SECTION 4.4        DISTRIBUTIONS.

                     (a)    PRIORITY. Distributable Assets will be distributed
       (or set aside for the benefit of the applicable Unitholder in the
       discretion of the Management Committee) as soon as reasonably practicable
       after such Distributable Assets become available to the Company, subject
       to SECTIONS 4.4(b) and (c) as follows:

                            (i)    FIRST, 100% of the Distributable Assets shall
              be distributed to the Unitholders pro rata in accordance with each
              such Unitholder's Unreturned Capital until each such Unitholder's
              Unreturned Capital has been reduced to zero;

                            (ii)   SECOND, after the required distributions
              pursuant to subparagraph (i) above, 100% of the Distributable
              Assets shall be distributed to the holders of Class A Units, pro
              rata in accordance with the aggregate amount of such Unitholders'
              Unpaid Preferred Return until each such Unitholder's Unpaid
              Preferred Return has been reduced to zero;

                            (iii)  THIRD, after the required distributions
              pursuant to subparagraph (ii) above, until the First Performance
              Hurdle has been satisfied, 100% of the Distributable Assets shall
              be distributed as follows:

                                      (A)    92.5% to the holders of Class A
                           Units and Class B Units, pro rata in accordance with
                           the number of Class A Units and Class B Units held by
                           each such Unitholder; and

                                      (B)    (1) a percentage, equal to the
                           product of (x) 7.5% multiplied by (y) the Class C
                           Fraction, to the holders of Class C Units, pro rata
                           in accordance with the number of Class C Units held
                           by each such Unitholder, and (2) a percentage, if
                           any, equal to the product of (x) 7.5% multiplied by
                           (y) one minus the Class C Fraction, to the holders of
                           Class A and Class B Units, pro rata in accordance
                           with the number of Class A Units and Class B Units
                           held by each such Unitholder;

                            (iv)   FOURTH, after the required distributions
              pursuant to subparagraph (iii) above, 100% of the Distributable
              Assets shall be distributed to the


                                       28



              holders of Class C Units, pro rata in accordance with the number
              of Class C Units held by each such Unitholder, until the
              cumulative amount of distributions made to holders of Class C
              Units pursuant to this SECTION 4.4(a)(iv) and SECTION
              4.4(a)(iii)(B)(1) above is equal to (1) the product of (x) 12.5%
              multiplied by (y) the Class C Fraction, multiplied by (2) the
              cumulative distributions made to all Unitholders pursuant to this
              SECTION 4.4(a)(iv) and SECTION 4.4(a)(iii) above;

                            (v)    FIFTH, after the required distributions
              pursuant to subparagraph (iv) above, until the Second Performance
              Hurdle has been satisfied, 100% of the Distributable Assets shall
              be distributed as follows:

                                     (A)  87.5% to the holders of Class A Units
                       and Class B Units, pro rata in accordance with the number
                       of Class A Units and Class B Units held by each such
                       Unitholder; and

                                     (B)  (1) a percentage, equal to the product
                       of (x) 12.5% multiplied by (y) the Class C Fraction, to
                       the holders of Class C Units, pro rata in accordance with
                       the number of Class C Units held by each such Unitholder,
                       and (2) a percentage, if any, equal to the product of (x)
                       12.5% multiplied by (y) one minus the Class C Fraction,
                       to the holders of Class A and Class B Units, pro rata in
                       accordance with the number of Class A Units and Class B
                       Units held by each such Unitholder;

                            (vi)   SIXTH, after the required distributions
              pursuant to subparagraph (v) above, until the Third Performance
              Hurdle has been satisfied, 100% of the Distributable Assets shall
              be distributed as follows:

                                     (A)  75% to the holders of Class A Units
                       and Class B Units, pro rata in accordance with the number
                       of Class A Units and Class B Units held by each such
                       Unitholder; and

                                     (B)  (1) a percentage, equal to the product
                       of (x) 25% multiplied by (y) the Class C Fraction, to the
                       holders of Class C Units, pro rata in accordance with the
                       number of Class C Units held by each such Unitholder, and
                       (2) a percentage, if any, equal to the product of (x) 25%
                       multiplied by (y) one minus the Class C Fraction, to the
                       holders of Class A and Class B Units, pro rata in
                       accordance with the number of Class A Units and Class B
                       Units held by each such Unitholder; and

                            (vii)  SEVENTH, after the required distributions
              pursuant to subparagraph (vi) above, 100% of the Distributable
              Assets shall be distributed as follows:


                                       29



                                     (A)  67.5% to the holders of Class A Units
                       and Class B Units, pro rata in accordance with the number
                       of Class A Units and Class B Units held by each such
                       Unitholder; and

                                     (B)  (1) a percentage, equal to the product
                       of (x) 32.5% multiplied by (y) the Class C Fraction to
                       the holders of Class C Units, pro rata in accordance with
                       the number of Class C Units held by each such Unitholder,
                       and (2) a percentage, if any, equal to the product of (x)
                       32.5% multiplied by (y) one minus the Class C Fraction,
                       to the holders of Class A Units and Class B Units, pro
                       rata in accordance with the number of Class A Units and
                       Class B Units held by each such Unitholder;

        PROVIDED that, if the Distributable Assets being distributed consist of
        more than one kind of asset, all Distributable Assets consisting of cash
        must be distributed before any other kind of asset is distributed.

                     (b)    SUCCESSORS. For purposes of determining the amount
       of distributions under this SECTION 4.4, each Unitholder shall be treated
       as having received amounts received by its predecessors in respect of any
       of such Unitholder's Units.

                     (c)    TAX DISTRIBUTIONS. Subject to the Act and to any
       restrictions contained in any agreement to which the Company is bound, no
       later than the tenth day of each March, June, September and December, the
       Company shall, to the extent of available cash, make a tax distribution
       to each Unitholder in an amount equal to the excess of (i) the product of
       (A) the cumulative taxable income (including any guaranteed payments for
       services that are not actually received by such Unitholder in cash)
       attributable to the Unitholder's investment as reported on the
       Unitholder's Schedule K-1 allocated by the Company to the Unitholder, in
       excess of the federal taxable loss carryforward deduction (assuming that
       such carryforward was not applied against any non-Company income of such
       Unitholder) to the extent that such loss carry-forward deduction would be
       available to offset such taxable income of a Unitholder from its
       investment in the Company and (B) the combined maximum federal, state and
       local marginal income tax rate (taking into account the deductibility of
       state and local taxes and adjusted appropriately for varying rates)
       applicable to individuals, over (ii) all prior distributions pursuant to
       this SECTION 4.4. All distributions made to a Unitholder pursuant to this
       SECTION 4.4(c) on account of the taxable income allocated to such
       Unitholder shall be treated as advance distributions under SECTION 4.4(a)
       or SECTION 5.2 and shall be taken into account in determining the amount
       of future distributions to such Unitholder. For purposes of determining
       the amount of distributions to be made to the Unitholders pursuant to
       SECTION 4.4(a) or SECTION 5.2, distributions made pursuant to this
       SECTION 4.4(c) shall be deemed made at such time as they offset
       distributions being made pursuant to SECTION 4.4(a) or SECTION 5.2.


                                       30



               SECTION 4.5 SECURITY INTEREST AND RIGHT OF SET-OFF. As security
for any withholding tax or other liability or obligation to which the Company
may be subject as a result of any act or status of any Unitholder, or to which
the Company may become subject with respect to the interest of any Unitholder,
the Company shall have (and each Unitholder hereby grants to the Company) a
security interest in all Distributable Assets distributable to such Unitholder
to the extent of the amount of such withholding tax or other liability or
obligation. The Company shall have a right of setoff against such distributions
of Distributable Assets in the amount of such withholding tax or other liability
or obligation, subject to the proviso in the first sentence of SECTION 4.3(f).
The Company may withhold distributions or portions thereof if it is required to
do so by the Code or any other provision of federal, state or local tax or other
law. Any amount withheld pursuant to the Code or any other provision of federal,
state or local tax or other law with respect to any distribution to a Unitholder
shall be treated as an amount distributed to such Unitholder for all purposes
under this Agreement.

                                    ARTICLE V
           WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS;
                            ADMISSION OF NEW MEMBERS

               SECTION 5.1 UNITHOLDER WITHDRAWAL. No Unitholder shall have the
power or right to withdraw or otherwise resign or be expelled from the Company
prior to the dissolution and winding up of the Company except pursuant to a
transfer permitted under this Agreement of all of such Unitholder's Units to an
Assignee, a Member or the Company. Notwithstanding anything to the contrary
contained in the Act, in no event shall any Unitholder be deemed to have
withdrawn from the Company or cease to be a Unitholder upon the occurrence of
any of the events specified in this Agreement, or any events similar thereto,
unless the Unitholder, after the occurrence of any such event, indicates in a
written instrument that the Unitholder has so withdrawn.

               SECTION 5.2    DISSOLUTION.

                       (a)    EVENTS.  The Company shall be dissolved and its
       affairs shall be wound up on the first to occur of the following:

                              (i)  the unanimous vote of the Management
               Committee;

                              (ii) (a) the written consent of the Members
               holding a majority of the outstanding Class A Units, and (b) the
               written consent of the Members holding a majority of the
               outstanding Class B Units;

                              (iii) the entry of a decree of judicial
               dissolution of the Company under Section 18-802 of the Act;


                                       31



                              (iv) upon consummation of a Sale of the Company
               (as defined in the Securityholders Agreement), upon consummation
               of a Public Offering (as defined in the Securityholders
               Agreement) or upon consummation of a merger or consolidation
               pursuant to which the Company is not the surviving entity, each
               with the consent of a majority of the Management Committee; and

                              (v)  upon the liquidation, dissolution or winding
               up of the Company or Holdings.

Except as provided in this Agreement, the death, retirement, resignation,
expulsion, incapacity, bankruptcy or dissolution of a Member, or the occurrence
of any other event that terminates the continued membership of a Member in the
Company, shall not cause a dissolution of the Company, and the Company shall
continue in existence subject to the terms and conditions of this Agreement.

                     (b)    ACTIONS UPON DISSOLUTION. When the Company is
       dissolved, the business and property of the Company shall be wound up and
       liquidated by the Management Committee or, in the event of the
       unavailability of the Management Committee, such Member or other
       liquidating trustee as shall be named by the Management Committee.

                     (c)    PRIORITY. Within 120 calendar days after the
       effective date of dissolution of the Company, whether by expiration of
       its full term or otherwise, the assets of the Company shall be
       distributed in the following manner and order:

                              (i)  All debts and obligations of the Company, if
              any, shall first be paid, discharged or provided for by adequate
              reserves; and

                              (ii) The balance shall be distributed to the
              Unitholders in accordance with SECTION 4.4.

                     (d)    CANCELLATION OF CERTIFICATE. On completion of the
       distribution of Company assets as provided herein, the Company is
       terminated, and shall file a certificate of cancellation with the
       Secretary of State of the State of Delaware, cancel any other filings
       made and take such other actions as may be necessary to terminate the
       Company.

               SECTION 5.3 TRANSFER BY UNITHOLDERS. Subject to the
Securityholders Agreement and this Agreement, a Unitholder may transfer or
assign all or part of its interest as a Unitholder in the Company to any Person
that agrees in writing to assume the responsibility of a Unitholder. Any Member
who shall assign any Units in the Company shall cease to be a Member of the
Company with respect to such Units and shall no longer have any rights or
privileges of a Member with respect to such Units. Any Member or Assignee who
acquires in any manner whatsoever any Units, irrespective of whether such Person
has accepted and adopted in writing the terms and provisions of this Agreement,
shall be deemed by the acceptance of the benefits of the acquisition thereof to
have agreed to be subject to and bound by all of the terms and conditions of
this Agreement that any


                                       32



predecessor in such Units or other interest in the Company was subject to or by
which such predecessor was bound. No Member shall cease to be a Member upon the
collateral assignment of, or the pledging or granting of a security interest in,
its entire interest in the Company.

               SECTION 5.4 ADMISSION OR SUBSTITUTION OF NEW MEMBERS.

                     (a)    ADMISSION. The Management Committee shall have the
       right, subject to SECTION 5.3, to admit as a Substitute Member or an
       Additional Member, any Person who acquires an interest in the Company, or
       any part thereof, from a Member or from the Company; PROVIDED THAT, the
       Management Committee shall admit as a Substitute Member, subject to
       SECTION 5.4(b), any transferee who acquires an interest in the Company
       pursuant to an Exempt Transfer (as such term is defined in the
       Securityholders Agreement). Concurrently with the admission of a
       Substitute Member or an Additional Member, the Management Committee shall
       forthwith cause any necessary papers to be filed and recorded and notice
       to be given wherever and to the extent required showing the substitution
       of a transferee as a Substitute Member in place of the transferring
       Member, or the admission of an Additional Member, all at the expense,
       including payment of any professional and filing fees incurred, of the
       Substitute Member or the Additional Member.

                     (b)    CONDITIONS. The admission of any Person as a
       Substitute or Additional Member shall be conditioned upon (i) such
       Person's written acceptance and adoption of all the terms and provisions
       of this Agreement, either by (X) execution and delivery of a counterpart
       signature page to this Agreement countersigned by a Representative on
       behalf of the Company or (Y) any other writing evidencing the intent of
       such Person to become a Substitute Member or Additional Member and such
       writing is accepted by the Management Committee on behalf of the Company
       and (ii) (at the request of the Management Committee) such Person's
       execution and delivery of a counterpart to the Securityholders Agreement.

               SECTION 5.5 COMPLIANCE WITH LAW. Notwithstanding any provision
hereof to the contrary, no sale or other disposition of an interest in the
Company may be made except in compliance with all federal, state and other
applicable laws, including federal and state securities laws. Nothing in this
SECTION 5.5 shall be construed to limit or otherwise affect any of the
provisions of the Securityholders Agreement or the Management Stock Purchase and
Unit Subscription Agreements, and to the extent any such provisions apply, they
are then to be construed as being incorporated in this Agreement and made a part
hereof.

                                   ARTICLE VI
                         REPORTS TO MEMBERS; TAX MATTERS

               SECTION 6.1 BOOKS OF ACCOUNT. Appropriate books of account shall
be kept by the Management Committee, in accordance with generally accepted
accounting principles, at the principal place of business of the Company, and
each Member shall have access to all books, records and accounts of the Company
and the right to make copies thereof for any purpose reasonably related


                                       33



to the Member's interest as a member of the Company, in each case, under such
conditions and restrictions as the Management Committee may reasonably
prescribe.

               SECTION 6.2    REPORTS.

                     (a)    FINANCIAL STATEMENTS. As promptly as practicable
       after the close of each fiscal year of the Company, the Management
       Committee shall cause an examination of the financial statements of the
       Company as of the end of each such fiscal year to be made in accordance
       with generally accepted auditing standards as in effect on the date
       thereof, by a firm of certified public accountants selected by the
       Management Committee. Within 90 days after the close of each fiscal year,
       a copy of the financial statements of the Company, including the report
       of such certified public accountants, shall be furnished to each
       Unitholder and shall include, as of the end of such fiscal year:

                              (i) a statement prepared by the Company setting
               forth the balance of each Unitholder's Capital Account and the
               amount of that Unitholder's allocable share of the Company's
               items of Net Income or Net Loss and deduction, capital gain and
               loss or credit for such year for each of its Economic Interests;
               and

                              (ii) a balance sheet, a statement of income and
               expense and a statement of changes in cash flows of the Company
               for that fiscal year.

        In addition, the Unitholders shall be supplied with all other Company
        information necessary to enable each Unitholder to prepare its federal,
        state, and local income tax returns.

                     (b)    DETERMINATIONS. All determinations, valuations and
       other matters of judgment required to be made for accounting purposes
       under this Agreement shall be made by the Management Committee and shall
       be conclusive and binding on all Unitholders, their Successors in
       Interest and any other Person, and to the fullest extent permitted by
       law, no such Person shall have the right to an accounting or an appraisal
       of the assets of the Company or any successor thereto; PROVIDED, HOWEVER,
       that with respect to determinations or valuations related to any
       determination of which performance hurdle applies with respect to any
       Company assets distributed in kind, if the holders of a majority of the
       Class B Units disagree in good faith with the Management Committee's
       determination, then such holders through a single representative shall
       promptly notify the Company in writing of such disagreement, in which
       event an independent appraiser, accountant or investment banking firm
       (the "ARBITER") selected by mutual agreement of such holders and the
       Management Committee shall make a determination of the Gross Asset Value
       of the Company assets distributed in kind or other disputed item thereof
       solely by (i) reviewing a single written presentation timely made by each
       of the Company and the representative of such holders setting forth their
       respective resolutions of the dispute and the bases therefor and (ii)
       accepting either such holders' or the Company's proposed resolution of
       the dispute. Promptly following the Company's receipt of such holders'
       written notice of disagreement, the


                                       34



       Company shall make available to such holders all data (including reports
       of employees and outside advisors) relied upon by the Management
       Committee in making its determination. Such holders' and the Company's
       written presentations must be submitted to the Arbiter within 30 days of
       the Arbiter's engagement. The Arbiter shall notify the representative of
       such holders and the Company of its decision within 40 days of its
       engagement. The party whose proposed resolution is not accepted shall pay
       all of the Arbiter's fees and expenses, which in the case of the holders
       shall be limited only to those holders challenging the Management
       Committee determination. If such holders' proposed resolution is
       accepted, the Company also shall pay all of such holders' reasonable
       out-of-pocket fees and expenses (including reasonable fees and expenses
       of counsel and one appraiser, accountant or investment banking firm)
       incurred in connection with the arbitration. Each of the Company and such
       holders agrees to execute, if requested by the Arbiter, a reasonable
       engagement letter with the Arbiter.

               SECTION 6.3 FISCAL YEAR. The fiscal year of the Company shall end
on December 31st of each calendar year unless otherwise determined by the
Management Committee in accordance with Section 706 of the Code.

               SECTION 6.4    CERTAIN TAX MATTERS.

                     (a)    PREPARATION OF RETURNS. The Management Committee
       shall cause to be prepared all federal, state and local tax returns of
       the Company for each year for which such returns are required to be filed
       and shall cause such returns to be timely filed. The Management Committee
       shall determine the appropriate treatment of each item of income, gain,
       loss, deduction and credit of the Company and the accounting methods and
       conventions under the tax laws of the United States, the several states
       and other relevant jurisdictions as to the treatment of any such item or
       any other method or procedure related to the preparation of such tax
       returns. The Management Committee may cause the Company to make or
       refrain from making any and all elections permitted by such tax laws.
       Each Unitholder agrees that it shall not, except as otherwise required by
       applicable law or regulatory requirements, (i) treat, on its individual
       income tax returns, any item of income, gain, loss, deduction or credit
       relating to its interest in the Company in a manner inconsistent with the
       treatment of such item by the Company as reflected on the Form K-1 or
       other information statement furnished by the Company to such Unitholder
       for use in preparing its income tax returns or (ii) file any claim for
       refund relating to any such item based on, or which would result in, such
       inconsistent treatment. In respect of an income tax audit of any tax
       return of the Company, the filing of any amended return or claim for
       refund in connection with any item of income, gain, loss, deduction or
       credit reflected on any tax return of the Company, or any administrative
       or judicial proceedings arising out of or in connection with any such
       audit, amended return, claim for refund or denial of such claim, (A) the
       Tax Matters Member (as defined below) shall be authorized to act for, and
       its decision shall be final and binding upon, the Company and all
       Unitholders except to the extent a Unitholder shall properly elect to be
       excluded from such proceeding pursuant to the Code, (B) all expenses
       incurred by the Tax


                                       35



       Matters Member in connection therewith (including attorneys',
       accountants' and other experts' fees and disbursements) shall be expenses
       of, and payable by, the Company, (C) no Unitholder shall have the right
       to (1) participate in the audit of any Company tax return, (2) file any
       amended return or claim for refund in connection with any item of income,
       gain, loss, deduction or credit (other than items which are not
       partnership items within the meaning of Section 6231(a)(4) of the Code or
       which cease to be partnership items under Section 6231(b) of the Code)
       reflected on any tax return of the Company, (3) participate in any
       administrative or judicial proceedings conducted by the Company or the
       Tax Matters Member arising out of or in connection with any such audit,
       amended return, claim for refund or denial of such claim, or (4) appeal,
       challenge or otherwise protest any adverse findings in any such audit
       conducted by the Company or the Tax Matters Member or with respect to any
       such amended return or claim for refund filed by the Company or the Tax
       Matters Member or in any such administrative or judicial proceedings
       conducted by the Company or the Tax Matters Member and (D) the Tax
       Matters Member shall keep the Unitholders reasonably apprised of the
       status of any such proceeding. Notwithstanding the previous sentence, if
       a petition for a readjustment to any partnership item included in a final
       partnership administrative adjustment is filed with a District Court or
       the Court of Claims and the IRS has elected to assess income tax against
       a Member with respect to that final partnership administrative
       adjustments (rather than suspending assessments until the District Court
       or Court of Claims proceedings become final), such Member shall be
       permitted to file a claim for refund within such period of time to avoid
       application of any statute of limitation provisions which would otherwise
       prevent the Member from having any claim based on the final outcome of
       that review.

                     (b)    TAX MATTERS MEMBER. The Company and each Member
       hereby designate VCP as the "tax matters partner" for purposes of Section
       6231(a)(7) of the Code (the "TAX MATTERS MEMBER").

                     (c)    CERTAIN FILINGS. Upon the sale of Company assets or
       a liquidation of the Company, Unitholders shall provide the Management
       Committee with certain tax filings as reasonably requested by the
       Management Committee and required under applicable law.

                                   ARTICLE VII
                                  MISCELLANEOUS

               SECTION 7.1 SCHEDULES. Without in any way limiting the provisions
of SECTION 6.2, a Representative may from time to time execute on behalf of the
Company and deliver to the Unitholders schedules which set forth the then
current Capital Account balances of each Unitholder and any other matters deemed
appropriate by the Management Committee or required by applicable law. Such
schedules shall be for information purposes only and shall not be deemed to be
part of this Agreement for any purpose whatsoever.


                                       36



               SECTION 7.2 GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY AND
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE,
EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE
OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the
event of a direct conflict between the provisions of this Agreement and any
provision of the Certificate or any mandatory provision of the Act, the
applicable provision of the Certificate or the Act shall control. If any
provision of this Agreement or the application thereof to any Person or
circumstance is held invalid or unenforceable to any extent, the remainder of
this Agreement and the application of that provision to other Persons or
circumstances is not affected thereby and that provision shall be enforced to
the greatest extent permitted by law.

               SECTION 7.3 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective Successors in Interest; PROVIDED that no Person claiming by, through
or under a Member (whether as such Member's Successor in Interest or otherwise),
as distinct from such Member itself, shall have any rights as, or in respect to,
a Member (including the right to approve or vote on any matter or to notice
thereof).

               SECTION 7.4 CONFIDENTIALITY. By executing this Agreement, for
three years from the receipt thereof, each Member expressly agrees to maintain
the confidentiality of, and not to disclose to any Person other than the
Company, another Member or a Person designated by the Company or any of their
respective financial planners, accountants, attorneys or other advisors, any
information relating to the business, financial structure, financial position or
financial results, clients or affairs of the Company that shall not be generally
known to the public, except as otherwise required by law or by any regulatory or
self-regulatory organization having jurisdiction and except in the case of any
Member who is employed by any entity controlled by the Company in the ordinary
course of its duties. Notwithstanding the provisions of this SECTION 7.4 to the
contrary, in the event that either of the 4J2R1C Limited Partnership or the 3J2R
Limited Partnership desires to undertake any transfer of its Membership Interest
pursuant to clause (h)(2) of the definition of Exempt Transfer set forth in the
Securityholders Agreement, such transferring entity may, upon the execution of a
confidentiality agreement (in form reasonably acceptable to the Company's legal
counsel) by any bona fide potential transferee (unless such potential transferee
is a direct competitor of the Company or its Affiliates), disclose to such
potential transferee information of the sort otherwise restricted by this
SECTION 7.4 if either of the 4J2R1C Limited Partnership or the 3J2R Limited
Partnership, as the case may be, reasonably believes such disclosure is
necessary for the purpose of transferring such Membership Interest to the bona
fide potential transferee.

               SECTION 7.5 AMENDMENTS. The Management Committee may, to the
fullest extent allowable under Delaware law, amend or modify this Agreement;
PROVIDED that, if an amendment or modification adversely affects any class of
Members, such class of Members must approve such amendment or modification;
PROVIDED FURTHER that, the Management Committee may amend this Agreement without
the consent of any class of Members in order to provide for the issuance of any
Company units in accordance with SECTION 2.9 hereof and the terms of the
Management Stock


                                       37



Purchase and Unit Subscription Agreements and to make any such other amendments
as it deems necessary or desirable to reflect such additional issuances PROVIDED
that, no such amendment shall adversely affect the relationship among the Class
A Units, Class B Units and Class C Units as set forth herein; PROVIDED FURTHER
that no amendment shall be effective if such amendment results in Units held by
a Member being redesignated to a different class of Unit than the class of which
it is then included, without such Member's consent; and PROVIDED FURTHER that
SECTION 3.8(d) hereof shall not be amended without the written consent of
Marathon.

               SECTION 7.6 NOTICES. Whenever notice is required or permitted by
this Agreement to be given, such notice shall be in writing and shall be given
to any Unitholder at its address or telecopy number shown in the Company's books
and records, or, if given to the Company, at the following address:

               c/o Vestar Capital Partners
               245 Park Avenue
               41st Floor
               New York, New York 10167
               Attention:  General Counsel
               Telecopy: (212) 808-4922

               with a copy to:

               Kirkland & Ellis
               200 East Randolph
               Chicago, IL 60601
               Attention: Stephen L. Ritchie, Esq.
               Telecopy: (312) 861-2200

Each proper notice shall be effective upon any of the following: (i) personal
delivery to the recipient, (ii) when telecopied to the recipient (with hard copy
sent to the recipient by reputable overnight courier service that same day or
the next business day (charges prepaid)), (iii) one business day after being
sent to the recipient by reputable overnight courier service (charges prepaid)
or (iv) two business days after being deposited in the mails (first class or
airmail postage prepaid).

               SECTION 7.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts (including by means of telecopied signature pages), all
of which together shall constitute a single instrument.

               SECTION 7.8 POWER OF ATTORNEY. Each Member hereby irrevocably
appoints each Representative as such Member's true and lawful representative and
attorney-in-fact, each acting alone, in such Member's name, place and stead, (i)
to make, execute, sign and file all instruments, documents and certificates
which, from time to time, may be required to set forth any amendment to this
Agreement or which may be required by this Agreement or by the laws of the
United States


                                       38



of America, the State of Delaware or any other state in which the Company shall
determine to do business, or any political subdivision or agency thereof and
(ii) to execute, implement and continue the valid and subsisting existence of
the Company or to qualify and continue the Company as a foreign limited
liability company in all jurisdictions in which the Company may conduct
business. The chief executive officer, as representative and attorney-in-fact,
however, shall not have any rights, powers or authority to amend or modify this
Agreement when acting in such capacity, except as expressly provided herein.
Such power of attorney is coupled with an interest and shall survive and
continue in full force and effect notwithstanding the subsequent withdrawal from
the Company of any Member for any reason and shall survive and shall not be
affected by the disability or incapacity of such Member.

               SECTION 7.9 ENTIRE AGREEMENT. This Agreement amends, restates and
supersedes in its entirety the Original Agreement. This Agreement and the other
documents and agreements referred to herein or entered into concurrently
herewith embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein; PROVIDED that, such other
agreements and documents shall not be deemed to be a part of, a modification of
or an amendment to this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

               SECTION 7.10 SECTION TITLES. Section titles and headings are for
descriptive purposes only and shall not control or alter the meaning of this
Agreement as set forth in the text hereof.


                                       39



               IN WITNESS WHEREOF, the parties have executed this Amended and
Restated Limited Liability Company Agreement as of the day and year first above
written.

                                  VESTAR CAPITAL PARTNERS IV, L.P.

                                  By:     Vestar Associates IV, L.P.,
                                          its General Partner

                                  By:     Vestar Associates Corporation IV,
                                          its General Partner

                                  By:
                                     ---------------------------------------
                                  Name:
                                  Title:  Managing Director

                                  VESTAR/MICHAEL, LLC

                                  By:
                                     ---------------------------------------
                                  Name:
                                  Title:

                                  MARATHON FUND LIMITED PARTNERSHIP IV

                                  By:     Miltiades, LLC
                                  Its     Sole General Partner

                                  By:
                                     ---------------------------------------
                                  Name:
                                       -------------------------------------
                                  Its:    Authorized Member

                                  4J2R1C LIMITED PARTNERSHIP

                                  By:
                                     ---------------------------------------
                                  Its:
                                      --------------------------------------
                                  By:
                                     ---------------------------------------
                                  Its:
                                      --------------------------------------


                                  3J2R LIMITED PARTNERSHIP

                                  By:
                                     ---------------------------------------





                                  Its:
                                      --------------------------------------
                                  By:
                                     ---------------------------------------
                                  Its:
                                     ---------------------------------------

                                  ------------------------------------------
                                  Gregg A. Ostrander

                                  -------------------------------------------
                                  John D. Reedy

                                  -------------------------------------------
                                  Bill L. Goucher

                                  -------------------------------------------
                                  James D. Clarkson

                                  -------------------------------------------
                                  Bradley L. Cook

                                  -------------------------------------------
                                  Max R. Hoffmann

                                  -------------------------------------------
                                  James Mohr

                                  -------------------------------------------
                                  Harold D. Sprinkle


                 [End of Signature Page to Amended and Restated
                      Limited Liability Company Agreement]





SCHEDULE A (INVESTORS)



                                                CLASS A UNITS Class B Units     Class C Units
                                            ----------------- -------------------------------------
                                                                             
Vestar Capital Partners IV, L.P.                 1,364,976.81              -                   -
c/o Vestar Capital Partners
245 Park Avenue, 41st Floor
New York, NY 10167
Attn: General Counsel

Vestar/Michael, LLC                                 35,023.19              -                   -
c/o Vestar Capital Partners
245 Park Avenue, 41st Floor
New York, NY 10167
Attn: General Counsel

Marathon Fund Limited Partnership IV               350,000.00              -                   -
c/o Goldner Hawn Johnson & Morrison
Incorporated
5250 Wells Fargo Center
Minneapolis, MN 55402-4123
Attn: John L. Morrison/Michael T. Sweeney

4J2R1C Limited Partnership                         195,650.00              -                   -
c/o Jeffrey Michael
10851 Louisiana Avenue South
Bloomington, MN 55438

3J2R Limited Partnership                           188,125.00              -                   -
c/o Jeffrey Michael
10851 Louisiana Avenue South
Bloomington, MN 55438

Gregg A. Ostrander                                          -       42,000.00           42,000.00
21520 Fairview Street
Greenwood, MN 55331

John D. Reedy                                               -       15,000.00           15,000.00
7262 Gordon Drive
Eden Prairie, MN 55346

Bill L. Goucher                                             -       15,000.00           15,000.00
3060 Quinwood Lane N.
Plymouth, MN 55441

James D. Clarkson                                           -       12,000.00           12,000.00
18783 Pines Way
Eden Prairie, MN 55347

Bradley L. Cook                                             -        4,000.00            4,000.00
18230 Bearpath Trail
Eden Prairie, MN 55347

Max R. Hoffman                                         921.83        3,078.17            4,000.00
14520 Wellington Road
Wayzata, MN 55391






                                                                            
James Mohr                                                  -        4,000.00            4,000.00
5288 River Oak Drive
Savage, MN 55378

Harold D. Sprinkle                                          -        4,000.00            4,000.00
4705 Settler's Court
Medina, MN 55340
- ----------------------------------------------------------------------------------------------------


TOTALS                                           2,134,696.83       99,078.17          100,000.00
- ----------------------------------------------------------------------------------------------------







EXHIBIT I (INVESTORS)



                                                    INITIAL CAPITAL CONTRIBUTION
                                           -------------------------------------
                                                   
Vestar Capital Partners IV, L.P.                       $136,194,519.85

Vestar/Michael, LLC                                    $  3,494,540.46

Marathon Fund Limited Partnership IV                   $ 34,922,265.08

4J2R1C Limited Partnership                             $ 19,521,546.18

3J2R Limited Partnership                               $ 18,770,717.48

Gregg A. Ostrander                                      $   167,626.87
21520 Fairview Street
Greenwood, MN 55331

John D. Reedy                                           $    59,866.74
7262 Gordon Drive
Eden Prairie, MN 55346

Bill L. Goucher                                         $    59,866.74
3060 Quinwood Lane N.
Plymouth, MN 55441

James D. Clarkson                                       $    47,893.39
18783 Pines Way
Eden Prairie, MN 55347

Bradley L. Cook                                         $    15,964.46
18230 Bearpath Trail
Eden Prairie, MN 55347

Max R. Hoffman                                          $   106,102.83
14520 Wellington Road
Wayzata, MN 55391

James Mohr                                              $    15,964.46
5288 River Oak Drive
Savage, MN 55378

Harold D. Sprinkle                                      $    15,964.46
4705 Settler's Court
Medina, MN 55340
- ----------------------------------------------------------------------


TOTALS                                                 $213,392,839.00
- ----------------------------------------------------------------------

EX-10.14

                                                                  Exhibit 10.14

================================================================================

                                                                [Execution Copy]

                            SECURITYHOLDERS AGREEMENT

                              Dated April 10, 2001

                                      Among

                           M-FOODS DAIRY HOLDINGS, LLC

                                       AND

                            THE OTHER PARTIES HERETO

================================================================================


                               Table of Contents

                                                                          Page

ARTICLE I
      REPRESENTATIONS AND WARRANTIES OF THE PARTIES..........................1
      1.1   Representations and Warranties of the Company....................1
      1.2   Representations and Warranties of the Securityholders............2

ARTICLE II
      VOTING AGREEMENTS......................................................2
      2.1   Election of Management Committee Members and Directors...........2
      2.2   Other Voting Matters.............................................3

ARTICLE III
      TRANSFERS OF SECURITIES................................................4
      3.1   Restrictions on Transfer of Securities...........................4
      3.2   Restrictions on Transfers of Vestar Securities...................4
      3.3   Securities Act Compliance........................................7
      3.4   Certain Transferees Bound by Agreement...........................7
      3.5   Transfers in Violation of Agreement..............................7

ARTICLE IV
      TAKE-ALONG RIGHTS ON APPROVED SALE.....................................8
      4.1   Take-Along Rights................................................8

ARTICLE V
      REGISTRATION RIGHTS....................................................9
      5.1   Demand Registrations.............................................9
      5.2   Incidental Registration.........................................11
      5.3   Holdback Agreements.............................................13
      5.4   Registration Procedures.........................................14
      5.5   Registration Expenses...........................................17
      5.6   Indemnification; Contribution...................................17
      5.7   Rule 144........................................................20
      5.8   Underwritten Registrations......................................20
      5.9   No Inconsistent Agreements......................................20

ARTICLE VI
      PRE-EMPTIVE RIGHTS....................................................20
      6.1   Issuance of New Securities to Affiliates........................20

ARTICLE VII
      AMENDMENT AND TERMINATION.............................................22
      7.1   Amendment and Waiver............................................22


                                       -i-


      7.2   Termination of Certain Provisions...............................22
      7.3   Termination of Agreement........................................22
      7.4   Termination as to a Party.......................................23

ARTICLE VIII
      MISCELLANEOUS.........................................................23
      8.1   Certain Defined Terms...........................................23
      8.2   Legends.........................................................29
      8.3   Severability....................................................30
      8.4   Entire Agreement................................................31
      8.5   Successors and Assigns..........................................31
      8.6   Counterparts....................................................31
      8.7   Remedies........................................................31
      8.8   Notices.........................................................31
      8.9   Governing Law...................................................33
      8.10  Descriptive Headings............................................33


                                      -ii-


                            SECURITYHOLDERS AGREEMENT

            THIS SECURITYHOLDERS AGREEMENT (this "Agreement") is entered into as
of April 10, 2001 by and among (i) M-Foods Dairy Holdings, LLC, a Delaware
limited liability company (the "Company"), (ii) Vestar Capital Partners IV,
L.P., a Delaware limited partnership, Vestar/Michael, LLC, a Delaware limited
liability company, and any other investment fund managed by Vestar Capital
Partners that at any time acquires Securities and executes a counterpart of this
Agreement or otherwise agrees to be bound by this Agreement (collectively,
"Vestar"), (iii) Marathon Dairy Investment Corp., a Minnesota corporation
("Marathon"), (iv) the Michael Family Securityholders (as defined herein), (v)
the initial parties to this Agreement who are identified as Employees on the
signature pages hereto (each, an "Employee," collectively, the "Employees"), and
(vi) each other holder of Securities who hereafter executes a separate agreement
to be bound by the terms hereof (which holder (unless such holder is an employee
of the Company or its Affiliates in which case such holder, after executing a
separate agreement to be bound by the terms hereof, shall be treated as a holder
of Employee Securities hereunder) shall be treated similar to a holder of
Marathon Securities except that such holder shall not be entitled to demand
registration rights) (Vestar, Marathon, the Michael Family Securityholders, the
Employees and each other Person that is or may become a party to this Agreement
as contemplated hereby are sometimes referred to herein collectively as the
"Securityholders" and individually as a "Securityholder"). Certain capitalized
terms used herein are defined in Section 8.1.

            The parties hereto agree as follows:

                                    ARTICLE I
                  REPRESENTATIONS AND WARRANTIES OF THE PARTIES

            1.1 Representations and Warranties of the Company. The Company
hereby represents and warrants to the Securityholders that as of the date of
this Agreement:

            (a) it is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, it has
full power and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby, and the execution, delivery and
performance by it of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary limited liability
company action;

            (b) this Agreement has been duly and validly executed and delivered
by the Company and constitutes a legal and binding obligation of the Company,
enforceable against the Company in accordance with its terms; and

            (c) the execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
hereby will not, with or without the giving of notice or lapse of time, or both
(i) violate any provision of law, statute, rule or regulation to which the
Company is subject, (ii) violate any order, judgment or decree applicable to the
Company or (iii) conflict with, or result in a breach or default under, any term
or condition of the


Company's organizational documents or any agreement or instrument to which the
Company is a party or by which it is bound.

            1.2 Representations and Warranties of the Securityholders. Each
Securityholder (as to himself or itself only) represents and warrants to the
Company and the other Securityholders that, as of the time such Securityholder
becomes a party to this Agreement:

            (a) this Agreement (or the separate joinder agreement executed by
such Securityholder) has been duly and validly executed and delivered by such
Securityholder, and this Agreement constitutes a legal and binding obligation of
such Securityholder, enforceable against such Securityholder in accordance with
its terms; and

            (b) the execution, delivery and performance by such Securityholder
of this Agreement (or any joinder to this Agreement, if applicable) and the
consummation by such Securityholder of the transactions contemplated hereby (and
thereby, if applicable) will not, with or without the giving of notice or lapse
of time, or both, (i) violate any provision of law, statute, rule or regulation
to which such Securityholder is subject, (ii) violate any order, judgment or
decree applicable to such Securityholder or (iii) conflict with, or result in a
breach or default under, any term or condition of any agreement or other
instrument to which such Securityholder is a party or by which such
Securityholder is bound.

                                   ARTICLE II
                                VOTING AGREEMENTS

            2.1 Election of Management Committee Members and Directors.

            (a) Each Person, other than the Company, that is a party to this
Agreement hereby agrees that such Person will vote, or cause to be voted, all
voting securities of the Company over which such Person has the power to vote or
direct the voting, and will take all other necessary or desirable action within
such Person's control, and the Company will take all necessary and desirable
actions within its control, to cause the authorized number of members or
directors for each of the respective management committees or boards of
directors of the Company and its Subsidiaries to be established at up to nine
directors, and to elect or cause to be elected to the respective management
committees or boards of directors of the Company and each of its Subsidiaries
and cause to be continued in office, the following individuals:

            (i)   up to five (5) members/directors designated by the Vestar
                  Majority Holders (the "Vestar Directors");

            (ii)  one (1) member/director designated by the Marathon Majority
                  Holders (the "Marathon Director");

            (iii) one (1) member/director designated by the Michael Family
                  Majority Holders (the "Michael Family Director");


                                      -2-


            (iv)  one (1) member/director, who shall be the chief executive
                  officer of the Company (the "Management Director"); and

            (v)   one (1) member/director designated by the chief executive
                  officer of the Company; provided that such member/director is
                  not a member, or former member, of the Company's or its
                  Subsidiaries' management or an employee or officer or former
                  employee or officer of the Company or its Subsidiaries (the
                  "CEO Designated Director").

            (b) If at any time either the Vestar Majority Holders, the Marathon
Majority Holders, the Michael Family Majority Holders or the chief executive
officer of the Company, as the case may be, shall notify the other parties to
this Agreement of their desire to remove, with or without cause, any individual
from a Company or Subsidiary membership/directorship for which such Person or
Persons have designation rights pursuant to paragraph (a) above, all such
parties so notified will vote, or cause to be voted, all voting securities of
the Company and its Subsidiaries over which they have the power to vote or
direct the voting, and shall take all such other actions promptly as shall be
necessary or desirable to cause the removal of such member/director. If the
Management Director ceases to be employed by the Company or its Subsidiaries,
such Management Director and the CEO Designated Director shall be removed
promptly after such time from each board and management committee.

            (c) If at any time any Vestar Director, the Marathon Director, the
Michael Family Director or the CEO Designated Director ceases to serve on the
management committee or board of directors of the Company or any Subsidiary of
the Company (whether due to resignation, removal or otherwise), the
Securityholders entitled to designate the Vestar Directors, the Marathon
Director, the Michael Family Director or the CEO Designated Director as
appropriate, shall be entitled to designate a successor member/director to fill
the vacancy created thereby on the terms and subject to the conditions of
paragraph (a) above. Each Person that is a party hereto agrees to vote, or cause
to be voted, all voting securities of the Company and its Subsidiaries over
which such Person has the power to vote or direct the voting, and shall take all
such other actions as shall be necessary or desirable to cause the designated
successor to be elected to fill such vacancy.

            (d) Nothing in this Agreement shall be construed to impair any
rights that the unitholders or stockholders of the Company or any Subsidiary of
the Company may have to remove any director for cause under applicable law, the
LLC Agreement of the Company or the organizational documents of such Subsidiary,
as the case may be. No such removal of an individual designated pursuant to this
Section 2.1 for cause shall affect any of the Securityholders' rights to
designate a different individual pursuant to this Section 2.1 to fill the
position from which such individual was removed.

            (e) Subject to Section 7.2, the provisions of this Section 2.1 shall
remain in effect following the first Public Offering.

            2.2 Other Voting Matters. In order to effectuate the provisions of
Sections 2.1, 2.2 and 4.1, each holder of Employee Securities hereby grants to
Gregg A. Ostrander, or if Gregg A. Ostrander shall cease to be the chief
executive officer of Michael Foods, Inc., to his successor in


                                      -3-


such position with Michael Foods, Inc., or if the chief executive officer of
Michael Foods, Inc. shall be unable to exercise this proxy due to illness or
absence or if the position of chief executive officer of Michael Foods, Inc.
shall be vacant, to the chief financial officer of Michael Foods, Inc., a proxy
to vote at any annual or special meeting of Securityholders, or to take any
action by written consent in lieu of such meeting with respect to, or to
otherwise take action in respect of, all of the Securities owned or held of
record by such holder in connection with the matters set forth in Sections 2.1
and 2.2 in accordance with the provisions of Sections 2.1 and 2.2. EACH OF THE
PROXIES GRANTED HEREBY IS IRREVOCABLE AND IS COUPLED WITH AN INTEREST. To
effectuate the provisions of this Section 2, the secretary of each of the
Company and each Subsidiary of the Company, or if there be no secretary such
other officer or employee of the Company or such Subsidiary as the management
committee or board of directors of the Company or such Subsidiary may appoint to
fulfill the duties of the Secretary, shall not record any vote or consent or
other action contrary to the terms of this Section 2.

                                   ARTICLE III
                             TRANSFERS OF SECURITIES

            3.1 Restrictions on Transfer of Securities. Prior to the completion
of the Company's first Public Offering, no holder of Marathon Securities,
Michael Family Securities or Employee Securities may Transfer any Marathon
Securities, Michael Family Securities or Employee Securities, as the case may
be, except in an Exempt Transfer or otherwise provided by this Agreement.

            3.2 Restrictions on Transfers of Vestar Securities.

            (a) Tag-Along Rights. Prior to making any Transfer of Vestar
Securities (other than a Transfer described in Section 3.2(b)) any holder of
Vestar Securities proposing to make such a Transfer (for purposes of this
Section 3.2, a "Selling Holder") shall give at least 30 days prior written
notice to each holder of Marathon Securities, Michael Family Securities and
Employee Securities (for purposes of this Section 3.2, each an "Other Holder")
and the Company, which notice (for purposes of this Section 3.2, the "Sale
Notice") shall identify the type and amount of Vestar Securities to be sold (for
purposes of this Section 3.2, the "Offered Securities"), describe in reasonable
detail the terms and conditions of such proposed Transfer and identify each
prospective Transferee. Any of the Other Holders may, within 15 days of the
receipt of the Sale Notice, give written notice (each, a "Tag-Along Notice") to
the Selling Holder that such Other Holder wishes to participate in such proposed
Transfer upon the terms and conditions set forth in the Sale Notice, which
Tag-Along Notice shall specify the Marathon Securities, Michael Family
Securities and Employee Securities such Other Holder desires to include in such
proposed Transfer; provided, however, that (1) each Other Holder shall be
required, as a condition to being permitted to sell Marathon Securities, Michael
Family Securities and Employee Securities pursuant to this Section 3.2(a) in
connection with a Transfer of Offered Securities, to elect to sell Marathon
Securities, Michael Family Securities and Employee Securities of the same type
and class and in the same relative proportions (which proportions shall be
determined on a unit for unit or, as the case may be, share for share basis and
on the basis of aggregate liquidation value with respect to Preferred Units or
Stock) as the Securities which comprise the Offered Securities, (2) no Employee
Security


                                      -4-


that is subject to vesting shall be entitled to be sold pursuant to this Section
3.2(a) unless such Employee Security has fully vested and (3) to exercise its
tag-along rights hereunder, each Other Holder must agree to make to the
Transferee the same representations, warranties, covenants, indemnities and
agreements as the Selling Holder agrees to make in connection with the Transfer
of the Offered Securities (except that in the case of representations and
warranties pertaining specifically to, or covenants made specifically by, the
Selling Holder, the Other Holders shall make comparable representations and
warranties pertaining specifically to (and, as applicable, covenants by)
themselves), and must agree to bear his or its ratable share (which shall be
proportionate based on the value of Securities that are Transferred but shall
not exceed the amount of proceeds received in connection with such Transfer) of
all liabilities to the Transferees arising out of representations, warranties
and covenants (other than those representations, warranties and covenants that
pertain specifically to a given Securityholder, who shall bear all of the
liability related thereto), indemnities or other agreements made in connection
with the Transfer. Each Securityholder will bear (x) its or his own costs of any
sale of Securities pursuant to this Section 3.2(a) and (y) its or his pro-rata
share (based upon the relative amount of Securities sold) of any of the other
costs of any reasonable and customary sale of Securities pursuant to this
Section 3.2(a) to the extent such costs are incurred for the benefit of all
Securityholders and are not otherwise paid by the Transferee.

            If none of the Other Holders gives the Selling Holder a Tag-Along
Notice prior to the expiration of the 15-day period for giving Tag-Along notices
with respect to the Transfer proposed in the Sale Notice, then (notwithstanding
the first sentence of this Section 3.2(a)) the Selling Holder may Transfer such
Offered Securities on the terms and conditions set forth, and to or among any of
the Transferees identified (or Affiliates of Transferees identified), in the
Sale Notice at any time within 180 days after expiration of the 15-day period
for giving Tag-Along Notices with respect to such Transfer. Any such Offered
Securities not Transferred by the Selling Holder during such 180-day period
will again be subject to the provisions of this Section 3.2(a) upon subsequent
Transfer. If one or more Other Holders give the Selling Holder a timely
Tag-Along Notice, then the Selling Holder shall use all reasonable efforts to
obtain the agreement of the prospective Transferee(s) to the participation of
the Other Holders in any contemplated Transfer, on the same terms and conditions
as are applicable to the Offered Securities, and no Selling Holder shall
transfer any of its shares to any prospective Transferee if such prospective
Transferee(s) declines to allow the participation of the Other Holders. If the
prospective Transferee(s) is unwilling or unable to acquire all of the Offered
Securities and all of the Marathon Securities, Michael Family Securities and
Employee Securities specified in a timely Tag-Along Notice upon such terms, then
the Selling Holder may elect either to cancel such proposed Transfer or to
allocate the maximum number of each class of Securities that the prospective
Transferees are willing to purchase (the "Allocable Shares") among the Selling
Holder and the Other Holders giving timely Tag-Along Notices as follows (it
being understood that the prospective Transferees shall be required to purchase
Securities of the same class on the same terms and conditions taking into
account the provisions of clause (1) of the first paragraph of this Section
3.2(a), and to consummate such Transfer on those terms and conditions):

            (i)   each participating Securityholder (including the Selling
                  Holder) shall be entitled to sell a number of shares of each
                  class of Securities (taking into account the provisions of
                  clause (1) of the first paragraph of this Section 3.2(a)) (not
                  to exceed, for any Other Holder, the number of shares of such
                  class of Securities identified in such Other Holder's
                  Tag-Along Notice) equal


                                      -5-


                  to the product of (A) the number of Allocable Shares of such
                  class of Securities and (B) a fraction, the numerator of which
                  is such Securityholder's Ownership Percentage of such class of
                  Securities and the denominator of which is the aggregate
                  Ownership Percentage for all participating Securityholders of
                  such class of Securities; and

            (ii)  if after allocating the Allocable Shares of any class of
                  Securities to such Securityholders in accordance with clause
                  (i) above, there are any Allocable Shares of such class that
                  remain unallocated, then they shall be allocated (in one or
                  more successive allocations on the basis of the allocation
                  method specified in clause (i) above) among the Selling Holder
                  and each such Other Holder that has elected in its Tag-Along
                  Notice to sell a greater number of shares of such class of
                  Securities than previously has been allocated to it pursuant
                  to clause (i) and this clause (ii) (all of whom (but no
                  others) shall, for purposes of clause (i) above, be deemed to
                  be the participating Securityholders) until all such Allocable
                  Shares have been allocated in accordance with this clause
                  (ii).

            (b) Excluded Transfers. The rights and restrictions contained in
Section 3.2(a) shall not apply with respect to any of the following Transfers of
Securities:

            (i)   any Transfer of Vestar Securities in a Public Sale;

            (ii)  any Transfer of Vestar Securities to and among the partners of
                  Vestar and the partners, securityholders and employees of such
                  partners (subject to compliance with Sections 3.3 and 3.4);

            (iii) any Transfer of Vestar Securities in accordance with Section
                  4.1;

            (iv)  any Transfer of Vestar Securities incidental to the exercise,
                  conversion or exchange of such securities in accordance with
                  their terms, any combination of shares (including any reverse
                  stock split) or any recapitalization, reorganization or
                  reclassification of, or any merger or consolidation involving,
                  the Company;

            (v)   any Transfer of Vestar Securities to employees or directors
                  of, or consultants to, any of the Company and its
                  Subsidiaries; and

            (vi)  any Transfer constituting an Exempt Individual Transfer.

            (c) Excluded Securities. No Securities that have been transferred by
the Selling Holder or an Other Holder in a Transfer pursuant to the provisions
of Section 3.2(a) ("Excluded Securities") shall be subject again to the
restrictions set forth in Section 3.2(a), nor shall any Securityholder holding
Excluded Securities be entitled to exercise any rights as an Other Holder under
Section 3.2(a) with respect to such Excluded Securities, and no Excluded
Securities held by


                                      -6-


a Selling Holder or any Other Holder shall be counted in determining the
respective participation rights of such Holders in a Transfer subject to Section
3.2(a).

            (d) Upon the occurrence of any event which gives rise to a
Securityholder's ability or requirement to transfer (including by operation of
law) such Securityholder's interests in the Company or a Subsidiary of the
Company to a third party in exchange for consideration pursuant to this
Agreement, at the election of such Securityholder, the Company shall take, and
shall cause its Subsidiaries to take, all actions necessary to convert
Securities then held by such Securityholder into the appropriate type of
security to permit the Securityholder to transfer such Securities to such third
party.

            (e) The provisions of this Section 3.2 shall remain in effect
following the first Public Offering.

            3.3 Securities Act Compliance. No Securities may be transferred by a
Securityholder (other than pursuant to an effective registration statement under
the Securities Act) unless such Securityholder first delivers to the Company an
opinion of counsel, which opinion and counsel shall be reasonably satisfactory
to the Company, to the effect that such Transfer is not required to be
registered under the Securities Act.

            3.4 Certain Transferees Bound by Agreement. Subject to compliance
with the other provisions of this Article III, any Securityholder may Transfer
any Securities held by such Securityholder in accordance with applicable law;
provided, however, that if the Transfer is not made pursuant to a Public Sale or
a transaction the consummation of which will cause the termination of this
Agreement pursuant to Article VII, then the Transferor of such Security shall
first deliver to the Company a written agreement of the proposed Transferee
(excluding a Transferee that is a Limited Partner) to become a Securityholder
and to be bound by the terms of this Agreement (unless such proposed Transferee
is already a Securityholder). All Marathon Securities, Michael Family Securities
and Employee Securities will continue to be Marathon Securities, Michael Family
Securities and Employee Securities in the hands of any Transferee (other than
the Company, Vestar or any Transferee in a Public Sale); provided that Marathon
Securities, Michael Family Securities and Employee Securities Transferred
pursuant to an exercise of tag-along rights as an Other Holder under Section
3.2(a) shall not be subject to the provisions of Section 3.1 in the hands of the
Transferee or any subsequent Transferee. All Vestar Securities will continue to
be Vestar Securities in the hands of any Transferee (other than the Company,
Marathon, the Michael Family Securityholders, the Employees or a Transferee in a
Public Sale).

            3.5 Transfers in Violation of Agreement. Any Transfer or attempted
Transfer of any Securities in violation of any provision of this Agreement shall
be void, and the Company shall not record such Transfer on its books or treat
any purported transferee of such Securities as the owner of such Securities for
any purpose.


                                      -7-


                                   ARTICLE IV
                       TAKE-ALONG RIGHTS ON APPROVED SALE

            4.1 Take-Along Rights.

            (a) If Vestar elects to consummate, or to cause the Company to
consummate, a transaction constituting a Sale of the Company, Vestar shall
notify the Company and the other Securityholders in writing of that election,
the other Securityholders will consent to and raise no objections to the
proposed transaction, and the Securityholders and the Company will take all
other actions reasonably necessary or desirable to cause the consummation of
such Sale of the Company on the terms proposed by Vestar. Without limiting the
foregoing, (i) if the proposed Sale of the Company is structured as a sale of
assets or a merger or consolidation, or otherwise requires equityholder
approval, the Securityholders and the Company will vote or cause to be voted all
Securities that they hold or with respect to which such Securityholder has the
power to direct the voting and which are entitled to vote on such transaction in
favor of such transaction and will waive any appraisal rights which they may
have in connection therewith and (ii) if the proposed Sale of the Company is
structured as or involves a sale or redemption of Securities, the
Securityholders will agree to sell their pro-rata share of the Securities being
sold in such Sale of the Company on the terms and conditions approved by Vestar,
and the Securityholders will execute any merger, asset purchase, security
purchase, recapitalization or other sale agreement approved by Vestar in
connection with such Sale of the Company.

            (b) The obligations of the Securityholders with respect to the Sale
of the Company are subject to the satisfaction of the following conditions: (i)
upon the consummation of the Sale of the Company, all of the holders of a
particular class or series of Securities shall receive the same form and amount
of consideration per share, unit or amount of Securities, or if any holders of a
particular class or series of Securities are given an option as to the form and
amount of consideration to be received, all holders of such class or series will
be given the same option and (ii) all holders of rights without regard to
vesting or exercise restrictions to acquire a particular class or series of
Securities will be given an opportunity to either (A) exercise such rights prior
to the consummation of the Sale of the Company and participate in such sale as
holders of such Securities or (B) upon the consummation of the Sale of the
Company, receive in exchange for such rights consideration equal to the amount
determined by multiplying (1) the same amount of consideration per share, unit
or amount of Securities received by the holders of such type and class of
Securities in connection with the Sale of the Company less the exercise price
per share, unit or amount of such rights to acquire such Securities by (2) the
number of shares, units or aggregate amount of Securities represented by such
rights.

            (c) Each Securityholder will bear its or his pro-rata share (based
upon the relative amount of Securities sold) of the reasonable and customary
costs of any sale of Securities pursuant to a Sale of the Company to the extent
such costs are incurred for the benefit of all Securityholders and are not
otherwise paid by the Company or the acquiring party (it being understood that
the reasonable and documented legal fees of one counsel for the holders of
Employee Securities up to a cap as determined by the Company's management
committee prior to the Sale of the Company shall be deemed costs for the benefit
of all Securityholders). Costs incurred by or on behalf of a Securityholder for
its or his sole benefit will not be considered costs of the transaction
hereunder.


                                      -8-


In the event that any transaction that Vestar elects to consummate or cause to
be consummated pursuant to this Section 4.1 is not consummated for any reason,
the Company will reimburse Vestar for all actual and reasonable expenses paid or
incurred by Vestar in connection therewith.

            (d) Notwithstanding any provision in this Agreement to the contrary,
Vestar Capital Partners shall be entitled to be paid customary and reasonable
fees by the Company for any investment banking services provided by it in
connection with a Sale of the Company. The provisions of this Section 4.1 shall
remain in effect following the first Public Offering.

            (e) In the event of a sale or exchange by the Securityholders of all
or substantially all of the Securities held by the Securityholders (whether by
sale, merger, recapitalization, reorganization, consolidation, combination or
otherwise), each Securityholder shall receive in exchange for the Securities
held by such Securityholder the same portion of the aggregate consideration from
such sale or exchange that such Securityholder would have received if such
aggregate consideration had been distributed by the Company in complete
liquidation pursuant to the rights and preferences set forth in the LLC
Agreement as in effect immediately prior to such sale or exchange. Each
Securityholder shall take all necessary or desirable actions in connection with
the distribution of the aggregate consideration from such sale or exchange as
requested by the Company.

                                    ARTICLE V
                               REGISTRATION RIGHTS

            5.1 Demand Registrations.

            (a) Requests for Registration. Subject to the provisions of this
Article V, the holders of a majority of Vestar Securities that constitute
Registrable Securities shall have the right (the "Vestar Demand Right"), the
holders of a majority of Marathon Securities that constitute Registrable
Securities shall have the right (the "Marathon Demand Right") and the holders of
a majority of Michael Family Securities that constitute Registrable Securities
shall have the right (the "Michael Family Demand Right"), in each case, to
request registration under the Securities Act of all or any portion of the
Registrable Securities held by such Securityholders (in each case, referred to
herein as the "Requesting Holders") by delivering a written notice to the
principal business office of the Company, which notice identifies the Requesting
Holders and specifies the number of Registrable Securities to be included in
such registration (the "Registration Request"). Subject to the restrictions set
forth in Section 5.1(d), the Company will give prompt written notice of such
Registration Request (the "Registration Notice") to all other holders of
Registrable Securities and will thereupon use its commercially reasonable
efforts to effect the registration (a "Demand Registration") under the
Securities Act on any form available to the Company of:

            (i)   the Registrable Securities requested to be registered by the
                  Requesting Holders;

            (ii)  all other Registrable Securities of the same type and class
                  which the Company has received a written request to register
                  within 30 days after the


                                      -9-


                  Registration Notice is given and any securities of the Company
                  proposed to be included in such registration by the Company
                  for its own account; and

            (iii) any securities of the Company proposed to be included in such
                  registration by the holders of registration rights granted
                  other than pursuant to this Agreement ("Other Registration
                  Rights").

            (b) Preservation of Demand Registration. A registration undertaken
by the Company at the request of the Requesting Holder will not count as a
Demand Registration:

            (i)   if, pursuant to the Vestar Demand Right, the Marathon Demand
                  Right or the Michael Family Demand Right the Requesting
                  Holders fail to register and sell at least 75% of the
                  Registrable Securities requested to be included in such
                  registration by them, unless such failure results from any act
                  of, or failure to act by, any of the Requesting Holders
                  (provided that if the Requesting Holders withdraw their
                  Registration Request prior to the time the registration
                  statement therefor is declared effective and promptly
                  reimburse the Company for all Registration Expenses incurred
                  by the Company in connection with effecting such registration,
                  such Registration Request shall not count as a Demand
                  Registration); or

            (ii)  if the Requesting Holders withdraw a Registration Request (A)
                  upon the determination of the management committee or, as the
                  case may be, board of directors of the Company to postpone the
                  filing or effectiveness of a Registration Statement pursuant
                  to Section 5.1(d) or (B) within 10 days of receiving notice
                  from the Company of its intent to exercise its Priority Right
                  in connection with such registration.

            (c) Priority on Demand Registration. If the sole or managing
underwriter of a Demand Registration advises the Company in writing that in its
opinion the number of Registrable Securities and other securities requested to
be included exceeds the number of Registrable Securities and other securities
which can be sold in such offering without adversely affecting the distribution
of the securities being offered, the price that will be paid in such offering or
the marketability thereof, the Company will include in such registration the
greatest number of (i) Registrable Securities proposed to be registered by the
holders thereof, (ii) securities having Other Registration Rights that are pari
passu with the demand rights granted in respect of Registrable Securities
hereunder proposed to be registered by the holders thereof and (iii) securities
proposed to be registered by the Company for its own account which in the
opinion of such underwriters can be sold in such offering without adversely
affecting the distribution of the securities being offered, the price that will
be paid in such offering or the marketability thereof, ratably among the holders
of Registrable Securities, the holders of such Other Registration Rights and the
Company, based (A) as between the Company and such holders requesting
registration, on the respective amounts of securities requested to be registered
and (B) as among the holders requesting registration, on the respective amounts
of Registrable Securities (whether requested to be registered pursuant to
Section 5.1 or 5.2) and securities subject to such Other Registration Rights, as
the case may be, held by each such holder; provided, however, that the Company
shall have the right (the "Priority Right") to


                                      -10-


receive priority over all holders of Registrable Securities in any Demand
Registration to be effected under this Section 5.1 with respect to securities
that the Company proposes to include in such registration for its own account by
giving written notice of its election to exercise such Priority Right to the
holders of Registrable Securities requesting registration thereof.

            (d) Restrictions on Demand Registrations. Except as otherwise
provided in this Section 5.1(d), the Company shall be obligated to effect four
Demand Registrations pursuant to a Vestar Demand Right. The Company shall not be
obligated to effect a Marathon Demand Right or a Michael Family Demand Right
until after the Company's first Public Offering. Thereafter, the Company shall
be obligated to effect two Marathon Demand Rights and two Michael Family Demand
Rights. Any Demand Registration requested must be for a firmly underwritten
public offering of Registrable Securities with an expected value of at least $15
million to be managed by an underwriter or underwriters of recognized national
standing selected by the Requesting Holders and reasonably acceptable to the
Company. The Company shall not be obligated to effect a Demand Registration if
after a request is made, the Company has determined in good faith that the
filing of a registration request would require disclosure of material
information which the Company has a bona fide business purpose for preserving as
confidential, the Company shall not be obligated to effect the registration
until the earlier of (A) the date upon which such material information is
disclosed to the public or is no longer material or (B) 120 days after the
Company first makes such good faith determination.

            (e) Stock Splits. In connection with any Demand Registration
pursuant to this Section 5.1, each party to this Agreement will vote, or cause
to be voted, all securities of the Company over which it has the power to vote
or direct the voting to effect any stock split which, in the opinion of the sole
or managing underwriter, is necessary to facilitate the effectiveness of such
Demand Registration.

            (f) Other Registration Rights. Except as provided in this Agreement,
the Company shall not grant to any Persons the right to request the Company to
register any equity securities of the Company, or any securities convertible or
exchangeable into or exercisable for such securities, without the prior written
consent of the holders of at least a majority of the Registrable Securities;
provided that the Company may grant rights to other Persons to participate in
Incidental Registrations so long as such rights are subordinate to the rights of
the holders of Registrable Securities with respect to such Incidental
Registrations.

            5.2 Incidental Registration.

            (a) Requests for Incidental Registration. At any time the Company
proposes to register any shares of Common Stock under the Securities Act (other
than registrations on such form(s) solely for registration of Common Stock in
connection with any employee benefit plan or dividend reinvestment plan or a
merger or consolidation), including registrations pursuant to Section 5.1(a),
whether or not for sale for its own account, the Company will give written
notice to each holder of Registrable Securities at least 30 days prior to the
initial filing of such Registration Statement with the SEC of its intent to file
such registration statement and of such holder's rights under this Section 5.2.
Upon the written request of any holder of Registrable Securities made within 20
days after any such notice is given (which request shall specify the Registrable
Securities intended


                                      -11-


to be disposed of by such holder), the Company will use its commercially
reasonable efforts to effect the registration (an "Incidental Registration")
under the Securities Act of all Registrable Securities which the Company, as the
case may be, has been so requested to register by the holders thereof; provided,
however, that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Registration
Statement filed in connection with such Incidental Registration (each an
"Incidental Registration Statement"), the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination to each holder of
Registrable Securities and, thereupon, (a) in the case of a determination not to
register, the Company shall be relieved of its obligation to register any
Registrable Securities under this Section 5.2 in connection with such
registration (but not from its obligation to pay the expenses incurred in
connection therewith) and (b) in the case of a determination to delay
registration, the Company shall be permitted to delay registering any
Registrable Securities under this Section 5.2 during the period that the
registration of such other securities is delayed.

            (b) Priority on Incidental Registration. If the sole or managing
underwriter of a registration advises the Company in writing that in its opinion
the number of Registrable Securities and other securities requested to be
included exceeds the number of Registrable Securities and other securities which
can be sold in such offering without adversely affecting the distribution of the
securities being offered, the price that will be paid in such offering or the
marketability thereof, the Company will include in such registration the
Registrable Securities and other securities of the Company in the following
order of priority:

            (i)   first, the greatest number of securities of the Company
                  proposed to be included in such registration by the Company
                  for its own account and by holders of Other Registration
                  Rights that have priority over the incidental registration
                  rights granted to holders of Registrable Securities under this
                  Agreement, which in the opinion of such underwriters can be so
                  sold; and

            (ii)  second, after all securities that the Company proposes to
                  register for its own account or for the accounts of holders of
                  Other Registration Rights that have priority over the
                  incidental registration rights under this Agreement have been
                  included, the greatest amount of Registrable Securities and
                  securities having Other Registration Rights that are pari
                  passu with Registrable Securities, in each case requested to
                  be registered by the holders thereof which in the opinion of
                  such underwriters can be sold in such offering without
                  adversely affecting the distribution of the securities being
                  offered, the price that will be paid in such offering or the
                  marketability thereof, ratably among the holders of
                  Registrable Securities (whether requested to be registered
                  pursuant to Section 5.1 or 5.2) and securities subject to such
                  Other Registration Rights based on the respective amounts of
                  Registrable Securities and securities subject to such Other
                  Registration Rights held by each such holder.

            (c) Upon delivering a request under this Section 5.2, a
Securityholder (excluding Vestar and its Affiliates, but including any other
Permitted Transferee of any thereof) will, if requested by the Company, execute
and deliver a custody agreement and power of attorney in form


                                      -12-


and substance reasonably satisfactory to the Company and one of the Vestar
Directors with respect to such Securityholder's Securities to be registered
pursuant to this Section 5.2 (a "Custody Agreement and Power of Attorney"). The
Custody Agreement and Power of Attorney will provide, among other things, that
the Securityholder will deliver to and deposit in custody with the custodian and
attorney-in-fact named therein (who shall be reasonably satisfactory to one of
the Vestar Directors) a certificate or certificates representing such Securities
(duly endorsed in blank by the registered owner or owners thereof or accompanied
by duly executed stock powers in blank) and irrevocably appoint said custodian
and attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on such Securityholder's behalf with respect to
the matters specified therein. Such Securityholder also agrees to execute such
other agreements as the Company may reasonably request to further evidence the
provisions of this Section 5.2.

            5.3 Holdback Agreements.

            (a) Each holder of Registrable Securities agrees that if requested
in connection with an underwritten offering made pursuant to a Registration
Statement for which such Securityholder has registration rights pursuant to this
Article V by the managing underwriter or underwriters of such underwritten
offering, such holder will not effect any Public Sale or distribution of any of
the securities being registered or any securities convertible or exchangeable or
exercisable for such securities (except as part of such underwritten offering),
during the period beginning10 days prior to, and ending 180 days after, the
closing date of each underwritten offering made pursuant to such Registration
Statement (or for such shorter period as to which the managing underwriter or
underwriters may agree, provided that such shorter period applies equally to all
holders of Registrable Securities).

            (b) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 7 days prior to and
during the180-day period beginning on the effective date of any underwritten
Demand Registration (or for such shorter period as to which the managing
underwriter or underwriters may agree), except as part of such Demand
Registration or in connection with any employee benefit or similar plan, any
dividend reinvestment plan, or a business acquisition or combination and (ii) to
use all reasonable efforts to cause each holder of at least 1% (on a
fully-diluted basis) of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, which are or may be
purchased from the Company at any time after the date of this Agreement (other
than in a registered offering) to agree not to effect any sale or distribution
of any such securities during such period (except as part of such underwritten
offering, if otherwise permitted).

            5.4 Registration Procedures. In connection with the registration of
any Registrable Securities, the Company shall effect such registrations to
permit the sale of such Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:

            (a) Prepare and file with the SEC a Registration Statement or
Registration Statements on a form available for the sale of the Registrable
Securities by the holders thereof in


                                      -13-


accordance with the intended method of distribution thereof, and use its
commercially reasonable efforts to cause each such Registration Statement to
become effective;

            (b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for a period ending on the earlier
of (i) 90 days from the effective date and (ii) such time as all of such
securities have been disposed of in accordance with the intended method of
disposition thereof; cause the related prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act, the Exchange Act and the rules
and regulations of the SEC promulgated thereunder applicable to it with respect
to the disposition of all securities covered by such Registration Statement as
so amended or in such prospectus as so supplemented.

            (c) Notify the selling holders of Registrable Securities promptly
(but in any event within 2 business days), and confirm such notice in writing,
(i) when a prospectus or any prospectus supplement or post-effective amendment
has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of the
issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, (iii) if at any time when a prospectus is required by
the Securities Act to be delivered in connection with sales of Registrable
Securities the Company becomes aware that the representations and warranties of
the Company contained in any agreement (including any underwriting agreement)
contemplated by Section 5.4(h) below cease to be true and correct in all
material respects, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of a Registration Statement or any of the Registrable Securities for offer or
sale in any jurisdiction, (v) if the Company becomes aware of the happening of
any event that makes any statement made in such Registration Statement or
related prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in such Registration Statement, prospectus or documents so that,
in the case of such Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the prospectus, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

            (d) Use its commercially reasonable efforts to prevent the issuance
of any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, and, if any such order is issued, to
obtain the withdrawal of any such order at the earliest possible moment.

            (e) Deliver to each selling holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the prospectus or
prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and the Company
hereby consents to the use of such prospectus and each amendment or supplement


                                      -14-


thereto by each of the selling holders of Registrable Securities and the
underwriters or agents, if any, in connection with the offering and sale of the
Registrable Securities covered by such prospectus and any amendment or
supplement thereto.

            (f) Prior to any public offering of Registrable Securities, to use
its commercially reasonable efforts to register or qualify, and cooperate with
the selling holders of Registrable Securities, the underwriters, if any, the
sales agents and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or "blue sky"
laws of such jurisdictions within the United States as any selling holder or the
managing underwriters reasonably request in writing; provided, however, that the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified or (ii) take any action that
would subject it to general service of process in any such jurisdiction where it
is not then so subject.

            (g) Upon the occurrence of any event contemplated by Section
5.4(c)(v) above, as promptly as practicable prepare a supplement or
post-effective amendment to the Registration Statement or a supplement to the
related prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such prospectus will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

            (h) Enter into an underwriting agreement in form, scope and
substance as is customary in underwritten offerings and take all such other
actions as are reasonably requested by the managing or sole underwriter in order
to expedite or facilitate the registration or the disposition of such
Registrable Securities, and in such connection, (i) make such representations
and warranties to the underwriters, with respect to the business of the Company
and its subsidiaries, and the Registration Statement, prospectus and documents,
if any, incorporated or deemed to be incorporated by reference therein, in each
case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and when
requested, (ii) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters), addressed to the underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by underwriters,
(iii) obtain "cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any Subsidiary of the Company or of
any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each of the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable to the holders of Registrable
Securities than those set forth in Section 5.6 hereof (or such other provisions
and procedures acceptable to holders of a majority of the Registrable Securities
covered by such Registration Statement and the managing underwriters or


                                      -15-


agents) with respect to all parties to be indemnified pursuant to said Section.
The above shall be done at each closing under such underwriting agreement, or as
and to the extent required thereunder.

            (i) Comply with all applicable rules and regulations of the SEC and
make generally available to its Securityholders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effectiveness of a Registration
Statement, which statements shall cover said 12-month periods.

            (j) (i) Use its commercially reasonable efforts to cause all such
Registrable Securities covered by such registration statement to be listed on
the principal securities exchange on which Common Stock is then listed (if any),
if the listing of such Registrable Securities is then permitted under the rules
of such exchange, or (ii) if no Common Stock is then so listed, use its
commercially reasonable efforts to, either (as the Company may elect) (x) cause
all such Registrable Securities to be listed on a national securities exchange
or (y) secure designation of all such Registrable Securities as a NASDAQ
"national market system security" within the meaning of Rule 11Aa2-1 or, failing
that, to secure NASDAQ authorization for such shares and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register as such with respect to such shares with the National Association of
Securities Dealers, Inc. ("NASD").

The Company may require each holder of Registrable Securities as to which any
registration is being effected to furnish to the Company such information
regarding such holder and the distribution of such Registrable Securities as the
Company may, from time to time, reasonably request in writing; provided that
such information shall be used only in connection with such registration. The
Company may exclude from such registration the Registrable Securities of any
holder who unreasonably fails to furnish such information promptly after
receiving such request. Each holder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
5.4(c)(ii), 5.4(c)(iv) or 5.4(c)(v), such holder will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement or prospectus until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 5.4, or until it is
advised in writing by the Company that the use of the applicable prospectus may
be resumed, and has received copies of any amendments or supplements thereto.

            5.5 Registration Expenses. Subject to Section 5.1(b)(i), all fees
and expenses incident to the performance of or compliance with this Agreement by
the Company shall be borne by the Company, whether or not any Registration
Statement is filed or becomes effective, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or "blue sky" laws), (ii) reasonable messenger, telephone and
delivery expenses, (iii) fees and disbursements of counsel for the Company, (iv)
fees and disbursements of all independent certified public accountants referred
to in Section 5.4(h), (v) underwriters' fees and expenses (excluding discounts,
commissions, or fees of


                                      -16-


underwriters, selling brokers, dealer managers or similar securities industry
professionals relating to the distribution of the Registrable Securities), (vi)
Securities Act liability insurance, if the Company so desires such insurance,
(vii) internal expenses of the Company, (viii) the expense of any annual audit,
(ix) the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange and (x) the fees and
expenses of any Person, including special experts, retained by the Company. In
connection with any Demand Registration or Incidental Registration hereunder,
the Company shall reimburse the holders of the Registrable Securities being
registered in such registration for the reasonable fees and disbursements of not
more than one counsel (together with appropriate local counsel) chosen by the
Requesting Holders, and other reasonable out-of-pocket expenses of the holders
of Registrable Securities incurred in connection with the registration of the
Registrable Securities.

            5.6 Indemnification; Contribution.

            (a) Indemnification by the Company. The Company shall, without
limitation as to time, indemnify and hold harmless, to the full extent permitted
by law, each holder of Registrable Securities, the officers, directors, agents
and employees of each of them, each Person who controls each such holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act), the officers, directors, agents and employees of each such controlling
person and any financial or investment adviser (each, an "Indemnified Party"),
to the fullest extent lawful, from and against any and all losses, claims,
damages, liabilities, actions or proceedings (whether commenced or threatened)
reasonable costs (including, without limitation, reasonable costs of preparation
and reasonable attorneys' fees) and reasonable expenses (including reasonable
expenses of investigation) (collectively, "Losses"), as incurred, arising out of
or based upon (i) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, prospectus or form of prospectus or in
any amendment or supplements thereto or in any preliminary prospectus, or
arising out of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except to the extent that the same arise out of or are based upon
information furnished in writing to the Company by such Indemnified Party or the
related holder of Registrable Securities expressly for use therein or (ii) any
violation by the Company of any federal, state or common law rule or regulation
applicable to the Company and relating to action required of or inaction by the
Company in connection with any such registration; provided, however, that the
Company shall not be liable to any Person who participates as an underwriter in
the offering or sale of Registrable Securities or any other Person, if any, who
controls such underwriters within the meaning of the Securities Act to the
extent that any such Losses arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
preliminary prospectus if (i) such Person failed to send or deliver a copy of
the prospectus with or prior to the delivery of written confirmation of the sale
by such Person to the Person asserting the claim from which such Losses arise,
(ii) the prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, and (iii) the Company has
complied with its obligations under Section 5.4(c). Each indemnity and
reimbursement of costs and expenses shall remain in full force and effect
regardless of any investigation made by or on behalf of such indemnified party.

            (b) Indemnification by Holders. In connection with any Registration
Statement in which a holder of Registrable Securities is participating, such
holder, or an authorized officer of


                                      -17-


such holder, shall furnish to the Company in writing such information as the
Company reasonably requests for use in connection with any Registration
Statement or prospectus and agrees, severally and not jointly, to indemnify, to
the full extent permitted by law, the Company, its directors, officers, agents
and employees, each Person who controls the Company (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling persons, from and
against all Losses arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in any Registration Statement,
prospectus, or form of prospectus, or arising out of or based upon any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, that such untrue or alleged untrue statement is contained in, or
such omission or alleged omission is required to be contained in, any
information so furnished in writing by such holder to the Company expressly for
use in such Registration Statement or prospectus and that such statement or
omission was relied upon by the Company in preparation of such Registration
Statement, prospectus or form of prospectus; provided, however, that such holder
of Registrable Securities shall not be liable in any such case to the extent
that the holder has furnished in writing to the Company within a reasonable
period of time prior to the filing of any such Registration Statement or
prospectus or amendment or supplement thereto information expressly for use in
such Registration Statement or prospectus or any amendment or supplement thereto
which corrected or made not misleading, information previously furnished to the
Company, and the Company failed to include such information therein. In no event
shall the liability of any selling holder of Registrable Securities hereunder be
greater in amount than the dollar amount of the proceeds (net of payment of all
expenses) received by such holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such indemnified party.

            (c) Conduct of Indemnification Proceedings. If any Person shall be
entitled to indemnity hereunder (an "indemnified party"), such indemnified party
shall give prompt notice to the party or parties from which such indemnity is
sought (the "indemnifying parties") of the commencement of any action, suit,
proceeding or investigation or written threat thereof (a "Proceeding") with
respect to which such indemnified party seeks indemnification or contribution
pursuant hereto; provided, however, that the failure to so notify the
indemnifying parties shall not relieve the indemnifying parties from any
obligation or liability except to the extent that the indemnifying parties have
been prejudiced by such failure. The indemnifying parties shall have the right,
exercisable by giving written notice to an indemnified party promptly after the
receipt of written notice from such indemnified party of such Proceeding, to
assume, at the indemnifying parties' expense, the defense of any such
Proceeding, with counsel reasonably satisfactory to such indemnified party;
provided, however, that an indemnified party or parties (if more than one such
indemnified party is named in any Proceeding) shall have the right to employ
separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless: (i) the indemnifying parties agree to
pay such fees and expenses; (ii) the indemnifying parties fail promptly to
assume the defense of such Proceeding or fail to employ counsel reasonably
satisfactory to such indemnified party or parties; or (iii) the named parties to
any such Proceeding (including any impleaded parties) include both such
indemnified party or parties and the indemnifying parties or an affiliate of the
indemnifying parties or such indemnified parties, and there may be one or more
defenses available to such indemnified party or parties that are different from
or additional to those available to the


                                      -18-


indemnifying parties, in which case, if such indemnified party or parties
notifies the indemnifying parties in writing that it elects to employ separate
counsel at the expense of the indemnifying parties, the indemnifying parties
shall not have the right to assume the defense thereof and such counsel shall be
at the expense of the indemnifying parties, it being understood, however, that,
unless there exists a conflict among indemnified parties, the indemnifying
parties shall not, in connection with any one such Proceeding or separate but
substantially similar or related Proceedings in the same jurisdiction, arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with appropriate
local counsel) at any time for such indemnified party or parties. Whether or not
such defense is assumed by the indemnifying parties, such indemnifying parties
or indemnified party or parties will not be subject to any liability for any
settlement made without its or their consent (but such consent will not be
unreasonably withheld). The indemnifying parties shall not consent to entry of
any judgment or enter into any settlement which (i) provides for other than
monetary damages without the consent of the indemnified party or parties (which
consent shall not be unreasonably withheld or delayed) or (ii) does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party or parties of a release, in form and substance satisfactory to
the indemnified party or parties, from all liability in respect of such
Proceeding for which such indemnified party would be entitled to indemnification
hereunder.

            (d) Contribution. If the indemnification provided for in this
Section 5.6 is unavailable to an indemnified party or is insufficient to hold
such indemnified party harmless for any Losses in respect of which this Section
5.6 would otherwise apply by its terms, then each applicable indemnifying party,
in lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the amount paid or payable by such indemnified party
as a result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such indemnifying party, on the one hand,
and indemnified party, on the other hand, shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been taken by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent any such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include any legal or other fees or expenses
incurred by such party in connection with any Proceeding, to the extent such
party would have been indemnified for such expenses if the indemnification
provided for in Section 5.6(a) or 5.6(b) was available to such party. The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5.6(d) were determined by pro-rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in this Section 5.6(d). Notwithstanding the
provisions of this Section 5.6(d), an indemnifying party that is a selling
holder of Registrable Securities shall not be required to contribute any amount
in excess of the amount by which the net proceeds received by such indemnifying
party exceeds the amount of any damages that such indemnifying party has
otherwise been required to pay by reasons of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.


                                      -19-


            5.7 Rule 144. At all times after the Company effects its first
Public Offering, the Company shall file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder, and will take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144. Upon the request of any holder of Registrable Securities,
the Company shall deliver to such holder a written statement as to whether it
has complied with such requirements.

            5.8 Underwritten Registrations. No holder of Registrable Securities
may participate in any underwritten registration hereunder unless such holder
(a) agrees to sell such holder's Registrable Securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.

            5.9 No Inconsistent Agreements. The Company has not and will not,
enter into any agreement with respect to the Company's securities that is
inconsistent with the rights granted to the holders of Registrable Securities in
this Article V or otherwise conflicts with the provisions hereof.

                                   ARTICLE VI
                               PRE-EMPTIVE RIGHTS

            6.1 Issuance of New Securities to Affiliates.

            (a) If at any time after the date of this Agreement the Company
proposes to issue or sell any Common Units, Common Stock, Common Stock
Equivalents or Preferred Stock of the Company (collectively, "New Securities"),
in each case to Vestar or any Affiliate of Vestar, the Company shall first offer
to sell to the holders of Marathon Securities, Michael Family Securities and
Employee Securities a portion of each type of such New Securities equal to the
quotient determined by dividing (x) the number of Fully-Diluted Units (which are
Class A Units and Class B Units and which are held or beneficially owned by such
holder of Marathon Securities, Michael Family Securities or Employee
Securities), by (y) the total number of Fully-Diluted Class A and B Units
outstanding immediately prior to such issuance or sale. The holders of Marathon
Securities, Michael Family Securities and Employee Securities shall be entitled
to purchase all or any portion of their respective portions (as determined in
the immediately preceding sentence) of such New Securities at the most favorable
price and on the most favorable terms as such New Securities are to be offered
to Vestar or any Affiliate of Vestar.

            (b) In order to exercise its purchase rights hereunder, each holder
of Marathon Securities, Michael Family Securities and Employee Securities must,
within 30 days after receipt of written notice from the Company describing in
reasonable detail the New Securities being offered,


                                      -20-


the purchase price thereof, the payment terms and the percentage of the New
Securities available to such holder pursuant to Section 6.1(a), deliver a
written notice to the Company describing its election to exercise its purchase
rights hereunder.

            (c) Upon the expiration of the offering periods described above, the
Company shall be entitled to sell such New Securities which the holders of
Marathon Securities, Michael Family Securities and Employee Securities have not
elected to purchase during the 180 days following such expiration on terms and
conditions no more favorable to the purchasers thereof than those offered to the
holders of Marathon Securities, Michael Family Securities and Employee
Securities. Any New Securities to be sold by the Company to Vestar or any
Affiliate of Vestar after such 180-day period must be reoffered to the holders
of Marathon Securities, Michael Family Securities and Employee Securities
pursuant to the terms of this Section 6.1.

            (d) The provisions of this Section 6.1 will not apply to the
following issuances of New Securities:

            (i)   any New Securities issued upon the conversion or exercise of
                  any Common Stock Equivalents not issued in violation of this
                  Section 6.1;

            (ii)  any issuance of New Securities incident to the exercise,
                  conversion or exchange of any securities of the Company that
                  were not issued in violation of this Section 6.1, a
                  subdivision of shares (including any stock dividend or stock
                  split), any combination of shares (including any reverse stock
                  split) or any recapitalization, reorganization or
                  reclassification of the Company; or

            (iii) any New Securities issued to a seller(s)in connection with the
                  acquisition by the Company of another Person that is not an
                  Affiliate of Vestar (whether by acquisition of stock or by
                  merger or consolidation, or the acquisition of all or
                  substantially all of such Person's assets).

            (e) Nothing in this Section 6.1 shall be deemed to prevent Vestar or
any Affiliate of Vestar from purchasing for cash any New Securities without
first complying with the provisions of this Section 6.1; provided, that in
connection with such purchase, (a) the Company's management committee or board
of directors has determined in good faith (1) that the Company needs an
immediate cash investment, (2) that no alternative financing on terms no less
favorable to the Company in the aggregate than such purchase is available which
is of a type that could be obtained without having to comply with this Section
6.1 and (3) that the delay caused by compliance with the provisions of this
Section 6.1 in connection with such investment would be reasonably likely to
cause severe and immediate harm to the Company, (b) the Company gives prompt
notice to the holders of Marathon Securities, Michael Family Securities and
Employee Securities of the Purchasing Holder's investment, which notice shall
describe in reasonable detail the New Securities being purchased by the Person
making such purchase (for purposes of this Section 6.1, the "Purchasing Holder")
and the purchase price thereof and (c) the Purchasing Holder and the Company
take all steps necessary to enable the holders of Marathon Securities, Michael
Family Securities and Employee Securities to effectively exercise their
respective rights under this Section 6.1 with respect


                                      -21-


to their purchase of a pro-rata share of the New Securities issued to the
Purchasing Holder after such purchase by the Purchasing Holder on the terms
specified in Section 6.1(a).

                                   ARTICLE VII
                            AMENDMENT AND TERMINATION

            7.1 Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Securityholders unless such modification,
amendment or waiver is approved in writing by each of the Company, Vestar, the
Marathon Majority Holders, the Michael Family Majority Holders and the Employee
Majority Holders. The failure of any party to enforce any of the provisions of
this Agreement shall in no way be construed as a waiver of such provisions and
shall not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.

            7.2 Termination of Certain Provisions. The provisions of Article II
shall terminate upon the consummation of the Company's first Public Offering if,
and only to the extent, required by the managing underwriter of such Public
Offering.

            7.3 Termination of Agreement. This Agreement will terminate in
respect of all Securityholders (a) with the written consent of the Company, the
Vestar Majority Holders, the Marathon Majority Holders, the Michael Family
Majority Holders and the Employee Majority Holders, (b) upon the dissolution,
liquidation or winding-up of the Company or (c) upon the consummation of a Sale
of the Company (except with respect to the rights to Incidental Registration
under Article V, which shall survive). The termination of this Agreement will
not affect any indemnification or contribution obligations under Section 5.6,
which shall survive such termination.

            7.4 Termination as to a Party. Any Person who ceases to hold any
Securities shall cease to be a Securityholder and shall have no further rights
or obligations under this Agreement (except with respect to any indemnification
and contribution obligations under Section 5.6, which shall survive).

                                  ARTICLE VIII
                                  MISCELLANEOUS

            8.1 Certain Defined Terms. As used in this Agreement, the following
terms shall have the meanings set forth or as referenced below:

            "Affiliate" of any particular Person means any other Person
Controlling, Controlled by or under common Control with such particular Person
or, in the case of a natural Person, any other member of such Person's Family
Group.

            "Agreement" has the meaning set forth in the preamble.


                                      -22-


            "Agreement of Merger" means the Agreement and Plan of Merger dated
as of December 21, 2000 by and among Holdings, Protein Acquisition Corp. (n/k/a
Michael Foods Acquisition Corp.) and Michael Foods, Inc., as amended.

            "Allocable Shares" has the meaning set forth in Section 3.2(a).

            "Call Option" has the meaning given to such term in the Management
Unit Subscription Agreements.

            "CEO Designated Director" has the meaning given such term in Section
2.1(a)(v).

            "Class A Units" has the meaning set forth in the LLC Agreement.

            "Class B Units" has the meaning set forth in the LLC Agreement.

            "Class C Units" has the meaning set forth in the LLC Agreement.

            "Class O Units" has the meaning set forth in the LLC Agreement.

            "Closing Date" has the meaning given such term in the Agreement of
Merger.

            "Common Stock" means, collectively, following the conversion of the
Company into a corporation or the Company being merged into, or otherwise
succeeded by, a corporation, the common stock of the Company and any other class
or series of authorized capital stock of the Company which is not limited to a
fixed sum or percentage of par or stated value in respect to the rights of the
holders thereof to participate in dividends or in the distribution of assets
upon any liquidation, dissolution or winding up of the successor to the Company.

            "Common Stock Equivalents" means (without duplication with any
Units, Common Stock or other Common Stock Equivalents) rights, warrants,
options, convertible securities, or exchangeable securities or indebtedness, or
other rights, exercisable for or convertible or exchangeable into, directly or
indirectly, Units, Common Stock or securities exercisable for or convertible or
exchangeable into Units or Common Stock, as the case may be, whether at the time
of issuance or upon the passage of time or the occurrence of some future event.

            "Company" has the meaning set forth in the preamble.

            "Control" (including, with correlative meaning, all conjugations
thereof) means with respect to any Person, the ability of another Person to
control or direct the actions or policies of such first Person, whether by
ownership of voting securities, by contract or otherwise.

            "Custody Agreement and Power of Attorney" has the meaning given to
such term in Section 5.2(c).

            "Demand Registration" has the meaning given to such term in Section
5.1(a).


                                      -23-


            "Employee(s)" has the meaning given to such term in the preamble.

            "Employee Majority Holders" means the Person or Persons having
beneficial ownership of a majority of the securities constituting Employee
Securities.

            "Employee Securities" means (a) the Preferred Units, Class A Units,
Class B Units or Class C Units acquired by the Employees on or after the date of
this Agreement under the Management Unit Subscription Agreements, (b) any Class
O Units acquired by the Employees, (c) any Units, Common Stock (including, for
the purpose of this definition, common stock of Holdings or any other common
stock distributed by the Company), Common Stock Equivalents or Preferred Stock
hereafter acquired by any holder of Employee Securities and (d) any securities
of the Company issued with respect to the securities referred to in clauses (a),
(b) or (c) above by way of a payment-in-kind, stock dividend or stock split or
in connection with a combination of shares, exchange, conversion,
recapitalization, merger, consolidation or other reorganization.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.

            "Excluded Securities" has the meaning set forth in Section 3.2(c).

            "Exempt Transfer" means a Transfer of Marathon Securities, Michael
Family Securities and Employee Securities (a) pursuant to an exercise of
tag-along rights as an Other Holder under Section 3.2, (b) pursuant to a Sale of
the Company under Section 4.1 or other transaction approved under Section 2.2,
(c) in the case of Employee Securities, to the Company pursuant to a Call Option
under a Management Unit Subscription Agreement, (d) pursuant to a Public Sale
(including pursuant to the provisions of Article V hereof), (e) upon the death
of the holder pursuant to the applicable laws of descent and distribution, (f)
solely to or among such Person's Family Group, (g) incidental to the exercise,
conversion or exchange of such securities in accordance with their terms, any
combination of shares (including any reverse stock split) or any
recapitalization, reorganization or reclassification of, or any merger or
consolidation involving, the Company or (h) in the case of Michael Family
Securities, (1) any Transfer by a Michael Family Securityholder to one or more
of its partners who is a descendent of James H. Michael or a spouse of such
decedent or (2) after the third anniversary of the date hereof, subject to the
right of first offer sets forth in Exhibit A attached hereto.

            "Exempt Individual Transfer" means a Transfer of Vestar Securities
held by a natural person (a) upon the death of the holder pursuant to the
applicable laws of descent and distribution, (b) solely to or among such
Person's Family Group or (c) to the Company incidental to the exercise,
conversion or exchange of such securities in accordance with their terms, any
combination of shares (including any reverse stock split) or any
recapitalization, reorganization or reclassification of, or any merger or
consolidation involving, the Company.

            "Family Group" means, with respect to any individual, such
individual's spouse and descendants (whether natural or adopted) and any trust,
partnership, limited liability company or similar vehicle established and
maintained solely for the benefit of (or the sole members or partners of which
are) such individual, such individual's spouse and/or such individual's
descendants.


                                      -24-


            "Fully-Diluted Units" means, as of any date of determination, the
number of shares of Common Stock outstanding, plus (without duplication) all
Units or, as the case may be, shares of Common Stock issuable, whether at such
time or upon the passage of time or the occurrence of future events, upon the
exercise, conversion or exchange of all then-outstanding Common Stock
Equivalents.

            "Holdings" means M-Foods Holdings, Inc., a Delaware corporation.

            "Incidental Registration" has the meaning given such term in Section
5.2(a).

            "Indemnified Party" has the meaning given such term in Section
5.6(a).

            "Limited Partner" means a limited partner of Vestar.

            "Losses" has the meaning given such term in Section 5.6(a).

            "Management Unit Subscription Agreements" mean the unit subscription
agreements between the Company and the respective Employees.

            "Marathon" has the meaning given such term in the preamble.

            "Marathon Demand Right" has the meaning given such term in Section
5.1(a).

            "Marathon Director" has the meaning given such term in Section
2.1(a)(ii).

            "Marathon Majority Holders" means the Person or Persons holding a
majority of the securities constituting Marathon Securities.

            "Marathon Securities" means (a) Marathon Units, (b) Units, Common
Stock (including, for the purpose of this definition, common stock of Holdings
or any other common stock distributed by the Company), Common Stock Equivalents
or Preferred Stock hereafter acquired by Marathon and (c) any securities of the
Company issued with respect to the securities referred to in clauses (a) or (b)
above by way of a payment-in-kind, stock dividend or stock split or in
connection with a combination of shares, exchange, conversion, recapitalization,
merger, consolidation or other reorganization.

            "Marathon Units" means the Class A Units issued to Marathon on the
Closing Date.

            "Michael Family Demand Right" has the meaning given such term in
Section 5.1(a).

            "Michael Family Directors" has the meaning given such term in
Section 2.1(a)(iii).

            "Michael Family Majority Holders" means the Person or Persons
holding a majority of the securities constituting Michael Family Securities.


                                      -25-


            "Michael Family Securities" means (a) Michael Family Units, (b)
Units, Common Stock (including, for the purpose of this definition, common stock
of Holdings or any other common stock distributed by the Company), Common Stock
Equivalents or Preferred Stock hereafter acquired by the Michael Family
Securityholders and (c) any securities of the Company issued with respect to the
securities referred to in clauses (a) or (b) above by way of a payment-in-kind,
stock dividend or stock split or in connection with a combination of shares,
exchange, conversion, recapitalization, merger, consolidation or other
reorganization.

            "Michael Family Securityholders" means 4J2R1C Limited Partnership
and 3J2R Limited Partnership.

            "Michael Family Units" means the Class A Units issued to the Michael
Family Securityholders on the Closing Date.

            "NASD" has the meaning given such term in Section 5.4(j).

            "NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.

            "New Securities" has the meaning given to such term in Section
6.1(a).

            "Offered Securities" has the meaning given to such term in Section
3.2(a).

            "LLC Agreement" means the Limited Liability Company Agreement dated
as of April 10, 2001 among the Company, Vestar, Marathon, the Michael Family
Securityholders and the other parties thereto.

            "Other Holder" has the meaning given such term in Section 3.2(a).

            "Other Registration Rights" has the meaning given such term in
Section 5.1(a)(iii).

            "Ownership Percentage" means, for each Securityholder and with
respect to a type and class of Security, the percentage obtained by dividing the
number of units or shares of such Security held by such Securityholder by the
total number of units or shares of such Security (other than Excluded
Securities) outstanding.

            "Person" means an individual, a partnership, a joint venture, a
corporation, an association, a joint stock company, a limited liability company,
a trust, an unincorporated organization or a government or any department or
agency or political subdivision thereof.

            "Preferred Stock" means collectively, following the conversion of
the Company into a corporation or the Company being merged into, or otherwise
succeeded by, a corporation, the classes or series of authorized capital stock
of the Company that is limited to a fixed sum or percentage of par value or
stated value in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the successor to the Company.


                                      -26-


            "Preferred Units" means the preferred units of the Company which may
be issued pursuant to Section 8.1 of the Management Unit Subscription
Agreements.

            "Priority Right" has the meaning given such term in Section
5.1(c)(i).

            "Proceeding" has the meaning given such term in Section 5.6(c).

            "Public Offering" means a sale of Common Stock to the public in an
offering pursuant to an effective registration statement filed with the SEC
pursuant to the Securities Act, as then in effect, provided that a Public
Offering shall not include an offering made in connection with a business
acquisition or combination or an employee benefit plan.

            "Public Sale" means a sale of Securities pursuant to a Public
Offering or a Rule 144 Sale.

            "Purchasing Holder" has the meaning given such term in Section
6.1(e).

            "Registrable Securities" means any Securities that are of the same
type and class as the Vestar Securities (it being understood upon the occurrence
of any event which gives rise to a Securityholder's ability to transfer such
Securityholder's interests in the Company or a Subsidiary of the Company to a
third party in exchange for consideration pursuant to this Agreement or pursuant
to a registration right, at the election of such Securityholder, the Company
shall take, and shall cause its Subsidiaries to take, all actions necessary to
convert Securities (other than the Class C Units) then held by such
Securityholder into the appropriate type of security to permit the
Securityholder to transfer such Securities). As to any particular Registrable
Securities, such securities will cease to be Registrable Securities when they
have been (i) Transferred in a Public Sale, (ii) unless Vestar otherwise elects,
have been distributed to the limited partners of Vestar or (iii) otherwise
Transferred and new certificates not bearing the legend set forth in Section
8.2(b) hereof shall have been delivered by the Company and subsequent
disposition of such securities shall not require registration or qualification
of such securities under the Securities Act or such state securities or blue sky
laws then in force. For purposes of this Agreement, a Person will be deemed to
be a holder of Registrable Securities whenever such Person has the right to
acquire such Registrable Securities (upon conversion or exercise in connection
with a Transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been affected.

            "Registration Expenses" means all amounts payable by the Company
pursuant to Section 5.5.

            "Registration Notice" has the meaning given such term in Section
5.1(a).

            "Registration Request" has the meaning given such term in Section
5.1(a).

            "Registration Statement" means any registration statement of the
Company under which any of the Registrable Securities are included therein
pursuant to the provisions of this Agreement, including the prospectus,
amendments and supplements to such registration statement,


                                      -27-


including post-effective amendments, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.

            "Requesting Holder" has the meaning given such term in Section
5.1(a).

            "Rule 144" means Rule 144 adopted under the Securities Act (or any
successor rule or regulation).

            "Rule 144 Sale" means a sale of Securities to the public through a
broker, dealer or market-maker pursuant to the provisions of Rule 144 (other
than Rule 144(k) prior to a Public Offering) adopted under the Securities Act
(or any successor rule or regulation).

            "Sale of the Company" means the consummation of a transaction,
whether in a single transaction or in a series of related transactions that are
consummated contemporaneously (or consummated pursuant to contemporaneous
agreements), with any other Person or group of related Persons on an
arm's-length basis other than an Affiliate of Vestar, pursuant to which such
party or parties (a) acquire (whether by merger, stock purchase,
recapitalization, reorganization, redemption, issuance of capital stock or
otherwise) more than 50% of either the Fully Diluted Units or the voting stock
of the Company or (b) acquire assets constituting all or substantially all of
the assets of the Company and its Subsidiaries on a consolidated basis;
provided, however, that in no event shall a Sale of the Company be deemed to
include any transaction effected for the purpose of (i) changing, directly or
indirectly, the form of organization or the organizational structure of the
Company or any of its Subsidiaries or (ii) contributing stock to entities
controlled by the Company.

            "Sale Notice" has the meaning given such term in Section 3.2(a).

            "SEC" means the Securities and Exchange Commission.

            "Securities" means, collectively, the Vestar Securities, the
Marathon Securities, the Michael Family Securities and the Employee Securities.

            "Securityholder(s)" has the meaning given such term in the preamble.

            "Securities Act" means the Securities Act of 1933, as amended from
time to time.

            "Selling Holder" has the meaning given such term in Section 3.2(a).

            "Subsidiary" means any corporation with respect to which another
specified corporation has the power to vote or direct the voting of sufficient
securities to elect directors having a majority of the voting power of the board
of directors of such corporation.

            "Tag-Along Notice" has the meaning given such term in Section
3.2(a).

            "Transfer" means (in either the noun or the verb form, including
with respect to the verb form, all conjugations thereof within their correlative
meanings) with respect to any security, the gift, sale, assignment, transfer,
pledge, hypothecation or other disposition (whether for or without


                                      -28-


consideration, whether directly or indirectly, and whether voluntary,
involuntary or by operation of law) of such security or any interest therein.

            "Units" means the Company's Class A Units Class B Units, Class C
Units or Class O Units.

            "Vestar" has the meaning given such term in the preamble.

            "Vestar Demand Right" has the meaning given such term in Section
5.1(a).

            "Vestar Directors" has the meaning given such term in Section
2.1(a)(i).

            "Vestar Majority Holders" means the Person or Persons holding a
majority of the securities constituting Vestar Securities.

            "Vestar Securities" means (a) Vestar Units, (b) Units, Common Stock
(including, for the purpose of this definition, common stock of Holdings or any
other common stock distributed by the Company), Common Stock Equivalents or
Preferred Stock hereafter acquired by Vestar and (c) any securities of the
Company issued with respect to the securities referred to in clauses (a) or (b)
above by way of a payment-in-kind, stock dividend or stock split or in
connection with a combination of shares, exchange, conversion, recapitalization,
merger, consolidation or other reorganization.

            "Vestar Units" means the Class A Units issued to Vestar on the
Closing Date.

            8.2 Legends.

            (a) Securityholders Agreement. Each certificate or instrument
evidencing Securities and each certificate or instrument issued in exchange for
or upon the Transfer of any such Securities (if such securities remain subject
to this Agreement after such Transfer) shall be stamped or otherwise imprinted
with a legend (as appropriately completed under the circumstances) in
substantially the following form:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE CONSTITUTE ["VESTAR
            SECURITIES"], ["MARATHON SECURITIES"], ["MICHAEL FAMILY
            SECURITIES"], ["EMPLOYEE SECURITIES"] UNDER A CERTAIN
            SECURITYHOLDERS AGREEMENT DATED AS OF APRIL 10, 2001 AMONG THE
            ISSUER OF SUCH SECURITIES (THE "COMPANY") AND CERTAIN OF THE
            COMPANY'S SECURITYHOLDERS AND, AS SUCH, ARE SUBJECT TO CERTAIN
            VOTING PROVISIONS, PURCHASE RIGHTS AND RESTRICTIONS ON TRANSFER SET
            FORTH IN THE SECURITYHOLDERS AGREEMENT. A COPY OF SUCH
            SECURITYHOLDERS AGREEMENT WILL BE FURNISHED


                                      -29-


            WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
            REQUEST."

            (b) Restricted Securities. Each instrument or certificate evidencing
Securities and each instrument or certificate issued in exchange or upon the
Transfer of any Securities shall be stamped or otherwise imprinted with a legend
substantially in the following form:

            "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR
            SOLD UNLESS IT HAS BEEN REGISTERED UNDER THE SECURITIES ACT OR
            UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE (AND, IN SUCH
            CASE, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
            SHALL HAVE BEEN DELIVERED TO THE COMPANY TO THE EFFECT THAT SUCH
            OFFER OR SALE IS NOT REQUIRED TO BE REGISTERED UNDER THE SECURITIES
            ACT)."

            (c) Removal of Legends. Whenever in the opinion of the Company and
counsel reasonably satisfactory to the Company (which opinion shall be delivered
to the Company in writing) the restrictions described in any legend set forth
above cease to be applicable to any Securities, the holder thereof shall be
entitled to receive from the Company, without expense to the holder, a new
instrument or certificate not bearing a legend stating such restriction.

            8.3 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

            8.4 Entire Agreement. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.

            8.5 Successors and Assigns. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and the Securityholders and any
subsequent holders of Securities and the respective successors and assigns of
each of them, so long as they hold Securities.


                                      -30-


            8.6 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages) each of which
shall be an original and all of which taken together shall constitute one and
the same agreement.

            8.7 Remedies. The Company and the Securityholders shall be entitled
to enforce their rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement (including costs of
enforcement) and to exercise all other rights existing in their favor. The
parties hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that the Company
or any Securityholder may in its or his sole discretion apply to any court of
law or equity of competent jurisdiction for specific performance or injunctive
relief (without posting a bond or other security) in order to enforce or prevent
any violation of the provisions of this Agreement.

            8.8 Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated on the Company's records, or at such address
or to the attention of such other person as the recipient party has specified by
prior written notice to the sending party. Notices will be deemed to have been
given hereunder when sent by facsimile (receipt confirmed) delivered personally,
5 days after deposit in the U.S. mail and one day after deposit with a reputable
overnight courier service. The Company's address is:

            M-Foods Dairy Holdings, LLC
            c/o Vestar Capital Partners IV, L.P.
            1225 Seventeenth Street
            Suite 1660
            Denver, CO  80202
            Attention:  James P. Kelley
            Facsimile:  (303) 292-6639

            and

            c/o Marathon Dairy Investment Corp.
            c/o Goldner Hawn Johnson & Morrison Incorporated
            5250 Wells Fargo Center
            Minneapolis, MN  55402-4123
            Attention:  John L. Morrison
                        Michael T. Sweeney
            Facsimile:  (612) 338-2860


                                      -31-


            with copies to:

            Vestar Capital Partners IV, L.P.
            245 Park Avenue
            41st Floor
            New York, NY  10167
            Attention:  General Counsel
            Facsimile:  (212) 808-4922

            and

            Kirkland & Ellis
            200 East Randolph Drive
            Chicago, IL  60601
            Attention:  Stephen L. Ritchie
            Facsimile:  (312) 861-2118

            and

            Faegre & Benson
            2200 Wells Fargo Center
            90 South Seventh Street
            Minneapolis, MN  55402-3901
            Attention:  Bruce M. Engler
            Facsimile:  (612) 336-3026

            and

            Skadden, Arps, Slate, Meagher & Flom LLP
            Four Times Square
            New York, NY 10036
            Attention:  Eric L. Cochran
            Facsimile:  (212) 735-2000

            and

            Ross, Rosenblatt Ltd.
            4100 Piper Jaffray Tower
            222 S. 9th St.
            Minneapolis, MN 55402
            Attention:  Burton Ross
            Facsimile:  (612) 338-1131

            8.9 Governing Law. The Delaware Limited Liability Company Act (and,
following the conversion of the Company into a corporation or the Company being
merged into, or otherwise succeeded by, a corporation, the relevant state
corporation law) shall govern all questions


                                      -32-


arising under this Agreement concerning the relative rights of the Company and
its stockholders. All other questions concerning the construction, validity and
interpretation of this Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. The parties hereto
hereby irrevocably and unconditionally submit to the exclusive jurisdiction of
any State or Federal court sitting in Wilmington, Delaware over any suit, action
or proceeding arising out of or relating to this Agreement. The parties hereby
agree that service of any process, summons, notice or document by U.S.
registered mail addressed to any such party shall be effective service of
process for any action, suit or proceeding brought against a party in any such
court. The parties hereto hereby irrevocably and unconditionally waive any
objection to the laying of venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. The parties hereto
agree that a final judgment in any such suit, action or proceeding brought in
any such court shall be conclusive and binding upon any party and may be
enforced in any other courts to whose jurisdiction any party is or may be
subject, by suit upon such judgment.

            8.10 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
                            [SIGNATURE PAGES FOLLOW]


                                      -33-


            IN WITNESS WHEREOF, the parties hereto have executed this
Securityholders Agreement on the day and year first above written.

                                    M-FOODS DAIRY HOLDINGS, LLC

                                    By:   ______________________________________
                                          Name:
                                          Title:


                                    VESTAR CAPITAL PARTNERS IV, L.P.

                                    By:   Vestar Associates IV, L.P.,
                                          its General Partner

                                    By:   Vestar Associates Corporation IV,
                                          its General Partner

                                    By:   ______________________________________
                                          Name:
                                          Title: Managing Director


                                    VESTAR/MICHAEL, LLC

                                    By:   ______________________________________
                                    Name:
                                    Title:


                                    MARATHON DAIRY INVESTMENT CORP.

                                    By:   ______________________________________

                                    Its:  ______________________________________


                                    4J2R1C LIMITED PARTNERSHIP

                                    By:   ______________________________________

                                    Its:  ______________________________________

                                    By:   ______________________________________

                                    Its:  ______________________________________



                                    3J2R LIMITED PARTNERSHIP

                                    By:   ______________________________________

                                    Its:  ______________________________________

                                    By:   ______________________________________

                                    Its:  ______________________________________

                                    ____________________________________________
                                    Gregg A. Ostrander

                                    ____________________________________________
                                    John D. Reedy

                                    ____________________________________________
                                    Bill L. Goucher

                                    ____________________________________________
                                    James D. Clarkson

                                    ____________________________________________
                                    Bradley L. Cook

                                    ____________________________________________
                                    Max R. Hoffmann

                                    ____________________________________________
                                    James Mohr

                                    ____________________________________________
                                    Harold D. Sprinkle

              [End of Signature Page to Securityholder's Agreement]


                                      -35-


                                    Exhibit A

            First Offer Rights. Prior to making any transfer pursuant to clause
(h)(2) of the definition of "Exempt Transfer," a holder of Michael Family
Securities shall deliver written notice disclosing in reasonable detail the
proposed terms and conditions of the transfer including the number and the price
per security (the "Offer Notice") to the Company which shall promptly submit the
Offer Notice to Vestar, Marathon and the Employees which may then elect to
purchase all (but not less than all) of such Michael Family Securities to be
transferred upon the same terms and conditions as those set forth in the Offer
Notice by delivering a written notice of such election to such holders of
Michael Family Securities within 20 days after the Offer Notice has been
delivered to the Company. Such holders of Michael Family Securities shall not
consummate any transfer until 40 days after the Offer Notice has been given to
the Company, unless the parties to the transfer have been finally determined
pursuant to this paragraph prior to the expiration of such 40-day period (the
date of the first to occur of such events is referred to herein as the
"Authorization Date"). If the Company has not elected to purchase all of the
Michael Family Securities to be transferred, Vestar, Marathon and the Employees
may elect to purchase all (but not less than all) of the Michael Family
Securities proposed to be transferred upon the same terms and conditions as
those set forth in the Offer Notice by delivering written notice of such
election to the holders of Michael Family Securities within 30 days after the
Offer Notice has been given to Vestar, Marathon and the Employees. If more than
one of Vestar, Marathon or the Employees elects to purchase the Michael Family
Securities, the Michael Family Securities to be sold shall be allocated among
Vestar, Marathon and the Employees pro rata according to the number of Fully
Diluted Units owned by each of Vestar, Marathon and the Employees. If neither
the Company nor Vestar, Marathon or the Employees elect to purchase all of the
Michael Family Securities, such holders of Michael Family Securities may
transfer such Michael Family Securities at a price no less than 95% of the price
per security specified in the Offer Notice and on other terms no more favorable
to the transferee(s) thereof than specified in the Offer Notice during the
90-day period immediately following the Authorization Date. Any Michael Family
Securities not transferred within such 90-day period shall be subject to the
provisions of this paragraph upon subsequent transfer. If the Company or any of
Vestar, Marathon or the Employees have elected to purchase Michael Family
Securities hereunder, the transfer of such Michael Family Securities shall be
consummated as soon as practical after the delivery of the election notice(s) to
such holder of Michael Family Securities, but in any event within 15 days after
the expiration of the 40-day period referenced above.

EX-10.15

                                                                 Exhibit 10.15

                                                                [Execution Copy]

                         MANAGEMENT STOCK PURCHASE AND
                          UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT (this
"Agreement") is made as of April 10, 2001, by and among MFoods Investors, LLC,
a Delaware limited liability company ("Investors"), Gregg A. Ostrander (the
"Executive"), for the purposes of Section 10.5 hereof, MFoods Holdings, Inc., a
Delaware corporation ("Holdings") and, for the purposes of Section 2.6 hereof,
Kristin Kjar Ostrander (the "Joint Tenant").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of Investors or one or more of its subsidiaries
and who will hold interests in Investors (collectively with the Executive, the
"Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, prior to the consummation of the transactions contemplated
by this Agreement and the Merger Agreement, the Executive is the record and
beneficial owner of the number of shares of the Company's common stock, par
value $0.01 per share (the "Shares"), set forth on Schedule I attached hereto;

            WHEREAS, on the terms and subject to the conditions hereof,
Investors desires to acquire from the Executive, and the Executive desires to
sell to Investors, certain of the Shares, as set forth on Schedule I (the
"Purchased Shares"); and

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive also
desires to contribute certain of the Shares (the "Contributed Shares") in
exchange for Investors' Class B Units (the "Class B Units") and Class C Units
(the "Class C Units"), in each case in the amounts set forth on Schedule II
attached hereto.

            NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:



1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.

      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
oneyear period commencing on the Closing Date (ii) 20% during the oneyear
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the oneyear period commencing on the second anniversary of the Closing Date;
(iv) 60% during the oneyear period commencing on the third anniversary of the
Closing Date; (v) 80% during the oneyear period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean Investors' Management Committee.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and
Investors or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with Investors or
one of its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive's duties; (ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to Investors or one of its subsidiaries; or (iii)
conviction of a felony or guilty or nolo contendere plea by the Executive with
respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of Investors or one of
its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer (while the Executive does not serve as such) or
based upon the advice of counsel for Investors shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best
interests of Investors and its subsidiaries. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than 75% of the entire membership of the


                                       2


Board (excluding the Executive) at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in (i), (ii) or (iii) above, and specifying the
particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm'slength
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or by virtue of their interests in Investors, a majority of the Board
of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means Investors' Class A
Units.

      1.8 Class B Units. The term "Class B Units" shall have the meaning set
forth in the preface.

      1.9 Class C Units. The term "Class C Units" shall have the meaning set
forth in the preface.

      1.10 Closing. The "Closing" for the sale and purchase of the Shares and
the contribution of Shares in exchange for Units hereunder shall occur
immediately prior to the consummation of the Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Contributed Shares. The term "Contributed Shares" shall have the
meaning set forth in the preface.


                                       3


      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and Investors or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job responsibilities as a result of chronic illness, physical,
mental or any other disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of Investors or any of its subsidiaries, and the term "employment"
shall include service as a part or fulltime employee to Investors or any of its
subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.


      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Investors at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
the Company in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of the Company and the Executive setting forth their respective resolutions of
the dispute and the bases therefor and (ii) accepting either the Executive's or
the Company's proposed resolution of the dispute. Promptly following the
Company's receipt of Executive's written notice of disagreement, the Company
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and the Company's written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and the


                                       4


Company of its decision within 40 days of its engagement. The party whose
proposed resolution is not accepted shall pay all of the Arbiter's fees and
expenses. If the Executive's proposed resolution is accepted, the Company also
shall pay all of the Executive's reasonable outofpocket fees and expenses
(including reasonable fees and expenses of counsel and one appraiser, accountant
or investment banking firm) incurred in connection with the arbitration. Each of
the Company and the Executive agrees to execute, if requested by the Arbiter, a
reasonable engagement letter with the Arbiter.

      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 113/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and Investors or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by Investors or one of its subsidiaries (as applicable) which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Investors or one of its subsidiaries promptly
after receipt of notice thereof given by the Executive; provided that after a
Change in Control, Investors or one of its subsidiaries (as applicable) shall
have the flexibility to appoint the Executive to a reporting


                                       5


relationship different from that which existed prior to the Change in Control,
to make an immaterial change in Executive's duties, or to change the Executive's
title provided; (ii) any failure by Investors or one of its subsidiaries (as
applicable) to provide Executive with the annual base salary Executive had
previously received or the failure by Investors or one of its subsidiaries (as
applicable) to increase such annual each year after a Change in Control by an
amount which at least equals on a percentage basis, the mean average percentage
increase in base salary for all employees similarly situated during the two full
calendar years immediately preceding a Change in Control, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by Investors or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of Investors or one of its subsidiaries (as applicable) upon a Change in
Control to (A) continue in effect any employee benefit plan, compensation plan,
welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by Investors or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of Investors or one
of its subsidiaries as in effect for Executive immediately prior to such Change
in Control; (iv) after a Change in Control, any purported termination by
Investors or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on Investor or its
subsidiaries' business to an extent substantially greater than the Executive's
current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Investors. The term "Investors" shall have the meaning set forth in
the preface.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Amended and
Restated Limited Liability Company Agreement of Investors, dated as of April 10,
2001, entered into by and among the members of Investors, as amended from time
to time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.


                                       6


      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.

      1.32 Purchased Shares. The term "Purchased Shares" shall have the meaning
set forth in the preface.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of Investors or any of its
subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board, after at least three years employment with
Investors after the Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among
Investors, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Shares. The term "Shares" shall have the meaning set forth in the
preface.

      1.38 Share Purchase Price. The term "Share Purchase Price" shall have the
meaning set forth in Section 2.2.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with Investors and its subsidiaries is terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Investors,
whether pursuant to this Agreement or any other arrangement.


                                       7


      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael Foods
CoInvest, LLC, a Delaware limited liability company.

2. Purchase and Sale of Shares; Contribution.

      2.1 Purchase and Sale of the Shares. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement, the Executive shall sell,
assign, transfer and convey to Investors, and Investors shall purchase and
acquire from the Executive, the Purchased Shares against payment at the Closing
of an aggregate amount equal to the Share Purchase Price by wire transfer of
immediately available funds to one or more accounts specified by the Executive
in a written notice to Investors prior to the Closing Date.

      2.2 Share Purchase Price. The aggregate purchase price for the Purchased
Shares (the "Share Purchase Price") will consist of the payment of an amount of
cash, equal to $30.10 per Purchased Share, as set forth on Schedule I.

      2.3 Contribution of Shares. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Investors hereby agrees to receive, the Contributed Shares in
exchange for the number of Units set forth on Schedule II.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":


            (a) The Executive shall deliver to Investors stock certificates
representing the Purchased Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment;

            (b) Investors shall deliver to the Executive the amount of the Share
Purchase Price by wire transfer of immediately available funds to one or more
accounts designated by the Executive in writing to Investors prior to the
Closing;

            (c) The Executive shall deliver to Investors stock certificates
representing the Contributed Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment; and

            (d) Investors shall deliver to the Executive unit certificates
representing the number of Class B Units and Class C Units set forth on Schedule
II.


                                       8


      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

      2.6 Joint Tenancy. As a joint tenant with respect to some or all of the
Shares subject to this Agreement, the Joint Tenant hereby represents and
acknowledges that she has read and understands the terms and provisions set
forth herein. In furtherance of the consummation of the transactions described
in this Agreement, the Joint Tenant hereby expressly gifts and transfers to the
Executive all right, title and interests in such of the Shares held in joint
tenancy, such gift and transfer taking effect immediately prior to and in
connection with the consummation of the transactions described herein. The Joint
Tenant hereby agrees and acknowledges that the effect of this Section 2.6 is to
terminate her joint tenancy interest in any of the Shares held in joint tenancy
as of the date hereof.

3. [Reserved]

4. Representations and Warranties of the Executive and Investors.

      4.1 Stock Purchase Representations of the Executive. The Executive
represents and warrants to Investors that the statements contained in this
Section 4.1 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is subject or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Executive is a party or by which he is bound or to which any of his assets
is subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Investors could become
liable or obligated.


                                       9



            (d) Capital Stock. The Executive holds of record and owns
beneficially the number of Shares set forth next to his name on Schedule I, free
and clear of any restrictions on transfer (other than any restrictions under the
Securities Act, state securities laws, joint tenancy laws or other Transaction
Documents), taxes, security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. In the event the
Executive owns the Shares in joint tenancy, the joint tenant of the Executive
has executed this Agreement on the signature page attached hereto and Executive
has informed such joint tenant of the transactions set forth in this Agreement.
The Executive is not a party to any option, warrant, purchase right, or other
contract or commitment that could require the Executive to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement). Except as set forth in other Transaction Documents, the Executive is
not a party to any voting trust, proxy, or other agreement or understanding with
respect to the voting of any capital stock of the Company. The Executive
acknowledges and represents that the Paying Agent (as defined in the Merger
Agreement) will not make any payment to Executive in connection with the Shares
subject to this Agreement and that such shares will be cancelled upon
consummation of the Acquisition.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Investors that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
            SUBJECT TO CERTAIN REPURCHASE OPTIONS AND OTHER
            PROVISIONS SET FORTH IN A MANAGEMENT STOCK PURCHASE
            AND UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER
            AND THE EXECUTIVE DATED AS OF APRIL 10, 2001, AS
            AMENDED AND MODIFIED FROM TIME TO TIME, A COPY OF
            WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE
            ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE";
            and


                                       10


            (e) a notation shall be made in the appropriate records of Investors
      indicating that the Units are subject to restrictions on transfer and, if
      Investors should at some time in the future engage the services of a
      securities transfer agent, appropriate stoptransfer instructions will be
      issued to such transfer agent with respect to the Units.

      4.3 [Reserved]

      4.4 Representations of Investors. Investors represents to the Executive
that the statements contained in this Section 4.4 are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date, with respect to itself:

            (a) Organization and Power. Investors is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware with full power and authority to enter into this Agreement and
perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Investors and the consummation of the transactions contemplated
hereby by Investors have been duly and validly authorized by all requisite
limited liability company action on the part of Investors, and no other
proceedings on its part are necessary to authorize the execution, delivery or
performance of this Agreement. This Agreement has been duly executed and
delivered by Investors, and this Agreement constitutes a valid and binding
obligation of Investors, enforceable in accordance with its terms and
conditions. Investors need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Investors is subject or any provision of
its charter or bylaws or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Investors is a party or by which it is bound or to which any of its assets is
subject.

            (d) Investment. Investors is not acquiring the Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Investors to issue, sell, or
otherwise cause to become outstanding any of its Units. Except as set forth in
the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit


                                       11


participation, or similar rights with respect to Investors. Except as set forth
in the Transaction Documents, there are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital stock of
Investors.

5. Covenants of the Executive and Investors

      5.1 Covenants. The Executive and/or Investors each agree as follows with
respect to the period between the execution of this Agreement and the Closing:

            (a) General. The Executive and Investors each will use his or its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement.

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with Investors and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Investors, and Investors shall be required to
purchase (subject to the provisions of Section 8 hereof), on one occasion from
the Executive and his Permitted Transferees, if applicable, all (but not less
than all) of the number of Units then held by the Executive and such other
number of Units held by the Executive's Permitted Transferees as the Executive
may request provided that in the aggregate such number does not exceed the
product of (x) the total number of Units collectively held by the Executive and
all of his Permitted Transferees and (y) the Applicable Percentage (measured as
of the Termination Date), at a price per unit equal to the Fair Market Value of
such unit (measured as of the delivery of the notice referred to in Section
7.1(b)).

            (b) If the Executive desires to exercise its option to require
Investors to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Investors setting forth the intention of Executive
and Permitted Transferees, if applicable, to collectively sell all Units
pursuant to Section 7.1(a) within the period described above, which notice shall
specify the number of Units to be sold and shall include the signature of the
Executive and each Permitted Transferee


                                       12


desiring to sell Units. Subject to the provisions of Section 8.1, the closing of
the purchase shall take place at the principal office of Investors on the later
of the 30th day after the giving of such notice and the date that is 10 business
days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Investors duly
executed instruments transferring title to units to Investors, against payment
of the appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.

      7.2 Call Options.

            (a) If the Executive's employment with Investors or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Investors shall have the right and
option to purchase, and the Executive and the Executive's Permitted Transferees
(hereinafter referred to as the "Executive Group") shall be required to sell to
Investors, any or all of such Units then held by such member of the Executive
Group (it being understood that if Units of any class subject to repurchase
hereunder may be repurchased at different prices, Investors may elect to
repurchase only the portion of the Units of such class subject to repurchase
hereunder at the lower price), at a price per unit equal to the applicable
purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with Investors and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with Investors and its
      subsidiaries is terminated by Investors and its subsidiaries without Cause
      or by the Executive for Good Reason;

            (iii) if the Executive's active employment with Investors and its
      subsidiaries is terminated (A) by Investors or any of its subsidiaries for
      Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Investors' rights under this Section 7.2(a) shall not be available
in the event of the termination of Executive's employment by Investors or its
subsidiaries without Cause or by Executive for Good Reason, in either case
following a sale by Investors or its subsidiaries of substantially all of the
line of business in which Executive primarily performs his services.

            (b) If Investors desires to exercise one of its options to purchase
Units pursuant to this Section 7.2, Investors shall, not later than the
expiration of the applicable period described


                                       13


for such purchase in Section 7.2(a), send written notice to each member of the
Executive Group of its intention to purchase Units, specifying the number of
Units to be purchased (the "Call Notice"). Subject to the provisions of Section
8, the closing of the purchase shall take place at the principal office of
Investors on the later of the 30th day after the giving of the Call Notice and
the date that is 10 business days after the final determination of Fair Market
Value. Subject to the provisions of Section 8.1, the Executive shall deliver to
Investors duly executed instruments transferring title to units to Investors,
against payment of the appropriate purchase price by cashier's or certified
check payable to the Executive or by wire transfer of immediately available
funds to an account designated by the Executive.

            (c) In the event of a purchase by Investors pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Investors is less than or equal to the Unvested Percentage
            of such class, the purchase price for each Unit shall be the lesser
            of (x) the Fair Market Value (measured as of the date of the Call
            Notice) and (y) the Cost of such Unit (the "Unvested Unit Purchase
            Price"), and (ii) if the number of such Units exceeds the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            (A) for a number of Units of such class equal to the result of (x)
            the Unvested Percentage and (y) the total number of Units of such
            class held by the Executive Group, the Unvested Unit Purchase Price,
            and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Investors shall have the right to revoke the exercise
of its option pursuant to this Section 7.2 for all or any portion of the Units
elected to be repurchased by it by delivering notice of such revocation in
writing to the Executive Group during the tenday period beginning on the date
that Investors is given written notice that the Fair Market Value of a Unit was
finally determined to be an amount at least 10% greater than the per Unit
repurchase price set forth in the Call Notice.


                                       14


      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Investors purchases Units at Fair Market Value pursuant to the terms of
this Section 7.2 and within six months of the date of the determination of such
Fair Market Value both (A) a Sale of the Company or a Public Offering occurs and
(B) in connection with such transaction, the per share value of the Units
exceeds the per share purchase price paid by Investors to Executive under this
Section 7.2, the Executive shall be entitled to receive from Investors the
benefit of such higher valuation for the Units purchased. The excess of (x) the
net proceeds which the Executive would have received in such Sale of the Company
or Public Offering from the sale in such transaction of all Units repurchased by
Investors under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Investors, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Investors shall not excuse, or constitute a waiver of its rights against, the
defaulting member.

8. Certain Limitations on Investors's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Investors elects or is required to
purchase any Units pursuant to Section 7, Investors shall pay the purchase price
for the Units it purchases (i) first, by offsetting indebtedness, if any, owing
from the Executive to Investors (which indebtedness shall be applied pro rata
against the proceeds receivable by each member of the Executive Group receiving
consideration in such repurchase) and (ii) then, by Investors' delivery of a
check or wire transfer of immediately available funds for the remainder of the
purchase price, if any, against delivery of the certificates or other
instruments representing the Units so purchased, duly endorsed; provided that if
such cash payment would result (A) in a violation of any law, statute, rule,
regulation, policy, order, writ, injunction, decree or judgment promulgated or
entered by any federal, state, local or foreign court or governmental authority
applicable to Investors or any of its subsidiaries or any of its or their
property or (B) after giving effect thereto, a Financing Default, or (C) if the
Board determines in good faith that immediately prior to such purchase there
shall exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the "Cash Deferral Conditions"), the
portion of the cash payment so affected may be made by Investors' delivery of
preferred units of Investors with a liquidation preference equal to the balance
of the purchase price; which preferred units shall accrue yield annually at the
"prime rate" published in The Wall Street Journal on the date of issuance, which
yield shall be payable at maturity or upon payment of distributions by Investors
(other than tax distributions). Each such preferred unit shall as of its
issuance be deemed to have basic contributions made with respect to such unit
equal to (A) the portion of the cash payment paid by the issuance of such
preferred units divided by (B) the number of preferred units so issued in the
repurchase. Any such preferred units issued shall be promptly


                                       15


redeemed (i) when the Cash Deferral Condition which prompted their issuance no
longer exists, (ii) upon consummation of an IPO of the Company or Holdings (or
their successors) (to the extent allowed by the underwriters of such IPO), or
(iii) upon a Sale of the Company from net cash proceeds, if any, payable to
Investors or its unitholders; to the extent that sufficient net cash proceeds
are not so payable, the preferred units shall be cancelled in exchange for such
noncash consideration received by unitholders in the Sale of the Company having
a fair market value equal to the principal of and accrued yield on the preferred
units. If a yield is required to be paid on any preferred units prior to
maturity and any Cash Deferral Conditions exist, such yield may be cumulated and
accrued until and to the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with
Investors or its subsidiaries terminates, (i) Executive, for himself or on
behalf of any other person, firm, partnership, corporation, or other entity,
engages, directly or indirectly, as an executive, agent, representative,
consultant, partner, shareholder or holder of any other financial interest, in
any business that competes with Investors or its subsidiaries in the line of
business Executive is employed in by Investors or its subsidiaries (as
applicable), as such business is described in any employment or severance
agreement then in effect between Executive and Investors or one of its
subsidiaries or, if no such agreement is then in effect, as described on
Schedule III attached hereto (a "Competing Business"), it being understood and
agreed that Executive's activities shall not satisfy this clause (i) where
Executive is employed by a person, firm, partnership, corporation, or other
entity engaged in a variety of activities, including the Competing Business, and
Executive is not engaged in or responsible for the Competing Business of such
entity. Executive may also, without satisfying clause (i) be a passive owner of
not more than 2% of the outstanding publicly traded stock of any class of a
Competing Business so long as Executive has no active participation in the
business of such entity, except to the extent permitted above; or (ii) Executive
(A) directly or indirectly through another entity, induces or attempts to induce
any employee of the Company or its subsidiaries to leave the employ of the
Company or its subsidiaries, or in any way interfere with the relationship
between the Company or any of its subsidiaries and any employee thereof, (B)
knowingly hires any person who was an employee of the Company or any of its
subsidiaries within 180 days prior to the time such employee was hired by
Executive, (C) induces or attempts to induce any customer, supplier, licensee or
other business relation of the Company or any of its subsidiaries to cease doing
business with the Company or its subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary or (D) directly or indirectly acquires or
attempt to acquire an interest in any business relating to the business of the
Company or any of its subsidiaries and with which the Company or any of its
subsidiaries has entertained discussions or has requested and received
information relating to the acquisition of such business by the Company or its
subsidiaries in the oneyear period immediately preceding Executive's termination
of employment with the Company.


                                       16


      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.

      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Investors, within ten business days
following the Activity Date, an amount equal to the excess, if any, of (A) the
aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Investors a written
agreement of the proposed transferee (a) evidencing such Person's undertaking to
be bound by the terms of this Agreement and (b) acknowledging that the Units
transferred to such Person will continue to be Units for purposes of this
Agreement in the hands of such Person. Any transfer or attempted transfer of
Units in violation of any provision of this Agreement or the Securityholders
Agreement shall be void, and Investors shall not record such transfer on its
books or treat any purported transferee of such Units as the owner of such Units
for any purpose.

      10.2 Deemed Transfer of Units. If Investors shall deliver, at the time and
place and in the amount and form provided in this Agreement, the consideration
for the Units to be repurchased in accordance with the provisions of this
Agreement, then from and after such time, the Person from whom such units are to
be repurchased shall no longer have any rights as a holder of such units (other
than the right to receive payment of such consideration in accordance with this
Agreement), and such Units shall be deemed purchased in accordance with the
applicable provisions hereof and Investors shall be deemed the owner and holder
of such Units, whether or not certificates therefor have been delivered as
required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Investors or any successor or assign of
Investors (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Units,
by reason of any dividend payable in units, issuance of units, combination,
recapitalization, reclassification, merger, consolidation or otherwise.

      10.4 Executive's Employment by Investors. Nothing contained in this
Agreement shall be deemed to obligate Investors or any subsidiary of Investors
to employ the Executive in any capacity whatsoever or to prohibit or restrict
Investors (or any such subsidiary) from terminating the employment of the
Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Investors against any and all losses, liabilities, damages, judgments,
fines, fees or expenses,


                                       17


including, without limitation, attorneys' fees (for purposes of this Section
10.5, hereinafter "Losses"), incurred in connection with any failure to withhold
amounts relating to the Units acquired herein by the Management Investors. In
the event there is a determination within the meaning of Section 1313 of the
Internal Revenue Code of 1986, as amended, that Investors properly failed to
withhold amounts relating to the Units acquired herein by Executive, Executive
shall provide Investors with a Form 4669 or other suitable evidence of payment
of taxes (which will include a cancelled check or a copy of the relevant signed
tax return) with respect to the receipt of any distributions relating to the
Units acquired herein by Executive. To the extent either Investors and/or any of
its affiliates is entitled to any tax deduction with respect to the issuance of
Units, (i) Investors shall specially allocate such deduction to the Executive
and/or (ii) Holdings shall pay, or cause any affiliate to pay, as the case may
be, Executive an amount equal to 40% of such deduction, such amount to be
grossed up to reflect any additional deduction to Holdings and/or any of its
affiliates (as the case may be) provided that if any Cash Deferral Condition
exists at the time such payment is required, such payment shall be deferred
until no such Cash Deferral Condition exists. Each of Executive and Investors
shall notify the other (in a manner described in Section 10.10 of this
Agreement) within 20 days of first receiving notice of an audit or other
proceeding being conducted by the Internal Revenue Service or any state or local
taxing authority relating to the Units acquired herein by the Management
Investors, and both Executive and Investors shall assist each other during the
course of such audit or other proceeding to the extent that such assistance is
reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Investors a valid
undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Investors and the members of the Executive Group hereby submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. Each of the members of the Executive Group and Investors
hereby irrevocably waives any objections which 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 brought in any court of competent jurisdiction in the
State of Delaware, and hereby further irrevocably waives any claim that


                                       18


any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum.

      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

              (a)    If to Investors
                     MFoods Investors, LLC
                     c/o Vestar Capital Partners IV, L.P.
                     1225 Seventeenth Street
                     Suite 1660
                     Denver, CO 80202
                     Attention: James P. Kelley
                     Facsimile: (303) 2926639

              with copies to:

                     Vestar Capital Partners IV, L.P.
                     245 Park Avenue, 41st Floor
                     New York, NY  10167
                     Attention: General Counsel
                     Facsimile: (212) 8084922

                     Kirkland & Ellis
                     200 East Randolph Drive
                     Chicago, IL 60601
                     Attention: Stephen L. Ritchie
                     Facsimile: (312) 8612200

              (b)    If to the Executive, to the address as shown on the unit
                     register of Investors.

              with a copy to:

                     Skadden, Arps, Slate, Meagher & Flom LLP
                     Four Times Square
                     New York, NY 100366522
                     Attention: Eric L. Cochran


                                       19


      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Investors under this Agreement shall be cumulative and not exclusive of any
rights or remedies which either would otherwise have hereunder or at law or in
equity or by statute, and no failure or delay by either party in exercising any
right or remedy shall impair any such right or remedy or operate as a waiver of
such right or remedy, nor shall any single or partial exercise of any power or
right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                   * * * * *


                                       20


      IN WITNESS WHEREOF, the parties have executed this Management Stock
Purchase and Unit Subscription Agreement as of the date first above written.

                           MFOODS INVESTORS, LLC


                           By:
                              ---------------------------------

                           Its:
                              ---------------------------------


                           MFOODS HOLDINGS, INC.


                           By:
                              ---------------------------------

                           Its:
                              ---------------------------------


                           EXECUTIVE

                           ------------------------------------
                                     Gregg A. Ostrander


                           JOINT TENANT

                           ------------------------------------
                                    Kristin Kjar Ostrander



                               CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Stock Purchase and Unit
Subscription Agreement (the "Agreement") and that I understand its contents. I
am aware that the Agreement provides for the repurchase of my spouse's Units (as
defined in the Agreement) under certain circumstances and imposes other
restrictions on the transfer of such Units. I agree that my spouse's interest in
the Units is subject to the Agreement and any interest I may have in such Units
shall also be irrevocably bound by the Agreement and, further, that my community
property interest in such Units, if any, shall be similarly bound by the
Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.


                  Acknowledged and agreed this ___ day of
                  _____________, 2001.


                  ------------------------------------------------

                  Name:
                       -------------------------------------------

                  ------------------------------------------------
                                    Witness



                                   SCHEDULE I

- --------------------------------------------------------------------------------
        Shares            Purchased Shares                 Share Purchase Price
- --------------------------------------------------------------------------------
        34,768                 29,199                         $878,889.93
- --------------------------------------------------------------------------------



                                  SCHEDULE II

- --------------------------------------------------------------------------------
       Contributed Shares                            Units
- --------------------------------------------------------------------------------
             5,569                            42,000 Class B Units
                                              42,000 Class C Units
- --------------------------------------------------------------------------------



                                  SCHEDULE III

Competing Business: Production, distribution or sale of eggs or egg products



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                    INCOME PURSUANT TO SECTION 83(b) OF THE
                             INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of MFoods Investors, LLC
("Investors") on ________, 2001. The undersigned desires to make an election to
have the Units taxed under the provision of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the undersigned
purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.832 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:

               ------------------------------------

               ------------------------------------

               ------------------------------------
               SSN:
                   --------------------------------

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a timebased vesting schedule. If the undersigned ceases to be
employed by Investors or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Investors at a
price per Unit equal to the lesser of (x) fair market value (measured as of the
date of such repurchase) and (y) cost. The Units are also subject to transfer
restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $______________.

            6. The aggregate amount paid for such property: $_______. A copy of
this election has been furnished to the Secretary of Investors pursuant to
Treasury Regulations ss.1.832(e)(7).



Dated:  ________, 2001          -------------------------------
                                             [Name]

EX-10.16

                                                                  Exhibit 10.16

                                                                [Execution Copy]

                         MANAGEMENT STOCK PURCHASE AND
                          UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT (this
"Agreement") is made as of April 10, 2001, by and among M-Foods Investors, LLC,
a Delaware limited liability company ("Investors"), John D. Reedy (the
"Executive"), and for the purposes of Section 10.5 hereof, M-Foods Holdings,
Inc., a Delaware corporation ("Holdings").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of Investors or one or more of its subsidiaries
and who will hold interests in Investors (collectively with the Executive, the
"Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, prior to the consummation of the transactions contemplated
by this Agreement and the Merger Agreement, the Executive is the record and
beneficial owner of the number of shares of the Company's common stock, par
value $0.01 per share (the "Shares"), set forth on Schedule I attached hereto;

            WHEREAS, on the terms and subject to the conditions hereof,
Investors desires to acquire from the Executive, and the Executive desires to
sell to Investors, certain of the Shares, as set forth on Schedule I (the
"Purchased Shares"); and

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive also
desires to contribute certain of the Shares (the "Contributed Shares") in
exchange for Investors' Class B Units (the "Class B Units") and Class C Units
(the "Class C Units"), in each case in the amounts set forth on Schedule II
attached hereto.

            NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:



1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.

      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean Investors' Management Committee.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and
Investors or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with Investors or
one of its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive's duties; (ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to Investors or one of its subsidiaries; or (iii)
conviction of a felony or guilty or nolo contendere plea by the Executive with
respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of Investors or one of
its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer (while the Executive does not serve as such) or
based upon the advice of counsel for Investors shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best
interests of Investors and its subsidiaries. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a


                                       2


resolution duly adopted by the affirmative vote of not less than 75%of the
entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in (i), (ii) or (iii)
above, and specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or by virtue of their interests in Investors, a majority of the Board
of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means Investors' Class A
Units.

      1.8 Class B Units. The term "Class B Units" shall have the meaning set
forth in the preface.

      1.9 Class C Units. The term "Class C Units" shall have the meaning set
forth in the preface.

      1.10 Closing. The "Closing" for the sale and purchase of the Shares and
the contribution of Shares in exchange for Units hereunder shall occur
immediately prior to the consummation of the Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Contributed Shares. The term "Contributed Shares" shall have the
meaning set forth in the preface.


                                       3


      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and Investors or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job responsibilities as a result of chronic illness, physical,
mental or any other disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of Investors or any of its subsidiaries, and the term "employment"
shall include service as a part or fulltime employee to Investors or any of its
subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Investors at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
the Company in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of the Company and the Executive setting forth their respective resolutions of
the dispute and the bases therefor and (ii) accepting either the Executive's or
the Company's proposed resolution of the dispute. Promptly following the
Company's receipt of Executive's written notice of disagreement, the Company
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and the Company's written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and the


                                       4


Company of its decision within 40 days of its engagement. The party whose
proposed resolution is not accepted shall pay all of the Arbiter's fees and
expenses. If the Executive's proposed resolution is accepted, the Company also
shall pay all of the Executive's reasonable out-of-pocket fees and expenses
(including reasonable fees and expenses of counsel and one appraiser, accountant
or investment banking firm) incurred in connection with the arbitration. Each of
the Company and the Executive agrees to execute, if requested by the Arbiter, a
reasonable engagement letter with the Arbiter.

      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and Investors or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by Investors or one of its subsidiaries (as applicable) which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Investors or one of its subsidiaries promptly
after receipt of notice thereof given by the Executive; provided that after a
Change in Control, Investors or one of its subsidiaries (as applicable) shall
have the flexibility to appoint the Executive to a reporting


                                       5


relationship different from that which existed prior to the Change in Control,
to make an immaterial change in Executive's duties, or to change the Executive's
title provided; (ii) any failure by Investors or one of its subsidiaries (as
applicable) to provide Executive with the annual base salary Executive had
previously received or the failure by Investors or one of its subsidiaries (as
applicable) to increase such annual each year after a Change in Control by an
amount which at least equals on a percentage basis, the mean average percentage
increase in base salary for all employees similarly situated during the two full
calendar years immediately preceding a Change in Control, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by Investors or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of Investors or one of its subsidiaries (as applicable) upon a Change in
Control to (A) continue in effect any employee benefit plan, compensation plan,
welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by Investors or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of Investors or one
of its subsidiaries as in effect for Executive immediately prior to such Change
in Control; (iv) after a Change in Control, any purported termination by
Investors or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on Investor or its
subsidiaries' business to an extent substantially greater than the Executive's
current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Investors. The term "Investors" shall have the meaning set forth in
the preface.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Amended and
Restated Limited Liability Company Agreement of Investors, dated as of April 10,
2001, entered into by and among the members of Investors, as amended from time
to time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.


                                       6


      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.

      1.32 Purchased Shares. The term "Purchased Shares" shall have the meaning
set forth in the preface.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of Investors or any of its
subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board, after at least three years employment with
Investors after the Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among
Investors, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Shares. The term "Shares" shall have the meaning set forth in the
preface.

      1.38 Share Purchase Price. The term "Share Purchase Price" shall have the
meaning set forth in Section 2.2.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with Investors and its subsidiaries is terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Investors,
whether pursuant to this Agreement or any other arrangement.


                                       7


      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael Foods
CoInvest, LLC, a Delaware limited liability company.

2. Purchase and Sale of Shares; Contribution.

      2.1 Purchase and Sale of the Shares. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement, the Executive shall sell,
assign, transfer and convey to Investors, and Investors shall purchase and
acquire from the Executive, the Purchased Shares against payment at the Closing
of an aggregate amount equal to the Share Purchase Price by wire transfer of
immediately available funds to one or more accounts specified by the Executive
in a written notice to Investors prior to the Closing Date.

      2.2 Share Purchase Price. The aggregate purchase price for the Purchased
Shares (the "Share Purchase Price") will consist of the payment of an amount of
cash, equal to $30.10 per Purchased Share, as set forth on Schedule I.

      2.3 Contribution of Shares. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Investors hereby agrees to receive, the Contributed Shares in
exchange for the number of Units set forth on Schedule II.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Investors stock certificates
representing the Purchased Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment;

            (b) Investors shall deliver to the Executive the amount of the Share
Purchase Price by wire transfer of immediately available funds to one or more
accounts designated by the Executive in writing to Investors prior to the
Closing;

            (c) The Executive shall deliver to Investors stock certificates
representing the Contributed Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment; and

            (d) Investors shall deliver to the Executive unit certificates
representing the number of Class B Units and Class C Units set forth on Schedule
II.


                                       8


      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Investors.

      4.1 Stock Purchase Representations of the Executive. The Executive
represents and warrants to Investors that the statements contained in this
Section 4.1 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is subject or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Executive is a party or by which he is bound or to which any of his assets
is subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Investors could become
liable or obligated.

            (d) Capital Stock. The Executive holds of record and owns
beneficially the number of Shares set forth next to his name on Schedule I, free
and clear of any restrictions on transfer (other than any restrictions under the
Securities Act, state securities laws, joint tenancy laws or other Transaction
Documents), taxes, security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. In the event the
Executive owns the Shares in joint tenancy, the joint tenant of the Executive
has executed this Agreement on the signature page attached hereto and Executive
has informed such joint tenant of the transactions set forth in this Agreement.
The Executive is not a party to any option, warrant, purchase right, or other
contract or commitment that could require the Executive to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement). Except as set forth in other Transaction


                                       9


Documents, the Executive is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
the Company. The Executive acknowledges and represents that the Paying Agent (as
defined in the Merger Agreement) will not make any payment to Executive in
connection with the Shares subject to this Agreement and that such shares will
be cancelled upon consummation of the Acquisition.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Investors that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
            SUBJECT TO CERTAIN REPURCHASE OPTIONS AND OTHER
            PROVISIONS SET FORTH IN A MANAGEMENT STOCK PURCHASE
            AND UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER
            AND THE EXECUTIVE DATED AS OF APRIL 10, 2001, AS
            AMENDED AND MODIFIED FROM TIME TO TIME, A COPY OF
            WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE
            ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE";
            and

            (e) a notation shall be made in the appropriate records of Investors
      indicating that the Units are subject to restrictions on transfer and, if
      Investors should at some time in the future engage the services of a
      securities transfer agent, appropriate stoptransfer instructions will be
      issued to such transfer agent with respect to the Units.

      4.3 [Reserved]


                                       10


      4.4 Representations of Investors. Investors represents to the Executive
that the statements contained in this Section 4.4 are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date, with respect to itself:

            (a) Organization and Power. Investors is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware with full power and authority to enter into this Agreement and
perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Investors and the consummation of the transactions contemplated
hereby by Investors have been duly and validly authorized by all requisite
limited liability company action on the part of Investors, and no other
proceedings on its part are necessary to authorize the execution, delivery or
performance of this Agreement. This Agreement has been duly executed and
delivered by Investors, and this Agreement constitutes a valid and binding
obligation of Investors, enforceable in accordance with its terms and
conditions. Investors need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Investors is subject or any provision of
its charter or bylaws or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Investors is a party or by which it is bound or to which any of its assets is
subject.

            (d) Investment. Investors is not acquiring the Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Investors to issue, sell, or
otherwise cause to become outstanding any of its Units. Except as set forth in
the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Investors. Except as set forth in the Transaction Documents, there
are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Investors.

5. Covenants of the Executive and Investors


                                       11


      5.1 Covenants. The Executive and/or Investors each agree as follows with
respect to the period between the execution of this Agreement and the Closing:

            (a) General. The Executive and Investors each will use his or its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section 6 below).

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with Investors and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Investors, and Investors shall be required to
purchase (subject to the provisions of Section 8 hereof), on one occasion from
the Executive and his Permitted Transferees, if applicable, all (but not less
than all) of the number of Units then held by the Executive and such other
number of Units held by the Executive's Permitted Transferees as the Executive
may request provided that in the aggregate such number does not exceed the
product of (x) the total number of Units collectively held by the Executive and
all of his Permitted Transferees and (y) the Applicable Percentage (measured as
of the Termination Date), at a price per unit equal to the Fair Market Value of
such unit (measured as of the delivery of the notice referred to in Section
7.1(b)).

            (b) If the Executive desires to exercise its option to require
Investors to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Investors setting forth the intention of Executive
and Permitted Transferees, if applicable, to collectively sell all Units
pursuant to Section 7.1(a) within the period described above, which notice shall
specify the number of Units to be sold and shall include the signature of the
Executive and each Permitted Transferee desiring to sell Units. Subject to the
provisions of Section 8.1, the closing of the purchase shall take place at the
principal office of Investors on the later of the 30th day after the giving of
such notice and the date that is 10 business days after the final determination
of Fair Market Value. Subject to the provisions of Section 8.1, the Executive
shall deliver to Investors duly executed instruments transferring title to units
to Investors, against payment of the appropriate purchase price by cashier's


                                       12


or certified check payable to the Executive or by wire transfer of immediately
available funds to an account designated by the Executive.

      7.2 Call Options.

            (a) If the Executive's employment with Investors or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Investors shall have the right and
option to purchase, and the Executive and the Executive's Permitted Transferees
(hereinafter referred to as the "Executive Group") shall be required to sell to
Investors, any or all of such Units then held by such member of the Executive
Group (it being understood that if Units of any class subject to repurchase
hereunder may be repurchased at different prices, Investors may elect to
repurchase only the portion of the Units of such class subject to repurchase
hereunder at the lower price), at a price per unit equal to the applicable
purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with Investors and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with Investors and its
      subsidiaries is terminated by Investors and its subsidiaries without Cause
      or by the Executive for Good Reason;

            (iii) if the Executive's active employment with Investors and its
      subsidiaries is terminated (A) by Investors or any of its subsidiaries for
      Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Investors' rights under this Section 7.2(a) shall not be available
in the event of the termination of Executive's employment by Investors or its
subsidiaries without Cause or by Executive for Good Reason, in either case
following a sale by Investors or its subsidiaries of substantially all of the
line of business in which Executive primarily performs his services.

            (b) If Investors desires to exercise one of its options to purchase
Units pursuant to this Section 7.2, Investors shall, not later than the
expiration of the applicable period described for such purchase in Section
7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Investors on the later of
the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of


                                       13


Section 8.1, the Executive shall deliver to Investors duly executed instruments
transferring title to units to Investors, against payment of the appropriate
purchase price by cashier's or certified check payable to the Executive or by
wire transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Investors pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Investors is less than or equal to the Unvested Percentage
            of such class, the purchase price for each Unit shall be the lesser
            of (x) the Fair Market Value (measured as of the date of the Call
            Notice) and (y) the Cost of such Unit (the "Unvested Unit Purchase
            Price"), and (ii) if the number of such Units exceeds the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            (A) for a number of Units of such class equal to the result of (x)
            the Unvested Percentage and (y) the total number of Units of such
            class held by the Executive Group, the Unvested Unit Purchase Price,
            and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Investors shall have the right to revoke the exercise
of its option pursuant to this Section 7.2 for all or any portion of the Units
elected to be repurchased by it by delivering notice of such revocation in
writing to the Executive Group during the tenday period beginning on the date
that Investors is given written notice that the Fair Market Value of a Unit was
finally determined to be an amount at least 10% greater than the per Unit
repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Investors purchases Units at Fair Market Value pursuant to the terms of
this Section 7.2 and within six months of the date of the determination of such
Fair Market Value both (A) a Sale of the Company or a Public Offering occurs and
(B) in connection with such transaction, the per share value of the Units


                                       14


exceeds the per share purchase price paid by Investors to Executive under this
Section 7.2, the Executive shall be entitled to receive from Investors the
benefit of such higher valuation for the Units purchased. The excess of (x) the
net proceeds which the Executive would have received in such Sale of the Company
or Public Offering from the sale in such transaction of all Units repurchased by
Investors under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Investors, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Investors shall not excuse, or constitute a waiver of its rights against, the
defaulting member.

8. Certain Limitations on Investors's Obligations to Purchase Units.


      8.1 Payment for Units. If at any time Investors elects or is required to
purchase any Units pursuant to Section 7, Investors shall pay the purchase price
for the Units it purchases (i) first, by offsetting indebtedness, if any, owing
from the Executive to Investors (which indebtedness shall be applied pro rata
against the proceeds receivable by each member of the Executive Group receiving
consideration in such repurchase) and (ii) then, by Investors' delivery of a
check or wire transfer of immediately available funds for the remainder of the
purchase price, if any, against delivery of the certificates or other
instruments representing the Units so purchased, duly endorsed; provided that if
such cash payment would result (A) in a violation of any law, statute, rule,
regulation, policy, order, writ, injunction, decree or judgment promulgated or
entered by any federal, state, local or foreign court or governmental authority
applicable to Investors or any of its subsidiaries or any of its or their
property or (B) after giving effect thereto, a Financing Default, or (C) if the
Board determines in good faith that immediately prior to such purchase there
shall exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the "Cash Deferral Conditions"), the
portion of the cash payment so affected may be made by Investors' delivery of
preferred units of Investors with a liquidation preference equal to the balance
of the purchase price; which preferred units shall accrue yield annually at the
"prime rate" published in The Wall Street Journal on the date of issuance, which
yield shall be payable at maturity or upon payment of distributions by Investors
(other than tax distributions). Each such preferred unit shall as of its
issuance be deemed to have basic contributions made with respect to such unit
equal to (A) the portion of the cash payment paid by the issuance of such
preferred units divided by (B) the number of preferred units so issued in the
repurchase. Any such preferred units issued shall be promptly redeemed (i) when
the Cash Deferral Condition which prompted their issuance no longer exists, (ii)
upon consummation of an IPO of the Company or Holdings (or their successors) (to
the extent allowed by the underwriters of such IPO), or (iii) upon a Sale of the
Company from net cash proceeds, if any, payable to Investors or its unitholders;
to the extent that sufficient net cash proceeds


                                       15


are not so payable, the preferred units shall be cancelled in exchange for such
noncash consideration received by unitholders in the Sale of the Company having
a fair market value equal to the principal of and accrued yield on the preferred
units. If a yield is required to be paid on any preferred units prior to
maturity and any Cash Deferral Conditions exist, such yield may be cumulated and
accrued until and to the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with
Investors or its subsidiaries terminates, (i) Executive, for himself or on
behalf of any other person, firm, partnership, corporation, or other entity,
engages, directly or indirectly, as an executive, agent, representative,
consultant, partner, shareholder or holder of any other financial interest, in
any business that competes with Investors or its subsidiaries in the line of
business Executive is employed in by Investors or its subsidiaries (as
applicable), as such business is described in any employment or severance
agreement then in effect between Executive and Investors or one of its
subsidiaries or, if no such agreement is then in effect, as described on
Schedule III attached hereto (a "Competing Business"), it being understood and
agreed that Executive's activities shall not satisfy this clause (i) where
Executive is employed by a person, firm, partnership, corporation, or other
entity engaged in a variety of activities, including the Competing Business, and
Executive is not engaged in or responsible for the Competing Business of such
entity. Executive may also, without satisfying clause (i) be a passive owner of
not more than 2% of the outstanding publicly traded stock of any class of a
Competing Business so long as Executive has no active participation in the
business of such entity, except to the extent permitted above; or (ii) Executive
(A) directly or indirectly through another entity, induces or attempts to induce
any employee of the Company or its subsidiaries to leave the employ of the
Company or its subsidiaries, or in any way interfere with the relationship
between the Company or any of its subsidiaries and any employee thereof, (B)
knowingly hires any person who was an employee of the Company or any of its
subsidiaries within 180 days prior to the time such employee was hired by
Executive, (C) induces or attempts to induce any customer, supplier, licensee or
other business relation of the Company or any of its subsidiaries to cease doing
business with the Company or its subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary or (D) directly or indirectly acquires or
attempt to acquire an interest in any business relating to the business of the
Company or any of its subsidiaries and with which the Company or any of its
subsidiaries has entertained discussions or has requested and received
information relating to the acquisition of such business by the Company or its
subsidiaries in the one-year period immediately preceding Executive's
termination of employment with the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.

      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Investors, within ten business days
following the Activity Date,


                                       16


an amount equal to the excess, if any, of (A) the aggregate proceeds Executive
received upon the sale or other disposition of Executive's Units, over (B) the
aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Investors a written
agreement of the proposed transferee (a) evidencing such Person's undertaking to
be bound by the terms of this Agreement and (b) acknowledging that the Units
transferred to such Person will continue to be Units for purposes of this
Agreement in the hands of such Person. Any transfer or attempted transfer of
Units in violation of any provision of this Agreement or the Securityholders
Agreement shall be void, and Investors shall not record such transfer on its
books or treat any purported transferee of such Units as the owner of such Units
for any purpose.

      10.2 Deemed Transfer of Units. If Investors shall deliver, at the time and
place and in the amount and form provided in this Agreement, the consideration
for the Units to be repurchased in accordance with the provisions of this
Agreement, then from and after such time, the Person from whom such units are to
be repurchased shall no longer have any rights as a holder of such units (other
than the right to receive payment of such consideration in accordance with this
Agreement), and such Units shall be deemed purchased in accordance with the
applicable provisions hereof and Investors shall be deemed the owner and holder
of such Units, whether or not certificates therefor have been delivered as
required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Investors or any successor or assign of
Investors (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Units,
by reason of any dividend payable in units, issuance of units, combination,
recapitalization, reclassification, merger, consolidation or otherwise.

      10.4 Executive's Employment by Investors. Nothing contained in this
Agreement shall be deemed to obligate Investors or any subsidiary of Investors
to employ the Executive in any capacity whatsoever or to prohibit or restrict
Investors (or any such subsidiary) from terminating the employment of the
Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Investors against any and all losses, liabilities, damages, judgments,
fines, fees or expenses, including, without limitation, attorneys' fees (for
purposes of this Section 10.5, hereinafter "Losses"), incurred in connection
with any failure to withhold amounts relating to the Units acquired herein by
the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Investors properly failed to withhold amounts relating to the Units acquired
herein by Executive, Executive shall provide Investors with


                                       17


a Form 4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Investors and/or any of its affiliates is entitled to any
tax deduction with respect to the issuance of Units, (i) Investors shall
specially allocate such deduction to the Executive and/or (ii) Holdings shall
pay, or cause any affiliate to pay, as the case may be, Executive an amount
equal to 40% of such deduction, such amount to be grossed up to reflect any
additional deduction to Holdings and/or any of its affiliates (as the case may
be) provided that if any Cash Deferral Condition exists at the time such payment
is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Investors shall notify the other (in a
manner described in Section 10.10 of this Agreement) within 20 days of first
receiving notice of an audit or other proceeding being conducted by the Internal
Revenue Service or any state or local taxing authority relating to the Units
acquired herein by the Management Investors, and both Executive and Investors
shall assist each other during the course of such audit or other proceeding to
the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Investors a valid
undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Investors and the members of the Executive Group hereby submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. Each of the members of the Executive Group and Investors
hereby irrevocably waives any objections which 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 brought in any court of competent jurisdiction in the
State of Delaware, and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum.

      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and


                                       18


three days after deposit in the U.S. Mail (postage prepaid and return receipt
requested) to the address set forth below or such other address as the recipient
party has previously delivered notice to the sending party.

             (a)  If to Investors

                  M-Foods Investors, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 2926639

             with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 8084922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 8612200

             (b)  If to the Executive, to the address as shown on
                  the unit register of Investors.

             with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 100366522
                  Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.


                                       19


      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Investors under this Agreement shall be cumulative and not exclusive of any
rights or remedies which either would otherwise have hereunder or at law or in
equity or by statute, and no failure or delay by either party in exercising any
right or remedy shall impair any such right or remedy or operate as a waiver of
such right or remedy, nor shall any single or partial exercise of any power or
right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                   * * * * *


                                       20


      IN WITNESS WHEREOF, the parties have executed this Management Stock
Purchase and Unit Subscription Agreement as of the date first above written.

                               M-FOODS INVESTORS, LLC

                               By:
                                  ----------------------------------------------

                               Its:
                                   ---------------------------------------------


                               M-FOODS HOLDINGS, INC.

                               By:
                                  ----------------------------------------------

                               Its:
                                   ---------------------------------------------


                               EXECUTIVE

                               -------------------------------------------------
                                                   John D. Reedy



                               CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Stock Purchase and Unit
Subscription Agreement (the "Agreement") and that I understand its contents. I
am aware that the Agreement provides for the repurchase of my spouse's Units (as
defined in the Agreement) under certain circumstances and imposes other
restrictions on the transfer of such Units. I agree that my spouse's interest in
the Units is subject to the Agreement and any interest I may have in such Units
shall also be irrevocably bound by the Agreement and, further, that my community
property interest in such Units, if any, shall be similarly bound by the
Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                  Acknowledged and agreed this ___ day of
                  _____________, 2001.


                  ---------------------------------------------

                  Name:
                       ----------------------------------------


                  ---------------------------------------------
                                   Witness



                                   SCHEDULE I

- --------------------------------------------------------------------------------
        Shares          Purchased Shares        Share Purchase Price
- --------------------------------------------------------------------------------
        19,870               17,881.07               $538,220.26
- --------------------------------------------------------------------------------



                                  SCHEDULE II

- --------------------------------------------------------------------------------
   Contributed Shares                          Units
- --------------------------------------------------------------------------------
        1,988.93                       15,000 Class B Units
                                       15,000 Class C Units
- --------------------------------------------------------------------------------



                                  SCHEDULE III

Competing Business: Production, distribution or sale of eggs or egg products



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                    INCOME PURSUANT TO SECTION 83(b) OF THE
                             INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Investors, LLC
("Investors") on ________, 2001. The undersigned desires to make an election to
have the Units taxed under the provision of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the undersigned
purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.832(e):

            1. The name, address and social security number of the undersigned:

               ------------------------------

               ------------------------------

               ------------------------------
               SSN:
                   --------------------------

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a timebased vesting schedule. If the undersigned ceases to be
employed by Investors or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Investors at a
price per Unit equal to the lesser of (x) fair market value (measured as of the
date of such repurchase) and (y) cost. The Units are also subject to transfer
restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $__________.

            6. The aggregate amount paid for such property: $_______.

            A copy of this election has been furnished to the Secretary of
Investors pursuant to Treasury Regulations ss.1.83-2(e)(7).



Dated:  ________, 2001    ---------------------------------
                                       [Name]

EX-10.17

                                                                 Exhibit 10.17

                                                                [Execution Copy]

                         MANAGEMENT STOCK PURCHASE AND
                          UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT (this
"Agreement") is made as of April 10, 2001, by and among M-Foods Investors, LLC,
a Delaware limited liability company ("Investors"), James D. Clarkson (the
"Executive"), for the purposes of Section 10.5 hereof, M-Foods Holdings, Inc., a
Delaware corporation ("Holdings") and, for the purposes of Section 2.6 hereof,
Susan Clarkson (the "Joint Tenant").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of Investors or one or more of its subsidiaries
and who will hold interests in Investors (collectively with the Executive, the
"Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, prior to the consummation of the transactions contemplated
by this Agreement and the Merger Agreement, the Executive is the record and
beneficial owner of the number of shares of the Company's common stock, par
value $0.01 per share (the "Shares"), set forth on Schedule I attached hereto;

            WHEREAS, on the terms and subject to the conditions hereof,
Investors desires to acquire from the Executive, and the Executive desires to
sell to Investors, certain of the Shares, as set forth on Schedule I (the
"Purchased Shares"); and

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive also
desires to contribute certain of the Shares (the "Contributed Shares") in
exchange for Investors' Class B Units (the "Class B Units") and Class C Units
(the "Class C Units"), in each case in the amounts set forth on Schedule II
attached hereto.

            NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:



1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.

      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40%
during the one-year period commencing on the second anniversary of the
Closing Date; (iv) 60% during the one-year period commencing on the third
anniversary of the Closing Date; (v) 80% during the one-year period
commencing on the fourth anniversary of the Closing Date; and (vi) 100% on
and after the fifth anniversary of the Closing Date. Notwithstanding the
foregoing, (A) immediately prior to and after the occurrence of a Sale of the
Company, such Applicable Percentage shall mean 100%, and (B) in the case of a
termination of employment described in Section 7.2(a)(iii)(B), such
Applicable Percentage in clauses (i), (ii) and (iii) shall be 0%, and in
clauses (iv) and (v) and (vi) shall be 40%, 75% and 100%, respectively.

      1.4 Board. The "Board" shall mean Investors' Management Committee.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and
Investors or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with Investors or
one of its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive's duties; (ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to Investors or one of its subsidiaries; or (iii)
conviction of a felony or guilty or nolo contendere plea by the Executive with
respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of Investors or one of
its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer (while the Executive does not serve as such) or
based upon the advice of counsel for Investors shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best
interests of Investors and its subsidiaries. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than 75% of the entire membership of the


                                       2


Board (excluding the Executive) at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in (i), (ii) or (iii) above, and specifying the
particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm'slength
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or by virtue of their interests in Investors, a majority of the Board
of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means Investors' Class A
Units.

      1.8 Class B Units. The term "Class B Units" shall have the meaning set
forth in the preface.

      1.9 Class C Units. The term "Class C Units" shall have the meaning set
forth in the preface.

      1.10 Closing. The "Closing" for the sale and purchase of the Shares and
the contribution of Shares in exchange for Units hereunder shall occur
immediately prior to the consummation of the Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Contributed Shares. The term "Contributed Shares" shall have the
meaning set forth in the preface.


                                       3


      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and Investors or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job responsibilities as a result of chronic illness, physical,
mental or any other disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of Investors or any of its subsidiaries, and the term "employment"
shall include service as a part or fulltime employee to Investors or any of its
subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Investors at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
the Company in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of the Company and the Executive setting forth their respective resolutions of
the dispute and the bases therefor and (ii) accepting either the Executive's or
the Company's proposed resolution of the dispute. Promptly following the
Company's receipt of Executive's written notice of disagreement, the Company
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and the Company's written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and the


                                       4


Company of its decision within 40 days of its engagement. The party whose
proposed resolution is not accepted shall pay all of the Arbiter's fees and
expenses. If the Executive's proposed resolution is accepted, the Company also
shall pay all of the Executive's reasonable out-of-pocket fees and expenses
(including reasonable fees and expenses of counsel and one appraiser, accountant
or investment banking firm) incurred in connection with the arbitration. Each of
the Company and the Executive agrees to execute, if requested by the Arbiter, a
reasonable engagement letter with the Arbiter.

      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11 3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and Investors or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by Investors or one of its subsidiaries (as applicable) which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Investors or one of its subsidiaries promptly
after receipt of notice thereof given by the Executive; provided that after a
Change in Control, Investors or one of its subsidiaries (as applicable) shall
have the flexibility to appoint the Executive to a reporting


                                       5


relationship different from that which existed prior to the Change in Control,
to make an immaterial change in Executive's duties, or to change the Executive's
title provided; (ii) any failure by Investors or one of its subsidiaries (as
applicable) to provide Executive with the annual base salary Executive had
previously received or the failure by Investors or one of its subsidiaries (as
applicable) to increase such annual each year after a Change in Control by an
amount which at least equals on a percentage basis, the mean average percentage
increase in base salary for all employees similarly situated during the two full
calendar years immediately preceding a Change in Control, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by Investors or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of Investors or one of its subsidiaries (as applicable) upon a Change in
Control to (A) continue in effect any employee benefit plan, compensation plan,
welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by Investors or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of Investors or one
of its subsidiaries as in effect for Executive immediately prior to such Change
in Control; (iv) after a Change in Control, any purported termination by
Investors or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on Investor or its
subsidiaries' business to an extent substantially greater than the Executive's
current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Investors. The term "Investors" shall have the meaning set forth in
the preface.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Amended and
Restated Limited Liability Company Agreement of Investors, dated as of April 10,
2001, entered into by and among the members of Investors, as amended from time
to time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.


                                       6


      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.

      1.32 Purchased Shares. The term "Purchased Shares" shall have the meaning
set forth in the preface.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of Investors or any of its
subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board, after at least three years employment with
Investors after the Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among
Investors, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Shares. The term "Shares" shall have the meaning set forth in the
preface.

      1.38 Share Purchase Price. The term "Share Purchase Price" shall have the
meaning set forth in Section 2.2.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with Investors and its subsidiaries is terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Investors,
whether pursuant to this Agreement or any other arrangement.


                                       7


      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael Foods
CoInvest, LLC, a Delaware limited liability company.

2. Purchase and Sale of Shares; Contribution.

      2.1 Purchase and Sale of the Shares. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement, the Executive shall sell,
assign, transfer and convey to Investors, and Investors shall purchase and
acquire from the Executive, the Purchased Shares against payment at the Closing
of an aggregate amount equal to the Share Purchase Price by wire transfer of
immediately available funds to one or more accounts specified by the Executive
in a written notice to Investors prior to the Closing Date.

      2.2 Share Purchase Price. The aggregate purchase price for the Purchased
Shares (the "Share Purchase Price") will consist of the payment of an amount of
cash, equal to $30.10 per Purchased Share, as set forth on Schedule I.

      2.3 Contribution of Shares. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Investors hereby agrees to receive, the Contributed Shares in
exchange for the number of Units set forth on Schedule II.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Investors stock certificates
representing the Purchased Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment;

            (b) Investors shall deliver to the Executive the amount of the Share
Purchase Price by wire transfer of immediately available funds to one or more
accounts designated by the Executive in writing to Investors prior to the
Closing;

            (c) The Executive shall deliver to Investors stock certificates
representing the Contributed Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment; and

            (d) Investors shall deliver to the Executive unit certificates
representing the number of Class B Units and Class C Units set forth on Schedule
II.


                                       8


      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

      2.6 Joint Tenancy. As a joint tenant with respect to some or all of the
Shares subject to this Agreement, the Joint Tenant hereby represents and
acknowledges that she has read and understands the terms and provisions set
forth herein. In furtherance of the consummation of the transactions described
in this Agreement, the Joint Tenant hereby expressly gifts and transfers to the
Executive all right, title and interests in such of the Shares held in joint
tenancy, such gift and transfer taking effect immediately prior to and in
connection with the consummation of the transactions described herein. The Joint
Tenant hereby agrees and acknowledges that the effect of this Section 2.6 is to
terminate her joint tenancy interest in any of the Shares held in joint tenancy
as of the date hereof.

3. [Reserved]

4. Representations and Warranties of the Executive and Investors.

      4.1 Stock Purchase Representations of the Executive. The Executive
represents and warrants to Investors that the statements contained in this
Section 4.1 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is subject or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Executive is a party or by which he is bound or to which any of his assets
is subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Investors could become
liable or obligated.


                                       9


            (d) Capital Stock. The Executive holds of record and owns
beneficially the number of Shares set forth next to his name on Schedule I, free
and clear of any restrictions on transfer (other than any restrictions under the
Securities Act, state securities laws, joint tenancy laws or other Transaction
Documents), taxes, security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. In the event the
Executive owns the Shares in joint tenancy, the joint tenant of the Executive
has executed this Agreement on the signature page attached hereto and Executive
has informed such joint tenant of the transactions set forth in this Agreement.
The Executive is not a party to any option, warrant, purchase right, or other
contract or commitment that could require the Executive to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement). Except as set forth in other Transaction Documents, the Executive is
not a party to any voting trust, proxy, or other agreement or understanding with
respect to the voting of any capital stock of the Company. The Executive
acknowledges and represents that the Paying Agent (as defined in the Merger
Agreement) will not make any payment to Executive in connection with the Shares
subject to this Agreement and that such shares will be cancelled upon
consummation of the Acquisition.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Investors that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
            SUBJECT TO CERTAIN REPURCHASE OPTIONS AND OTHER
            PROVISIONS SET FORTH IN A MANAGEMENT STOCK PURCHASE
            AND UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER
            AND THE EXECUTIVE DATED AS OF APRIL 10, 2001, AS
            AMENDED AND MODIFIED FROM TIME TO TIME, A COPY OF
            WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE
            ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE";
            and


                               10


            (e) a notation shall be made in the appropriate records of Investors
      indicating that the Units are subject to restrictions on transfer and, if
      Investors should at some time in the future engage the services of a
      securities transfer agent, appropriate stoptransfer instructions will be
      issued to such transfer agent with respect to the Units.

      4.3 [Reserved]

      4.4 Representations of Investors. Investors represents to the Executive
that the statements contained in this Section 4.4 are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date, with respect to itself:

            (a) Organization and Power. Investors is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware with full power and authority to enter into this Agreement and
perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Investors and the consummation of the transactions contemplated
hereby by Investors have been duly and validly authorized by all requisite
limited liability company action on the part of Investors, and no other
proceedings on its part are necessary to authorize the execution, delivery or
performance of this Agreement. This Agreement has been duly executed and
delivered by Investors, and this Agreement constitutes a valid and binding
obligation of Investors, enforceable in accordance with its terms and
conditions. Investors need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Investors is subject or any provision of
its charter or bylaws or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Investors is a party or by which it is bound or to which any of its assets is
subject.

            (d) Investment. Investors is not acquiring the Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Investors to issue, sell, or
otherwise cause to become outstanding any of its Units. Except as set forth in
the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit


                                       11


participation, or similar rights with respect to Investors. Except as set forth
in the Transaction Documents, there are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital stock of
Investors.

5. Covenants of the Executive and Investors

      5.1 Covenants. The Executive and/or Investors each agree as follows with
respect to the period between the execution of this Agreement and the Closing:

            (a) General. The Executive and Investors each will use his or its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section 6 below).

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with Investors and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Investors, and Investors shall be required to
purchase (subject to the provisions of Section 8 hereof), on one occasion from
the Executive and his Permitted Transferees, if applicable, all (but not less
than all) of the number of Units then held by the Executive and such other
number of Units held by the Executive's Permitted Transferees as the Executive
may request provided that in the aggregate such number does not exceed the
product of (x) the total number of Units collectively held by the Executive and
all of his Permitted Transferees and (y) the Applicable Percentage (measured as
of the Termination Date), at a price per unit equal to the Fair Market Value of
such unit (measured as of the delivery of the notice referred to in Section
7.1(b)).

            (b) If the Executive desires to exercise its option to require
Investors to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Investors setting forth the intention of Executive
and Permitted Transferees, if applicable, to collectively sell all Units
pursuant to Section 7.1(a) within the period described above, which notice shall
specify the number


                                       12


of Units to be sold and shall include the signature of the Executive and each
Permitted Transferee desiring to sell Units. Subject to the provisions of
Section 8.1, the closing of the purchase shall take place at the principal
office of Investors on the later of the 30th day after the giving of such notice
and the date that is 10 business days after the final determination of Fair
Market Value. Subject to the provisions of Section 8.1, the Executive shall
deliver to Investors duly executed instruments transferring title to units to
Investors, against payment of the appropriate purchase price by cashier's or
certified check payable to the Executive or by wire transfer of immediately
available funds to an account designated by the Executive.

      7.2 Call Options.

            (a) If the Executive's employment with Investors or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Investors shall have the right and
option to purchase, and the Executive and the Executive's Permitted Transferees
(hereinafter referred to as the "Executive Group") shall be required to sell to
Investors, any or all of such Units then held by such member of the Executive
Group (it being understood that if Units of any class subject to repurchase
hereunder may be repurchased at different prices, Investors may elect to
repurchase only the portion of the Units of such class subject to repurchase
hereunder at the lower price), at a price per unit equal to the applicable
purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with Investors and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with Investors and its
      subsidiaries is terminated by Investors and its subsidiaries without Cause
      or by the Executive for Good Reason;

            (iii) if the Executive's active employment with Investors and its
      subsidiaries is terminated (A) by Investors or any of its subsidiaries for
      Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Investors' rights under this Section 7.2(a) shall not be available
in the event of the termination of Executive's employment by Investors or its
subsidiaries without Cause or by Executive for Good Reason, in either case
following a sale by Investors or its subsidiaries of substantially all of the
line of business in which Executive primarily performs his services.


                                       13


            (b) If Investors desires to exercise one of its options to purchase
Units pursuant to this Section 7.2, Investors shall, not later than the
expiration of the applicable period described for such purchase in Section
7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Investors on the later of
the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Investors duly
executed instruments transferring title to units to Investors, against payment
of the appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.

            (c) In the event of a purchase by Investors pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Investors is less than or equal to the Unvested Percentage
            of such class, the purchase price for each Unit shall be the lesser
            of (x) the Fair Market Value (measured as of the date of the Call
            Notice) and (y) the Cost of such Unit (the "Unvested Unit Purchase
            Price"), and (ii) if the number of such Units exceeds the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            (A) for a number of Units of such class equal to the result of (x)
            the Unvested Percentage and (y) the total number of Units of such
            class held by the Executive Group, the Unvested Unit Purchase Price,
            and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Investors shall have the right to revoke the exercise
of its option pursuant to this Section 7.2 for all or any portion of the Units
elected to be repurchased by it by delivering notice of such revocation in
writing to the Executive Group during the tenday period beginning on the date
that Investors is given written notice that the


                                       14


Fair Market Value of a Unit was finally determined to be an amount at least 10%
greater than the per Unit repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Investors purchases Units at Fair Market Value pursuant to the terms of
this Section 7.2 and within six months of the date of the determination of such
Fair Market Value both (A) a Sale of the Company or a Public Offering occurs and
(B) in connection with such transaction, the per share value of the Units
exceeds the per share purchase price paid by Investors to Executive under this
Section 7.2, the Executive shall be entitled to receive from Investors the
benefit of such higher valuation for the Units purchased. The excess of (x) the
net proceeds which the Executive would have received in such Sale of the Company
or Public Offering from the sale in such transaction of all Units repurchased by
Investors under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Investors, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Investors shall not excuse, or constitute a waiver of its rights against, the
defaulting member.

8. Certain Limitations on Investors's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Investors elects or is required to
purchase any Units pursuant to Section 7, Investors shall pay the purchase price
for the Units it purchases (i) first, by offsetting indebtedness, if any, owing
from the Executive to Investors (which indebtedness shall be applied pro rata
against the proceeds receivable by each member of the Executive Group receiving
consideration in such repurchase) and (ii) then, by Investors' delivery of a
check or wire transfer of immediately available funds for the remainder of the
purchase price, if any, against delivery of the certificates or other
instruments representing the Units so purchased, duly endorsed; provided that if
such cash payment would result (A) in a violation of any law, statute, rule,
regulation, policy, order, writ, injunction, decree or judgment promulgated or
entered by any federal, state, local or foreign court or governmental authority
applicable to Investors or any of its subsidiaries or any of its or their
property or (B) after giving effect thereto, a Financing Default, or (C) if the
Board determines in good faith that immediately prior to such purchase there
shall exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the "Cash Deferral Conditions"), the
portion of the cash payment so affected may be made by Investors' delivery of
preferred units of Investors with a liquidation preference equal to the balance
of the purchase price; which preferred units shall accrue yield annually at the
"prime rate" published in The Wall Street Journal on the date of issuance, which
yield shall be payable at maturity or upon payment of distributions by Investors
(other than tax distributions). Each such preferred unit shall as of its


                                       15


issuance be deemed to have basic contributions made with respect to such unit
equal to (A) the portion of the cash payment paid by the issuance of such
preferred units divided by (B) the number of preferred units so issued in the
repurchase. Any such preferred units issued shall be promptly redeemed (i) when
the Cash Deferral Condition which prompted their issuance no longer exists, (ii)
upon consummation of an IPO of the Company or Holdings (or their successors) (to
the extent allowed by the underwriters of such IPO), or (iii) upon a Sale of the
Company from net cash proceeds, if any, payable to Investors or its unitholders;
to the extent that sufficient net cash proceeds are not so payable, the
preferred units shall be cancelled in exchange for such noncash consideration
received by unitholders in the Sale of the Company having a fair market value
equal to the principal of and accrued yield on the preferred units. If a yield
is required to be paid on any preferred units prior to maturity and any Cash
Deferral Conditions exist, such yield may be cumulated and accrued until and to
the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with
Investors or its subsidiaries terminates, (i) Executive, for himself or on
behalf of any other person, firm, partnership, corporation, or other entity,
engages, directly or indirectly, as an executive, agent, representative,
consultant, partner, shareholder or holder of any other financial interest, in
any business that competes with Investors or its subsidiaries in the line of
business Executive is employed in by Investors or its subsidiaries (as
applicable), as such business is described in any employment or severance
agreement then in effect between Executive and Investors or one of its
subsidiaries or, if no such agreement is then in effect, as described on
Schedule III attached hereto (a "Competing Business"), it being understood and
agreed that Executive's activities shall not satisfy this clause (i) where
Executive is employed by a person, firm, partnership, corporation, or other
entity engaged in a variety of activities, including the Competing Business, and
Executive is not engaged in or responsible for the Competing Business of such
entity. Executive may also, without satisfying clause (i) be a passive owner of
not more than 2% of the outstanding publicly traded stock of any class of a
Competing Business so long as Executive has no active participation in the
business of such entity, except to the extent permitted above; or (ii) Executive
(A) directly or indirectly through another entity, induces or attempts to induce
any employee of the Company or its subsidiaries to leave the employ of the
Company or its subsidiaries, or in any way interfere with the relationship
between the Company or any of its subsidiaries and any employee thereof, (B)
knowingly hires any person who was an employee of the Company or any of its
subsidiaries within 180 days prior to the time such employee was hired by
Executive, (C) induces or attempts to induce any customer, supplier, licensee or
other business relation of the Company or any of its subsidiaries to cease doing
business with the Company or its subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary or (D) directly or indirectly acquires or
attempt to acquire an interest in any business relating to the business of the
Company or any of its subsidiaries and with which the Company or any of its
subsidiaries has entertained discussions or has requested and received


                                       16


information relating to the acquisition of such business by the Company or
its subsidiaries in the one-year period immediately preceding Executive's
termination of employment with the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.

      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Investors, within ten business days
following the Activity Date, an amount equal to the excess, if any, of (A) the
aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Investors a written
agreement of the proposed transferee (a) evidencing such Person's undertaking to
be bound by the terms of this Agreement and (b) acknowledging that the Units
transferred to such Person will continue to be Units for purposes of this
Agreement in the hands of such Person. Any transfer or attempted transfer of
Units in violation of any provision of this Agreement or the Securityholders
Agreement shall be void, and Investors shall not record such transfer on its
books or treat any purported transferee of such Units as the owner of such Units
for any purpose.

      10.2 Deemed Transfer of Units. If Investors shall deliver, at the time and
place and in the amount and form provided in this Agreement, the consideration
for the Units to be repurchased in accordance with the provisions of this
Agreement, then from and after such time, the Person from whom such units are to
be repurchased shall no longer have any rights as a holder of such units (other
than the right to receive payment of such consideration in accordance with this
Agreement), and such Units shall be deemed purchased in accordance with the
applicable provisions hereof and Investors shall be deemed the owner and holder
of such Units, whether or not certificates therefor have been delivered as
required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Investors or any successor or assign of
Investors (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Units,
by reason of any dividend payable in units, issuance of units, combination,
recapitalization, reclassification, merger, consolidation or otherwise.

      10.4 Executive's Employment by Investors. Nothing contained in this
Agreement shall be deemed to obligate Investors or any subsidiary of Investors
to employ the Executive in any capacity whatsoever or to prohibit or restrict
Investors (or any such subsidiary) from terminating the employment of the
Executive at any time or for any reason whatsoever, with or without Cause.


                                       17


      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Investors against any and all losses, liabilities, damages, judgments,
fines, fees or expenses, including, without limitation, attorneys' fees (for
purposes of this Section 10.5, hereinafter "Losses"), incurred in connection
with any failure to withhold amounts relating to the Units acquired herein by
the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Investors properly failed to withhold amounts relating to the Units acquired
herein by Executive, Executive shall provide Investors with a Form 4669 or other
suitable evidence of payment of taxes (which will include a cancelled check or a
copy of the relevant signed tax return) with respect to the receipt of any
distributions relating to the Units acquired herein by Executive. To the extent
either Investors and/or any of its affiliates is entitled to any tax deduction
with respect to the issuance of Units, (i) Investors shall specially allocate
such deduction to the Executive and/or (ii) Holdings shall pay, or cause any
affiliate to pay, as the case may be, Executive an amount equal to 40% of such
deduction, such amount to be grossed up to reflect any additional deduction to
Holdings and/or any of its affiliates (as the case may be) provided that if any
Cash Deferral Condition exists at the time such payment is required, such
payment shall be deferred until no such Cash Deferral Condition exists. Each of
Executive and Investors shall notify the other (in a manner described in Section
10.10 of this Agreement) within 20 days of first receiving notice of an audit or
other proceeding being conducted by the Internal Revenue Service or any state or
local taxing authority relating to the Units acquired herein by the Management
Investors, and both Executive and Investors shall assist each other during the
course of such audit or other proceeding to the extent that such assistance is
reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Investors a valid
undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Investors and the members of the Executive Group hereby submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. Each of the members of the Executive Group and Investors
hereby irrevocably waives any objections which 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 brought in any court of


                                       18


competent jurisdiction in the State of Delaware, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in any inconvenient forum.

      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

             (a)  If to Investors

                  M-Foods Investors, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 2926639

             with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 8084922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 8612200

             (b)  If to the Executive, to the address as shown on
                  the unit register of Investors.

             with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 100366522
                  Attention: Eric L. Cochran


                                       19


      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Investors under this Agreement shall be cumulative and not exclusive of any
rights or remedies which either would otherwise have hereunder or at law or in
equity or by statute, and no failure or delay by either party in exercising any
right or remedy shall impair any such right or remedy or operate as a waiver of
such right or remedy, nor shall any single or partial exercise of any power or
right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                   * * * * *


                                       20


      IN WITNESS WHEREOF, the parties have executed this Management Stock
Purchase and Unit Subscription Agreement as of the date first above written.

                              M-FOODS INVESTORS, LLC

                              By
                                 -----------------------------------------------

                              Its:
                                   ---------------------------------------------


                              M-FOODS HOLDINGS, INC.

                              By
                                 -----------------------------------------------

                              Its:
                                   ---------------------------------------------


                              EXECUTIVE

                              --------------------------------------------------
                                                James D. Clarkson


                              JOINT TENANT

                              --------------------------------------------------
                                                  Susan Clarkson



                               CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Stock Purchase and Unit
Subscription Agreement (the "Agreement") and that I understand its contents. I
am aware that the Agreement provides for the repurchase of my spouse's Units (as
defined in the Agreement) under certain circumstances and imposes other
restrictions on the transfer of such Units. I agree that my spouse's interest in
the Units is subject to the Agreement and any interest I may have in such Units
shall also be irrevocably bound by the Agreement and, further, that my community
property interest in such Units, if any, shall be similarly bound by the
Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.


                            Acknowledged and agreed this ___ day of
                            _____________, 2001.


                            ----------------------------------------------------

                            Name:
                            ----------------------------------------------------


                            ----------------------------------------------------
                                                 Witness



                                   SCHEDULE I

- --------------------------------------------------------------------------------
        Shares          Purchased Shares        Share Purchase Price
- --------------------------------------------------------------------------------
        9,238               7,646.86                 $230,170.41
- --------------------------------------------------------------------------------



                                  SCHEDULE II

- --------------------------------------------------------------------------------
        Contributed Shares              Units
- --------------------------------------------------------------------------------
              1,591.14          12,000 Class B Units
                                12,000 Class C Units
- --------------------------------------------------------------------------------



                                  SCHEDULE III

Competing Business: Production, distribution or sale of refrigerated potato
products or specialty dairy products and mixes



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                    INCOME PURSUANT TO SECTION 83(b) OF THE
                             INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Investors, LLC
("Investors") on ________, 2001. The undersigned desires to make an election to
have the Units taxed under the provision of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the undersigned
purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.832 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.832(e):

            1. The name, address and social security number of the undersigned:

               ------------------------------

               ------------------------------

               ------------------------------

               SSN:
                   --------------------------

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a timebased vesting schedule. If the undersigned ceases to be
employed by Investors or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Investors at a
price per Unit equal to the lesser of (x) fair market value (measured as of the
date of such repurchase) and (y) cost. The Units are also subject to transfer
restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $.

            6. The aggregate amount paid for such property: $_______.

            A copy of this election has been furnished to the Secretary of
Investors pursuant to Treasury Regulations ss.1.832(e)(7).



Dated:  ________, 2001         ---------------------------------
                                             [Name]

EX-10.18

                                                                  Exhibit 10.18

                                                                [Execution Copy]

                          MANAGEMENT STOCK PURCHASE AND
                           UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT (this
"Agreement") is made as of April 10, 2001, by and among M-Foods Investors, LLC,
a Delaware limited liability company ("Investors"), Bill L. Goucher (the
"Executive"), for the purposes of Section 10.5 hereof, M-Foods Holdings, Inc., a
Delaware corporation ("Holdings") and, for the purposes of Section 2.6 hereof,
Sherry L. Goucher (the "Joint Tenant").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of Investors or one or more of its subsidiaries
and who will hold interests in Investors (collectively with the Executive, the
"Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, prior to the consummation of the transactions contemplated
by this Agreement and the Merger Agreement, the Executive is the record and
beneficial owner of the number of shares of the Company's common stock, par
value $0.01 per share (the "Shares"), set forth on Schedule I attached hereto;

            WHEREAS, on the terms and subject to the conditions hereof,
Investors desires to acquire from the Executive, and the Executive desires to
sell to Investors, certain of the Shares, as set forth on Schedule I (the
"Purchased Shares"); and

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive also
desires to contribute certain of the Shares (the "Contributed Shares") in
exchange for Investors' Class B Units (the "Class B Units") and Class C Units
(the "Class C Units"), in each case in the amounts set forth on Schedule II
attached hereto.

            NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:



1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.

      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean Investors' Management Committee.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and
Investors or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with Investors or
one of its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive's duties; (ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to Investors or one of its subsidiaries; or (iii)
conviction of a felony or guilty or nolo contendere plea by the Executive with
respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of Investors or one of
its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer (while the Executive does not serve as such) or
based upon the advice of counsel for Investors shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best
interests of Investors and its subsidiaries. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than 75%of the entire membership of the


                                       2


Board (excluding the Executive) at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in (i), (ii) or (iii) above, and specifying the
particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or by virtue of their interests in Investors, a majority of the Board
of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means Investors' Class A
Units.

      1.8 Class B Units. The term "Class B Units" shall have the meaning set
forth in the preface.

      1.9 Class C Units. The term "Class C Units" shall have the meaning set
forth in the preface.

      1.10 Closing. The "Closing" for the sale and purchase of the Shares and
the contribution of Shares in exchange for Units hereunder shall occur
immediately prior to the consummation of the Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Contributed Shares. The term "Contributed Shares" shall have the
meaning set forth in the preface.


                                       3


      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and Investors or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job responsibilities as a result of chronic illness, physical,
mental or any other disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of Investors or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to Investors or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Investors at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
the Company in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of the Company and the Executive setting forth their respective resolutions of
the dispute and the bases therefor and (ii) accepting either the Executive's or
the Company's proposed resolution of the dispute. Promptly following the
Company's receipt of Executive's written notice of disagreement, the Company
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and the Company's written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and the


                                       4


Company of its decision within 40 days of its engagement. The party whose
proposed resolution is not accepted shall pay all of the Arbiter's fees and
expenses. If the Executive's proposed resolution is accepted, the Company also
shall pay all of the Executive's reasonable out-of-pocket fees and expenses
(including reasonable fees and expenses of counsel and one appraiser, accountant
or investment banking firm) incurred in connection with the arbitration. Each of
the Company and the Executive agrees to execute, if requested by the Arbiter, a
reasonable engagement letter with the Arbiter.

      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and Investors or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by Investors or one of its subsidiaries (as applicable) which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Investors or one of its subsidiaries promptly
after receipt of notice thereof given by the Executive; provided that after a
Change in Control, Investors or one of its subsidiaries (as applicable) shall
have the flexibility to appoint the Executive to a reporting


                                       5


relationship different from that which existed prior to the Change in Control,
to make an immaterial change in Executive's duties, or to change the Executive's
title provided; (ii) any failure by Investors or one of its subsidiaries (as
applicable) to provide Executive with the annual base salary Executive had
previously received or the failure by Investors or one of its subsidiaries (as
applicable) to increase such annual each year after a Change in Control by an
amount which at least equals on a percentage basis, the mean average percentage
increase in base salary for all employees similarly situated during the two full
calendar years immediately preceding a Change in Control, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by Investors or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of Investors or one of its subsidiaries (as applicable) upon a Change in
Control to (A) continue in effect any employee benefit plan, compensation plan,
welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by Investors or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of Investors or one
of its subsidiaries as in effect for Executive immediately prior to such Change
in Control; (iv) after a Change in Control, any purported termination by
Investors or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on Investor or its
subsidiaries' business to an extent substantially greater than the Executive's
current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Investors. The term "Investors" shall have the meaning set forth in
the preface.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Amended and
Restated Limited Liability Company Agreement of Investors, dated as of April 10,
2001, entered into by and among the members of Investors, as amended from time
to time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.


                                       6


      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.

      1.32 Purchased Shares. The term "Purchased Shares" shall have the meaning
set forth in the preface.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of Investors or any of its
subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board, after at least three years employment with
Investors after the Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among
Investors, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Shares. The term "Shares" shall have the meaning set forth in the
preface.

      1.38 Share Purchase Price. The term "Share Purchase Price" shall have the
meaning set forth in Section 2.2.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with Investors and its subsidiaries is terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Investors,
whether pursuant to this Agreement or any other arrangement.


                                       7


      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael Foods
Co-Invest, LLC, a Delaware limited liability company.

2. Purchase and Sale of Shares; Contribution.

      2.1 Purchase and Sale of the Shares. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement, the Executive shall sell,
assign, transfer and convey to Investors, and Investors shall purchase and
acquire from the Executive, the Purchased Shares against payment at the Closing
of an aggregate amount equal to the Share Purchase Price by wire transfer of
immediately available funds to one or more accounts specified by the Executive
in a written notice to Investors prior to the Closing Date.

      2.2 Share Purchase Price. The aggregate purchase price for the Purchased
Shares (the "Share Purchase Price") will consist of the payment of an amount of
cash, equal to $30.10 per Purchased Share, as set forth on Schedule I.

      2.3 Contribution of Shares. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Investors hereby agrees to receive, the Contributed Shares in
exchange for the number of Units set forth on Schedule II.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Investors stock certificates
representing the Purchased Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment;

            (b) Investors shall deliver to the Executive the amount of the Share
Purchase Price by wire transfer of immediately available funds to one or more
accounts designated by the Executive in writing to Investors prior to the
Closing;

            (c) The Executive shall deliver to Investors stock certificates
representing the Contributed Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment; and

            (d) Investors shall deliver to the Executive unit certificates
representing the number of Class B Units and Class C Units set forth on Schedule
II.


                                       8


      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

      2.6 Joint Tenancy. As a joint tenant with respect to some or all of the
Shares subject to this Agreement, the Joint Tenant hereby represents and
acknowledges that she has read and understands the terms and provisions set
forth herein. In furtherance of the consummation of the transactions described
in this Agreement, the Joint Tenant hereby expressly gifts and transfers to the
Executive all right, title and interests in such of the Shares held in joint
tenancy, such gift and transfer taking effect immediately prior to and in
connection with the consummation of the transactions described herein. The Joint
Tenant hereby agrees and acknowledges that the effect of this Section 2.6 is to
terminate her joint tenancy interest in any of the Shares held in joint tenancy
as of the date hereof.

3. [Reserved]

4. Representations and Warranties of the Executive and Investors.

      4.1 Stock Purchase Representations of the Executive. The Executive
represents and warrants to Investors that the statements contained in this
Section 4.1 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is subject or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Executive is a party or by which he is bound or to which any of his assets
is subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Investors could become
liable or obligated.


                                       9


            (d) Capital Stock. The Executive holds of record and owns
beneficially the number of Shares set forth next to his name on Schedule I, free
and clear of any restrictions on transfer (other than any restrictions under the
Securities Act, state securities laws, joint tenancy laws or other Transaction
Documents), taxes, security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. In the event the
Executive owns the Shares in joint tenancy, the joint tenant of the Executive
has executed this Agreement on the signature page attached hereto and Executive
has informed such joint tenant of the transactions set forth in this Agreement.
The Executive is not a party to any option, warrant, purchase right, or other
contract or commitment that could require the Executive to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement). Except as set forth in other Transaction Documents, the Executive is
not a party to any voting trust, proxy, or other agreement or understanding with
respect to the voting of any capital stock of the Company. The Executive
acknowledges and represents that the Paying Agent (as defined in the Merger
Agreement) will not make any payment to Executive in connection with the Shares
subject to this Agreement and that such shares will be cancelled upon
consummation of the Acquisition.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Investors that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT BETWEEN
            THE ISSUER AND THE EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED
            AND MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY
            THE HOLDER HEREOF AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS
            WITHOUT CHARGE"; and


                                       10


            (e) a notation shall be made in the appropriate records of Investors
      indicating that the Units are subject to restrictions on transfer and, if
      Investors should at some time in the future engage the services of a
      securities transfer agent, appropriate stop-transfer instructions will be
      issued to such transfer agent with respect to the Units.

      4.3 [Reserved]

      4.4 Representations of Investors. Investors represents to the Executive
that the statements contained in this Section 4.4 are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date, with respect to itself:

            (a) Organization and Power. Investors is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware with full power and authority to enter into this Agreement and
perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Investors and the consummation of the transactions contemplated
hereby by Investors have been duly and validly authorized by all requisite
limited liability company action on the part of Investors, and no other
proceedings on its part are necessary to authorize the execution, delivery or
performance of this Agreement. This Agreement has been duly executed and
delivered by Investors, and this Agreement constitutes a valid and binding
obligation of Investors, enforceable in accordance with its terms and
conditions. Investors need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Investors is subject or any provision of
its charter or bylaws or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Investors is a party or by which it is bound or to which any of its assets is
subject.

            (d) Investment. Investors is not acquiring the Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Investors to issue, sell, or
otherwise cause to become outstanding any of its Units. Except as set forth in
the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit


                                       11


participation, or similar rights with respect to Investors. Except as set forth
in the Transaction Documents, there are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital stock of
Investors.

5. Covenants of the Executive and Investors

      5.1 Covenants. The Executive and/or Investors each agree as follows with
respect to the period between the execution of this Agreement and the Closing:

            (a) General. The Executive and Investors each will use his or its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section 6 below).

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with Investors and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Investors, and Investors shall be required to
purchase (subject to the provisions of Section 8 hereof), on one occasion from
the Executive and his Permitted Transferees, if applicable, all (but not less
than all) of the number of Units then held by the Executive and such other
number of Units held by the Executive's Permitted Transferees as the Executive
may request provided that in the aggregate such number does not exceed the
product of (x) the total number of Units collectively held by the Executive and
all of his Permitted Transferees and (y) the Applicable Percentage (measured as
of the Termination Date), at a price per unit equal to the Fair Market Value of
such unit (measured as of the delivery of the notice referred to in Section
7.1(b)).

            (b) If the Executive desires to exercise its option to require
Investors to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Investors setting forth the intention of Executive
and Permitted Transferees, if applicable, to collectively sell all Units
pursuant to Section 7.1(a) within the period described above, which notice shall
specify the number

                                       12


of Units to be sold and shall include the signature of the Executive and each
Permitted Transferee desiring to sell Units. Subject to the provisions of
Section 8.1, the closing of the purchase shall take place at the principal
office of Investors on the later of the 30th day after the giving of such notice
and the date that is 10 business days after the final determination of Fair
Market Value. Subject to the provisions of Section 8.1, the Executive shall
deliver to Investors duly executed instruments transferring title to units to
Investors, against payment of the appropriate purchase price by cashier's or
certified check payable to the Executive or by wire transfer of immediately
available funds to an account designated by the Executive.

      7.2 Call Options.

            (a) If the Executive's employment with Investors or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Investors shall have the right and
option to purchase, and the Executive and the Executive's Permitted Transferees
(hereinafter referred to as the "Executive Group") shall be required to sell to
Investors, any or all of such Units then held by such member of the Executive
Group (it being understood that if Units of any class subject to repurchase
hereunder may be repurchased at different prices, Investors may elect to
repurchase only the portion of the Units of such class subject to repurchase
hereunder at the lower price), at a price per unit equal to the applicable
purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with Investors and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with Investors and its
      subsidiaries is terminated by Investors and its subsidiaries without Cause
      or by the Executive for Good Reason;

            (iii) if the Executive's active employment with Investors and its
      subsidiaries is terminated (A) by Investors or any of its subsidiaries for
      Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Investors' rights under this Section 7.2(a) shall not be available
in the event of the termination of Executive's employment by Investors or its
subsidiaries without Cause or by Executive for Good Reason, in either case
following a sale by Investors or its subsidiaries of substantially all of the
line of business in which Executive primarily performs his services.


                                       13


            (b) If Investors desires to exercise one of its options to purchase
Units pursuant to this Section 7.2, Investors shall, not later than the
expiration of the applicable period described for such purchase in Section
7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Investors on the later of
the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Investors duly
executed instruments transferring title to units to Investors, against payment
of the appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.

            (c) In the event of a purchase by Investors pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Investors is less than or equal to the Unvested Percentage
            of such class, the purchase price for each Unit shall be the lesser
            of (x) the Fair Market Value (measured as of the date of the Call
            Notice) and (y) the Cost of such Unit (the "Unvested Unit Purchase
            Price"), and (ii) if the number of such Units exceeds the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            (A) for a number of Units of such class equal to the result of (x)
            the Unvested Percentage and (y) the total number of Units of such
            class held by the Executive Group, the Unvested Unit Purchase Price,
            and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Investors shall have the right to revoke the exercise
of its option pursuant to this Section 7.2 for all or any portion of the Units
elected to be repurchased by it by delivering notice of such revocation in
writing to the Executive Group during the ten-day period beginning on the date
that Investors is given written notice that the


                                       14


Fair Market Value of a Unit was finally determined to be an amount at least 10%
greater than the per Unit repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Investors purchases Units at Fair Market Value pursuant to the terms of
this Section 7.2 and within six months of the date of the determination of such
Fair Market Value both (A) a Sale of the Company or a Public Offering occurs and
(B) in connection with such transaction, the per share value of the Units
exceeds the per share purchase price paid by Investors to Executive under this
Section 7.2, the Executive shall be entitled to receive from Investors the
benefit of such higher valuation for the Units purchased. The excess of (x) the
net proceeds which the Executive would have received in such Sale of the Company
or Public Offering from the sale in such transaction of all Units repurchased by
Investors under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Investors, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Investors shall not excuse, or constitute a waiver of its rights against, the
defaulting member.

8. Certain Limitations on Investors's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Investors elects or is required to
purchase any Units pursuant to Section 7, Investors shall pay the purchase price
for the Units it purchases (i) first, by offsetting indebtedness, if any, owing
from the Executive to Investors (which indebtedness shall be applied pro rata
against the proceeds receivable by each member of the Executive Group receiving
consideration in such repurchase) and (ii) then, by Investors' delivery of a
check or wire transfer of immediately available funds for the remainder of the
purchase price, if any, against delivery of the certificates or other
instruments representing the Units so purchased, duly endorsed; provided that if
such cash payment would result (A) in a violation of any law, statute, rule,
regulation, policy, order, writ, injunction, decree or judgment promulgated or
entered by any federal, state, local or foreign court or governmental authority
applicable to Investors or any of its subsidiaries or any of its or their
property or (B) after giving effect thereto, a Financing Default, or (C) if the
Board determines in good faith that immediately prior to such purchase there
shall exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the "Cash Deferral Conditions"), the
portion of the cash payment so affected may be made by Investors' delivery of
preferred units of Investors with a liquidation preference equal to the balance
of the purchase price; which preferred units shall accrue yield annually at the
"prime rate" published in The Wall Street Journal on the date of issuance, which
yield shall be payable at maturity or upon payment of distributions by Investors
(other than tax distributions). Each such preferred unit shall as of its


                                       15


issuance be deemed to have basic contributions made with respect to such unit
equal to (A) the portion of the cash payment paid by the issuance of such
preferred units divided by (B) the number of preferred units so issued in the
repurchase. Any such preferred units issued shall be promptly redeemed (i) when
the Cash Deferral Condition which prompted their issuance no longer exists, (ii)
upon consummation of an IPO of the Company or Holdings (or their successors) (to
the extent allowed by the underwriters of such IPO), or (iii) upon a Sale of the
Company from net cash proceeds, if any, payable to Investors or its unitholders;
to the extent that sufficient net cash proceeds are not so payable, the
preferred units shall be cancelled in exchange for such non-cash consideration
received by unitholders in the Sale of the Company having a fair market value
equal to the principal of and accrued yield on the preferred units. If a yield
is required to be paid on any preferred units prior to maturity and any Cash
Deferral Conditions exist, such yield may be cumulated and accrued until and to
the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with
Investors or its subsidiaries terminates, (i) Executive, for himself or on
behalf of any other person, firm, partnership, corporation, or other entity,
engages, directly or indirectly, as an executive, agent, representative,
consultant, partner, shareholder or holder of any other financial interest, in
any business that competes with Investors or its subsidiaries in the line of
business Executive is employed in by Investors or its subsidiaries (as
applicable), as such business is described in any employment or severance
agreement then in effect between Executive and Investors or one of its
subsidiaries or, if no such agreement is then in effect, as described on
Schedule III attached hereto (a "Competing Business"), it being understood and
agreed that Executive's activities shall not satisfy this clause (i) where
Executive is employed by a person, firm, partnership, corporation, or other
entity engaged in a variety of activities, including the Competing Business, and
Executive is not engaged in or responsible for the Competing Business of such
entity. Executive may also, without satisfying clause (i) be a passive owner of
not more than 2% of the outstanding publicly traded stock of any class of a
Competing Business so long as Executive has no active participation in the
business of such entity, except to the extent permitted above; or (ii) Executive
(A) directly or indirectly through another entity, induces or attempts to induce
any employee of the Company or its subsidiaries to leave the employ of the
Company or its subsidiaries, or in any way interfere with the relationship
between the Company or any of its subsidiaries and any employee thereof, (B)
knowingly hires any person who was an employee of the Company or any of its
subsidiaries within 180 days prior to the time such employee was hired by
Executive, (C) induces or attempts to induce any customer, supplier, licensee or
other business relation of the Company or any of its subsidiaries to cease doing
business with the Company or its subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary or (D) directly or indirectly acquires or
attempt to acquire an interest in any business relating to the business of the
Company or any of its subsidiaries and with which the Company or any of its
subsidiaries has entertained discussions or has requested and received


                                       16


information relating to the acquisition of such business by the Company or its
subsidiaries in the one-year period immediately preceding Executive's
termination of employment with the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.

      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Investors, within ten business days
following the Activity Date, an amount equal to the excess, if any, of (A) the
aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Investors a written
agreement of the proposed transferee (a) evidencing such Person's undertaking to
be bound by the terms of this Agreement and (b) acknowledging that the Units
transferred to such Person will continue to be Units for purposes of this
Agreement in the hands of such Person. Any transfer or attempted transfer of
Units in violation of any provision of this Agreement or the Securityholders
Agreement shall be void, and Investors shall not record such transfer on its
books or treat any purported transferee of such Units as the owner of such Units
for any purpose.

      10.2 Deemed Transfer of Units. If Investors shall deliver, at the time and
place and in the amount and form provided in this Agreement, the consideration
for the Units to be repurchased in accordance with the provisions of this
Agreement, then from and after such time, the Person from whom such units are to
be repurchased shall no longer have any rights as a holder of such units (other
than the right to receive payment of such consideration in accordance with this
Agreement), and such Units shall be deemed purchased in accordance with the
applicable provisions hereof and Investors shall be deemed the owner and holder
of such Units, whether or not certificates therefor have been delivered as
required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Investors or any successor or assign of
Investors (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Units,
by reason of any dividend payable in units, issuance of units, combination,
recapitalization, reclassification, merger, consolidation or otherwise.

      10.4 Executive's Employment by Investors. Nothing contained in this
Agreement shall be deemed to obligate Investors or any subsidiary of Investors
to employ the Executive in any capacity whatsoever or to prohibit or restrict
Investors (or any such subsidiary) from terminating the employment of the
Executive at any time or for any reason whatsoever, with or without Cause.


                                       17


      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Investors against any and all losses, liabilities, damages, judgments,
fines, fees or expenses, including, without limitation, attorneys' fees (for
purposes of this Section 10.5, hereinafter "Losses"), incurred in connection
with any failure to withhold amounts relating to the Units acquired herein by
the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Investors properly failed to withhold amounts relating to the Units acquired
herein by Executive, Executive shall provide Investors with a Form 4669 or other
suitable evidence of payment of taxes (which will include a cancelled check or a
copy of the relevant signed tax return) with respect to the receipt of any
distributions relating to the Units acquired herein by Executive. To the extent
either Investors and/or any of its affiliates is entitled to any tax deduction
with respect to the issuance of Units, (i) Investors shall specially allocate
such deduction to the Executive and/or (ii) Holdings shall pay, or cause any
affiliate to pay, as the case may be, Executive an amount equal to 40% of such
deduction, such amount to be grossed up to reflect any additional deduction to
Holdings and/or any of its affiliates (as the case may be) provided that if any
Cash Deferral Condition exists at the time such payment is required, such
payment shall be deferred until no such Cash Deferral Condition exists. Each of
Executive and Investors shall notify the other (in a manner described in Section
10.10 of this Agreement) within 20 days of first receiving notice of an audit or
other proceeding being conducted by the Internal Revenue Service or any state or
local taxing authority relating to the Units acquired herein by the Management
Investors, and both Executive and Investors shall assist each other during the
course of such audit or other proceeding to the extent that such assistance is
reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Investors a valid
undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Investors and the members of the Executive Group hereby submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. Each of the members of the Executive Group and Investors
hereby irrevocably waives any objections which 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 brought in any court of


                                       18


competent jurisdiction in the State of Delaware, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in any inconvenient forum.

      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

                  (a)   If to Investors

                        M-Foods Investors, LLC
                        c/o Vestar Capital Partners IV, L.P.
                        1225 Seventeenth Street
                        Suite 1660
                        Denver, CO 80202
                        Attention: James P. Kelley
                        Facsimile: (303) 292-6639

                  with copies to:

                        Vestar Capital Partners IV, L.P.
                        245 Park Avenue, 41st Floor
                        New York, NY  10167
                        Attention: General Counsel
                        Facsimile: (212) 808-4922

                        Kirkland & Ellis
                        200 East Randolph Drive
                        Chicago, IL 60601
                        Attention: Stephen L. Ritchie
                        Facsimile: (312) 861-2200

                  (b)   If to the Executive, to the address as shown on the unit
                        register of Investors.

                  with a copy to:

                        Skadden, Arps, Slate, Meagher & Flom LLP
                        Four Times Square
                        New York, NY 10036-6522
                        Attention: Eric L. Cochran


                                       19


      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Investors under this Agreement shall be cumulative and not exclusive of any
rights or remedies which either would otherwise have hereunder or at law or in
equity or by statute, and no failure or delay by either party in exercising any
right or remedy shall impair any such right or remedy or operate as a waiver of
such right or remedy, nor shall any single or partial exercise of any power or
right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       20


      IN WITNESS WHEREOF, the parties have executed this Management Stock
Purchase and Unit Subscription Agreement as of the date first above written.

                                     M-FOODS INVESTORS, LLC

                                     By:
                                        ----------------------------------------

                                     Its:
                                         ---------------------------------------


                                     M-FOODS HOLDINGS, INC.

                                     By:
                                        ----------------------------------------

                                     Its:
                                         ---------------------------------------

                                     EXECUTIVE

                                     -------------------------------------------
                                                 Bill L. Goucher


                                     JOINT TENANT

                                     -------------------------------------------
                                                 Sherry L. Goucher



                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Stock Purchase and Unit
Subscription Agreement (the "Agreement") and that I understand its contents. I
am aware that the Agreement provides for the repurchase of my spouse's Units (as
defined in the Agreement) under certain circumstances and imposes other
restrictions on the transfer of such Units. I agree that my spouse's interest in
the Units is subject to the Agreement and any interest I may have in such Units
shall also be irrevocably bound by the Agreement and, further, that my community
property interest in such Units, if any, shall be similarly bound by the
Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                        Acknowledged and agreed
                                        this ___ day of _____________, 2001.


                                        ________________________________________

                                        Name:___________________________________

                                        ________________________________________
                                                          Witness


                                   SCHEDULE I

- --------------------------------------------------------------------------------
      Shares                 Purchased Shares           Share Purchase Price
- --------------------------------------------------------------------------------
      15,078                     13,089.07                   $393,981.06
- --------------------------------------------------------------------------------



                                   SCHEDULE II

- --------------------------------------------------------------------------------
          Contributed Shares                                 Units
- --------------------------------------------------------------------------------
               1,988.93                              15,000 Class B Units
                                                     15,000 Class C Units
- --------------------------------------------------------------------------------



                                  SCHEDULE III

Competing Business: Production, distribution or sale of eggs or egg products



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Investors, LLC
("Investors") on ________, 2001. The undersigned desires to make an election to
have the Units taxed under the provision of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the undersigned
purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:
               ______________________________
               ______________________________
               ______________________________
               SSN:__________________________

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by Investors or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Investors at a
price per Unit equal to the lesser of (x) fair market value (measured as of the
date of such repurchase) and (y) cost. The Units are also subject to transfer
restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $_______.

            6. The aggregate amount paid for such property: $_______.

            A copy of this election has been furnished to the Secretary of
Investors pursuant to Treasury Regulations ss.1.83-2(e)(7).


Dated:  ________, 2001                               __________________________
                                                              [Name]

EX-10.19

                                                                   Exhibit 10.19

                                                                [Execution Copy]

                          MANAGEMENT STOCK PURCHASE AND
                           UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT (this
"Agreement") is made as of April 10, 2001, by and among M-Foods Investors, LLC,
a Delaware limited liability company ("Investors"), Max R. Hoffmann (the
"Executive"), and for the purposes of Section 10.5 hereof, M-Foods Holdings,
Inc., a Delaware corporation ("Holdings").

           WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of Investors or one or more of its subsidiaries
and who will hold interests in Investors (collectively with the Executive, the
"Management Investors");

           WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

           WHEREAS, prior to the consummation of the transactions contemplated
by this Agreement and the Merger Agreement, the Executive is the record and
beneficial owner of the number of shares of the Company's common stock, par
value $0.01 per share (the "Shares"), set forth on Schedule I attached hereto;

           WHEREAS, on the terms and subject to the conditions hereof, Investors
desires to acquire from the Executive, and the Executive desires to sell to
Investors, certain of the Shares, as set forth on Schedule I (the "Purchased
Shares"); and

           WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive also
desires to contribute certain of the Shares (the "Contributed Shares") in
exchange for Investors' Class A Units (the "Class A Units"), Class B Units (the
"Class B Units") and Class C Units (the "Class C Units"), in each case in the
amounts set forth on Schedule II attached hereto.

           NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:

1. Definitions.



      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.

      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean Investors' Management Committee.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and
Investors or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with Investors or
one of its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive's duties; (ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to Investors or one of its subsidiaries; or (iii)
conviction of a felony or guilty or nolo contendere plea by the Executive with
respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of Investors or one of
its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer (while the Executive does not serve as such) or
based upon the advice of counsel for Investors shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best
interests of Investors and its subsidiaries. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than 75% of the entire membership of the Board
(excluding the Executive) at a meeting of the Board called and held for such
purpose (after


                                        2


reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in (i), (ii) or (iii) above, and specifying the particulars thereof in
detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or by virtue of their interests in Investors, a majority of the Board
of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" shall have the meaning set
forth in the preface.

      1.8 Class B Units. The term "Class B Units" shall have the meaning set
forth in the preface.

      1.9 Class C Units. The term "Class C Units" shall have the meaning set
forth in the preface.

      1.10 Closing. The "Closing" for the sale and purchase of the Shares and
the contribution of Shares in exchange for Units hereunder shall occur
immediately prior to the consummation of the Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Contributed Shares. The term "Contributed Shares" shall have the
meaning set forth in the preface.


                                        3


      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and Investors or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job responsibilities as a result of chronic illness, physical,
mental or any other disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of Investors or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to Investors or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Investors at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
the Company in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of the Company and the Executive setting forth their respective resolutions of
the dispute and the bases therefor and (ii) accepting either the Executive's or
the Company's proposed resolution of the dispute. Promptly following the
Company's receipt of Executive's written notice of disagreement, the Company
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and the Company's written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and the


                                        4


Company of its decision within 40 days of its engagement. The party whose
proposed resolution is not accepted shall pay all of the Arbiter's fees and
expenses. If the Executive's proposed resolution is accepted, the Company also
shall pay all of the Executive's reasonable out-of-pocket fees and expenses
(including reasonable fees and expenses of counsel and one appraiser, accountant
or investment banking firm) incurred in connection with the arbitration. Each of
the Company and the Executive agrees to execute, if requested by the Arbiter, a
reasonable engagement letter with the Arbiter.

      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and Investors or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by Investors or one of its subsidiaries (as applicable) which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Investors or one of its subsidiaries promptly
after receipt of notice thereof given by the Executive; provided that after a
Change in Control, Investors or one of its subsidiaries (as applicable) shall
have the flexibility to appoint the Executive to a reporting


                                        5


relationship different from that which existed prior to the Change in Control,
to make an immaterial change in Executive's duties, or to change the Executive's
title provided; (ii) any failure by Investors or one of its subsidiaries (as
applicable) to provide Executive with the annual base salary Executive had
previously received or the failure by Investors or one of its subsidiaries (as
applicable) to increase such annual each year after a Change in Control by an
amount which at least equals on a percentage basis, the mean average percentage
increase in base salary for all employees similarly situated during the two full
calendar years immediately preceding a Change in Control, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by Investors or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of Investors or one of its subsidiaries (as applicable) upon a Change in
Control to (A) continue in effect any employee benefit plan, compensation plan,
welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by Investors or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of Investors or one
of its subsidiaries as in effect for Executive immediately prior to such Change
in Control; (iv) after a Change in Control, any purported termination by
Investors or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on Investor or its
subsidiaries' business to an extent substantially greater than the Executive's
current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Investors. The term "Investors" shall have the meaning set forth in
the preface.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Amended and
Restated Limited Liability Company Agreement of Investors, dated as of April 10,
2001, entered into by and among the members of Investors, as amended from time
to time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.


                                        6


      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.

      1.32 Purchased Shares. The term "Purchased Shares" shall have the meaning
set forth in the preface.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of Investors or any of its
subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board, after at least three years employment with
Investors after the Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among
Investors, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Shares. The term "Shares" shall have the meaning set forth in the
preface.

      1.38 Share Purchase Price. The term "Share Purchase Price" shall have the
meaning set forth in Section 2.2.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with Investors and its subsidiaries is terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Investors,
whether pursuant to this Agreement or any other arrangement.


                                        7


      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael Foods
Co-Invest, LLC, a Delaware limited liability company.

2. Purchase and Sale of Shares; Contribution.

      2.1 Purchase and Sale of the Shares. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement, the Executive shall sell,
assign, transfer and convey to Investors, and Investors shall purchase and
acquire from the Executive, the Purchased Shares against payment at the Closing
of an aggregate amount equal to the Share Purchase Price by wire transfer of
immediately available funds to one or more accounts specified by the Executive
in a written notice to Investors prior to the Closing Date.

      2.2 Share Purchase Price. The aggregate purchase price for the Purchased
Shares (the "Share Purchase Price") will consist of the payment of an amount of
cash, equal to $30.10 per Purchased Share, as set forth on Schedule I.

      2.3 Contribution of Shares. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Investors hereby agrees to receive, the Contributed Shares in
exchange for the number of Units set forth on Schedule II.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Investors stock certificates
representing the Purchased Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment;

            (b) Investors shall deliver to the Executive the amount of the Share
Purchase Price by wire transfer of immediately available funds to one or more
accounts designated by the Executive in writing to Investors prior to the
Closing;

            (c) The Executive shall deliver to Investors stock certificates
representing the Contributed Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment; and

            (d) Investors shall deliver to the Executive unit certificates
representing the number of Class A Units, Class B Units and Class C Units set
forth on Schedule II.


                                        8


      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Investors.

      4.1 Stock Purchase Representations of the Executive. The Executive
represents and warrants to Investors that the statements contained in this
Section 4.1 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is subject or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Executive is a party or by which he is bound or to which any of his assets
is subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Investors could become
liable or obligated.

            (d) Capital Stock. The Executive holds of record and owns
beneficially the number of Shares set forth next to his name on Schedule I, free
and clear of any restrictions on transfer (other than any restrictions under the
Securities Act, state securities laws, joint tenancy laws or other Transaction
Documents), taxes, security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. In the event the
Executive owns the Shares in joint tenancy, the joint tenant of the Executive
has executed this Agreement on the signature page attached hereto and Executive
has informed such joint tenant of the transactions set forth in this Agreement.
The Executive is not a party to any option, warrant, purchase right, or other
contract or commitment that could require the Executive to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement). Except as set forth in other Transaction


                                        9


Documents, the Executive is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
the Company. The Executive acknowledges and represents that the Paying Agent (as
defined in the Merger Agreement) will not make any payment to Executive in
connection with the Shares subject to this Agreement and that such shares will
be cancelled upon consummation of the Acquisition.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Investors that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT BETWEEN
            THE ISSUER AND THE EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED
            AND MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY
            THE HOLDER HEREOF AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS
            WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Investors
      indicating that the Units are subject to restrictions on transfer and, if
      Investors should at some time in the future engage the services of a
      securities transfer agent, appropriate stop-transfer instructions will be
      issued to such transfer agent with respect to the Units.

      4.3 [Reserved]


                                       10


      4.4 Representations of Investors. Investors represents to the Executive
that the statements contained in this Section 4.4 are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date, with respect to itself:

            (a) Organization and Power. Investors is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware with full power and authority to enter into this Agreement and
perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Investors and the consummation of the transactions contemplated
hereby by Investors have been duly and validly authorized by all requisite
limited liability company action on the part of Investors, and no other
proceedings on its part are necessary to authorize the execution, delivery or
performance of this Agreement. This Agreement has been duly executed and
delivered by Investors, and this Agreement constitutes a valid and binding
obligation of Investors, enforceable in accordance with its terms and
conditions. Investors need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Investors is subject or any provision of
its charter or bylaws or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Investors is a party or by which it is bound or to which any of its assets is
subject.

            (d) Investment. Investors is not acquiring the Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Investors to issue, sell, or
otherwise cause to become outstanding any of its Units. Except as set forth in
the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Investors. Except as set forth in the Transaction Documents, there
are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Investors.

5. Covenants of the Executive and Investors


                                       11


      5.1 Covenants. The Executive and/or Investors each agree as follows with
respect to the period between the execution of this Agreement and the Closing:

            (a) General. The Executive and Investors each will use his or its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement.

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with Investors and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Investors, and Investors shall be required to
purchase (subject to the provisions of Section 8 hereof), on one occasion from
the Executive and his Permitted Transferees, if applicable, all (but not less
than all) of the number of Units then held by the Executive and such other
number of Units held by the Executive's Permitted Transferees as the Executive
may request provided that in the aggregate such number does not exceed the
product of (x) the total number of Units collectively held by the Executive and
all of his Permitted Transferees and (y) the Applicable Percentage (measured as
of the Termination Date), at a price per unit equal to the Fair Market Value of
such unit (measured as of the delivery of the notice referred to in Section
7.1(b)).

            (b) If the Executive desires to exercise its option to require
Investors to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Investors setting forth the intention of Executive
and Permitted Transferees, if applicable, to collectively sell all Units
pursuant to Section 7.1(a) within the period described above, which notice shall
specify the number of Units to be sold and shall include the signature of the
Executive and each Permitted Transferee desiring to sell Units. Subject to the
provisions of Section 8.1, the closing of the purchase shall take place at the
principal office of Investors on the later of the 30th day after the giving of
such notice and the date that is 10 business days after the final determination
of Fair Market Value. Subject to the provisions of Section 8.1, the Executive
shall deliver to Investors duly executed instruments transferring title to units
to Investors, against payment of the appropriate purchase price by cashier's


                                       12


or certified check payable to the Executive or by wire transfer of immediately
available funds to an account designated by the Executive.

      7.2 Call Options.

            (a) If the Executive's employment with Investors or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Investors shall have the right and
option to purchase, and the Executive and the Executive's Permitted Transferees
(hereinafter referred to as the "Executive Group") shall be required to sell to
Investors, any or all of such Units then held by such member of the Executive
Group (it being understood that if Units of any class subject to repurchase
hereunder may be repurchased at different prices, Investors may elect to
repurchase only the portion of the Units of such class subject to repurchase
hereunder at the lower price), at a price per unit equal to the applicable
purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with Investors and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with Investors and its
      subsidiaries is terminated by Investors and its subsidiaries without Cause
      or by the Executive for Good Reason;

            (iii) if the Executive's active employment with Investors and its
      subsidiaries is terminated (A) by Investors or any of its subsidiaries for
      Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Investors' rights under this Section 7.2(a) shall not be available
in the event of the termination of Executive's employment by Investors or its
subsidiaries without Cause or by Executive for Good Reason, in either case
following a sale by Investors or its subsidiaries of substantially all of the
line of business in which Executive primarily performs his services.

            (b) If Investors desires to exercise one of its options to purchase
Units pursuant to this Section 7.2, Investors shall, not later than the
expiration of the applicable period described for such purchase in Section
7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Investors on the later of
the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of


                                       13


Section 8.1, the Executive shall deliver to Investors duly executed instruments
transferring title to units to Investors, against payment of the appropriate
purchase price by cashier's or certified check payable to the Executive or by
wire transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Investors pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Investors is less than or equal to the Unvested Percentage
            of such class, the purchase price for each Unit shall be the lesser
            of (x) the Fair Market Value (measured as of the date of the Call
            Notice) and (y) the Cost of such Unit (the "Unvested Unit Purchase
            Price"), and (ii) if the number of such Units exceeds the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            (A) for a number of Units of such class equal to the result of (x)
            the Unvested Percentage and (y) the total number of Units of such
            class held by the Executive Group, the Unvested Unit Purchase Price,
            and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Investors shall have the right to revoke the exercise
of its option pursuant to this Section 7.2 for all or any portion of the Units
elected to be repurchased by it by delivering notice of such revocation in
writing to the Executive Group during the ten-day period beginning on the date
that Investors is given written notice that the Fair Market Value of a Unit was
finally determined to be an amount at least 10% greater than the per Unit
repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Investors purchases Units at Fair Market Value pursuant to the terms of
this Section 7.2 and within six months of the date of the determination of such
Fair Market Value both (A) a Sale of the Company or a Public Offering occurs and
(B) in connection with such transaction, the per share value of the Units


                                       14


exceeds the per share purchase price paid by Investors to Executive under this
Section 7.2, the Executive shall be entitled to receive from Investors the
benefit of such higher valuation for the Units purchased. The excess of (x) the
net proceeds which the Executive would have received in such Sale of the Company
or Public Offering from the sale in such transaction of all Units repurchased by
Investors under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Investors, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Investors shall not excuse, or constitute a waiver of its rights against, the
defaulting member.

8. Certain Limitations on Investors's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Investors elects or is required to
purchase any Units pursuant to Section 7, Investors shall pay the purchase price
for the Units it purchases (i) first, by offsetting indebtedness, if any, owing
from the Executive to Investors (which indebtedness shall be applied pro rata
against the proceeds receivable by each member of the Executive Group receiving
consideration in such repurchase) and (ii) then, by Investors' delivery of a
check or wire transfer of immediately available funds for the remainder of the
purchase price, if any, against delivery of the certificates or other
instruments representing the Units so purchased, duly endorsed; provided that if
such cash payment would result (A) in a violation of any law, statute, rule,
regulation, policy, order, writ, injunction, decree or judgment promulgated or
entered by any federal, state, local or foreign court or governmental authority
applicable to Investors or any of its subsidiaries or any of its or their
property or (B) after giving effect thereto, a Financing Default, or (C) if the
Board determines in good faith that immediately prior to such purchase there
shall exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the "Cash Deferral Conditions"), the
portion of the cash payment so affected may be made by Investors' delivery of
preferred units of Investors with a liquidation preference equal to the balance
of the purchase price; which preferred units shall accrue yield annually at the
"prime rate" published in The Wall Street Journal on the date of issuance, which
yield shall be payable at maturity or upon payment of distributions by Investors
(other than tax distributions). Each such preferred unit shall as of its
issuance be deemed to have basic contributions made with respect to such unit
equal to (A) the portion of the cash payment paid by the issuance of such
preferred units divided by (B) the number of preferred units so issued in the
repurchase. Any such preferred units issued shall be promptly redeemed (i) when
the Cash Deferral Condition which prompted their issuance no longer exists, (ii)
upon consummation of an IPO of the Company or Holdings (or their successors) (to
the extent allowed by the underwriters of such IPO), or (iii) upon a Sale of the
Company from net cash proceeds, if any, payable to Investors or its unitholders;
to the extent that sufficient net cash proceeds


                                       15


are not so payable, the preferred units shall be cancelled in exchange for such
non-cash consideration received by unitholders in the Sale of the Company having
a fair market value equal to the principal of and accrued yield on the preferred
units. If a yield is required to be paid on any preferred units prior to
maturity and any Cash Deferral Conditions exist, such yield may be cumulated and
accrued until and to the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with
Investors or its subsidiaries terminates, (i) Executive, for himself or on
behalf of any other person, firm, partnership, corporation, or other entity,
engages, directly or indirectly, as an executive, agent, representative,
consultant, partner, shareholder or holder of any other financial interest, in
any business that competes with Investors or its subsidiaries in the line of
business Executive is employed in by Investors or its subsidiaries (as
applicable), as such business is described in any employment or severance
agreement then in effect between Executive and Investors or one of its
subsidiaries or, if no such agreement is then in effect, as described on
Schedule III attached hereto (a "Competing Business"), it being understood and
agreed that Executive's activities shall not satisfy this clause (i) where
Executive is employed by a person, firm, partnership, corporation, or other
entity engaged in a variety of activities, including the Competing Business, and
Executive is not engaged in or responsible for the Competing Business of such
entity. Executive may also, without satisfying clause (i) be a passive owner of
not more than 2% of the outstanding publicly traded stock of any class of a
Competing Business so long as Executive has no active participation in the
business of such entity, except to the extent permitted above; or (ii) Executive
(A) directly or indirectly through another entity, induces or attempts to induce
any employee of the Company or its subsidiaries to leave the employ of the
Company or its subsidiaries, or in any way interfere with the relationship
between the Company or any of its subsidiaries and any employee thereof, (B)
knowingly hires any person who was an employee of the Company or any of its
subsidiaries within 180 days prior to the time such employee was hired by
Executive, (C) induces or attempts to induce any customer, supplier, licensee or
other business relation of the Company or any of its subsidiaries to cease doing
business with the Company or its subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary or (D) directly or indirectly acquires or
attempt to acquire an interest in any business relating to the business of the
Company or any of its subsidiaries and with which the Company or any of its
subsidiaries has entertained discussions or has requested and received
information relating to the acquisition of such business by the Company or its
subsidiaries in the one-year period immediately preceding Executive's
termination of employment with the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.

      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Investors, within ten business days
following the Activity Date,


                                       16


an amount equal to the excess, if any, of (A) the aggregate proceeds Executive
received upon the sale or other disposition of Executive's Units, over (B) the
aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Investors a written
agreement of the proposed transferee (a) evidencing such Person's undertaking to
be bound by the terms of this Agreement and (b) acknowledging that the Units
transferred to such Person will continue to be Units for purposes of this
Agreement in the hands of such Person. Any transfer or attempted transfer of
Units in violation of any provision of this Agreement or the Securityholders
Agreement shall be void, and Investors shall not record such transfer on its
books or treat any purported transferee of such Units as the owner of such Units
for any purpose.

      10.2 Deemed Transfer of Units. If Investors shall deliver, at the time and
place and in the amount and form provided in this Agreement, the consideration
for the Units to be repurchased in accordance with the provisions of this
Agreement, then from and after such time, the Person from whom such units are to
be repurchased shall no longer have any rights as a holder of such units (other
than the right to receive payment of such consideration in accordance with this
Agreement), and such Units shall be deemed purchased in accordance with the
applicable provisions hereof and Investors shall be deemed the owner and holder
of such Units, whether or not certificates therefor have been delivered as
required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Investors or any successor or assign of
Investors (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Units,
by reason of any dividend payable in units, issuance of units, combination,
recapitalization, reclassification, merger, consolidation or otherwise.

      10.4 Executive's Employment by Investors. Nothing contained in this
Agreement shall be deemed to obligate Investors or any subsidiary of Investors
to employ the Executive in any capacity whatsoever or to prohibit or restrict
Investors (or any such subsidiary) from terminating the employment of the
Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Investors against any and all losses, liabilities, damages, judgments,
fines, fees or expenses, including, without limitation, attorneys' fees (for
purposes of this Section 10.5, hereinafter "Losses"), incurred in connection
with any failure to withhold amounts relating to the Units acquired herein by
the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Investors properly failed to withhold amounts relating to the Units acquired
herein by Executive, Executive shall provide Investors with


                                       17


a Form 4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Investors and/or any of its affiliates is entitled to any
tax deduction with respect to the issuance of Units, (i) Investors shall
specially allocate such deduction to the Executive and/or (ii) Holdings shall
pay, or cause any affiliate to pay, as the case may be, Executive an amount
equal to 40% of such deduction, such amount to be grossed up to reflect any
additional deduction to Holdings and/or any of its affiliates (as the case may
be) provided that if any Cash Deferral Condition exists at the time such payment
is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Investors shall notify the other (in a
manner described in Section 10.10 of this Agreement) within 20 days of first
receiving notice of an audit or other proceeding being conducted by the Internal
Revenue Service or any state or local taxing authority relating to the Units
acquired herein by the Management Investors, and both Executive and Investors
shall assist each other during the course of such audit or other proceeding to
the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Investors a valid
undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Investors and the members of the Executive Group hereby submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. Each of the members of the Executive Group and Investors
hereby irrevocably waives any objections which 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 brought in any court of competent jurisdiction in the
State of Delaware, and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum.

      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and


                                       18


three days after deposit in the U.S. Mail (postage prepaid and return receipt
requested) to the address set forth below or such other address as the recipient
party has previously delivered notice to the sending party.

            (a)   If to Investors

                  M-Foods Investors, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 292-6639

            with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 808-4922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 861-2200

            (b)   If to the Executive, to the address as shown on the unit
                  register of Investors.

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036-6522
                  Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.


                                       19


      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Investors under this Agreement shall be cumulative and not exclusive of any
rights or remedies which either would otherwise have hereunder or at law or in
equity or by statute, and no failure or delay by either party in exercising any
right or remedy shall impair any such right or remedy or operate as a waiver of
such right or remedy, nor shall any single or partial exercise of any power or
right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       20


      IN WITNESS WHEREOF, the parties have executed this Management Stock
Purchase and Unit Subscription Agreement as of the date first above written.

                                      M-FOODS INVESTORS, LLC

                                      By:_______________________________________

                                      Its:______________________________________


                                      M-FOODS HOLDINGS, INC.

                                      By:_______________________________________

                                      Its:______________________________________

                                      EXECUTIVE

                                      __________________________________________
                                                 Max R. Hoffmann



                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Stock Purchase and Unit
Subscription Agreement (the "Agreement") and that I understand its contents. I
am aware that the Agreement provides for the repurchase of my spouse's Units (as
defined in the Agreement) under certain circumstances and imposes other
restrictions on the transfer of such Units. I agree that my spouse's interest in
the Units is subject to the Agreement and any interest I may have in such Units
shall also be irrevocably bound by the Agreement and, further, that my community
property interest in such Units, if any, shall be similarly bound by the
Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                    Acknowledged and agreed this ___ day of
                                    _____________, 2001.

                                    ________________________________________

                                    Name: __________________________________

                                    ________________________________________
                                                    Witness



                                   SCHEDULE I

- --------------------------------------------------------------------------------
Shares                     Purchased Shares                 Share Purchase Price
- --------------------------------------------------------------------------------
17,998                        14,472.99                         $435,636.98
- --------------------------------------------------------------------------------



                                   SCHEDULE II

- --------------------------------------------------------------------------------
       Contributed Shares                                      Units
- --------------------------------------------------------------------------------
            3,525.01                                   921.83 Class A Units
                                                      3,078.17 Class B Units
                                                        4,000 Class C Units
- --------------------------------------------------------------------------------



                                  SCHEDULE III

Competing Business: Production, distribution or sale of refrigerated potato
products or specialty dairy products and mixes



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Investors, LLC
("Investors") on ________, 2001. The undersigned desires to make an election to
have the Units taxed under the provision of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the undersigned
purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:

               ______________________________
               ______________________________
               ______________________________
               SSN:__________________________

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by Investors or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Investors at a
price per Unit equal to the lesser of (x) fair market value (measured as of the
date of such repurchase) and (y) cost. The Units are also subject to transfer
restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $_______.

            6. The aggregate amount paid for such property: $_______.

            A copy of this election has been furnished to the Secretary of
Investors pursuant to Treasury Regulations ss.1.83-2(e)(7).



Dated:  ________, 2001                             _____________________________
                                                             [Name]

EX-10.20

                                                                   Exhibit 10.20

                                                                [Execution Copy]

                          MANAGEMENT STOCK PURCHASE AND
                           UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT (this
"Agreement") is made as of April 10, 2001, by and among M-Foods Investors, LLC,
a Delaware limited liability company ("Investors"), Harold D. Sprinkle (the
"Executive"), and for the purposes of Section 10.5 hereof, M-Foods Holdings,
Inc., a Delaware corporation ("Holdings").

      WHEREAS, the Executive is an employee and shareholder of Michael Foods,
Inc., a Minnesota corporation (the "Company"), and one of several persons who
are or will be key employees of Investors or one or more of its subsidiaries and
who will hold interests in Investors (collectively with the Executive, the
"Management Investors");

      WHEREAS, the Company entered into an Agreement and Plan of Merger with
Holdings and Protein Acquisition Corp., a Minnesota corporation, and a wholly
owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.) ("Merger
Sub"), dated as of December 21, 2000, as amended from time to time in accordance
with its terms (the "Merger Agreement"), pursuant to which Merger Sub shall be
merged with and into the Company (the "Acquisition"), in accordance with the
terms and conditions of the Merger Agreement and the relevant provisions of the
MBCA (as defined in the Merger Agreement), and the surviving corporation shall
be the Company;

      WHEREAS, prior to the consummation of the transactions contemplated by
this Agreement and the Merger Agreement, the Executive is the record and
beneficial owner of the number of shares of the Company's common stock, par
value $0.01 per share (the "Shares"), set forth on Schedule I attached hereto;

      WHEREAS, on the terms and subject to the conditions hereof, Investors
desires to acquire from the Executive, and the Executive desires to sell to
Investors, certain of the Shares, as set forth on Schedule I (the "Purchased
Shares"); and

      WHEREAS, on the terms and subject to the conditions hereof and pursuant to
Section 721(a) of the Internal Revenue Code, the Executive also desires to
contribute certain of the Shares (the "Contributed Shares") in exchange for
Investors' Class B Units (the "Class B Units") and Class C Units (the "Class C
Units"), in each case in the amounts set forth on Schedule II attached hereto.

      NOW, THEREFORE, in order to implement the foregoing and in consideration
of the mutual representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:



1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.

      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean Investors' Management Committee.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and
Investors or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with Investors or
one of its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive's duties; (ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to Investors or one of its subsidiaries; or (iii)
conviction of a felony or guilty or nolo contendere plea by the Executive with
respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of Investors or one of
its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer (while the Executive does not serve as such) or
based upon the advice of counsel for Investors shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best
interests of Investors and its subsidiaries. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a


                                        2


resolution duly adopted by the affirmative vote of not less than 75%of the
entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in (i), (ii) or (iii)
above, and specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or by virtue of their interests in Investors, a majority of the Board
of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means Investors' Class A
Units.

      1.8 Class B Units. The term "Class B Units" shall have the meaning set
forth in the preface.

      1.9 Class C Units. The term "Class C Units" shall have the meaning set
forth in the preface.

      1.10 Closing. The "Closing" for the sale and purchase of the Shares and
the contribution of Shares in exchange for Units hereunder shall occur
immediately prior to the consummation of the Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Contributed Shares. The term "Contributed Shares" shall have the
meaning set forth in the preface.


                                        3


      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and Investors or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job responsibilities as a result of chronic illness, physical,
mental or any other disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of Investors or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to Investors or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Investors at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
the Company in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of the Company and the Executive setting forth their respective resolutions of
the dispute and the bases therefor and (ii) accepting either the Executive's or
the Company's proposed resolution of the dispute. Promptly following the
Company's receipt of Executive's written notice of disagreement, the Company
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and the Company's written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and the


                                        4


Company of its decision within 40 days of its engagement. The party whose
proposed resolution is not accepted shall pay all of the Arbiter's fees and
expenses. If the Executive's proposed resolution is accepted, the Company also
shall pay all of the Executive's reasonable out-of-pocket fees and expenses
(including reasonable fees and expenses of counsel and one appraiser, accountant
or investment banking firm) incurred in connection with the arbitration. Each of
the Company and the Executive agrees to execute, if requested by the Arbiter, a
reasonable engagement letter with the Arbiter.

      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and Investors or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by Investors or one of its subsidiaries (as applicable) which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Investors or one of its subsidiaries promptly
after receipt of notice thereof given by the Executive; provided that after a
Change in Control, Investors or one of its subsidiaries (as applicable) shall
have the flexibility to appoint the Executive to a reporting


                                        5


relationship different from that which existed prior to the Change in Control,
to make an immaterial change in Executive's duties, or to change the Executive's
title provided; (ii) any failure by Investors or one of its subsidiaries (as
applicable) to provide Executive with the annual base salary Executive had
previously received or the failure by Investors or one of its subsidiaries (as
applicable) to increase such annual each year after a Change in Control by an
amount which at least equals on a percentage basis, the mean average percentage
increase in base salary for all employees similarly situated during the two full
calendar years immediately preceding a Change in Control, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by Investors or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of Investors or one of its subsidiaries (as applicable) upon a Change in
Control to (A) continue in effect any employee benefit plan, compensation plan,
welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by Investors or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of Investors or one
of its subsidiaries as in effect for Executive immediately prior to such Change
in Control; (iv) after a Change in Control, any purported termination by
Investors or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on Investor or its
subsidiaries' business to an extent substantially greater than the Executive's
current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Investors. The term "Investors" shall have the meaning set forth in
the preface.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Amended and
Restated Limited Liability Company Agreement of Investors, dated as of April 10,
2001, entered into by and among the members of Investors, as amended from time
to time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.


                                        6


      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.

      1.32 Purchased Shares. The term "Purchased Shares" shall have the meaning
set forth in the preface.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of Investors or any of its
subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board, after at least three years employment with
Investors after the Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among
Investors, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Shares. The term "Shares" shall have the meaning set forth in the
preface.

      1.38 Share Purchase Price. The term "Share Purchase Price" shall have the
meaning set forth in Section 2.2.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with Investors and its subsidiaries is terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Investors,
whether pursuant to this Agreement or any other arrangement.


                                        7


      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael Foods
Co-Invest, LLC, a Delaware limited liability company.

2. Purchase and Sale of Shares; Contribution.

      2.1 Purchase and Sale of the Shares. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement, the Executive shall sell,
assign, transfer and convey to Investors, and Investors shall purchase and
acquire from the Executive, the Purchased Shares against payment at the Closing
of an aggregate amount equal to the Share Purchase Price by wire transfer of
immediately available funds to one or more accounts specified by the Executive
in a written notice to Investors prior to the Closing Date.

      2.2 Share Purchase Price. The aggregate purchase price for the Purchased
Shares (the "Share Purchase Price") will consist of the payment of an amount of
cash, equal to $30.10 per Purchased Share, as set forth on Schedule I.

      2.3 Contribution of Shares. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Investors hereby agrees to receive, the Contributed Shares in
exchange for the number of Units set forth on Schedule II.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Investors stock certificates
representing the Purchased Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment;

            (b) Investors shall deliver to the Executive the amount of the Share
Purchase Price by wire transfer of immediately available funds to one or more
accounts designated by the Executive in writing to Investors prior to the
Closing;

            (c) The Executive shall deliver to Investors stock certificates
representing the Contributed Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment; and

            (d) Investors shall deliver to the Executive unit certificates
representing the number of Class B Units and Class C Units set forth on Schedule
II.


                                        8


      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Investors.

      4.1 Stock Purchase Representations of the Executive. The Executive
represents and warrants to Investors that the statements contained in this
Section 4.1 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is subject or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Executive is a party or by which he is bound or to which any of his assets
is subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Investors could become
liable or obligated.

            (d) Capital Stock. The Executive holds of record and owns
beneficially the number of Shares set forth next to his name on Schedule I, free
and clear of any restrictions on transfer (other than any restrictions under the
Securities Act, state securities laws, joint tenancy laws or other Transaction
Documents), taxes, security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. In the event the
Executive owns the Shares in joint tenancy, the joint tenant of the Executive
has executed this Agreement on the signature page attached hereto and Executive
has informed such joint tenant of the transactions set forth in this Agreement.
The Executive is not a party to any option, warrant, purchase right, or other
contract or commitment that could require the Executive to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement). Except as set forth in other Transaction


                                        9


Documents, the Executive is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
the Company. The Executive acknowledges and represents that the Paying Agent (as
defined in the Merger Agreement) will not make any payment to Executive in
connection with the Shares subject to this Agreement and that such shares will
be cancelled upon consummation of the Acquisition.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Investors that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT BETWEEN
            THE ISSUER AND THE EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED
            AND MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY
            THE HOLDER HEREOF AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS
            WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Investors
      indicating that the Units are subject to restrictions on transfer and, if
      Investors should at some time in the future engage the services of a
      securities transfer agent, appropriate stop-transfer instructions will be
      issued to such transfer agent with respect to the Units.

      4.3 [Reserved]


                                       10


      4.4 Representations of Investors. Investors represents to the Executive
that the statements contained in this Section 4.4 are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date, with respect to itself:

            (a) Organization and Power. Investors is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware with full power and authority to enter into this Agreement and
perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Investors and the consummation of the transactions contemplated
hereby by Investors have been duly and validly authorized by all requisite
limited liability company action on the part of Investors, and no other
proceedings on its part are necessary to authorize the execution, delivery or
performance of this Agreement. This Agreement has been duly executed and
delivered by Investors, and this Agreement constitutes a valid and binding
obligation of Investors, enforceable in accordance with its terms and
conditions. Investors need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Investors is subject or any provision of
its charter or bylaws or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Investors is a party or by which it is bound or to which any of its assets is
subject.

            (d) Investment. Investors is not acquiring the Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Investors to issue, sell, or
otherwise cause to become outstanding any of its Units. Except as set forth in
the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Investors. Except as set forth in the Transaction Documents, there
are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Investors.

5. Covenants of the Executive and Investors


                                       11


      5.1 Covenants. The Executive and/or Investors each agree as follows with
respect to the period between the execution of this Agreement and the Closing:

            (a) General. The Executive and Investors each will use his or its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section 6 below).

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with Investors and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Investors, and Investors shall be required to
purchase (subject to the provisions of Section 8 hereof), on one occasion from
the Executive and his Permitted Transferees, if applicable, all (but not less
than all) of the number of Units then held by the Executive and such other
number of Units held by the Executive's Permitted Transferees as the Executive
may request provided that in the aggregate such number does not exceed the
product of (x) the total number of Units collectively held by the Executive and
all of his Permitted Transferees and (y) the Applicable Percentage (measured as
of the Termination Date), at a price per unit equal to the Fair Market Value of
such unit (measured as of the delivery of the notice referred to in Section
7.1(b)).

            (b) If the Executive desires to exercise its option to require
Investors to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Investors setting forth the intention of Executive
and Permitted Transferees, if applicable, to collectively sell all Units
pursuant to Section 7.1(a) within the period described above, which notice shall
specify the number of Units to be sold and shall include the signature of the
Executive and each Permitted Transferee desiring to sell Units. Subject to the
provisions of Section 8.1, the closing of the purchase shall take place at the
principal office of Investors on the later of the 30th day after the giving of
such notice and the date that is 10 business days after the final determination
of Fair Market Value. Subject to the provisions of Section 8.1, the Executive
shall deliver to Investors duly executed instruments transferring title to units
to Investors, against payment of the appropriate purchase price by cashier's


                                       12


or certified check payable to the Executive or by wire transfer of immediately
available funds to an account designated by the Executive.

      7.2 Call Options.

            (a) If the Executive's employment with Investors or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Investors shall have the right and
option to purchase, and the Executive and the Executive's Permitted Transferees
(hereinafter referred to as the "Executive Group") shall be required to sell to
Investors, any or all of such Units then held by such member of the Executive
Group (it being understood that if Units of any class subject to repurchase
hereunder may be repurchased at different prices, Investors may elect to
repurchase only the portion of the Units of such class subject to repurchase
hereunder at the lower price), at a price per unit equal to the applicable
purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with Investors and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with Investors and its
      subsidiaries is terminated by Investors and its subsidiaries without Cause
      or by the Executive for Good Reason;

            (iii) if the Executive's active employment with Investors and its
      subsidiaries is terminated (A) by Investors or any of its subsidiaries for
      Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Investors' rights under this Section 7.2(a) shall not be available
in the event of the termination of Executive's employment by Investors or its
subsidiaries without Cause or by Executive for Good Reason, in either case
following a sale by Investors or its subsidiaries of substantially all of the
line of business in which Executive primarily performs his services.

            (b) If Investors desires to exercise one of its options to purchase
Units pursuant to this Section 7.2, Investors shall, not later than the
expiration of the applicable period described for such purchase in Section
7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Investors on the later of
the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of


                                       13


Section 8.1, the Executive shall deliver to Investors duly executed instruments
transferring title to units to Investors, against payment of the appropriate
purchase price by cashier's or certified check payable to the Executive or by
wire transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Investors pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Investors is less than or equal to the Unvested Percentage
            of such class, the purchase price for each Unit shall be the lesser
            of (x) the Fair Market Value (measured as of the date of the Call
            Notice) and (y) the Cost of such Unit (the "Unvested Unit Purchase
            Price"), and (ii) if the number of such Units exceeds the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            (A) for a number of Units of such class equal to the result of (x)
            the Unvested Percentage and (y) the total number of Units of such
            class held by the Executive Group, the Unvested Unit Purchase Price,
            and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Investors shall have the right to revoke the exercise
of its option pursuant to this Section 7.2 for all or any portion of the Units
elected to be repurchased by it by delivering notice of such revocation in
writing to the Executive Group during the ten-day period beginning on the date
that Investors is given written notice that the Fair Market Value of a Unit was
finally determined to be an amount at least 10% greater than the per Unit
repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Investors purchases Units at Fair Market Value pursuant to the terms of
this Section 7.2 and within six months of the date of the determination of such
Fair Market Value both (A) a Sale of the Company or a Public Offering occurs and
(B) in connection with such transaction, the per share value of the Units


                                       14


exceeds the per share purchase price paid by Investors to Executive under this
Section 7.2, the Executive shall be entitled to receive from Investors the
benefit of such higher valuation for the Units purchased. The excess of (x) the
net proceeds which the Executive would have received in such Sale of the Company
or Public Offering from the sale in such transaction of all Units repurchased by
Investors under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Investors, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Investors shall not excuse, or constitute a waiver of its rights against, the
defaulting member.

8. Certain Limitations on Investors's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Investors elects or is required to
purchase any Units pursuant to Section 7, Investors shall pay the purchase price
for the Units it purchases (i) first, by offsetting indebtedness, if any, owing
from the Executive to Investors (which indebtedness shall be applied pro rata
against the proceeds receivable by each member of the Executive Group receiving
consideration in such repurchase) and (ii) then, by Investors' delivery of a
check or wire transfer of immediately available funds for the remainder of the
purchase price, if any, against delivery of the certificates or other
instruments representing the Units so purchased, duly endorsed; provided that if
such cash payment would result (A) in a violation of any law, statute, rule,
regulation, policy, order, writ, injunction, decree or judgment promulgated or
entered by any federal, state, local or foreign court or governmental authority
applicable to Investors or any of its subsidiaries or any of its or their
property or (B) after giving effect thereto, a Financing Default, or (C) if the
Board determines in good faith that immediately prior to such purchase there
shall exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the "Cash Deferral Conditions"), the
portion of the cash payment so affected may be made by Investors' delivery of
preferred units of Investors with a liquidation preference equal to the balance
of the purchase price; which preferred units shall accrue yield annually at the
"prime rate" published in The Wall Street Journal on the date of issuance, which
yield shall be payable at maturity or upon payment of distributions by Investors
(other than tax distributions). Each such preferred unit shall as of its
issuance be deemed to have basic contributions made with respect to such unit
equal to (A) the portion of the cash payment paid by the issuance of such
preferred units divided by (B) the number of preferred units so issued in the
repurchase. Any such preferred units issued shall be promptly redeemed (i) when
the Cash Deferral Condition which prompted their issuance no longer exists, (ii)
upon consummation of an IPO of the Company or Holdings (or their successors) (to
the extent allowed by the underwriters of such IPO), or (iii) upon a Sale of the
Company from net cash proceeds, if any, payable to Investors or its unitholders;
to the extent that sufficient net cash proceeds


                                       15


are not so payable, the preferred units shall be cancelled in exchange for such
non-cash consideration received by unitholders in the Sale of the Company having
a fair market value equal to the principal of and accrued yield on the preferred
units. If a yield is required to be paid on any preferred units prior to
maturity and any Cash Deferral Conditions exist, such yield may be cumulated and
accrued until and to the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with
Investors or its subsidiaries terminates, (i) Executive, for himself or on
behalf of any other person, firm, partnership, corporation, or other entity,
engages, directly or indirectly, as an executive, agent, representative,
consultant, partner, shareholder or holder of any other financial interest, in
any business that competes with Investors or its subsidiaries in the line of
business Executive is employed in by Investors or its subsidiaries (as
applicable), as such business is described in any employment or severance
agreement then in effect between Executive and Investors or one of its
subsidiaries or, if no such agreement is then in effect, as described on
Schedule III attached hereto (a "Competing Business"), it being understood and
agreed that Executive's activities shall not satisfy this clause (i) where
Executive is employed by a person, firm, partnership, corporation, or other
entity engaged in a variety of activities, including the Competing Business, and
Executive is not engaged in or responsible for the Competing Business of such
entity. Executive may also, without satisfying clause (i) be a passive owner of
not more than 2% of the outstanding publicly traded stock of any class of a
Competing Business so long as Executive has no active participation in the
business of such entity, except to the extent permitted above; or (ii) Executive
(A) directly or indirectly through another entity, induces or attempts to induce
any employee of the Company or its subsidiaries to leave the employ of the
Company or its subsidiaries, or in any way interfere with the relationship
between the Company or any of its subsidiaries and any employee thereof, (B)
knowingly hires any person who was an employee of the Company or any of its
subsidiaries within 180 days prior to the time such employee was hired by
Executive, (C) induces or attempts to induce any customer, supplier, licensee or
other business relation of the Company or any of its subsidiaries to cease doing
business with the Company or its subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary or (D) directly or indirectly acquires or
attempt to acquire an interest in any business relating to the business of the
Company or any of its subsidiaries and with which the Company or any of its
subsidiaries has entertained discussions or has requested and received
information relating to the acquisition of such business by the Company or its
subsidiaries in the one-year period immediately preceding Executive's
termination of employment with the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.

      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Investors, within ten business days
following the Activity Date,


                                       16


an amount equal to the excess, if any, of (A) the aggregate proceeds Executive
received upon the sale or other disposition of Executive's Units, over (B) the
aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Investors a written
agreement of the proposed transferee (a) evidencing such Person's undertaking to
be bound by the terms of this Agreement and (b) acknowledging that the Units
transferred to such Person will continue to be Units for purposes of this
Agreement in the hands of such Person. Any transfer or attempted transfer of
Units in violation of any provision of this Agreement or the Securityholders
Agreement shall be void, and Investors shall not record such transfer on its
books or treat any purported transferee of such Units as the owner of such Units
for any purpose.

      10.2 Deemed Transfer of Units. If Investors shall deliver, at the time and
place and in the amount and form provided in this Agreement, the consideration
for the Units to be repurchased in accordance with the provisions of this
Agreement, then from and after such time, the Person from whom such units are to
be repurchased shall no longer have any rights as a holder of such units (other
than the right to receive payment of such consideration in accordance with this
Agreement), and such Units shall be deemed purchased in accordance with the
applicable provisions hereof and Investors shall be deemed the owner and holder
of such Units, whether or not certificates therefor have been delivered as
required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Investors or any successor or assign of
Investors (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Units,
by reason of any dividend payable in units, issuance of units, combination,
recapitalization, reclassification, merger, consolidation or otherwise.

      10.4 Executive's Employment by Investors. Nothing contained in this
Agreement shall be deemed to obligate Investors or any subsidiary of Investors
to employ the Executive in any capacity whatsoever or to prohibit or restrict
Investors (or any such subsidiary) from terminating the employment of the
Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Investors against any and all losses, liabilities, damages, judgments,
fines, fees or expenses, including, without limitation, attorneys' fees (for
purposes of this Section 10.5, hereinafter "Losses"), incurred in connection
with any failure to withhold amounts relating to the Units acquired herein by
the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Investors properly failed to withhold amounts relating to the Units acquired
herein by Executive, Executive shall provide Investors with


                                       17


a Form 4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Investors and/or any of its affiliates is entitled to any
tax deduction with respect to the issuance of Units, (i) Investors shall
specially allocate such deduction to the Executive and/or (ii) Holdings shall
pay, or cause any affiliate to pay, as the case may be, Executive an amount
equal to 40% of such deduction, such amount to be grossed up to reflect any
additional deduction to Holdings and/or any of its affiliates (as the case may
be) provided that if any Cash Deferral Condition exists at the time such payment
is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Investors shall notify the other (in a
manner described in Section 10.10 of this Agreement) within 20 days of first
receiving notice of an audit or other proceeding being conducted by the Internal
Revenue Service or any state or local taxing authority relating to the Units
acquired herein by the Management Investors, and both Executive and Investors
shall assist each other during the course of such audit or other proceeding to
the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Investors a valid
undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Investors and the members of the Executive Group hereby submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. Each of the members of the Executive Group and Investors
hereby irrevocably waives any objections which 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 brought in any court of competent jurisdiction in the
State of Delaware, and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum.

      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and


                                       18


three days after deposit in the U.S. Mail (postage prepaid and return receipt
requested) to the address set forth below or such other address as the recipient
party has previously delivered notice to the sending party.

            (a)   If to Investors

                  M-Foods Investors, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 292-6639

            with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 808-4922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 861-2200

            (b)   If to the Executive, to the address as shown on the unit
                  register of Investors.

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036-6522
                  Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.


                                       19


      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Investors under this Agreement shall be cumulative and not exclusive of any
rights or remedies which either would otherwise have hereunder or at law or in
equity or by statute, and no failure or delay by either party in exercising any
right or remedy shall impair any such right or remedy or operate as a waiver of
such right or remedy, nor shall any single or partial exercise of any power or
right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       20


      IN WITNESS WHEREOF, the parties have executed this Management Stock
Purchase and Unit Subscription Agreement as of the date first above written.

                                  M-FOODS INVESTORS, LLC

                                  By:___________________________________________

                                  Its:__________________________________________


                                  M-FOODS HOLDINGS, INC.

                                  By:___________________________________________

                                  Its:__________________________________________


                                  EXECUTIVE

                                  ______________________________________________
                                                Harold D. Sprinkle



                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Stock Purchase and Unit
Subscription Agreement (the "Agreement") and that I understand its contents. I
am aware that the Agreement provides for the repurchase of my spouse's Units (as
defined in the Agreement) under certain circumstances and imposes other
restrictions on the transfer of such Units. I agree that my spouse's interest in
the Units is subject to the Agreement and any interest I may have in such Units
shall also be irrevocably bound by the Agreement and, further, that my community
property interest in such Units, if any, shall be similarly bound by the
Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                    Acknowledged and agreed this ___ day of
                                    _____________, 2001.

                                    ____________________________________________

                                    Name:_______________________________________

                                    ____________________________________________
                                                      Witness



                                   SCHEDULE I

- --------------------------------------------------------------------------------
Shares                  Purchased Shares                    Share Purchase Price
- --------------------------------------------------------------------------------
 2,022                      1,491.62                             $44,897.74
- --------------------------------------------------------------------------------



                                   SCHEDULE II

- --------------------------------------------------------------------------------
        Contributed Shares                                        Units
- --------------------------------------------------------------------------------
              530.38                                       4,000 Class B Units
                                                           4,000 Class C Units
- --------------------------------------------------------------------------------



                                  SCHEDULE III

Competing Business: Production, distribution or sale of eggs or egg products



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Investors, LLC
("Investors") on ________, 2001. The undersigned desires to make an election to
have the Units taxed under the provision of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the undersigned
purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:

            _____________________________
            _____________________________
            _____________________________
            SSN:_________________________

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by Investors or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Investors at a
price per Unit equal to the lesser of (x) fair market value (measured as of the
date of such repurchase) and (y) cost. The Units are also subject to transfer
restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $_______.

            6. The aggregate amount paid for such property: $_______.

            A copy of this election has been furnished to the Secretary of
Investors pursuant to Treasury Regulations ss.1.83-2(e)(7).



Dated:  ________, 2001                             _____________________________
                                                              [Name]

EX-10.21

                                                                   Exhibit 10.21

                                                                [Execution Copy]

                          MANAGEMENT STOCK PURCHASE AND
                           UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT (this
"Agreement") is made as of April 10, 2001, by and among M-Foods Investors, LLC,
a Delaware limited liability company ("Investors"), Bradley L. Cook (the
"Executive"), and for the purposes of Section 10.5 hereof, M-Foods Holdings,
Inc., a Delaware corporation ("Holdings").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of Investors or one or more of its subsidiaries
and who will hold interests in Investors (collectively with the Executive, the
"Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, prior to the consummation of the transactions contemplated
by this Agreement and the Merger Agreement, the Executive is the record and
beneficial owner of the number of shares of the Company's common stock, par
value $0.01 per share (the "Shares"), set forth on Schedule I attached hereto;

            WHEREAS, on the terms and subject to the conditions hereof,
Investors desires to acquire from the Executive, and the Executive desires to
sell to Investors, certain of the Shares, as set forth on Schedule I (the
"Purchased Shares"); and

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive also
desires to contribute certain of the Shares (the "Contributed Shares") in
exchange for Investors' Class B Units (the "Class B Units") and Class C Units
(the "Class C Units"), in each case in the amounts set forth on Schedule II
attached hereto.

            NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:


1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.

      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean Investors' Management Committee.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and
Investors or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with Investors or
one of its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive's duties; (ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to Investors or one of its subsidiaries; or (iii)
conviction of a felony or guilty or nolo contendere plea by the Executive with
respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of Investors or one of
its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer (while the Executive does not serve as such) or
based upon the advice of counsel for Investors shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best
interests of Investors and its subsidiaries. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a


                                       2


resolution duly adopted by the affirmative vote of not less than 75%of the
entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in (i), (ii) or (iii)
above, and specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or by virtue of their interests in Investors, a majority of the Board
of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means Investors' Class A
Units.

      1.8 Class B Units. The term "Class B Units" shall have the meaning set
forth in the preface.

      1.9 Class C Units. The term "Class C Units" shall have the meaning set
forth in the preface.

      1.10 Closing. The "Closing" for the sale and purchase of the Shares and
the contribution of Shares in exchange for Units hereunder shall occur
immediately prior to the consummation of the Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Contributed Shares. The term "Contributed Shares" shall have the
meaning set forth in the preface.


                                       3


      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and Investors or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job responsibilities as a result of chronic illness, physical,
mental or any other disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of Investors or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to Investors or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Investors at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
the Company in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of the Company and the Executive setting forth their respective resolutions of
the dispute and the bases therefor and (ii) accepting either the Executive's or
the Company's proposed resolution of the dispute. Promptly following the
Company's receipt of Executive's written notice of disagreement, the Company
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and the Company's written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and the


                                       4


Company of its decision within 40 days of its engagement. The party whose
proposed resolution is not accepted shall pay all of the Arbiter's fees and
expenses. If the Executive's proposed resolution is accepted, the Company also
shall pay all of the Executive's reasonable out-of-pocket fees and expenses
(including reasonable fees and expenses of counsel and one appraiser, accountant
or investment banking firm) incurred in connection with the arbitration. Each of
the Company and the Executive agrees to execute, if requested by the Arbiter, a
reasonable engagement letter with the Arbiter.

      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and Investors or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by Investors or one of its subsidiaries (as applicable) which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Investors or one of its subsidiaries promptly
after receipt of notice thereof given by the Executive; provided that after a
Change in Control, Investors or one of its subsidiaries (as applicable) shall
have the flexibility to appoint the Executive to a reporting


                                       5


relationship different from that which existed prior to the Change in Control,
to make an immaterial change in Executive's duties, or to change the Executive's
title provided; (ii) any failure by Investors or one of its subsidiaries (as
applicable) to provide Executive with the annual base salary Executive had
previously received or the failure by Investors or one of its subsidiaries (as
applicable) to increase such annual each year after a Change in Control by an
amount which at least equals on a percentage basis, the mean average percentage
increase in base salary for all employees similarly situated during the two full
calendar years immediately preceding a Change in Control, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by Investors or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of Investors or one of its subsidiaries (as applicable) upon a Change in
Control to (A) continue in effect any employee benefit plan, compensation plan,
welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by Investors or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of Investors or one
of its subsidiaries as in effect for Executive immediately prior to such Change
in Control; (iv) after a Change in Control, any purported termination by
Investors or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on Investor or its
subsidiaries' business to an extent substantially greater than the Executive's
current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Investors. The term "Investors" shall have the meaning set forth in
the preface.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Amended and
Restated Limited Liability Company Agreement of Investors, dated as of April 10,
2001, entered into by and among the members of Investors, as amended from time
to time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.


                                       6


      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.

      1.32 Purchased Shares. The term "Purchased Shares" shall have the meaning
set forth in the preface.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of Investors or any of its
subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board, after at least three years employment with
Investors after the Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among
Investors, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Shares. The term "Shares" shall have the meaning set forth in the
preface.

      1.38 Share Purchase Price. The term "Share Purchase Price" shall have the
meaning set forth in Section 2.2.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with Investors and its subsidiaries is terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Investors,
whether pursuant to this Agreement or any other arrangement.


                                       7


      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael Foods
Co-Invest, LLC, a Delaware limited liability company.

2. Purchase and Sale of Shares; Contribution.

      2.1 Purchase and Sale of the Shares. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement, the Executive shall sell,
assign, transfer and convey to Investors, and Investors shall purchase and
acquire from the Executive, the Purchased Shares against payment at the Closing
of an aggregate amount equal to the Share Purchase Price by wire transfer of
immediately available funds to one or more accounts specified by the Executive
in a written notice to Investors prior to the Closing Date.

      2.2 Share Purchase Price. The aggregate purchase price for the Purchased
Shares (the "Share Purchase Price") will consist of the payment of an amount of
cash, equal to $30.10 per Purchased Share, as set forth on Schedule I.

      2.3 Contribution of Shares. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Investors hereby agrees to receive, the Contributed Shares in
exchange for the number of Units set forth on Schedule II.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Investors stock certificates
representing the Purchased Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment;

            (b) Investors shall deliver to the Executive the amount of the Share
Purchase Price by wire transfer of immediately available funds to one or more
accounts designated by the Executive in writing to Investors prior to the
Closing;

            (c) The Executive shall deliver to Investors stock certificates
representing the Contributed Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment; and

            (d) Investors shall deliver to the Executive unit certificates
representing the number of Class B Units and Class C Units set forth on Schedule
II.


                                       8


      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Investors.

      4.1 Stock Purchase Representations of the Executive. The Executive
represents and warrants to Investors that the statements contained in this
Section 4.1 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is subject or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Executive is a party or by which he is bound or to which any of his assets
is subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Investors could become
liable or obligated.

            (d) Capital Stock. The Executive holds of record and owns
beneficially the number of Shares set forth next to his name on Schedule I, free
and clear of any restrictions on transfer (other than any restrictions under the
Securities Act, state securities laws, joint tenancy laws or other Transaction
Documents), taxes, security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. In the event the
Executive owns the Shares in joint tenancy, the joint tenant of the Executive
has executed this Agreement on the signature page attached hereto and Executive
has informed such joint tenant of the transactions set forth in this Agreement.
The Executive is not a party to any option, warrant, purchase right, or other
contract or commitment that could require the Executive to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement). Except as set forth in other Transaction


                                       9


Documents, the Executive is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
the Company. The Executive acknowledges and represents that the Paying Agent (as
defined in the Merger Agreement) will not make any payment to Executive in
connection with the Shares subject to this Agreement and that such shares will
be cancelled upon consummation of the Acquisition.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Investors that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT BETWEEN
            THE ISSUER AND THE EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED
            AND MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY
            THE HOLDER HEREOF AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS
            WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Investors
      indicating that the Units are subject to restrictions on transfer and, if
      Investors should at some time in the future engage the services of a
      securities transfer agent, appropriate stop-transfer instructions will be
      issued to such transfer agent with respect to the Units.

      4.3 [Reserved]


                                       10


      4.4 Representations of Investors. Investors represents to the Executive
that the statements contained in this Section 4.4 are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date, with respect to itself:

            (a) Organization and Power. Investors is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware with full power and authority to enter into this Agreement and
perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Investors and the consummation of the transactions contemplated
hereby by Investors have been duly and validly authorized by all requisite
limited liability company action on the part of Investors, and no other
proceedings on its part are necessary to authorize the execution, delivery or
performance of this Agreement. This Agreement has been duly executed and
delivered by Investors, and this Agreement constitutes a valid and binding
obligation of Investors, enforceable in accordance with its terms and
conditions. Investors need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Investors is subject or any provision of
its charter or bylaws or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Investors is a party or by which it is bound or to which any of its assets is
subject.

            (d) Investment. Investors is not acquiring the Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Investors to issue, sell, or
otherwise cause to become outstanding any of its Units. Except as set forth in
the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Investors. Except as set forth in the Transaction Documents, there
are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Investors.

5. Covenants of the Executive and Investors


                                       11


      5.1 Covenants. The Executive and/or Investors each agree as follows with
respect to the period between the execution of this Agreement and the Closing:

            (a) General. The Executive and Investors each will use his or its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section 6 below).

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with Investors and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Investors, and Investors shall be required to
purchase (subject to the provisions of Section 8 hereof), on one occasion from
the Executive and his Permitted Transferees, if applicable, all (but not less
than all) of the number of Units then held by the Executive and such other
number of Units held by the Executive's Permitted Transferees as the Executive
may request provided that in the aggregate such number does not exceed the
product of (x) the total number of Units collectively held by the Executive and
all of his Permitted Transferees and (y) the Applicable Percentage (measured as
of the Termination Date), at a price per unit equal to the Fair Market Value of
such unit (measured as of the delivery of the notice referred to in Section
7.1(b)).

            (b) If the Executive desires to exercise its option to require
Investors to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Investors setting forth the intention of Executive
and Permitted Transferees, if applicable, to collectively sell all Units
pursuant to Section 7.1(a) within the period described above, which notice shall
specify the number of Units to be sold and shall include the signature of the
Executive and each Permitted Transferee desiring to sell Units. Subject to the
provisions of Section 8.1, the closing of the purchase shall take place at the
principal office of Investors on the later of the 30th day after the giving of
such notice and the date that is 10 business days after the final determination
of Fair Market Value. Subject to the provisions of Section 8.1, the Executive
shall deliver to Investors duly executed instruments transferring title to units
to Investors, against payment of the appropriate purchase price by cashier's


                                       12


or certified check payable to the Executive or by wire transfer of immediately
available funds to an account designated by the Executive.

      7.2 Call Options.

            (a) If the Executive's employment with Investors or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Investors shall have the right and
option to purchase, and the Executive and the Executive's Permitted Transferees
(hereinafter referred to as the "Executive Group") shall be required to sell to
Investors, any or all of such Units then held by such member of the Executive
Group (it being understood that if Units of any class subject to repurchase
hereunder may be repurchased at different prices, Investors may elect to
repurchase only the portion of the Units of such class subject to repurchase
hereunder at the lower price), at a price per unit equal to the applicable
purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with Investors and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with Investors and its
      subsidiaries is terminated by Investors and its subsidiaries without Cause
      or by the Executive for Good Reason;

            (iii) if the Executive's active employment with Investors and its
      subsidiaries is terminated (A) by Investors or any of its subsidiaries for
      Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Investors' rights under this Section 7.2(a) shall not be available
in the event of the termination of Executive's employment by Investors or its
subsidiaries without Cause or by Executive for Good Reason, in either case
following a sale by Investors or its subsidiaries of substantially all of the
line of business in which Executive primarily performs his services.

            (b) If Investors desires to exercise one of its options to purchase
Units pursuant to this Section 7.2, Investors shall, not later than the
expiration of the applicable period described for such purchase in Section
7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Investors on the later of
the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of


                                       13


Section 8.1, the Executive shall deliver to Investors duly executed instruments
transferring title to units to Investors, against payment of the appropriate
purchase price by cashier's or certified check payable to the Executive or by
wire transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Investors pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Investors is less than or equal to the Unvested Percentage
            of such class, the purchase price for each Unit shall be the lesser
            of (x) the Fair Market Value (measured as of the date of the Call
            Notice) and (y) the Cost of such Unit (the "Unvested Unit Purchase
            Price"), and (ii) if the number of such Units exceeds the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            (A) for a number of Units of such class equal to the result of (x)
            the Unvested Percentage and (y) the total number of Units of such
            class held by the Executive Group, the Unvested Unit Purchase Price,
            and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Investors shall have the right to revoke the exercise
of its option pursuant to this Section 7.2 for all or any portion of the Units
elected to be repurchased by it by delivering notice of such revocation in
writing to the Executive Group during the ten-day period beginning on the date
that Investors is given written notice that the Fair Market Value of a Unit was
finally determined to be an amount at least 10% greater than the per Unit
repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Investors purchases Units at Fair Market Value pursuant to the terms of
this Section 7.2 and within six months of the date of the determination of such
Fair Market Value both (A) a Sale of the Company or a Public Offering occurs and
(B) in connection with such transaction, the per share value of the Units


                                       14


exceeds the per share purchase price paid by Investors to Executive under this
Section 7.2, the Executive shall be entitled to receive from Investors the
benefit of such higher valuation for the Units purchased. The excess of (x) the
net proceeds which the Executive would have received in such Sale of the Company
or Public Offering from the sale in such transaction of all Units repurchased by
Investors under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Investors, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Investors shall not excuse, or constitute a waiver of its rights against, the
defaulting member.

8. Certain Limitations on Investors's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Investors elects or is required to
purchase any Units pursuant to Section 7, Investors shall pay the purchase price
for the Units it purchases (i) first, by offsetting indebtedness, if any, owing
from the Executive to Investors (which indebtedness shall be applied pro rata
against the proceeds receivable by each member of the Executive Group receiving
consideration in such repurchase) and (ii) then, by Investors' delivery of a
check or wire transfer of immediately available funds for the remainder of the
purchase price, if any, against delivery of the certificates or other
instruments representing the Units so purchased, duly endorsed; provided that if
such cash payment would result (A) in a violation of any law, statute, rule,
regulation, policy, order, writ, injunction, decree or judgment promulgated or
entered by any federal, state, local or foreign court or governmental authority
applicable to Investors or any of its subsidiaries or any of its or their
property or (B) after giving effect thereto, a Financing Default, or (C) if the
Board determines in good faith that immediately prior to such purchase there
shall exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the "Cash Deferral Conditions"), the
portion of the cash payment so affected may be made by Investors' delivery of
preferred units of Investors with a liquidation preference equal to the balance
of the purchase price; which preferred units shall accrue yield annually at the
"prime rate" published in The Wall Street Journal on the date of issuance, which
yield shall be payable at maturity or upon payment of distributions by Investors
(other than tax distributions). Each such preferred unit shall as of its
issuance be deemed to have basic contributions made with respect to such unit
equal to (A) the portion of the cash payment paid by the issuance of such
preferred units divided by (B) the number of preferred units so issued in the
repurchase. Any such preferred units issued shall be promptly redeemed (i) when
the Cash Deferral Condition which prompted their issuance no longer exists, (ii)
upon consummation of an IPO of the Company or Holdings (or their successors) (to
the extent allowed by the underwriters of such IPO), or (iii) upon a Sale of the
Company from net cash proceeds, if any, payable to Investors or its unitholders;
to the extent that sufficient net cash proceeds


                                       15


are not so payable, the preferred units shall be cancelled in exchange for such
non-cash consideration received by unitholders in the Sale of the Company having
a fair market value equal to the principal of and accrued yield on the preferred
units. If a yield is required to be paid on any preferred units prior to
maturity and any Cash Deferral Conditions exist, such yield may be cumulated and
accrued until and to the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with
Investors or its subsidiaries terminates, (i) Executive, for himself or on
behalf of any other person, firm, partnership, corporation, or other entity,
engages, directly or indirectly, as an executive, agent, representative,
consultant, partner, shareholder or holder of any other financial interest, in
any business that competes with Investors or its subsidiaries in the line of
business Executive is employed in by Investors or its subsidiaries (as
applicable), as such business is described in any employment or severance
agreement then in effect between Executive and Investors or one of its
subsidiaries or, if no such agreement is then in effect, as described on
Schedule III attached hereto (a "Competing Business"), it being understood and
agreed that Executive's activities shall not satisfy this clause (i) where
Executive is employed by a person, firm, partnership, corporation, or other
entity engaged in a variety of activities, including the Competing Business, and
Executive is not engaged in or responsible for the Competing Business of such
entity. Executive may also, without satisfying clause (i) be a passive owner of
not more than 2% of the outstanding publicly traded stock of any class of a
Competing Business so long as Executive has no active participation in the
business of such entity, except to the extent permitted above; or (ii) Executive
(A) directly or indirectly through another entity, induces or attempts to induce
any employee of the Company or its subsidiaries to leave the employ of the
Company or its subsidiaries, or in any way interfere with the relationship
between the Company or any of its subsidiaries and any employee thereof, (B)
knowingly hires any person who was an employee of the Company or any of its
subsidiaries within 180 days prior to the time such employee was hired by
Executive, (C) induces or attempts to induce any customer, supplier, licensee or
other business relation of the Company or any of its subsidiaries to cease doing
business with the Company or its subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary or (D) directly or indirectly acquires or
attempt to acquire an interest in any business relating to the business of the
Company or any of its subsidiaries and with which the Company or any of its
subsidiaries has entertained discussions or has requested and received
information relating to the acquisition of such business by the Company or its
subsidiaries in the one-year period immediately preceding Executive's
termination of employment with the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.

      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Investors, within ten business days
following the Activity Date,


                                       16


an amount equal to the excess, if any, of (A) the aggregate proceeds Executive
received upon the sale or other disposition of Executive's Units, over (B) the
aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Investors a written
agreement of the proposed transferee (a) evidencing such Person's undertaking to
be bound by the terms of this Agreement and (b) acknowledging that the Units
transferred to such Person will continue to be Units for purposes of this
Agreement in the hands of such Person. Any transfer or attempted transfer of
Units in violation of any provision of this Agreement or the Securityholders
Agreement shall be void, and Investors shall not record such transfer on its
books or treat any purported transferee of such Units as the owner of such Units
for any purpose.

      10.2 Deemed Transfer of Units. If Investors shall deliver, at the time and
place and in the amount and form provided in this Agreement, the consideration
for the Units to be repurchased in accordance with the provisions of this
Agreement, then from and after such time, the Person from whom such units are to
be repurchased shall no longer have any rights as a holder of such units (other
than the right to receive payment of such consideration in accordance with this
Agreement), and such Units shall be deemed purchased in accordance with the
applicable provisions hereof and Investors shall be deemed the owner and holder
of such Units, whether or not certificates therefor have been delivered as
required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Investors or any successor or assign of
Investors (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Units,
by reason of any dividend payable in units, issuance of units, combination,
recapitalization, reclassification, merger, consolidation or otherwise.

      10.4 Executive's Employment by Investors. Nothing contained in this
Agreement shall be deemed to obligate Investors or any subsidiary of Investors
to employ the Executive in any capacity whatsoever or to prohibit or restrict
Investors (or any such subsidiary) from terminating the employment of the
Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Investors against any and all losses, liabilities, damages, judgments,
fines, fees or expenses, including, without limitation, attorneys' fees (for
purposes of this Section 10.5, hereinafter "Losses"), incurred in connection
with any failure to withhold amounts relating to the Units acquired herein by
the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Investors properly failed to withhold amounts relating to the Units acquired
herein by Executive, Executive shall provide Investors with


                                       17


a Form 4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Investors and/or any of its affiliates is entitled to any
tax deduction with respect to the issuance of Units, (i) Investors shall
specially allocate such deduction to the Executive and/or (ii) Holdings shall
pay, or cause any affiliate to pay, as the case may be, Executive an amount
equal to 40% of such deduction, such amount to be grossed up to reflect any
additional deduction to Holdings and/or any of its affiliates (as the case may
be) provided that if any Cash Deferral Condition exists at the time such payment
is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Investors shall notify the other (in a
manner described in Section 10.10 of this Agreement) within 20 days of first
receiving notice of an audit or other proceeding being conducted by the Internal
Revenue Service or any state or local taxing authority relating to the Units
acquired herein by the Management Investors, and both Executive and Investors
shall assist each other during the course of such audit or other proceeding to
the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Investors a valid
undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Investors and the members of the Executive Group hereby submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. Each of the members of the Executive Group and Investors
hereby irrevocably waives any objections which 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 brought in any court of competent jurisdiction in the
State of Delaware, and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum.

      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and


                                       18


three days after deposit in the U.S. Mail (postage prepaid and return receipt
requested) to the address set forth below or such other address as the recipient
party has previously delivered notice to the sending party.

            (a)   If to Investors

                  M-Foods Investors, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 292-6639

            with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 808-4922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 861-2200

            (b)   If to the Executive, to the address as shown on the unit
                  register of Investors.

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036-6522
                  Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.


                                       19


      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Investors under this Agreement shall be cumulative and not exclusive of any
rights or remedies which either would otherwise have hereunder or at law or in
equity or by statute, and no failure or delay by either party in exercising any
right or remedy shall impair any such right or remedy or operate as a waiver of
such right or remedy, nor shall any single or partial exercise of any power or
right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       20


      IN WITNESS WHEREOF, the parties have executed this Management Stock
Purchase and Unit Subscription Agreement as of the date first above written.

                                  M-FOODS INVESTORS, LLC

                                  By:
                                     -------------------------------------------

                                  Its:
                                      ------------------------------------------


                                  M-FOODS HOLDINGS, INC.

                                  By:
                                     -------------------------------------------

                                  Its:
                                      ------------------------------------------


                                  EXECUTIVE

                                  ----------------------------------------------
                                                 Bradley L. Cook


                                       21


                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Stock Purchase and Unit
Subscription Agreement (the "Agreement") and that I understand its contents. I
am aware that the Agreement provides for the repurchase of my spouse's Units (as
defined in the Agreement) under certain circumstances and imposes other
restrictions on the transfer of such Units. I agree that my spouse's interest in
the Units is subject to the Agreement and any interest I may have in such Units
shall also be irrevocably bound by the Agreement and, further, that my community
property interest in such Units, if any, shall be similarly bound by the
Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                      Acknowledged and agreed
                                      this ___ day of _____________, 2001.


                                      __________________________________________


                                      Name:_____________________________________


                                      __________________________________________
                                                        Witness


                                       22


                                                    SCHEDULE I

- --------------------------------------------------------------------------------
  Shares             Purchased Shares                  Share Purchase Price
- --------------------------------------------------------------------------------
   6,789                 6,258.62                          $188,384.44
- --------------------------------------------------------------------------------


                                       23


                                   SCHEDULE II

- --------------------------------------------------------------------------------
      Contributed Shares                                       Units
- --------------------------------------------------------------------------------
            530.38                                      4,000 Class B Units
                                                        4,000 Class C Units
- --------------------------------------------------------------------------------


                                       24


                                  SCHEDULE III

Competing Business: Production, distribution or sale of eggs or egg products



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Investors, LLC
("Investors") on ________, 2001. The undersigned desires to make an election to
have the Units taxed under the provision of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the undersigned
purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:
               ______________________________
               ______________________________
               ______________________________
               SSN:__________________________

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by Investors or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Investors at a
price per Unit equal to the lesser of (x) fair market value (measured as of the
date of such repurchase) and (y) cost. The Units are also subject to transfer
restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $_______.

            6. The aggregate amount paid for such property: $_______. A copy of
this election has been furnished to the Secretary of Investors pursuant to
Treasury Regulations ss.1.83-2(e)(7).


Dated:  ________, 2001                               ___________________________
                                                               [Name]

EX-10.22

                                                                   Exhibit 10.22

                                                                [Execution Copy]

                          MANAGEMENT STOCK PURCHASE AND
                           UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT (this
"Agreement") is made as of April 10, 2001, by and among M-Foods Investors, LLC,
a Delaware limited liability company ("Investors"), James Mohr (the
"Executive"), and for the purposes of Section 10.5 hereof, M-Foods Holdings,
Inc., a Delaware corporation ("Holdings").

      WHEREAS, the Executive is an employee and shareholder of Michael Foods,
Inc., a Minnesota corporation (the "Company"), and one of several persons who
are or will be key employees of Investors or one or more of its subsidiaries and
who will hold interests in Investors (collectively with the Executive, the
"Management Investors");

      WHEREAS, the Company entered into an Agreement and Plan of Merger with
Holdings and Protein Acquisition Corp., a Minnesota corporation, and a wholly
owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.) ("Merger
Sub"), dated as of December 21, 2000, as amended from time to time in accordance
with its terms (the "Merger Agreement"), pursuant to which Merger Sub shall be
merged with and into the Company (the "Acquisition"), in accordance with the
terms and conditions of the Merger Agreement and the relevant provisions of the
MBCA (as defined in the Merger Agreement), and the surviving corporation shall
be the Company;

      WHEREAS, prior to the consummation of the transactions contemplated by
this Agreement and the Merger Agreement, the Executive is the record and
beneficial owner of the number of shares of the Company's common stock, par
value $0.01 per share (the "Shares"), set forth on Schedule I attached hereto;

      WHEREAS, on the terms and subject to the conditions hereof, Investors
desires to acquire from the Executive, and the Executive desires to sell to
Investors, certain of the Shares, as set forth on Schedule I (the "Purchased
Shares"); and

      WHEREAS, on the terms and subject to the conditions hereof and pursuant to
Section 721(a) of the Internal Revenue Code, the Executive also desires to
contribute certain of the Shares (the "Contributed Shares") in exchange for
Investors' Class B Units (the "Class B Units") and Class C Units (the "Class C
Units"), in each case in the amounts set forth on Schedule II attached hereto.

      NOW, THEREFORE, in order to implement the foregoing and in consideration
of the mutual representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:



1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.

      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean Investors' Management Committee.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and
Investors or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with Investors or
one of its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive's duties; (ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to Investors or one of its subsidiaries; or (iii)
conviction of a felony or guilty or nolo contendere plea by the Executive with
respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of Investors or one of
its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer (while the Executive does not serve as such) or
based upon the advice of counsel for Investors shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best
interests of Investors and its subsidiaries. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a


                                        2


resolution duly adopted by the affirmative vote of not less than 75%of the
entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in (i), (ii) or (iii)
above, and specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or by virtue of their interests in Investors, a majority of the Board
of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means Investors' Class A
Units.

      1.8 Class B Units. The term "Class B Units" shall have the meaning set
forth in the preface.

      1.9 Class C Units. The term "Class C Units" shall have the meaning set
forth in the preface.

      1.10 Closing. The "Closing" for the sale and purchase of the Shares and
the contribution of Shares in exchange for Units hereunder shall occur
immediately prior to the consummation of the Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Contributed Shares. The term "Contributed Shares" shall have the
meaning set forth in the preface.


                                        3


      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and Investors or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job responsibilities as a result of chronic illness, physical,
mental or any other disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of Investors or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to Investors or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Investors at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
the Company in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of the Company and the Executive setting forth their respective resolutions of
the dispute and the bases therefor and (ii) accepting either the Executive's or
the Company's proposed resolution of the dispute. Promptly following the
Company's receipt of Executive's written notice of disagreement, the Company
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and the Company's written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and the


                                        4


Company of its decision within 40 days of its engagement. The party whose
proposed resolution is not accepted shall pay all of the Arbiter's fees and
expenses. If the Executive's proposed resolution is accepted, the Company also
shall pay all of the Executive's reasonable out-of-pocket fees and expenses
(including reasonable fees and expenses of counsel and one appraiser, accountant
or investment banking firm) incurred in connection with the arbitration. Each of
the Company and the Executive agrees to execute, if requested by the Arbiter, a
reasonable engagement letter with the Arbiter.

      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and Investors or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by Investors or one of its subsidiaries (as applicable) which results in
a diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Investors or one of its subsidiaries promptly
after receipt of notice thereof given by the Executive; provided that after a
Change in Control, Investors or one of its subsidiaries (as applicable) shall
have the flexibility to appoint the Executive to a reporting


                                        5


relationship different from that which existed prior to the Change in Control,
to make an immaterial change in Executive's duties, or to change the Executive's
title provided; (ii) any failure by Investors or one of its subsidiaries (as
applicable) to provide Executive with the annual base salary Executive had
previously received or the failure by Investors or one of its subsidiaries (as
applicable) to increase such annual each year after a Change in Control by an
amount which at least equals on a percentage basis, the mean average percentage
increase in base salary for all employees similarly situated during the two full
calendar years immediately preceding a Change in Control, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by Investors or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of Investors or one of its subsidiaries (as applicable) upon a Change in
Control to (A) continue in effect any employee benefit plan, compensation plan,
welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by Investors or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of Investors or one
of its subsidiaries as in effect for Executive immediately prior to such Change
in Control; (iv) after a Change in Control, any purported termination by
Investors or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on Investor or its
subsidiaries' business to an extent substantially greater than the Executive's
current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Investors. The term "Investors" shall have the meaning set forth in
the preface.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Amended and
Restated Limited Liability Company Agreement of Investors, dated as of April 10,
2001, entered into by and among the members of Investors, as amended from time
to time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.


                                        6


      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.

      1.32 Purchased Shares. The term "Purchased Shares" shall have the meaning
set forth in the preface.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of Investors or any of its
subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board, after at least three years employment with
Investors after the Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among
Investors, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Shares. The term "Shares" shall have the meaning set forth in the
preface.

      1.38 Share Purchase Price. The term "Share Purchase Price" shall have the
meaning set forth in Section 2.2.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with Investors and its subsidiaries is terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Investors,
whether pursuant to this Agreement or any other arrangement.


                                        7


      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael Foods
Co-Invest, LLC, a Delaware limited liability company.

2. Purchase and Sale of Shares; Contribution.

      2.1 Purchase and Sale of the Shares. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement, the Executive shall sell,
assign, transfer and convey to Investors, and Investors shall purchase and
acquire from the Executive, the Purchased Shares against payment at the Closing
of an aggregate amount equal to the Share Purchase Price by wire transfer of
immediately available funds to one or more accounts specified by the Executive
in a written notice to Investors prior to the Closing Date.

      2.2 Share Purchase Price. The aggregate purchase price for the Purchased
Shares (the "Share Purchase Price") will consist of the payment of an amount of
cash, equal to $30.10 per Purchased Share, as set forth on Schedule I.

      2.3 Contribution of Shares. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Investors hereby agrees to receive, the Contributed Shares in
exchange for the number of Units set forth on Schedule II.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Investors stock certificates
representing the Purchased Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment;

            (b) Investors shall deliver to the Executive the amount of the Share
Purchase Price by wire transfer of immediately available funds to one or more
accounts designated by the Executive in writing to Investors prior to the
Closing;

            (c) The Executive shall deliver to Investors stock certificates
representing the Contributed Shares duly endorsed for transfer or accompanied by
duly executed stock powers or forms of assignment; and

            (d) Investors shall deliver to the Executive unit certificates
representing the number of Class B Units and Class C Units set forth on Schedule
II.


                                        8


      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Investors.

      4.1 Stock Purchase Representations of the Executive. The Executive
represents and warrants to Investors that the statements contained in this
Section 4.1 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is subject or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Executive is a party or by which he is bound or to which any of his assets
is subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Investors could become
liable or obligated.

            (d) Capital Stock. The Executive holds of record and owns
beneficially the number of Shares set forth next to his name on Schedule I, free
and clear of any restrictions on transfer (other than any restrictions under the
Securities Act, state securities laws, joint tenancy laws or other Transaction
Documents), taxes, security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. In the event the
Executive owns the Shares in joint tenancy, the joint tenant of the Executive
has executed this Agreement on the signature page attached hereto and Executive
has informed such joint tenant of the transactions set forth in this Agreement.
The Executive is not a party to any option, warrant, purchase right, or other
contract or commitment that could require the Executive to sell, transfer, or
otherwise dispose of any capital stock of the Company (other than this
Agreement). Except as set forth in other Transaction


                                        9


Documents, the Executive is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
the Company. The Executive acknowledges and represents that the Paying Agent (as
defined in the Merger Agreement) will not make any payment to Executive in
connection with the Shares subject to this Agreement and that such shares will
be cancelled upon consummation of the Acquisition.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Investors that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT STOCK PURCHASE AND UNIT SUBSCRIPTION AGREEMENT BETWEEN
            THE ISSUER AND THE EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED
            AND MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY
            THE HOLDER HEREOF AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS
            WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Investors
      indicating that the Units are subject to restrictions on transfer and, if
      Investors should at some time in the future engage the services of a
      securities transfer agent, appropriate stop-transfer instructions will be
      issued to such transfer agent with respect to the Units.

      4.3 [Reserved]


                                       10


      4.4 Representations of Investors. Investors represents to the Executive
that the statements contained in this Section 4.4 are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date, with respect to itself:

            (a) Organization and Power. Investors is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware with full power and authority to enter into this Agreement and
perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Investors and the consummation of the transactions contemplated
hereby by Investors have been duly and validly authorized by all requisite
limited liability company action on the part of Investors, and no other
proceedings on its part are necessary to authorize the execution, delivery or
performance of this Agreement. This Agreement has been duly executed and
delivered by Investors, and this Agreement constitutes a valid and binding
obligation of Investors, enforceable in accordance with its terms and
conditions. Investors need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Investors is subject or any provision of
its charter or bylaws or conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Investors is a party or by which it is bound or to which any of its assets is
subject.

            (d) Investment. Investors is not acquiring the Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Investors to issue, sell, or
otherwise cause to become outstanding any of its Units. Except as set forth in
the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Investors. Except as set forth in the Transaction Documents, there
are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Investors.

5. Covenants of the Executive and Investors


                                       11


      5.1 Covenants. The Executive and/or Investors each agree as follows with
respect to the period between the execution of this Agreement and the Closing:

            (a) General. The Executive and Investors each will use his or its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Section 6 below).

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with Investors and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Investors, and Investors shall be required to
purchase (subject to the provisions of Section 8 hereof), on one occasion from
the Executive and his Permitted Transferees, if applicable, all (but not less
than all) of the number of Units then held by the Executive and such other
number of Units held by the Executive's Permitted Transferees as the Executive
may request provided that in the aggregate such number does not exceed the
product of (x) the total number of Units collectively held by the Executive and
all of his Permitted Transferees and (y) the Applicable Percentage (measured as
of the Termination Date), at a price per unit equal to the Fair Market Value of
such unit (measured as of the delivery of the notice referred to in Section
7.1(b)).

            (b) If the Executive desires to exercise its option to require
Investors to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Investors setting forth the intention of Executive
and Permitted Transferees, if applicable, to collectively sell all Units
pursuant to Section 7.1(a) within the period described above, which notice shall
specify the number of Units to be sold and shall include the signature of the
Executive and each Permitted Transferee desiring to sell Units. Subject to the
provisions of Section 8.1, the closing of the purchase shall take place at the
principal office of Investors on the later of the 30th day after the giving of
such notice and the date that is 10 business days after the final determination
of Fair Market Value. Subject to the provisions of Section 8.1, the Executive
shall deliver to Investors duly executed instruments transferring title to units
to Investors, against payment of the appropriate purchase price by cashier's


                                       12


or certified check payable to the Executive or by wire transfer of immediately
available funds to an account designated by the Executive.

      7.2 Call Options.

            (a) If the Executive's employment with Investors or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Investors shall have the right and
option to purchase, and the Executive and the Executive's Permitted Transferees
(hereinafter referred to as the "Executive Group") shall be required to sell to
Investors, any or all of such Units then held by such member of the Executive
Group (it being understood that if Units of any class subject to repurchase
hereunder may be repurchased at different prices, Investors may elect to
repurchase only the portion of the Units of such class subject to repurchase
hereunder at the lower price), at a price per unit equal to the applicable
purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with Investors and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with Investors and its
      subsidiaries is terminated by Investors and its subsidiaries without Cause
      or by the Executive for Good Reason;

            (iii) if the Executive's active employment with Investors and its
      subsidiaries is terminated (A) by Investors or any of its subsidiaries for
      Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Investors' rights under this Section 7.2(a) shall not be available
in the event of the termination of Executive's employment by Investors or its
subsidiaries without Cause or by Executive for Good Reason, in either case
following a sale by Investors or its subsidiaries of substantially all of the
line of business in which Executive primarily performs his services.

            (b) If Investors desires to exercise one of its options to purchase
Units pursuant to this Section 7.2, Investors shall, not later than the
expiration of the applicable period described for such purchase in Section
7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Investors on the later of
the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of


                                       13


Section 8.1, the Executive shall deliver to Investors duly executed instruments
transferring title to units to Investors, against payment of the appropriate
purchase price by cashier's or certified check payable to the Executive or by
wire transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Investors pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Investors is less than or equal to the Unvested Percentage
            of such class, the purchase price for each Unit shall be the lesser
            of (x) the Fair Market Value (measured as of the date of the Call
            Notice) and (y) the Cost of such Unit (the "Unvested Unit Purchase
            Price"), and (ii) if the number of such Units exceeds the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            (A) for a number of Units of such class equal to the result of (x)
            the Unvested Percentage and (y) the total number of Units of such
            class held by the Executive Group, the Unvested Unit Purchase Price,
            and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Investors shall have the right to revoke the exercise
of its option pursuant to this Section 7.2 for all or any portion of the Units
elected to be repurchased by it by delivering notice of such revocation in
writing to the Executive Group during the ten-day period beginning on the date
that Investors is given written notice that the Fair Market Value of a Unit was
finally determined to be an amount at least 10% greater than the per Unit
repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Investors purchases Units at Fair Market Value pursuant to the terms of
this Section 7.2 and within six months of the date of the determination of such
Fair Market Value both (A) a Sale of the Company or a Public Offering occurs and
(B) in connection with such transaction, the per share value of the Units


                                       14


exceeds the per share purchase price paid by Investors to Executive under this
Section 7.2, the Executive shall be entitled to receive from Investors the
benefit of such higher valuation for the Units purchased. The excess of (x) the
net proceeds which the Executive would have received in such Sale of the Company
or Public Offering from the sale in such transaction of all Units repurchased by
Investors under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Investors, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Investors shall not excuse, or constitute a waiver of its rights against, the
defaulting member.

8. Certain Limitations on Investors's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Investors elects or is required to
purchase any Units pursuant to Section 7, Investors shall pay the purchase price
for the Units it purchases (i) first, by offsetting indebtedness, if any, owing
from the Executive to Investors (which indebtedness shall be applied pro rata
against the proceeds receivable by each member of the Executive Group receiving
consideration in such repurchase) and (ii) then, by Investors' delivery of a
check or wire transfer of immediately available funds for the remainder of the
purchase price, if any, against delivery of the certificates or other
instruments representing the Units so purchased, duly endorsed; provided that if
such cash payment would result (A) in a violation of any law, statute, rule,
regulation, policy, order, writ, injunction, decree or judgment promulgated or
entered by any federal, state, local or foreign court or governmental authority
applicable to Investors or any of its subsidiaries or any of its or their
property or (B) after giving effect thereto, a Financing Default, or (C) if the
Board determines in good faith that immediately prior to such purchase there
shall exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the "Cash Deferral Conditions"), the
portion of the cash payment so affected may be made by Investors' delivery of
preferred units of Investors with a liquidation preference equal to the balance
of the purchase price; which preferred units shall accrue yield annually at the
"prime rate" published in The Wall Street Journal on the date of issuance, which
yield shall be payable at maturity or upon payment of distributions by Investors
(other than tax distributions). Each such preferred unit shall as of its
issuance be deemed to have basic contributions made with respect to such unit
equal to (A) the portion of the cash payment paid by the issuance of such
preferred units divided by (B) the number of preferred units so issued in the
repurchase. Any such preferred units issued shall be promptly redeemed (i) when
the Cash Deferral Condition which prompted their issuance no longer exists, (ii)
upon consummation of an IPO of the Company or Holdings (or their successors) (to
the extent allowed by the underwriters of such IPO), or (iii) upon a Sale of the
Company from net cash proceeds, if any, payable to Investors or its unitholders;
to the extent that sufficient net cash proceeds


                                       15


are not so payable, the preferred units shall be cancelled in exchange for such
non-cash consideration received by unitholders in the Sale of the Company having
a fair market value equal to the principal of and accrued yield on the preferred
units. If a yield is required to be paid on any preferred units prior to
maturity and any Cash Deferral Conditions exist, such yield may be cumulated and
accrued until and to the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with
Investors or its subsidiaries terminates, (i) Executive, for himself or on
behalf of any other person, firm, partnership, corporation, or other entity,
engages, directly or indirectly, as an executive, agent, representative,
consultant, partner, shareholder or holder of any other financial interest, in
any business that competes with Investors or its subsidiaries in the line of
business Executive is employed in by Investors or its subsidiaries (as
applicable), as such business is described in any employment or severance
agreement then in effect between Executive and Investors or one of its
subsidiaries or, if no such agreement is then in effect, as described on
Schedule III attached hereto (a "Competing Business"), it being understood and
agreed that Executive's activities shall not satisfy this clause (i) where
Executive is employed by a person, firm, partnership, corporation, or other
entity engaged in a variety of activities, including the Competing Business, and
Executive is not engaged in or responsible for the Competing Business of such
entity. Executive may also, without satisfying clause (i) be a passive owner of
not more than 2% of the outstanding publicly traded stock of any class of a
Competing Business so long as Executive has no active participation in the
business of such entity, except to the extent permitted above; or (ii) Executive
(A) directly or indirectly through another entity, induces or attempts to induce
any employee of the Company or its subsidiaries to leave the employ of the
Company or its subsidiaries, or in any way interfere with the relationship
between the Company or any of its subsidiaries and any employee thereof, (B)
knowingly hires any person who was an employee of the Company or any of its
subsidiaries within 180 days prior to the time such employee was hired by
Executive, (C) induces or attempts to induce any customer, supplier, licensee or
other business relation of the Company or any of its subsidiaries to cease doing
business with the Company or its subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary or (D) directly or indirectly acquires or
attempt to acquire an interest in any business relating to the business of the
Company or any of its subsidiaries and with which the Company or any of its
subsidiaries has entertained discussions or has requested and received
information relating to the acquisition of such business by the Company or its
subsidiaries in the one-year period immediately preceding Executive's
termination of employment with the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.

      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Investors, within ten business days
following the Activity Date,


                                       16


an amount equal to the excess, if any, of (A) the aggregate proceeds Executive
received upon the sale or other disposition of Executive's Units, over (B) the
aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Investors a written
agreement of the proposed transferee (a) evidencing such Person's undertaking to
be bound by the terms of this Agreement and (b) acknowledging that the Units
transferred to such Person will continue to be Units for purposes of this
Agreement in the hands of such Person. Any transfer or attempted transfer of
Units in violation of any provision of this Agreement or the Securityholders
Agreement shall be void, and Investors shall not record such transfer on its
books or treat any purported transferee of such Units as the owner of such Units
for any purpose.

      10.2 Deemed Transfer of Units. If Investors shall deliver, at the time and
place and in the amount and form provided in this Agreement, the consideration
for the Units to be repurchased in accordance with the provisions of this
Agreement, then from and after such time, the Person from whom such units are to
be repurchased shall no longer have any rights as a holder of such units (other
than the right to receive payment of such consideration in accordance with this
Agreement), and such Units shall be deemed purchased in accordance with the
applicable provisions hereof and Investors shall be deemed the owner and holder
of such Units, whether or not certificates therefor have been delivered as
required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Investors or any successor or assign of
Investors (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Units,
by reason of any dividend payable in units, issuance of units, combination,
recapitalization, reclassification, merger, consolidation or otherwise.

      10.4 Executive's Employment by Investors. Nothing contained in this
Agreement shall be deemed to obligate Investors or any subsidiary of Investors
to employ the Executive in any capacity whatsoever or to prohibit or restrict
Investors (or any such subsidiary) from terminating the employment of the
Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Investors against any and all losses, liabilities, damages, judgments,
fines, fees or expenses, including, without limitation, attorneys' fees (for
purposes of this Section 10.5, hereinafter "Losses"), incurred in connection
with any failure to withhold amounts relating to the Units acquired herein by
the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Investors properly failed to withhold amounts relating to the Units acquired
herein by Executive, Executive shall provide Investors with


                                       17


a Form 4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Investors and/or any of its affiliates is entitled to any
tax deduction with respect to the issuance of Units, (i) Investors shall
specially allocate such deduction to the Executive and/or (ii) Holdings shall
pay, or cause any affiliate to pay, as the case may be, Executive an amount
equal to 40% of such deduction, such amount to be grossed up to reflect any
additional deduction to Holdings and/or any of its affiliates (as the case may
be) provided that if any Cash Deferral Condition exists at the time such payment
is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Investors shall notify the other (in a
manner described in Section 10.10 of this Agreement) within 20 days of first
receiving notice of an audit or other proceeding being conducted by the Internal
Revenue Service or any state or local taxing authority relating to the Units
acquired herein by the Management Investors, and both Executive and Investors
shall assist each other during the course of such audit or other proceeding to
the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Investors a valid
undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Investors and the members of the Executive Group hereby submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. Each of the members of the Executive Group and Investors
hereby irrevocably waives any objections which 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 brought in any court of competent jurisdiction in the
State of Delaware, and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum.

      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and


                                       18


three days after deposit in the U.S. Mail (postage prepaid and return receipt
requested) to the address set forth below or such other address as the recipient
party has previously delivered notice to the sending party.

      (a)   If to Investors

            M-Foods Investors, LLC
            c/o Vestar Capital Partners IV, L.P.
            1225 Seventeenth Street
            Suite 1660
            Denver, CO 80202
            Attention: James P. Kelley
            Facsimile: (303) 292-6639

      with copies to:

            Vestar Capital Partners IV, L.P.
            245 Park Avenue, 41st Floor
            New York, NY  10167
            Attention: General Counsel
            Facsimile: (212) 808-4922

            Kirkland & Ellis
            200 East Randolph Drive
            Chicago, IL 60601
            Attention: Stephen L. Ritchie
            Facsimile: (312) 861-2200

      (b)   If to the Executive, to the address as shown on the unit register of
            Investors.

      with a copy to:

             Skadden, Arps, Slate, Meagher & Flom LLP
             Four Times Square
             New York, NY 10036-6522
             Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.


                                       19


      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Investors under this Agreement shall be cumulative and not exclusive of any
rights or remedies which either would otherwise have hereunder or at law or in
equity or by statute, and no failure or delay by either party in exercising any
right or remedy shall impair any such right or remedy or operate as a waiver of
such right or remedy, nor shall any single or partial exercise of any power or
right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       20


      IN WITNESS WHEREOF, the parties have executed this Management Stock
Purchase and Unit Subscription Agreement as of the date first above written.

                                  M-FOODS INVESTORS, LLC

                                  By:___________________________________________

                                  Its:__________________________________________


                                  M-FOODS HOLDINGS, INC.

                                  By:___________________________________________

                                  Its:__________________________________________


                                  EXECUTIVE

                                  ______________________________________________
                                                    James Mohr



                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Stock Purchase and Unit
Subscription Agreement (the "Agreement") and that I understand its contents. I
am aware that the Agreement provides for the repurchase of my spouse's Units (as
defined in the Agreement) under certain circumstances and imposes other
restrictions on the transfer of such Units. I agree that my spouse's interest in
the Units is subject to the Agreement and any interest I may have in such Units
shall also be irrevocably bound by the Agreement and, further, that my community
property interest in such Units, if any, shall be similarly bound by the
Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                    Acknowledged and agreed this ___ day of
                                    _____________, 2001.

                                    ____________________________________________

                                    Name:_______________________________________

                                    ____________________________________________
                                                      Witness



                                   SCHEDULE I

- --------------------------------------------------------------------------------
Shares                      Purchased Shares                Share Purchase Price
- --------------------------------------------------------------------------------
 4,159                          3,628.62                        $109,221.44
- --------------------------------------------------------------------------------



                                   SCHEDULE II

- --------------------------------------------------------------------------------
         Contributed Shares                                       Units
- --------------------------------------------------------------------------------
               530.38                                      4,000 Class B Units
                                                           4,000 Class C Units
- --------------------------------------------------------------------------------



                                  SCHEDULE III

Competing Business: Production, distribution or sale of eggs or egg products



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Investors, LLC
("Investors") on ________, 2001. The undersigned desires to make an election to
have the Units taxed under the provision of Section 83(b) of the Internal
Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the undersigned
purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:
            _____________________________
            _____________________________
            _____________________________
            SSN:_________________________

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by Investors or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Investors at a
price per Unit equal to the lesser of (x) fair market value (measured as of the
date of such repurchase) and (y) cost. The Units are also subject to transfer
restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $_______.

            6. The aggregate amount paid for such property: $_______.

            A copy of this election has been furnished to the Secretary of
Investors pursuant to Treasury Regulations ss.1.83-2(e)(7).



Dated:  ________, 2001                             _____________________________
                                                             [Name]

EX-10.23

                                                                   Exhibit 10.23

                                                                [Execution Copy]

                     MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this "Agreement") is made as
of April 10, 2001, by and among M-Foods Dairy Holdings, LLC, a Delaware limited
liability company ("Dairy Holdings"), Gregg A. Ostrander (the "Executive"), and
for the purposes of Section 10.5 hereof, M-Foods Holdings, Inc., a Delaware
corporation ("Holdings").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of the Company or one or more of its
subsidiaries and who will hold interests in Dairy Holdings (collectively with
the Executive, the "Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive desires
to contribute cash in the amount set forth on Schedule I hereto in exchange for
Units of Dairy Holdings in the amounts set forth on Schedule I attached hereto;
and

            WHEREAS, subsequent to (A) the Acquisition and the transactions
relating thereto and (B) the transactions set forth herein and the other
Management Unit Subscription Agreements entered into between Dairy Holdings and
the Management Investors, the Company shall be an affiliate of Dairy Holdings
and, therefore, as set forth herein, certain events occurring between the
Executive and the Company or its subsidiaries will create certain events between
the Executive and Dairy Holdings.

NOW, THEREFORE, in order to implement the foregoing and in consideration of the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows:

1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.


      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean the Management Committee of Dairy
Holdings.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and the
Company or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with the Company
or one of its subsidiaries (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Company which
specifically identifies the manner in which the Company believes that the
Executive has not substantially performed the Executive's duties; (ii) the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company or one of its
subsidiaries; or (iii) conviction of a felony or guilty or nolo contendere plea
by the Executive with respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company or one
of its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board of Directors of the Company
or upon the instructions of the Chief Executive Officer of the Company (while
the Executive does not serve as such) or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company and its
subsidiaries. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than 75% of the entire membership of the Board of Directors of the Company
(excluding the Executive) at a meeting of the Board of Directors of the Company
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board of Directors of the Company) finding that, in the good
faith opinion of the Board of Directors of the Company, the


                                       2


Executive is guilty of the conduct described in (i), (ii) or (iii) above, and
specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or indirectly, a majority of the Board of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means the Class A Units of
Dairy Holdings.

      1.8 Class B Units. The term "Class B Units" means the Class B Units of
Dairy Holdings.

      1.9 Class C Units. The term "Class C Units" means the Class C Units of
Dairy Holdings.

      1.10 Closing. The "Closing" for the contribution of cash in exchange for
Units hereunder shall occur immediately prior to the consummation of the
Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Intentionally Omitted.

      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and the Company or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job


                                       3


responsibilities as a result of chronic illness, physical, mental or any other
disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of the Company or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to the Company or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Dairy Holdings at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
Dairy Holdings in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of Dairy Holdings and the Executive setting forth their respective resolutions
of the dispute and the bases therefor and (ii) accepting either the Executive's
or Dairy Holding's proposed resolution of the dispute. Promptly following Dairy
Holdings' receipt of Executive's written notice of disagreement, Dairy Holdings
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and Dairy Holdings' written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and Dairy Holdings of its decision within 40 days of its engagement.
The party whose proposed resolution is not accepted shall pay all of the
Arbiter's fees and expenses. If the Executive's proposed resolution is accepted,
Dairy Holdings also shall pay all of the Executive's reasonable out-of-pocket
fees and expenses (including reasonable fees and expenses of counsel and one
appraiser, accountant or investment banking firm) incurred in connection with
the arbitration. Each of Dairy Holdings and the Executive agrees to execute, if
requested by the Arbiter, a reasonable engagement letter with the Arbiter.


                                       4


      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and the Company or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by the Company or one of its subsidiaries (as applicable) which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by The Company or one of its
subsidiaries promptly after receipt of notice thereof given by the Executive;
provided that after a Change in Control, the Company or one of its subsidiaries
(as applicable) shall have the flexibility to appoint the Executive to a
reporting relationship different from that which existed prior to the Change in
Control, to make an immaterial change in Executive's duties, or to change the
Executive's title provided; (ii) any failure by the Company or one of its
subsidiaries (as applicable) to provide Executive with the annual base salary
Executive had previously received or the failure by The Company or one of its
subsidiaries (as applicable) to increase such annual each year after a Change in
Control by an amount which at least equals on a percentage basis, the mean
average percentage increase in base salary for all employees similarly situated
during the two full calendar years immediately preceding a Change in Control,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and


                                       5


which is remedied by the Company or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of the Company or one of its subsidiaries (as applicable) upon a Change
in Control to (A) continue in effect any employee benefit plan, compensation
plan, welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by the Company or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of the Company or
one of its subsidiaries as in effect for Executive immediately prior to such
Change in Control; (iv) after a Change in Control, any purported termination by
the Company or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on the Company's
or its subsidiaries' business to an extent substantially greater than the
Executive's current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Intentionally Omitted.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Limited
Liability Company Agreement of Dairy Holdings, dated as of April 10, 2001,
entered into by and among the members of Dairy Holdings, as amended from time to
time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.

      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.


                                       6


      1.32 Intentionally Omitted.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of the Company or any of
its subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board of Directors of the Company, after at least
three years employment with the Company or any of its subsidiaries after the
Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among Dairy
Holdings, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Intentionally Omitted.

      1.38 Intentionally Omitted.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with the Company and its subsidiaries is
terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Dairy Holdings,
whether pursuant to this Agreement or any other arrangement.

      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael, LLC, a
Delaware limited liability company.

2. Purchase and Sale of Units.


                                       7


      2.1 Intentionally Omitted.

      2.2 Intentionally Omitted.

      2.3 Contribution of Cash. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Dairy Holdings hereby agrees to receive, cash in an amount set
forth on Schedule I attached hereto in exchange for the number of Units set
forth on Schedule I.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Dairy Holdings the amount of cash
set forth in Schedule I attached hereto by check or wire transfer of immediately
available funds; and

            (b) Dairy Holdings shall deliver to the Executive unit certificates
representing the number of Units set forth on Schedule I attached hereto.

      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Dairy Holdings.

      4.1 Representations of the Executive. The Executive represents and
warrants to Dairy Holdings that the statements contained in this Section 4.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is


                                       8


subject or conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Executive is a party or by which he is bound or to which any of his assets is
subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Dairy Holdings could
become liable or obligated.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Dairy Holdings that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE
            EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED AND MODIFIED FROM
            TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF
            AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Dairy
      Holdings indicating that the Units are subject to restrictions on transfer
      and, if Dairy Holdings should at some time in the future engage the
      services of a securities transfer agent, appropriate stop-transfer
      instructions will be issued to such transfer agent with respect to the
      Units.

      4.3 [Reserved]


                                       9


      4.4 Representations of Dairy Holdings. Dairy Holdings represents to the
Executive that the statements contained in this Section 4.4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date, with respect to itself:

            (a) Organization and Power. Dairy Holdings is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware with full power and authority to enter into this Agreement
and perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Dairy Holdings and the consummation of the transactions
contemplated hereby by Dairy Holdings have been duly and validly authorized by
all requisite limited liability company action on the part of Dairy Holdings,
and no other proceedings on its part are necessary to authorize the execution,
delivery or performance of this Agreement. This Agreement has been duly executed
and delivered by Dairy Holdings, and this Agreement constitutes a valid and
binding obligation of Dairy Holdings, enforceable in accordance with its terms
and conditions. Dairy Holdings need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Dairy Holdings is subject or any
provision of its charter or bylaws or conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Dairy Holdings is a party or by which it is bound or to which any of
its assets is subject.

            (d) Intentionally Omitted.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Dairy Holdings to issue, sell,
or otherwise cause to become outstanding any of its Units. Except as set forth
in the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Dairy Holdings. Except as set forth in the Transaction Documents,
there are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Dairy Holdings.

5. Covenants of the Executive and Dairy Holdings

      5.1 Covenants. The Executive and/or Dairy Holdings each agree as follows
with respect to the period between the execution of this Agreement and the
Closing:


                                       10


            (a) General. The Executive and Dairy Holdings each will use his or
its commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement.

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with the Company and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Dairy Holdings, and Dairy Holdings shall be
required to purchase (subject to the provisions of Section 8 hereof), on one
occasion from the Executive and his Permitted Transferees, if applicable, all
(but not less than all) of the number of Units then held by the Executive and
such other number of Units held by the Executive's Permitted Transferees as the
Executive may request provided that in the aggregate such number does not exceed
the product of (x) the total number of Units (by class) collectively held by the
Executive and all of his Permitted Transferees and (y) the Applicable Percentage
(measured as of the Termination Date), at a price per unit equal to the Fair
Market Value of such unit (measured as of the delivery of the notice referred to
in Section 7.1(b)).

            (b) If the Executive desires to exercise its option to require Dairy
Holdings to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Dairy Holdings setting forth the intention of
Executive and Permitted Transferees, if applicable, to collectively sell all
Units pursuant to Section 7.1(a) within the period described above, which notice
shall specify the number of Units to be sold and shall include the signature of
the Executive and each Permitted Transferee desiring to sell Units. Subject to
the provisions of Section 8.1, the closing of the purchase shall take place at
the principal office of Dairy Holdings on the later of the 30th day after the
giving of such notice and the date that is 10 business days after the final
determination of Fair Market Value. Subject to the provisions of Section 8.1,
the Executive shall deliver to Dairy Holdings duly executed instruments
transferring title to units to Dairy Holdings, against payment of the
appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.


                                       11


      7.2 Call Options.

            (a) If the Executive's employment with the Company or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Dairy Holdings shall have the right
and option to purchase, and the Executive and the Executive's Permitted
Transferees (hereinafter referred to as the "Executive Group") shall be required
to sell to Dairy Holdings, any or all of such Units then held by such member of
the Executive Group (it being understood that if Units of any class subject to
repurchase hereunder may be repurchased at different prices, Dairy Holdings may
elect to repurchase only the portion of the Units of such class subject to
repurchase hereunder at the lower price), at a price per unit equal to the
applicable purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with the Company and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with the Company and its
      subsidiaries is terminated by the Company and its subsidiaries without
      Cause or by the Executive for Good Reason;

            (iii) if the Executive's active employment with the Company and its
      subsidiaries is terminated (A) by the Company or any of its subsidiaries
      for Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Dairy Holdings' rights under this Section 7.2(a) shall not be
available in the event of the termination of Executive's employment by the
Company or its subsidiaries without Cause or by Executive for Good Reason, in
either case following a sale by the Company or its subsidiaries of substantially
all of the line of business in which Executive primarily performs his services.

            (b) If Dairy Holdings desires to exercise one of its options to
purchase Units pursuant to this Section 7.2, Dairy Holdings shall, not later
than the expiration of the applicable period described for such purchase in
Section 7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Dairy Holdings on the later
of the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Dairy Holdings duly
executed instruments transferring title to Units to Dairy Holdings, against
payment of the appropriate purchase


                                       12


price by cashier's or certified check payable to the Executive or by wire
transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Dairy Holdings pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Dairy Holdings is less than or equal to the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            the lesser of (x) the Fair Market Value (measured as of the date of
            the Call Notice) and (y) the Cost of such Unit (the "Unvested Unit
            Purchase Price"), and (ii) if the number of such Units exceeds the
            Unvested Percentage of such class, the purchase price for each Unit
            shall be (A) for a number of Units of such class equal to the result
            of (x) the Unvested Percentage and (y) the total number of Units of
            such class held by the Executive Group, the Unvested Unit Purchase
            Price, and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Dairy Holdings shall have the right to revoke the
exercise of its option pursuant to this Section 7.2 for all or any portion of
the Units elected to be repurchased by it by delivering notice of such
revocation in writing to the Executive Group during the ten-day period beginning
on the date that Dairy Holdings is given written notice that the Fair Market
Value of a Unit was finally determined to be an amount at least 10% greater than
the per Unit repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Dairy Holdings purchases Units at Fair Market Value pursuant to the terms
of this Section 7.2 and within six months of the date of the determination of
such Fair Market Value both (A) a Sale of the Company or a Public Offering
occurs and (B) in connection with such transaction, the per share value of the
Units exceeds the per share purchase price paid by Dairy Holdings to Executive
under this Section 7.2, the


                                       13


Executive shall be entitled to receive from Dairy Holdings the benefit of such
higher valuation for the Units purchased. The excess of (x) the net proceeds
which the Executive would have received in such Sale of the Company or Public
Offering from the sale in such transaction of all Units repurchased by Dairy
Holdings under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Dairy Holdings, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Dairy Holdings shall not excuse, or constitute a waiver of its rights against,
the defaulting member.

8. Certain Limitations on Dairy Holdings's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Dairy Holdings elects or is required
to purchase any Units pursuant to Section 7, Dairy Holdings shall pay the
purchase price for the Units it purchases (i) first, by offsetting indebtedness,
if any, owing from the Executive to Dairy Holdings (which indebtedness shall be
applied pro rata against the proceeds receivable by each member of the Executive
Group receiving consideration in such repurchase) and (ii) then, by Dairy
Holdings' delivery of a check or wire transfer of immediately available funds
for the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Units so purchased, duly
endorsed; provided that if such cash payment would result (A) in a violation of
any law, statute, rule, regulation, policy, order, writ, injunction, decree or
judgment promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its subsidiaries or
any of its or their property or (B) after giving effect thereto, a Financing
Default, or (C) if the Board determines in good faith that immediately prior to
such purchase there shall exist a Financing Default which prohibits such
purchase, dividend or distribution ((A) through (C) collectively the "Cash
Deferral Conditions"), the portion of the cash payment so affected may be made
by Dairy Holdings' delivery of preferred units of Dairy Holdings with a
liquidation preference equal to the balance of the purchase price; which
preferred units shall accrue yield annually at the "prime rate" published in The
Wall Street Journal on the date of issuance, which yield shall be payable at
maturity or upon payment of distributions by Dairy Holdings (other than tax
distributions). Each such preferred unit shall as of its issuance be deemed to
have basic contributions made with respect to such unit equal to (A) the portion
of the cash payment paid by the issuance of such preferred units divided by (B)
the number of preferred units so issued in the repurchase. Any such preferred
units issued shall be promptly redeemed (i) when the Cash Deferral Condition
which prompted their issuance no longer exists, (ii) upon consummation of an IPO
of the Company or Holdings (or their successors) (to the extent allowed by the
underwriters of such IPO), or (iii) upon a Sale of the Company from net cash
proceeds, if any, payable to Dairy Holdings or its unitholders (other than
proceeds required to be paid to Holdings);


                                       14


to the extent that sufficient net cash proceeds are not so payable, the
preferred units shall be cancelled in exchange for such non-cash consideration
received by unitholders in the Sale of the Company having a fair market value
equal to the principal of and accrued yield on the preferred units. If a yield
is required to be paid on any preferred units prior to maturity and any Cash
Deferral Conditions exist, such yield may be cumulated and accrued until and to
the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with the
Company or its subsidiaries terminates, (i) Executive, for himself or on behalf
of any other person, firm, partnership, corporation, or other entity, engages,
directly or indirectly, as an executive, agent, representative, consultant,
partner, shareholder or holder of any other financial interest, in any business
that competes with the Company or its subsidiaries in the line of business
Executive is employed in by the Company or its subsidiaries (as applicable), as
such business is described in any employment or severance agreement then in
effect between Executive and the Company or one of its subsidiaries or, if no
such agreement is then in effect, as described on Schedule II attached hereto (a
"Competing Business"), it being understood and agreed that Executive's
activities shall not satisfy this clause (i) where Executive is employed by a
person, firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, and Executive is not engaged in or
responsible for the Competing Business of such entity. Executive may also,
without satisfying clause (i) be a passive owner of not more than 2% of the
outstanding publicly traded stock of any class of a Competing Business so long
as Executive has no active participation in the business of such entity, except
to the extent permitted above; or (ii) Executive (A) directly or indirectly
through another entity, induces or attempts to induce any employee of the
Company or its subsidiaries to leave the employ of the Company or its
subsidiaries, or in any way interfere with the relationship between the Company
or any of its subsidiaries and any employee thereof, (B) knowingly hires any
person who was an employee of the Company or any of its subsidiaries within 180
days prior to the time such employee was hired by Executive, (C) induces or
attempts to induce any customer, supplier, licensee or other business relation
of the Company or any of its subsidiaries to cease doing business with the
Company or its subsidiaries or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any subsidiary or (D) directly or indirectly acquires or attempt to
acquire an interest in any business relating to the business of the Company or
any of its subsidiaries and with which the Company or any of its subsidiaries
has entertained discussions or has requested and received information relating
to the acquisition of such business by the Company or its subsidiaries in the
one-year period immediately preceding Executive's termination of employment with
the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.


                                       15


      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Dairy Holdings, within ten business
days following the Activity Date, an amount equal to the excess, if any, of (A)
the aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Dairy Holdings a
written agreement of the proposed transferee (a) evidencing such Person's
undertaking to be bound by the terms of this Agreement and (b) acknowledging
that the Units transferred to such Person will continue to be Units for purposes
of this Agreement in the hands of such Person. Any transfer or attempted
transfer of Units in violation of any provision of this Agreement or the
Securityholders Agreement shall be void, and Dairy Holdings shall not record
such transfer on its books or treat any purported transferee of such Units as
the owner of such Units for any purpose.

      10.2 Deemed Transfer of Units. If Dairy Holdings shall deliver, at the
time and place and in the amount and form provided in this Agreement, the
consideration for the Units to be repurchased in accordance with the provisions
of this Agreement, then from and after such time, the Person from whom such
units are to be repurchased shall no longer have any rights as a holder of such
units (other than the right to receive payment of such consideration in
accordance with this Agreement), and such Units shall be deemed purchased in
accordance with the applicable provisions hereof and Dairy Holdings shall be
deemed the owner and holder of such Units, whether or not certificates therefor
have been delivered as required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Dairy Holdings or any successor or assign
of Dairy Holdings (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Units, by reason of any dividend payable in units, issuance
of units, combination, recapitalization, reclassification, merger, consolidation
or otherwise.

      10.4 Executive's Employment by the Company. Nothing contained in this
Agreement shall be deemed to obligate the Company or any subsidiary of the
Company to employ the Executive in any capacity whatsoever or to prohibit or
restrict the Company (or any such subsidiary) from terminating the employment of
the Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Dairy Holdings against any and all losses, liabilities, damages,
judgments, fines, fees or expenses, including, without limitation, attorneys'
fees (for purposes of this Section 10.5, hereinafter "Losses"), incurred in
connection with any failure to withhold amounts relating to the Units acquired
herein by


                                       16


the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Dairy Holdings properly failed to withhold amounts relating to the Units
acquired herein by Executive, Executive shall provide Dairy Holdings with a Form
4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Dairy Holdings and/or any of its affiliates is entitled to
any tax deduction with respect to the issuance of Units, (i) Dairy Holdings
shall specially allocate such deduction to the Executive and/or (ii) Holdings
shall pay, or cause any affiliate to pay, as the case may be, Executive an
amount equal to 40% of such deduction, such amount to be grossed up to reflect
any additional deduction to Holdings and/or any of its affiliates (as the case
may be) provided that if any Cash Deferral Condition exists at the time such
payment is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Dairy Holdings shall notify the other
(in a manner described in Section 10.10 of this Agreement) within 20 days of
first receiving notice of an audit or other proceeding being conducted by the
Internal Revenue Service or any state or local taxing authority relating to the
Units acquired herein by the Management Investors, and both Executive and Dairy
Holdings shall assist each other during the course of such audit or other
proceeding to the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Dairy Holdings a
valid undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Dairy Holdings and the members of the Executive Group hereby submits to
the exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. Each of the members of the Executive Group and
Dairy Holdings hereby irrevocably waives any objections which 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 brought in any court of competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum.


                                       17


      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

            (a)   If to Dairy Holdings
                  M-Foods Dairy Holdings, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 292-6639

            with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 808-4922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 861-2200

            (b)   If to the Executive, to the address as shown on the unit
                  register of Dairy Holdings.

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036-6522
                  Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises,


                                       18


representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein and therein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Dairy Holdings under this Agreement shall be cumulative and not exclusive of
any rights or remedies which either would otherwise have hereunder or at law or
in equity or by statute, and no failure or delay by either party in exercising
any right or remedy shall impair any such right or remedy or operate as a waiver
of such right or remedy, nor shall any single or partial exercise of any power
or right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       19


      IN WITNESS WHEREOF, the parties have executed this Management Unit
Subscription Agreement as of the date first above written.


                                    M-FOODS DAIRY HOLDINGS, LLC

                                    By:_________________________________________

                                    Its:________________________________________


                                    M-FOODS HOLDINGS, INC.

                                    By:_________________________________________

                                    Its:________________________________________


                                    ____________________________________________
                                                 Gregg A. Ostrander


                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Unit Subscription
Agreement (the "Agreement") and that I understand its contents. I am aware that
the Agreement provides for the repurchase of my spouse's Units (as defined in
the Agreement) under certain circumstances and imposes other restrictions on the
transfer of such Units. I agree that my spouse's interest in the Units is
subject to the Agreement and any interest I may have in such Units shall also be
irrevocably bound by the Agreement and, further, that my community property
interest in such Units, if any, shall be similarly bound by the Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                        Acknowledged and agreed
                                        this ___ day of _____________, 2001.

                                        Name: _________________________________

                                        ________________________________________
                                                          Witness


                                   SCHEDULE I

- --------------------------------------------------------------------------------
             Cash                                    Units
- --------------------------------------------------------------------------------
           $373.13                           42,000 Class B Units
                                             42,000 Class C Units
- --------------------------------------------------------------------------------


                                   SCHEDULE II

Competing Business: Production, distribution or sale of eggs or egg products


                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Dairy Holdings,
LLC ("Dairy Holdings") on ________, 2001. The undersigned desires to make an
election to have the Units taxed under the provision of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the
undersigned purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:
                ______________________________
                ______________________________
                ______________________________
                SSN:__________________________

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by The Company or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Dairy Holdings at
a price per Unit equal to the lesser of (x) fair market value (measured as of
the date of such repurchase) and (y) cost. The Units are also subject to
transfer restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $_______.

            6. The aggregate amount paid for such property: $_______.



            A copy of this election has been furnished to the Secretary of Dairy
Holdings pursuant to Treasury Regulations ss.1.83-2(e)(7).

Dated:  ________, 2001                               ___________________________
                                                                [Name]

EX-10.24

                                                                   Exhibit 10.24

                                                                [Execution Copy]

                     MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this "Agreement") is made as
of April 10, 2001, by and among M-Foods Dairy Holdings, LLC, a Delaware limited
liability company ("Dairy Holdings"), John D. Reedy (the "Executive"), and for
the purposes of Section 10.5 hereof, M-Foods Holdings, Inc., a Delaware
corporation ("Holdings").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of the Company or one or more of its
subsidiaries and who will hold interests in Dairy Holdings (collectively with
the Executive, the "Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive desires
to contribute cash in the amount set forth on Schedule I hereto in exchange for
Units of Dairy Holdings in the amounts set forth on Schedule I attached hereto;
and

            WHEREAS, subsequent to (A) the Acquisition and the transactions
relating thereto and (B) the transactions set forth herein and the other
Management Unit Subscription Agreements entered into between Dairy Holdings and
the Management Investors, the Company shall be an affiliate of Dairy Holdings
and, therefore, as set forth herein, certain events occurring between the
Executive and the Company or its subsidiaries will create certain events between
the Executive and Dairy Holdings.

            NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:

1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.


      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean the Management Committee of Dairy
Holdings.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and the
Company or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with the Company
or one of its subsidiaries (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Company which
specifically identifies the manner in which the Company believes that the
Executive has not substantially performed the Executive's duties; (ii) the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company or one of its
subsidiaries; or (iii) conviction of a felony or guilty or nolo contendere plea
by the Executive with respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company or one
of its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board of Directors of the Company
or upon the instructions of the Chief Executive Officer of the Company (while
the Executive does not serve as such) or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company and its
subsidiaries. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than 75% of the entire membership of the Board of Directors of the Company
(excluding the Executive) at a meeting of the Board of Directors of the Company
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board of Directors of the Company) finding that, in the good
faith opinion of the Board of Directors of the Company, the


                                       2


Executive is guilty of the conduct described in (i), (ii) or (iii) above, and
specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or indirectly, a majority of the Board of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means the Class A Units of
Dairy Holdings.

      1.8 Class B Units. The term "Class B Units" means the Class B Units of
Dairy Holdings.

      1.9 Class C Units. The term "Class C Units" means the Class C Units of
Dairy Holdings.

      1.10 Closing. The "Closing" for the contribution of cash in exchange for
Units hereunder shall occur immediately prior to the consummation of the
Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Intentionally Omitted.

      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and the Company or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job


                                       3


responsibilities as a result of chronic illness, physical, mental or any other
disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of the Company or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to the Company or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Dairy Holdings at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
Dairy Holdings in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of Dairy Holdings and the Executive setting forth their respective resolutions
of the dispute and the bases therefor and (ii) accepting either the Executive's
or Dairy Holding's proposed resolution of the dispute. Promptly following Dairy
Holdings' receipt of Executive's written notice of disagreement, Dairy Holdings
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and Dairy Holdings' written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and Dairy Holdings of its decision within 40 days of its engagement.
The party whose proposed resolution is not accepted shall pay all of the
Arbiter's fees and expenses. If the Executive's proposed resolution is accepted,
Dairy Holdings also shall pay all of the Executive's reasonable out-of-pocket
fees and expenses (including reasonable fees and expenses of counsel and one
appraiser, accountant or investment banking firm) incurred in connection with
the arbitration. Each of Dairy Holdings and the Executive agrees to execute, if
requested by the Arbiter, a reasonable engagement letter with the Arbiter.


                                       4


      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and the Company or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by the Company or one of its subsidiaries (as applicable) which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by The Company or one of its
subsidiaries promptly after receipt of notice thereof given by the Executive;
provided that after a Change in Control, the Company or one of its subsidiaries
(as applicable) shall have the flexibility to appoint the Executive to a
reporting relationship different from that which existed prior to the Change in
Control, to make an immaterial change in Executive's duties, or to change the
Executive's title provided; (ii) any failure by the Company or one of its
subsidiaries (as applicable) to provide Executive with the annual base salary
Executive had previously received or the failure by The Company or one of its
subsidiaries (as applicable) to increase such annual each year after a Change in
Control by an amount which at least equals on a percentage basis, the mean
average percentage increase in base salary for all employees similarly situated
during the two full calendar years immediately preceding a Change in Control,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and


                                       5


which is remedied by the Company or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of the Company or one of its subsidiaries (as applicable) upon a Change
in Control to (A) continue in effect any employee benefit plan, compensation
plan, welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by the Company or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of the Company or
one of its subsidiaries as in effect for Executive immediately prior to such
Change in Control; (iv) after a Change in Control, any purported termination by
the Company or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on the Company's
or its subsidiaries' business to an extent substantially greater than the
Executive's current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Intentionally Omitted.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Limited
Liability Company Agreement of Dairy Holdings, dated as of April 10, 2001,
entered into by and among the members of Dairy Holdings, as amended from time to
time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.

      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.


                                       6


      1.32 Intentionally Omitted.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of the Company or any of
its subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board of Directors of the Company, after at least
three years employment with the Company or any of its subsidiaries after the
Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among Dairy
Holdings, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Intentionally Omitted.

      1.38 Intentionally Omitted.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with the Company and its subsidiaries is
terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Dairy Holdings,
whether pursuant to this Agreement or any other arrangement.

      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael, LLC, a
Delaware limited liability company.

2. Purchase and Sale of Units.


                                       7


      2.1 Intentionally Omitted.

      2.2 Intentionally Omitted.

      2.3 Contribution of Cash. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Dairy Holdings hereby agrees to receive, cash in an amount set
forth on Schedule I attached hereto in exchange for the number of Units set
forth on Schedule I.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Dairy Holdings the amount of cash
set forth in Schedule I attached hereto by check or wire transfer of immediately
available funds; and

            (b) Dairy Holdings shall deliver to the Executive unit certificates
representing the number of Units set forth on Schedule I attached hereto.

      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Dairy Holdings.

      4.1 Representations of the Executive. The Executive represents and
warrants to Dairy Holdings that the statements contained in this Section 4.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is


                                       8


subject or conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Executive is a party or by which he is bound or to which any of his assets is
subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Dairy Holdings could
become liable or obligated.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Dairy Holdings that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE
            EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED AND MODIFIED FROM
            TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF
            AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Dairy
      Holdings indicating that the Units are subject to restrictions on transfer
      and, if Dairy Holdings should at some time in the future engage the
      services of a securities transfer agent, appropriate stop-transfer
      instructions will be issued to such transfer agent with respect to the
      Units.

      4.3 [Reserved]


                                       9


      4.4 Representations of Dairy Holdings. Dairy Holdings represents to the
Executive that the statements contained in this Section 4.4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date, with respect to itself:

            (a) Organization and Power. Dairy Holdings is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware with full power and authority to enter into this Agreement
and perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Dairy Holdings and the consummation of the transactions
contemplated hereby by Dairy Holdings have been duly and validly authorized by
all requisite limited liability company action on the part of Dairy Holdings,
and no other proceedings on its part are necessary to authorize the execution,
delivery or performance of this Agreement. This Agreement has been duly executed
and delivered by Dairy Holdings, and this Agreement constitutes a valid and
binding obligation of Dairy Holdings, enforceable in accordance with its terms
and conditions. Dairy Holdings need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Dairy Holdings is subject or any
provision of its charter or bylaws or conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Dairy Holdings is a party or by which it is bound or to which any of
its assets is subject.

            (d) Intentionally Omitted.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Dairy Holdings to issue, sell,
or otherwise cause to become outstanding any of its Units. Except as set forth
in the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Dairy Holdings. Except as set forth in the Transaction Documents,
there are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Dairy Holdings.

5. Covenants of the Executive and Dairy Holdings

      5.1 Covenants. The Executive and/or Dairy Holdings each agree as follows
with respect to the period between the execution of this Agreement and the
Closing:


                                       10


            (a) General. The Executive and Dairy Holdings each will use his or
its commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement.

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with the Company and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Dairy Holdings, and Dairy Holdings shall be
required to purchase (subject to the provisions of Section 8 hereof), on one
occasion from the Executive and his Permitted Transferees, if applicable, all
(but not less than all) of the number of Units then held by the Executive and
such other number of Units held by the Executive's Permitted Transferees as the
Executive may request provided that in the aggregate such number does not exceed
the product of (x) the total number of Units (by class) collectively held by the
Executive and all of his Permitted Transferees and (y) the Applicable Percentage
(measured as of the Termination Date), at a price per unit equal to the Fair
Market Value of such unit (measured as of the delivery of the notice referred to
in Section 7.1(b)).

            (b) If the Executive desires to exercise its option to require Dairy
Holdings to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Dairy Holdings setting forth the intention of
Executive and Permitted Transferees, if applicable, to collectively sell all
Units pursuant to Section 7.1(a) within the period described above, which notice
shall specify the number of Units to be sold and shall include the signature of
the Executive and each Permitted Transferee desiring to sell Units. Subject to
the provisions of Section 8.1, the closing of the purchase shall take place at
the principal office of Dairy Holdings on the later of the 30th day after the
giving of such notice and the date that is 10 business days after the final
determination of Fair Market Value. Subject to the provisions of Section 8.1,
the Executive shall deliver to Dairy Holdings duly executed instruments
transferring title to units to Dairy Holdings, against payment of the
appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.


                                       11


      7.2 Call Options.

            (a) If the Executive's employment with the Company or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Dairy Holdings shall have the right
and option to purchase, and the Executive and the Executive's Permitted
Transferees (hereinafter referred to as the "Executive Group") shall be required
to sell to Dairy Holdings, any or all of such Units then held by such member of
the Executive Group (it being understood that if Units of any class subject to
repurchase hereunder may be repurchased at different prices, Dairy Holdings may
elect to repurchase only the portion of the Units of such class subject to
repurchase hereunder at the lower price), at a price per unit equal to the
applicable purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with the Company and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with the Company and its
      subsidiaries is terminated by the Company and its subsidiaries without
      Cause or by the Executive for Good Reason;

            (iii) if the Executive's active employment with the Company and its
      subsidiaries is terminated (A) by the Company or any of its subsidiaries
      for Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Dairy Holdings' rights under this Section 7.2(a) shall not be
available in the event of the termination of Executive's employment by the
Company or its subsidiaries without Cause or by Executive for Good Reason, in
either case following a sale by the Company or its subsidiaries of substantially
all of the line of business in which Executive primarily performs his services.

            (b) If Dairy Holdings desires to exercise one of its options to
purchase Units pursuant to this Section 7.2, Dairy Holdings shall, not later
than the expiration of the applicable period described for such purchase in
Section 7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Dairy Holdings on the later
of the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Dairy Holdings duly
executed instruments transferring title to Units to Dairy Holdings, against
payment of the appropriate purchase


                                       12


price by cashier's or certified check payable to the Executive or by wire
transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Dairy Holdings pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Dairy Holdings is less than or equal to the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            the lesser of (x) the Fair Market Value (measured as of the date of
            the Call Notice) and (y) the Cost of such Unit (the "Unvested Unit
            Purchase Price"), and (ii) if the number of such Units exceeds the
            Unvested Percentage of such class, the purchase price for each Unit
            shall be (A) for a number of Units of such class equal to the result
            of (x) the Unvested Percentage and (y) the total number of Units of
            such class held by the Executive Group, the Unvested Unit Purchase
            Price, and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Dairy Holdings shall have the right to revoke the
exercise of its option pursuant to this Section 7.2 for all or any portion of
the Units elected to be repurchased by it by delivering notice of such
revocation in writing to the Executive Group during the ten-day period beginning
on the date that Dairy Holdings is given written notice that the Fair Market
Value of a Unit was finally determined to be an amount at least 10% greater than
the per Unit repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Dairy Holdings purchases Units at Fair Market Value pursuant to the terms
of this Section 7.2 and within six months of the date of the determination of
such Fair Market Value both (A) a Sale of the Company or a Public Offering
occurs and (B) in connection with such transaction, the per share value of the
Units exceeds the per share purchase price paid by Dairy Holdings to Executive
under this Section 7.2, the


                                       13


Executive shall be entitled to receive from Dairy Holdings the benefit of such
higher valuation for the Units purchased. The excess of (x) the net proceeds
which the Executive would have received in such Sale of the Company or Public
Offering from the sale in such transaction of all Units repurchased by Dairy
Holdings under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Dairy Holdings, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Dairy Holdings shall not excuse, or constitute a waiver of its rights against,
the defaulting member.

8. Certain Limitations on Dairy Holdings's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Dairy Holdings elects or is required
to purchase any Units pursuant to Section 7, Dairy Holdings shall pay the
purchase price for the Units it purchases (i) first, by offsetting indebtedness,
if any, owing from the Executive to Dairy Holdings (which indebtedness shall be
applied pro rata against the proceeds receivable by each member of the Executive
Group receiving consideration in such repurchase) and (ii) then, by Dairy
Holdings' delivery of a check or wire transfer of immediately available funds
for the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Units so purchased, duly
endorsed; provided that if such cash payment would result (A) in a violation of
any law, statute, rule, regulation, policy, order, writ, injunction, decree or
judgment promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its subsidiaries or
any of its or their property or (B) after giving effect thereto, a Financing
Default, or (C) if the Board determines in good faith that immediately prior to
such purchase there shall exist a Financing Default which prohibits such
purchase, dividend or distribution ((A) through (C) collectively the "Cash
Deferral Conditions"), the portion of the cash payment so affected may be made
by Dairy Holdings' delivery of preferred units of Dairy Holdings with a
liquidation preference equal to the balance of the purchase price; which
preferred units shall accrue yield annually at the "prime rate" published in The
Wall Street Journal on the date of issuance, which yield shall be payable at
maturity or upon payment of distributions by Dairy Holdings (other than tax
distributions). Each such preferred unit shall as of its issuance be deemed to
have basic contributions made with respect to such unit equal to (A) the portion
of the cash payment paid by the issuance of such preferred units divided by (B)
the number of preferred units so issued in the repurchase. Any such preferred
units issued shall be promptly redeemed (i) when the Cash Deferral Condition
which prompted their issuance no longer exists, (ii) upon consummation of an IPO
of the Company or Holdings (or their successors) (to the extent allowed by the
underwriters of such IPO), or (iii) upon a Sale of the Company from net cash
proceeds, if any, payable to Dairy Holdings or its unitholders (other than
proceeds required to be paid to Holdings);


                                       14


to the extent that sufficient net cash proceeds are not so payable, the
preferred units shall be cancelled in exchange for such non-cash consideration
received by unitholders in the Sale of the Company having a fair market value
equal to the principal of and accrued yield on the preferred units. If a yield
is required to be paid on any preferred units prior to maturity and any Cash
Deferral Conditions exist, such yield may be cumulated and accrued until and to
the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with the
Company or its subsidiaries terminates, (i) Executive, for himself or on behalf
of any other person, firm, partnership, corporation, or other entity, engages,
directly or indirectly, as an executive, agent, representative, consultant,
partner, shareholder or holder of any other financial interest, in any business
that competes with the Company or its subsidiaries in the line of business
Executive is employed in by the Company or its subsidiaries (as applicable), as
such business is described in any employment or severance agreement then in
effect between Executive and the Company or one of its subsidiaries or, if no
such agreement is then in effect, as described on Schedule II attached hereto (a
"Competing Business"), it being understood and agreed that Executive's
activities shall not satisfy this clause (i) where Executive is employed by a
person, firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, and Executive is not engaged in or
responsible for the Competing Business of such entity. Executive may also,
without satisfying clause (i) be a passive owner of not more than 2% of the
outstanding publicly traded stock of any class of a Competing Business so long
as Executive has no active participation in the business of such entity, except
to the extent permitted above; or (ii) Executive (A) directly or indirectly
through another entity, induces or attempts to induce any employee of the
Company or its subsidiaries to leave the employ of the Company or its
subsidiaries, or in any way interfere with the relationship between the Company
or any of its subsidiaries and any employee thereof, (B) knowingly hires any
person who was an employee of the Company or any of its subsidiaries within 180
days prior to the time such employee was hired by Executive, (C) induces or
attempts to induce any customer, supplier, licensee or other business relation
of the Company or any of its subsidiaries to cease doing business with the
Company or its subsidiaries or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any subsidiary or (D) directly or indirectly acquires or attempt to
acquire an interest in any business relating to the business of the Company or
any of its subsidiaries and with which the Company or any of its subsidiaries
has entertained discussions or has requested and received information relating
to the acquisition of such business by the Company or its subsidiaries in the
one-year period immediately preceding Executive's termination of employment with
the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.


                                       15


      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Dairy Holdings, within ten business
days following the Activity Date, an amount equal to the excess, if any, of (A)
the aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Dairy Holdings a
written agreement of the proposed transferee (a) evidencing such Person's
undertaking to be bound by the terms of this Agreement and (b) acknowledging
that the Units transferred to such Person will continue to be Units for purposes
of this Agreement in the hands of such Person. Any transfer or attempted
transfer of Units in violation of any provision of this Agreement or the
Securityholders Agreement shall be void, and Dairy Holdings shall not record
such transfer on its books or treat any purported transferee of such Units as
the owner of such Units for any purpose.

      10.2 Deemed Transfer of Units. If Dairy Holdings shall deliver, at the
time and place and in the amount and form provided in this Agreement, the
consideration for the Units to be repurchased in accordance with the provisions
of this Agreement, then from and after such time, the Person from whom such
units are to be repurchased shall no longer have any rights as a holder of such
units (other than the right to receive payment of such consideration in
accordance with this Agreement), and such Units shall be deemed purchased in
accordance with the applicable provisions hereof and Dairy Holdings shall be
deemed the owner and holder of such Units, whether or not certificates therefor
have been delivered as required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Dairy Holdings or any successor or assign
of Dairy Holdings (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Units, by reason of any dividend payable in units, issuance
of units, combination, recapitalization, reclassification, merger, consolidation
or otherwise.

      10.4 Executive's Employment by the Company. Nothing contained in this
Agreement shall be deemed to obligate the Company or any subsidiary of the
Company to employ the Executive in any capacity whatsoever or to prohibit or
restrict the Company (or any such subsidiary) from terminating the employment of
the Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Dairy Holdings against any and all losses, liabilities, damages,
judgments, fines, fees or expenses, including, without limitation, attorneys'
fees (for purposes of this Section 10.5, hereinafter "Losses"), incurred in
connection with any failure to withhold amounts relating to the Units acquired
herein by


                                       16


the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Dairy Holdings properly failed to withhold amounts relating to the Units
acquired herein by Executive, Executive shall provide Dairy Holdings with a Form
4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Dairy Holdings and/or any of its affiliates is entitled to
any tax deduction with respect to the issuance of Units, (i) Dairy Holdings
shall specially allocate such deduction to the Executive and/or (ii) Holdings
shall pay, or cause any affiliate to pay, as the case may be, Executive an
amount equal to 40% of such deduction, such amount to be grossed up to reflect
any additional deduction to Holdings and/or any of its affiliates (as the case
may be) provided that if any Cash Deferral Condition exists at the time such
payment is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Dairy Holdings shall notify the other
(in a manner described in Section 10.10 of this Agreement) within 20 days of
first receiving notice of an audit or other proceeding being conducted by the
Internal Revenue Service or any state or local taxing authority relating to the
Units acquired herein by the Management Investors, and both Executive and Dairy
Holdings shall assist each other during the course of such audit or other
proceeding to the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Dairy Holdings a
valid undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Dairy Holdings and the members of the Executive Group hereby submits to
the exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. Each of the members of the Executive Group and
Dairy Holdings hereby irrevocably waives any objections which 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 brought in any court of competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum.


                                       17


      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

            (a)   If to Dairy Holdings
                  M-Foods Dairy Holdings, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 292-6639

            with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 808-4922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 861-2200

            (b)   If to the Executive, to the address as shown on the unit
                  register of Dairy Holdings.

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036-6522
                  Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises,


                                       18


representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein and therein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Dairy Holdings under this Agreement shall be cumulative and not exclusive of
any rights or remedies which either would otherwise have hereunder or at law or
in equity or by statute, and no failure or delay by either party in exercising
any right or remedy shall impair any such right or remedy or operate as a waiver
of such right or remedy, nor shall any single or partial exercise of any power
or right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       19


      IN WITNESS WHEREOF, the parties have executed this Management Unit
Subscription Agreement as of the date first above written.


                               M-FOODS DAIRY HOLDINGS, LLC

                               By:______________________________________________

                               Its:_____________________________________________


                               M_FOODS HOLDINGS, INC.

                               By:______________________________________________

                               Its:_____________________________________________


                                ________________________________________________
                                                   John D. Reedy


                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Unit Subscription
Agreement (the "Agreement") and that I understand its contents. I am aware that
the Agreement provides for the repurchase of my spouse's Units (as defined in
the Agreement) under certain circumstances and imposes other restrictions on the
transfer of such Units. I agree that my spouse's interest in the Units is
subject to the Agreement and any interest I may have in such Units shall also be
irrevocably bound by the Agreement and, further, that my community property
interest in such Units, if any, shall be similarly bound by the Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                      Acknowledged and agreed this ___ day of
                                      _____________, 2001.


                                      _________________________________________

                                      Name:____________________________________


                                      _________________________________________
                                                     Witness



                                                    SCHEDULE I

- --------------------------------------------------------------------------------
               Cash                                         Units
- --------------------------------------------------------------------------------
             $133.26                                15,000 Class B Units
                                                    15,000 Class C Units
- --------------------------------------------------------------------------------


                                   SCHEDULE II

Competing Business: Production, distribution or sale of eggs or egg products



                                    EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Dairy Holdings,
LLC ("Dairy Holdings") on ________, 2001. The undersigned desires to make an
election to have the Units taxed under the provision of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the
undersigned purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:
               ______________________________
               ______________________________
               ______________________________
               SSN:__________________________

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by The Company or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Dairy Holdings at
a price per Unit equal to the lesser of (x) fair market value (measured as of
the date of such repurchase) and (y) cost. The Units are also subject to
transfer restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $_______.

            6. The aggregate amount paid for such property: $_______.



            A copy of this election has been furnished to the Secretary of Dairy
Holdings pursuant to Treasury Regulations ss.1.83-2(e)(7).

Dated:  ________, 2001                             _____________________________
                                                             [Name]

EX-10.25

                                                                   Exhibit 10.25

                                                                [Execution Copy]

                     MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this "Agreement") is made as
of April 10, 2001, by and among M-Foods Dairy Holdings, LLC, a Delaware limited
liability company ("Dairy Holdings"), James D. Clarkson (the "Executive"), and
for the purposes of Section 10.5 hereof, M- Foods Holdings, Inc., a Delaware
corporation ("Holdings").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of the Company or one or more of its
subsidiaries and who will hold interests in Dairy Holdings (collectively with
the Executive, the "Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive desires
to contribute cash in the amount set forth on Schedule I hereto in exchange for
Units of Dairy Holdings in the amounts set forth on Schedule I attached hereto;
and

            WHEREAS, subsequent to (A) the Acquisition and the transactions
relating thereto and (B) the transactions set forth herein and the other
Management Unit Subscription Agreements entered into between Dairy Holdings and
the Management Investors, the Company shall be an affiliate of Dairy Holdings
and, therefore, as set forth herein, certain events occurring between the
Executive and the Company or its subsidiaries will create certain events between
the Executive and Dairy Holdings.

            NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:

1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.



      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean the Management Committee of Dairy
Holdings.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and the
Company or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with the Company
or one of its subsidiaries (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Company which
specifically identifies the manner in which the Company believes that the
Executive has not substantially performed the Executive's duties; (ii) the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company or one of its
subsidiaries; or (iii) conviction of a felony or guilty or nolo contendere plea
by the Executive with respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company or one
of its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board of Directors of the Company
or upon the instructions of the Chief Executive Officer of the Company (while
the Executive does not serve as such) or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company and its
subsidiaries. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than 75% of the entire membership of the Board of Directors of the Company
(excluding the Executive) at a meeting of the Board of Directors of the Company
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board of Directors of the Company) finding that, in the good
faith opinion of the Board of Directors of the Company, the


                                        2


Executive is guilty of the conduct described in (i), (ii) or (iii) above, and
specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or indirectly, a majority of the Board of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means the Class A Units of
Dairy Holdings.

      1.8 Class B Units. The term "Class B Units" means the Class B Units of
Dairy Holdings.

      1.9 Class C Units. The term "Class C Units" means the Class C Units of
Dairy Holdings.

      1.10 Closing. The "Closing" for the contribution of cash in exchange for
Units hereunder shall occur immediately prior to the consummation of the
Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Intentionally Omitted.

      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and the Company or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job


                                        3


responsibilities as a result of chronic illness, physical, mental or any other
disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of the Company or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to the Company or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Dairy Holdings at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
Dairy Holdings in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of Dairy Holdings and the Executive setting forth their respective resolutions
of the dispute and the bases therefor and (ii) accepting either the Executive's
or Dairy Holding's proposed resolution of the dispute. Promptly following Dairy
Holdings' receipt of Executive's written notice of disagreement, Dairy Holdings
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and Dairy Holdings' written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and Dairy Holdings of its decision within 40 days of its engagement.
The party whose proposed resolution is not accepted shall pay all of the
Arbiter's fees and expenses. If the Executive's proposed resolution is accepted,
Dairy Holdings also shall pay all of the Executive's reasonable out-of-pocket
fees and expenses (including reasonable fees and expenses of counsel and one
appraiser, accountant or investment banking firm) incurred in connection with
the arbitration. Each of Dairy Holdings and the Executive agrees to execute, if
requested by the Arbiter, a reasonable engagement letter with the Arbiter.


                                        4


      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and the Company or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by the Company or one of its subsidiaries (as applicable) which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by The Company or one of its
subsidiaries promptly after receipt of notice thereof given by the Executive;
provided that after a Change in Control, the Company or one of its subsidiaries
(as applicable) shall have the flexibility to appoint the Executive to a
reporting relationship different from that which existed prior to the Change in
Control, to make an immaterial change in Executive's duties, or to change the
Executive's title provided; (ii) any failure by the Company or one of its
subsidiaries (as applicable) to provide Executive with the annual base salary
Executive had previously received or the failure by The Company or one of its
subsidiaries (as applicable) to increase such annual each year after a Change in
Control by an amount which at least equals on a percentage basis, the mean
average percentage increase in base salary for all employees similarly situated
during the two full calendar years immediately preceding a Change in Control,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and


                                        5


which is remedied by the Company or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of the Company or one of its subsidiaries (as applicable) upon a Change
in Control to (A) continue in effect any employee benefit plan, compensation
plan, welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by the Company or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of the Company or
one of its subsidiaries as in effect for Executive immediately prior to such
Change in Control; (iv) after a Change in Control, any purported termination by
the Company or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on the Company's
or its subsidiaries' business to an extent substantially greater than the
Executive's current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Intentionally Omitted.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Limited
Liability Company Agreement of Dairy Holdings, dated as of April 10, 2001,
entered into by and among the members of Dairy Holdings, as amended from time to
time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.

      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.


                                        6


      1.32 Intentionally Omitted.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of the Company or any of
its subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board of Directors of the Company, after at least
three years employment with the Company or any of its subsidiaries after the
Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among Dairy
Holdings, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Intentionally Omitted.

      1.38 Intentionally Omitted.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with the Company and its subsidiaries is
terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Dairy Holdings,
whether pursuant to this Agreement or any other arrangement.

      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael, LLC, a
Delaware limited liability company.

2. Purchase and Sale of Units.


                                        7


      2.1 Intentionally Omitted.

      2.2 Intentionally Omitted.

      2.3 Contribution of Cash. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Dairy Holdings hereby agrees to receive, cash in an amount set
forth on Schedule I attached hereto in exchange for the number of Units set
forth on Schedule I.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Dairy Holdings the amount of cash
set forth in Schedule I attached hereto by check or wire transfer of immediately
available funds; and

            (b) Dairy Holdings shall deliver to the Executive unit certificates
representing the number of Units set forth on Schedule I attached hereto.

      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Dairy Holdings.

      4.1 Representations of the Executive. The Executive represents and
warrants to Dairy Holdings that the statements contained in this Section 4.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is


                                        8


subject or conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Executive is a party or by which he is bound or to which any of his assets is
subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Dairy Holdings could
become liable or obligated.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Dairy Holdings that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE
            EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED AND MODIFIED FROM
            TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF
            AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Dairy
      Holdings indicating that the Units are subject to restrictions on transfer
      and, if Dairy Holdings should at some time in the future engage the
      services of a securities transfer agent, appropriate stop-transfer
      instructions will be issued to such transfer agent with respect to the
      Units.

      4.3 [Reserved]


                                        9


      4.4 Representations of Dairy Holdings. Dairy Holdings represents to the
Executive that the statements contained in this Section 4.4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date, with respect to itself:

            (a) Organization and Power. Dairy Holdings is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware with full power and authority to enter into this Agreement
and perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Dairy Holdings and the consummation of the transactions
contemplated hereby by Dairy Holdings have been duly and validly authorized by
all requisite limited liability company action on the part of Dairy Holdings,
and no other proceedings on its part are necessary to authorize the execution,
delivery or performance of this Agreement. This Agreement has been duly executed
and delivered by Dairy Holdings, and this Agreement constitutes a valid and
binding obligation of Dairy Holdings, enforceable in accordance with its terms
and conditions. Dairy Holdings need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Dairy Holdings is subject or any
provision of its charter or bylaws or conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Dairy Holdings is a party or by which it is bound or to which any of
its assets is subject.

            (d) Intentionally Omitted.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Dairy Holdings to issue, sell,
or otherwise cause to become outstanding any of its Units. Except as set forth
in the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Dairy Holdings. Except as set forth in the Transaction Documents,
there are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Dairy Holdings.

5. Covenants of the Executive and Dairy Holdings

      5.1 Covenants. The Executive and/or Dairy Holdings each agree as follows
with respect to the period between the execution of this Agreement and the
Closing:


                                       10


            (a) General. The Executive and Dairy Holdings each will use his or
its commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement.

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with the Company and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Dairy Holdings, and Dairy Holdings shall be
required to purchase (subject to the provisions of Section 8 hereof), on one
occasion from the Executive and his Permitted Transferees, if applicable, all
(but not less than all) of the number of Units then held by the Executive and
such other number of Units held by the Executive's Permitted Transferees as the
Executive may request provided that in the aggregate such number does not exceed
the product of (x) the total number of Units (by class) collectively held by the
Executive and all of his Permitted Transferees and (y) the Applicable Percentage
(measured as of the Termination Date), at a price per unit equal to the Fair
Market Value of such unit (measured as of the delivery of the notice referred to
in Section 7.1(b)).

            (b) If the Executive desires to exercise its option to require Dairy
Holdings to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Dairy Holdings setting forth the intention of
Executive and Permitted Transferees, if applicable, to collectively sell all
Units pursuant to Section 7.1(a) within the period described above, which notice
shall specify the number of Units to be sold and shall include the signature of
the Executive and each Permitted Transferee desiring to sell Units. Subject to
the provisions of Section 8.1, the closing of the purchase shall take place at
the principal office of Dairy Holdings on the later of the 30th day after the
giving of such notice and the date that is 10 business days after the final
determination of Fair Market Value. Subject to the provisions of Section 8.1,
the Executive shall deliver to Dairy Holdings duly executed instruments
transferring title to units to Dairy Holdings, against payment of the
appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.


                                       11


      7.2 Call Options.

            (a) If the Executive's employment with the Company or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Dairy Holdings shall have the right
and option to purchase, and the Executive and the Executive's Permitted
Transferees (hereinafter referred to as the "Executive Group") shall be required
to sell to Dairy Holdings, any or all of such Units then held by such member of
the Executive Group (it being understood that if Units of any class subject to
repurchase hereunder may be repurchased at different prices, Dairy Holdings may
elect to repurchase only the portion of the Units of such class subject to
repurchase hereunder at the lower price), at a price per unit equal to the
applicable purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with the Company and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with the Company and its
      subsidiaries is terminated by the Company and its subsidiaries without
      Cause or by the Executive for Good Reason;

            (iii) if the Executive's active employment with the Company and its
      subsidiaries is terminated (A) by the Company or any of its subsidiaries
      for Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Dairy Holdings' rights under this Section 7.2(a) shall not be
available in the event of the termination of Executive's employment by the
Company or its subsidiaries without Cause or by Executive for Good Reason, in
either case following a sale by the Company or its subsidiaries of substantially
all of the line of business in which Executive primarily performs his services.

            (b) If Dairy Holdings desires to exercise one of its options to
purchase Units pursuant to this Section 7.2, Dairy Holdings shall, not later
than the expiration of the applicable period described for such purchase in
Section 7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Dairy Holdings on the later
of the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Dairy Holdings duly
executed instruments transferring title to Units to Dairy Holdings, against
payment of the appropriate purchase


                                       12


price by cashier's or certified check payable to the Executive or by wire
transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Dairy Holdings pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Dairy Holdings is less than or equal to the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            the lesser of (x) the Fair Market Value (measured as of the date of
            the Call Notice) and (y) the Cost of such Unit (the "Unvested Unit
            Purchase Price"), and (ii) if the number of such Units exceeds the
            Unvested Percentage of such class, the purchase price for each Unit
            shall be (A) for a number of Units of such class equal to the result
            of (x) the Unvested Percentage and (y) the total number of Units of
            such class held by the Executive Group, the Unvested Unit Purchase
            Price, and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Dairy Holdings shall have the right to revoke the
exercise of its option pursuant to this Section 7.2 for all or any portion of
the Units elected to be repurchased by it by delivering notice of such
revocation in writing to the Executive Group during the ten-day period beginning
on the date that Dairy Holdings is given written notice that the Fair Market
Value of a Unit was finally determined to be an amount at least 10% greater than
the per Unit repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Dairy Holdings purchases Units at Fair Market Value pursuant to the terms
of this Section 7.2 and within six months of the date of the determination of
such Fair Market Value both (A) a Sale of the Company or a Public Offering
occurs and (B) in connection with such transaction, the per share value of the
Units exceeds the per share purchase price paid by Dairy Holdings to Executive
under this Section 7.2, the


                                       13


Executive shall be entitled to receive from Dairy Holdings the benefit of such
higher valuation for the Units purchased. The excess of (x) the net proceeds
which the Executive would have received in such Sale of the Company or Public
Offering from the sale in such transaction of all Units repurchased by Dairy
Holdings under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Dairy Holdings, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Dairy Holdings shall not excuse, or constitute a waiver of its rights against,
the defaulting member.

8. Certain Limitations on Dairy Holdings's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Dairy Holdings elects or is required
to purchase any Units pursuant to Section 7, Dairy Holdings shall pay the
purchase price for the Units it purchases (i) first, by offsetting indebtedness,
if any, owing from the Executive to Dairy Holdings (which indebtedness shall be
applied pro rata against the proceeds receivable by each member of the Executive
Group receiving consideration in such repurchase) and (ii) then, by Dairy
Holdings' delivery of a check or wire transfer of immediately available funds
for the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Units so purchased, duly
endorsed; provided that if such cash payment would result (A) in a violation of
any law, statute, rule, regulation, policy, order, writ, injunction, decree or
judgment promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its subsidiaries or
any of its or their property or (B) after giving effect thereto, a Financing
Default, or (C) if the Board determines in good faith that immediately prior to
such purchase there shall exist a Financing Default which prohibits such
purchase, dividend or distribution ((A) through (C) collectively the "Cash
Deferral Conditions"), the portion of the cash payment so affected may be made
by Dairy Holdings' delivery of preferred units of Dairy Holdings with a
liquidation preference equal to the balance of the purchase price; which
preferred units shall accrue yield annually at the "prime rate" published in The
Wall Street Journal on the date of issuance, which yield shall be payable at
maturity or upon payment of distributions by Dairy Holdings (other than tax
distributions). Each such preferred unit shall as of its issuance be deemed to
have basic contributions made with respect to such unit equal to (A) the portion
of the cash payment paid by the issuance of such preferred units divided by (B)
the number of preferred units so issued in the repurchase. Any such preferred
units issued shall be promptly redeemed (i) when the Cash Deferral Condition
which prompted their issuance no longer exists, (ii) upon consummation of an IPO
of the Company or Holdings (or their successors) (to the extent allowed by the
underwriters of such IPO), or (iii) upon a Sale of the Company from net cash
proceeds, if any, payable to Dairy Holdings or its unitholders (other than
proceeds required to be paid to Holdings);


                                       14


to the extent that sufficient net cash proceeds are not so payable, the
preferred units shall be cancelled in exchange for such non-cash consideration
received by unitholders in the Sale of the Company having a fair market value
equal to the principal of and accrued yield on the preferred units. If a yield
is required to be paid on any preferred units prior to maturity and any Cash
Deferral Conditions exist, such yield may be cumulated and accrued until and to
the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with the
Company or its subsidiaries terminates, (i) Executive, for himself or on behalf
of any other person, firm, partnership, corporation, or other entity, engages,
directly or indirectly, as an executive, agent, representative, consultant,
partner, shareholder or holder of any other financial interest, in any business
that competes with the Company or its subsidiaries in the line of business
Executive is employed in by the Company or its subsidiaries (as applicable), as
such business is described in any employment or severance agreement then in
effect between Executive and the Company or one of its subsidiaries or, if no
such agreement is then in effect, as described on Schedule II attached hereto (a
"Competing Business"), it being understood and agreed that Executive's
activities shall not satisfy this clause (i) where Executive is employed by a
person, firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, and Executive is not engaged in or
responsible for the Competing Business of such entity. Executive may also,
without satisfying clause (i) be a passive owner of not more than 2% of the
outstanding publicly traded stock of any class of a Competing Business so long
as Executive has no active participation in the business of such entity, except
to the extent permitted above; or (ii) Executive (A) directly or indirectly
through another entity, induces or attempts to induce any employee of the
Company or its subsidiaries to leave the employ of the Company or its
subsidiaries, or in any way interfere with the relationship between the Company
or any of its subsidiaries and any employee thereof, (B) knowingly hires any
person who was an employee of the Company or any of its subsidiaries within 180
days prior to the time such employee was hired by Executive, (C) induces or
attempts to induce any customer, supplier, licensee or other business relation
of the Company or any of its subsidiaries to cease doing business with the
Company or its subsidiaries or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any subsidiary or (D) directly or indirectly acquires or attempt to
acquire an interest in any business relating to the business of the Company or
any of its subsidiaries and with which the Company or any of its subsidiaries
has entertained discussions or has requested and received information relating
to the acquisition of such business by the Company or its subsidiaries in the
one-year period immediately preceding Executive's termination of employment with
the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.


                                       15


      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Dairy Holdings, within ten business
days following the Activity Date, an amount equal to the excess, if any, of (A)
the aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Dairy Holdings a
written agreement of the proposed transferee (a) evidencing such Person's
undertaking to be bound by the terms of this Agreement and (b) acknowledging
that the Units transferred to such Person will continue to be Units for purposes
of this Agreement in the hands of such Person. Any transfer or attempted
transfer of Units in violation of any provision of this Agreement or the
Securityholders Agreement shall be void, and Dairy Holdings shall not record
such transfer on its books or treat any purported transferee of such Units as
the owner of such Units for any purpose.

      10.2 Deemed Transfer of Units. If Dairy Holdings shall deliver, at the
time and place and in the amount and form provided in this Agreement, the
consideration for the Units to be repurchased in accordance with the provisions
of this Agreement, then from and after such time, the Person from whom such
units are to be repurchased shall no longer have any rights as a holder of such
units (other than the right to receive payment of such consideration in
accordance with this Agreement), and such Units shall be deemed purchased in
accordance with the applicable provisions hereof and Dairy Holdings shall be
deemed the owner and holder of such Units, whether or not certificates therefor
have been delivered as required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Dairy Holdings or any successor or assign
of Dairy Holdings (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Units, by reason of any dividend payable in units, issuance
of units, combination, recapitalization, reclassification, merger, consolidation
or otherwise.

      10.4 Executive's Employment by the Company. Nothing contained in this
Agreement shall be deemed to obligate the Company or any subsidiary of the
Company to employ the Executive in any capacity whatsoever or to prohibit or
restrict the Company (or any such subsidiary) from terminating the employment of
the Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Dairy Holdings against any and all losses, liabilities, damages,
judgments, fines, fees or expenses, including, without limitation, attorneys'
fees (for purposes of this Section 10.5, hereinafter "Losses"), incurred in
connection with any failure to withhold amounts relating to the Units acquired
herein by


                                       16


the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Dairy Holdings properly failed to withhold amounts relating to the Units
acquired herein by Executive, Executive shall provide Dairy Holdings with a Form
4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Dairy Holdings and/or any of its affiliates is entitled to
any tax deduction with respect to the issuance of Units, (i) Dairy Holdings
shall specially allocate such deduction to the Executive and/or (ii) Holdings
shall pay, or cause any affiliate to pay, as the case may be, Executive an
amount equal to 40% of such deduction, such amount to be grossed up to reflect
any additional deduction to Holdings and/or any of its affiliates (as the case
may be) provided that if any Cash Deferral Condition exists at the time such
payment is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Dairy Holdings shall notify the other
(in a manner described in Section 10.10 of this Agreement) within 20 days of
first receiving notice of an audit or other proceeding being conducted by the
Internal Revenue Service or any state or local taxing authority relating to the
Units acquired herein by the Management Investors, and both Executive and Dairy
Holdings shall assist each other during the course of such audit or other
proceeding to the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Dairy Holdings a
valid undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Dairy Holdings and the members of the Executive Group hereby submits to
the exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. Each of the members of the Executive Group and
Dairy Holdings hereby irrevocably waives any objections which 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 brought in any court of competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum.


                                       17


      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

            (a) If to Dairy Holdings

                  M-Foods Dairy Holdings, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 292-6639

            with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 808-4922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 861-2200

            (b) If to the Executive, to the address as shown on the unit
register of Dairy Holdings.

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036-6522
                  Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises,


                                       18


representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein and therein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Dairy Holdings under this Agreement shall be cumulative and not exclusive of
any rights or remedies which either would otherwise have hereunder or at law or
in equity or by statute, and no failure or delay by either party in exercising
any right or remedy shall impair any such right or remedy or operate as a waiver
of such right or remedy, nor shall any single or partial exercise of any power
or right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       19


      IN WITNESS WHEREOF, the parties have executed this Management Unit
Subscription Agreement as of the date first above written.

                                  M-FOODS DAIRY HOLDINGS, LLC

                                  By:___________________________________________

                                  Its:__________________________________________


                                  M-FOODS HOLDINGS, INC.

                                  By:___________________________________________

                                  Its:__________________________________________

                                  ______________________________________________
                                                James D. Clarkson



                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Unit Subscription
Agreement (the "Agreement") and that I understand its contents. I am aware that
the Agreement provides for the repurchase of my spouse's Units (as defined in
the Agreement) under certain circumstances and imposes other restrictions on the
transfer of such Units. I agree that my spouse's interest in the Units is
subject to the Agreement and any interest I may have in such Units shall also be
irrevocably bound by the Agreement and, further, that my community property
interest in such Units, if any, shall be similarly bound by the Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                    Acknowledged and agreed this ___ day of
                                    _____________, 2001.

                                    ____________________________________________

                                    Name:_______________________________________

                                    ____________________________________________
                                                      Witness



                                   SCHEDULE I

- --------------------------------------------------------------------------------
                Cash                                              Units
- --------------------------------------------------------------------------------
              $106.61                                     12,000 Class B Units
                                                          12,000 Class C Units
- --------------------------------------------------------------------------------



                                   SCHEDULE II

Competing Business: Production, distribution or sale of refrigerated potato
products or specialty dairy products and mixes



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Dairy Holdings,
LLC ("Dairy Holdings") on ________, 2001. The undersigned desires to make an
election to have the Units taxed under the provision of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the
undersigned purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:
            _____________________________
            _____________________________
            _____________________________
            SSN:_________________________

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by The Company or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Dairy Holdings at
a price per Unit equal to the lesser of (x) fair market value (measured as of
the date of such repurchase) and (y) cost. The Units are also subject to
transfer restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $_______.

            6. The aggregate amount paid for such property: $_______.



            A copy of this election has been furnished to the Secretary of Dairy
Holdings pursuant to Treasury Regulations ss.1.83-2(e)(7).


Dated: ________, 2001                              _____________________________
                                                              [Name]

EX-10.26

                                                                   Exhibit 10.26

                                                                [Execution Copy]

                     MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this "Agreement") is made as
of April 10, 2001, by and among M-Foods Dairy Holdings, LLC, a Delaware limited
liability company ("Dairy Holdings"), Bill L. Goucher (the "Executive"), and for
the purposes of Section 10.5 hereof, M-Foods Holdings, Inc., a Delaware
corporation ("Holdings").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of the Company or one or more of its
subsidiaries and who will hold interests in Dairy Holdings (collectively with
the Executive, the "Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive desires
to contribute cash in the amount set forth on Schedule I hereto in exchange for
Units of Dairy Holdings in the amounts set forth on Schedule I attached hereto;
and

            WHEREAS, subsequent to (A) the Acquisition and the transactions
relating thereto and (B) the transactions set forth herein and the other
Management Unit Subscription Agreements entered into between Dairy Holdings and
the Management Investors, the Company shall be an affiliate of Dairy Holdings
and, therefore, as set forth herein, certain events occurring between the
Executive and the Company or its subsidiaries will create certain events between
the Executive and Dairy Holdings.

            NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:

1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.



      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean the Management Committee of Dairy
Holdings.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and the
Company or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with the Company
or one of its subsidiaries (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Company which
specifically identifies the manner in which the Company believes that the
Executive has not substantially performed the Executive's duties; (ii) the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company or one of its
subsidiaries; or (iii) conviction of a felony or guilty or nolo contendere plea
by the Executive with respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company or one
of its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board of Directors of the Company
or upon the instructions of the Chief Executive Officer of the Company (while
the Executive does not serve as such) or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company and its
subsidiaries. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than 75% of the entire membership of the Board of Directors of the Company
(excluding the Executive) at a meeting of the Board of Directors of the Company
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board of Directors of the Company) finding that, in the good
faith opinion of the Board of Directors of the Company, the


                                        2


Executive is guilty of the conduct described in (i), (ii) or (iii) above, and
specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or indirectly, a majority of the Board of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means the Class A Units of
Dairy Holdings.

      1.8 Class B Units. The term "Class B Units" means the Class B Units of
Dairy Holdings.

      1.9 Class C Units. The term "Class C Units" means the Class C Units of
Dairy Holdings.

      1.10 Closing. The "Closing" for the contribution of cash in exchange for
Units hereunder shall occur immediately prior to the consummation of the
Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Intentionally Omitted.

      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and the Company or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job


                                        3


responsibilities as a result of chronic illness, physical, mental or any other
disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of the Company or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to the Company or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Dairy Holdings at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
Dairy Holdings in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of Dairy Holdings and the Executive setting forth their respective resolutions
of the dispute and the bases therefor and (ii) accepting either the Executive's
or Dairy Holding's proposed resolution of the dispute. Promptly following Dairy
Holdings' receipt of Executive's written notice of disagreement, Dairy Holdings
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and Dairy Holdings' written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and Dairy Holdings of its decision within 40 days of its engagement.
The party whose proposed resolution is not accepted shall pay all of the
Arbiter's fees and expenses. If the Executive's proposed resolution is accepted,
Dairy Holdings also shall pay all of the Executive's reasonable out-of-pocket
fees and expenses (including reasonable fees and expenses of counsel and one
appraiser, accountant or investment banking firm) incurred in connection with
the arbitration. Each of Dairy Holdings and the Executive agrees to execute, if
requested by the Arbiter, a reasonable engagement letter with the Arbiter.


                                        4


      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and the Company or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by the Company or one of its subsidiaries (as applicable) which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by The Company or one of its
subsidiaries promptly after receipt of notice thereof given by the Executive;
provided that after a Change in Control, the Company or one of its subsidiaries
(as applicable) shall have the flexibility to appoint the Executive to a
reporting relationship different from that which existed prior to the Change in
Control, to make an immaterial change in Executive's duties, or to change the
Executive's title provided; (ii) any failure by the Company or one of its
subsidiaries (as applicable) to provide Executive with the annual base salary
Executive had previously received or the failure by The Company or one of its
subsidiaries (as applicable) to increase such annual each year after a Change in
Control by an amount which at least equals on a percentage basis, the mean
average percentage increase in base salary for all employees similarly situated
during the two full calendar years immediately preceding a Change in Control,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and


                                        5


which is remedied by the Company or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of the Company or one of its subsidiaries (as applicable) upon a Change
in Control to (A) continue in effect any employee benefit plan, compensation
plan, welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by the Company or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of the Company or
one of its subsidiaries as in effect for Executive immediately prior to such
Change in Control; (iv) after a Change in Control, any purported termination by
the Company or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on the Company's
or its subsidiaries' business to an extent substantially greater than the
Executive's current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Intentionally Omitted.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Limited
Liability Company Agreement of Dairy Holdings, dated as of April 10, 2001,
entered into by and among the members of Dairy Holdings, as amended from time to
time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.

      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.


                                        6


      1.32 Intentionally Omitted.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of the Company or any of
its subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board of Directors of the Company, after at least
three years employment with the Company or any of its subsidiaries after the
Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among Dairy
Holdings, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Intentionally Omitted.

      1.38 Intentionally Omitted.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with the Company and its subsidiaries is
terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Dairy Holdings,
whether pursuant to this Agreement or any other arrangement.

      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael, LLC, a
Delaware limited liability company.

2. Purchase and Sale of Units.


                                        7


      2.1 Intentionally Omitted.

      2.2 Intentionally Omitted.

      2.3 Contribution of Cash. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Dairy Holdings hereby agrees to receive, cash in an amount set
forth on Schedule I attached hereto in exchange for the number of Units set
forth on Schedule I.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Dairy Holdings the amount of cash
set forth in Schedule I attached hereto by check or wire transfer of immediately
available funds; and

            (b) Dairy Holdings shall deliver to the Executive unit certificates
representing the number of Units set forth on Schedule I attached hereto.

      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Dairy Holdings.

      4.1 Representations of the Executive. The Executive represents and
warrants to Dairy Holdings that the statements contained in this Section 4.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is


                                        8


subject or conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Executive is a party or by which he is bound or to which any of his assets is
subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Dairy Holdings could
become liable or obligated.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Dairy Holdings that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE
            EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED AND MODIFIED FROM
            TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF
            AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Dairy
      Holdings indicating that the Units are subject to restrictions on transfer
      and, if Dairy Holdings should at some time in the future engage the
      services of a securities transfer agent, appropriate stop-transfer
      instructions will be issued to such transfer agent with respect to the
      Units.

      4.3 [Reserved]


                                        9


      4.4 Representations of Dairy Holdings. Dairy Holdings represents to the
Executive that the statements contained in this Section 4.4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date, with respect to itself:

            (a) Organization and Power. Dairy Holdings is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware with full power and authority to enter into this Agreement
and perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Dairy Holdings and the consummation of the transactions
contemplated hereby by Dairy Holdings have been duly and validly authorized by
all requisite limited liability company action on the part of Dairy Holdings,
and no other proceedings on its part are necessary to authorize the execution,
delivery or performance of this Agreement. This Agreement has been duly executed
and delivered by Dairy Holdings, and this Agreement constitutes a valid and
binding obligation of Dairy Holdings, enforceable in accordance with its terms
and conditions. Dairy Holdings need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Dairy Holdings is subject or any
provision of its charter or bylaws or conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Dairy Holdings is a party or by which it is bound or to which any of
its assets is subject.

            (d) Intentionally Omitted.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Dairy Holdings to issue, sell,
or otherwise cause to become outstanding any of its Units. Except as set forth
in the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Dairy Holdings. Except as set forth in the Transaction Documents,
there are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Dairy Holdings.

5. Covenants of the Executive and Dairy Holdings

      5.1 Covenants. The Executive and/or Dairy Holdings each agree as follows
with respect to the period between the execution of this Agreement and the
Closing:


                                       10


            (a) General. The Executive and Dairy Holdings each will use his or
its commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement.

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with the Company and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Dairy Holdings, and Dairy Holdings shall be
required to purchase (subject to the provisions of Section 8 hereof), on one
occasion from the Executive and his Permitted Transferees, if applicable, all
(but not less than all) of the number of Units then held by the Executive and
such other number of Units held by the Executive's Permitted Transferees as the
Executive may request provided that in the aggregate such number does not exceed
the product of (x) the total number of Units (by class) collectively held by the
Executive and all of his Permitted Transferees and (y) the Applicable Percentage
(measured as of the Termination Date), at a price per unit equal to the Fair
Market Value of such unit (measured as of the delivery of the notice referred to
in Section 7.1(b)).

            (b) If the Executive desires to exercise its option to require Dairy
Holdings to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Dairy Holdings setting forth the intention of
Executive and Permitted Transferees, if applicable, to collectively sell all
Units pursuant to Section 7.1(a) within the period described above, which notice
shall specify the number of Units to be sold and shall include the signature of
the Executive and each Permitted Transferee desiring to sell Units. Subject to
the provisions of Section 8.1, the closing of the purchase shall take place at
the principal office of Dairy Holdings on the later of the 30th day after the
giving of such notice and the date that is 10 business days after the final
determination of Fair Market Value. Subject to the provisions of Section 8.1,
the Executive shall deliver to Dairy Holdings duly executed instruments
transferring title to units to Dairy Holdings, against payment of the
appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.


                                       11


      7.2 Call Options.

            (a) If the Executive's employment with the Company or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Dairy Holdings shall have the right
and option to purchase, and the Executive and the Executive's Permitted
Transferees (hereinafter referred to as the "Executive Group") shall be required
to sell to Dairy Holdings, any or all of such Units then held by such member of
the Executive Group (it being understood that if Units of any class subject to
repurchase hereunder may be repurchased at different prices, Dairy Holdings may
elect to repurchase only the portion of the Units of such class subject to
repurchase hereunder at the lower price), at a price per unit equal to the
applicable purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with the Company and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with the Company and its
      subsidiaries is terminated by the Company and its subsidiaries without
      Cause or by the Executive for Good Reason;

            (iii) if the Executive's active employment with the Company and its
      subsidiaries is terminated (A) by the Company or any of its subsidiaries
      for Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Dairy Holdings' rights under this Section 7.2(a) shall not be
available in the event of the termination of Executive's employment by the
Company or its subsidiaries without Cause or by Executive for Good Reason, in
either case following a sale by the Company or its subsidiaries of substantially
all of the line of business in which Executive primarily performs his services.

            (b) If Dairy Holdings desires to exercise one of its options to
purchase Units pursuant to this Section 7.2, Dairy Holdings shall, not later
than the expiration of the applicable period described for such purchase in
Section 7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Dairy Holdings on the later
of the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Dairy Holdings duly
executed instruments transferring title to Units to Dairy Holdings, against
payment of the appropriate purchase


                                       12


price by cashier's or certified check payable to the Executive or by wire
transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Dairy Holdings pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Dairy Holdings is less than or equal to the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            the lesser of (x) the Fair Market Value (measured as of the date of
            the Call Notice) and (y) the Cost of such Unit (the "Unvested Unit
            Purchase Price"), and (ii) if the number of such Units exceeds the
            Unvested Percentage of such class, the purchase price for each Unit
            shall be (A) for a number of Units of such class equal to the result
            of (x) the Unvested Percentage and (y) the total number of Units of
            such class held by the Executive Group, the Unvested Unit Purchase
            Price, and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Dairy Holdings shall have the right to revoke the
exercise of its option pursuant to this Section 7.2 for all or any portion of
the Units elected to be repurchased by it by delivering notice of such
revocation in writing to the Executive Group during the ten-day period beginning
on the date that Dairy Holdings is given written notice that the Fair Market
Value of a Unit was finally determined to be an amount at least 10% greater than
the per Unit repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Dairy Holdings purchases Units at Fair Market Value pursuant to the terms
of this Section 7.2 and within six months of the date of the determination of
such Fair Market Value both (A) a Sale of the Company or a Public Offering
occurs and (B) in connection with such transaction, the per share value of the
Units exceeds the per share purchase price paid by Dairy Holdings to Executive
under this Section 7.2, the


                                       13


Executive shall be entitled to receive from Dairy Holdings the benefit of such
higher valuation for the Units purchased. The excess of (x) the net proceeds
which the Executive would have received in such Sale of the Company or Public
Offering from the sale in such transaction of all Units repurchased by Dairy
Holdings under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Dairy Holdings, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Dairy Holdings shall not excuse, or constitute a waiver of its rights against,
the defaulting member.

8. Certain Limitations on Dairy Holdings's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Dairy Holdings elects or is required
to purchase any Units pursuant to Section 7, Dairy Holdings shall pay the
purchase price for the Units it purchases (i) first, by offsetting indebtedness,
if any, owing from the Executive to Dairy Holdings (which indebtedness shall be
applied pro rata against the proceeds receivable by each member of the Executive
Group receiving consideration in such repurchase) and (ii) then, by Dairy
Holdings' delivery of a check or wire transfer of immediately available funds
for the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Units so purchased, duly
endorsed; provided that if such cash payment would result (A) in a violation of
any law, statute, rule, regulation, policy, order, writ, injunction, decree or
judgment promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its subsidiaries or
any of its or their property or (B) after giving effect thereto, a Financing
Default, or (C) if the Board determines in good faith that immediately prior to
such purchase there shall exist a Financing Default which prohibits such
purchase, dividend or distribution ((A) through (C) collectively the "Cash
Deferral Conditions"), the portion of the cash payment so affected may be made
by Dairy Holdings' delivery of preferred units of Dairy Holdings with a
liquidation preference equal to the balance of the purchase price; which
preferred units shall accrue yield annually at the "prime rate" published in The
Wall Street Journal on the date of issuance, which yield shall be payable at
maturity or upon payment of distributions by Dairy Holdings (other than tax
distributions). Each such preferred unit shall as of its issuance be deemed to
have basic contributions made with respect to such unit equal to (A) the portion
of the cash payment paid by the issuance of such preferred units divided by (B)
the number of preferred units so issued in the repurchase. Any such preferred
units issued shall be promptly redeemed (i) when the Cash Deferral Condition
which prompted their issuance no longer exists, (ii) upon consummation of an IPO
of the Company or Holdings (or their successors) (to the extent allowed by the
underwriters of such IPO), or (iii) upon a Sale of the Company from net cash
proceeds, if any, payable to Dairy Holdings or its unitholders (other than
proceeds required to be paid to Holdings);


                                       14


to the extent that sufficient net cash proceeds are not so payable, the
preferred units shall be cancelled in exchange for such non-cash consideration
received by unitholders in the Sale of the Company having a fair market value
equal to the principal of and accrued yield on the preferred units. If a yield
is required to be paid on any preferred units prior to maturity and any Cash
Deferral Conditions exist, such yield may be cumulated and accrued until and to
the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with the
Company or its subsidiaries terminates, (i) Executive, for himself or on behalf
of any other person, firm, partnership, corporation, or other entity, engages,
directly or indirectly, as an executive, agent, representative, consultant,
partner, shareholder or holder of any other financial interest, in any business
that competes with the Company or its subsidiaries in the line of business
Executive is employed in by the Company or its subsidiaries (as applicable), as
such business is described in any employment or severance agreement then in
effect between Executive and the Company or one of its subsidiaries or, if no
such agreement is then in effect, as described on Schedule II attached hereto (a
"Competing Business"), it being understood and agreed that Executive's
activities shall not satisfy this clause (i) where Executive is employed by a
person, firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, and Executive is not engaged in or
responsible for the Competing Business of such entity. Executive may also,
without satisfying clause (i) be a passive owner of not more than 2% of the
outstanding publicly traded stock of any class of a Competing Business so long
as Executive has no active participation in the business of such entity, except
to the extent permitted above; or (ii) Executive (A) directly or indirectly
through another entity, induces or attempts to induce any employee of the
Company or its subsidiaries to leave the employ of the Company or its
subsidiaries, or in any way interfere with the relationship between the Company
or any of its subsidiaries and any employee thereof, (B) knowingly hires any
person who was an employee of the Company or any of its subsidiaries within 180
days prior to the time such employee was hired by Executive, (C) induces or
attempts to induce any customer, supplier, licensee or other business relation
of the Company or any of its subsidiaries to cease doing business with the
Company or its subsidiaries or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any subsidiary or (D) directly or indirectly acquires or attempt to
acquire an interest in any business relating to the business of the Company or
any of its subsidiaries and with which the Company or any of its subsidiaries
has entertained discussions or has requested and received information relating
to the acquisition of such business by the Company or its subsidiaries in the
one-year period immediately preceding Executive's termination of employment with
the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.


                                       15


      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Dairy Holdings, within ten business
days following the Activity Date, an amount equal to the excess, if any, of (A)
the aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Dairy Holdings a
written agreement of the proposed transferee (a) evidencing such Person's
undertaking to be bound by the terms of this Agreement and (b) acknowledging
that the Units transferred to such Person will continue to be Units for purposes
of this Agreement in the hands of such Person. Any transfer or attempted
transfer of Units in violation of any provision of this Agreement or the
Securityholders Agreement shall be void, and Dairy Holdings shall not record
such transfer on its books or treat any purported transferee of such Units as
the owner of such Units for any purpose.

      10.2 Deemed Transfer of Units. If Dairy Holdings shall deliver, at the
time and place and in the amount and form provided in this Agreement, the
consideration for the Units to be repurchased in accordance with the provisions
of this Agreement, then from and after such time, the Person from whom such
units are to be repurchased shall no longer have any rights as a holder of such
units (other than the right to receive payment of such consideration in
accordance with this Agreement), and such Units shall be deemed purchased in
accordance with the applicable provisions hereof and Dairy Holdings shall be
deemed the owner and holder of such Units, whether or not certificates therefor
have been delivered as required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Dairy Holdings or any successor or assign
of Dairy Holdings (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Units, by reason of any dividend payable in units, issuance
of units, combination, recapitalization, reclassification, merger, consolidation
or otherwise.

      10.4 Executive's Employment by the Company. Nothing contained in this
Agreement shall be deemed to obligate the Company or any subsidiary of the
Company to employ the Executive in any capacity whatsoever or to prohibit or
restrict the Company (or any such subsidiary) from terminating the employment of
the Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Dairy Holdings against any and all losses, liabilities, damages,
judgments, fines, fees or expenses, including, without limitation, attorneys'
fees (for purposes of this Section 10.5, hereinafter "Losses"), incurred in
connection with any failure to withhold amounts relating to the Units acquired
herein by


                                       16


the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Dairy Holdings properly failed to withhold amounts relating to the Units
acquired herein by Executive, Executive shall provide Dairy Holdings with a Form
4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Dairy Holdings and/or any of its affiliates is entitled to
any tax deduction with respect to the issuance of Units, (i) Dairy Holdings
shall specially allocate such deduction to the Executive and/or (ii) Holdings
shall pay, or cause any affiliate to pay, as the case may be, Executive an
amount equal to 40% of such deduction, such amount to be grossed up to reflect
any additional deduction to Holdings and/or any of its affiliates (as the case
may be) provided that if any Cash Deferral Condition exists at the time such
payment is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Dairy Holdings shall notify the other
(in a manner described in Section 10.10 of this Agreement) within 20 days of
first receiving notice of an audit or other proceeding being conducted by the
Internal Revenue Service or any state or local taxing authority relating to the
Units acquired herein by the Management Investors, and both Executive and Dairy
Holdings shall assist each other during the course of such audit or other
proceeding to the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Dairy Holdings a
valid undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Dairy Holdings and the members of the Executive Group hereby submits to
the exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. Each of the members of the Executive Group and
Dairy Holdings hereby irrevocably waives any objections which 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 brought in any court of competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum.


                                       17


      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

            (a)   If to Dairy Holdings

                  M-Foods Dairy Holdings, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 292-6639

            with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 808-4922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 861-2200

            (b) If to the Executive, to the address as shown on the unit
register of Dairy Holdings.

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036-6522
                  Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises,


                                       18


representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein and therein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Dairy Holdings under this Agreement shall be cumulative and not exclusive of
any rights or remedies which either would otherwise have hereunder or at law or
in equity or by statute, and no failure or delay by either party in exercising
any right or remedy shall impair any such right or remedy or operate as a waiver
of such right or remedy, nor shall any single or partial exercise of any power
or right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       19


      IN WITNESS WHEREOF, the parties have executed this Management Unit
Subscription Agreement as of the date first above written.

                                  M-FOODS DAIRY HOLDINGS, LLC

                                  By:___________________________________________

                                  Its:__________________________________________


                                  M-FOODS HOLDINGS, INC.

                                  By:___________________________________________

                                  Its:__________________________________________


                                  ______________________________________________
                                                 Bill L. Goucher



                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Unit Subscription
Agreement (the "Agreement") and that I understand its contents. I am aware that
the Agreement provides for the repurchase of my spouse's Units (as defined in
the Agreement) under certain circumstances and imposes other restrictions on the
transfer of such Units. I agree that my spouse's interest in the Units is
subject to the Agreement and any interest I may have in such Units shall also be
irrevocably bound by the Agreement and, further, that my community property
interest in such Units, if any, shall be similarly bound by the Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                    Acknowledged and agreed this ___ day of
                                    _____________, 2001.

                                    ____________________________________________

                                    Name:_______________________________________

                                    ____________________________________________
                                                      Witness



                                   SCHEDULE I

- --------------------------------------------------------------------------------
               Cash                                               Units
- --------------------------------------------------------------------------------
             $133.26                                      15,000 Class B Units
                                                          15,000 Class C Units
- --------------------------------------------------------------------------------



                                   SCHEDULE II

Competing Business: Production, distribution or sale of eggs or egg products



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Dairy Holdings,
LLC ("Dairy Holdings") on ________, 2001. The undersigned desires to make an
election to have the Units taxed under the provision of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the
undersigned purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:
            _____________________________
            _____________________________
            _____________________________
            SSN:_________________________

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by The Company or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Dairy Holdings at
a price per Unit equal to the lesser of (x) fair market value (measured as of
the date of such repurchase) and (y) cost. The Units are also subject to
transfer restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $_______.

            6. The aggregate amount paid for such property: $_______.



            A copy of this election has been furnished to the Secretary of Dairy
Holdings pursuant to Treasury Regulations ss.1.83-2(e)(7).

Dated:  ________, 2001                             _____________________________
                                                               [Name]

EX-10.27

                                                                   Exhibit 10.27

                                                                [Execution Copy]

                     MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this "Agreement") is made as
of April 10, 2001, by and among M-Foods Dairy Holdings, LLC, a Delaware limited
liability company ("Dairy Holdings"), Max R. Hoffmann (the "Executive"), and for
the purposes of Section 10.5 hereof, M-Foods Holdings, Inc., a Delaware
corporation ("Holdings").

          WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of the Company or one or more of its
subsidiaries and who will hold interests in Dairy Holdings (collectively with
the Executive, the "Management Investors");

          WHEREAS, the Company entered into an Agreement and Plan of Merger with
Holdings and Protein Acquisition Corp., a Minnesota corporation, and a wholly
owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.) ("Merger
Sub"), dated as of December 21, 2000, as amended from time to time in accordance
with its terms (the "Merger Agreement"), pursuant to which Merger Sub shall be
merged with and into the Company (the "Acquisition"), in accordance with the
terms and conditions of the Merger Agreement and the relevant provisions of the
MBCA (as defined in the Merger Agreement), and the surviving corporation shall
be the Company;

          WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive desires
to contribute cash in the amount set forth on Schedule I hereto in exchange for
Units of Dairy Holdings in the amounts set forth on Schedule I attached hereto;
and

          WHEREAS, subsequent to (A) the Acquisition and the transactions
relating thereto and (B) the transactions set forth herein and the other
Management Unit Subscription Agreements entered into between Dairy Holdings and
the Management Investors, the Company shall be an affiliate of Dairy Holdings
and, therefore, as set forth herein, certain events occurring between the
Executive and the Company or its subsidiaries will create certain events between
the Executive and Dairy Holdings.

          NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:

1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.


      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean the Management Committee of Dairy
Holdings.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and the
Company or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with the Company
or one of its subsidiaries (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Company which
specifically identifies the manner in which the Company believes that the
Executive has not substantially performed the Executive's duties; (ii) the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company or one of its
subsidiaries; or (iii) conviction of a felony or guilty or nolo contendere plea
by the Executive with respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company or one
of its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board of Directors of the Company
or upon the instructions of the Chief Executive Officer of the Company (while
the Executive does not serve as such) or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company and its
subsidiaries. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than 75% of the entire membership of the Board of Directors of the Company
(excluding the Executive) at a meeting of the Board of Directors of the Company
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board of Directors of the Company) finding that, in the good
faith opinion of the Board of Directors of the Company, the


                                        2


Executive is guilty of the conduct described in (i), (ii) or (iii) above, and
specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or indirectly, a majority of the Board of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means the Class A Units of
Dairy Holdings.

      1.8 Class B Units. The term "Class B Units" means the Class B Units of
Dairy Holdings.

      1.9 Class C Units. The term "Class C Units" means the Class C Units of
Dairy Holdings.

      1.10 Closing. The "Closing" for the contribution of cash in exchange for
Units hereunder shall occur immediately prior to the consummation of the
Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Intentionally Omitted.

      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and the Company or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job


                                        3


responsibilities as a result of chronic illness, physical, mental or any other
disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of the Company or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to the Company or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Dairy Holdings at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
Dairy Holdings in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of Dairy Holdings and the Executive setting forth their respective resolutions
of the dispute and the bases therefor and (ii) accepting either the Executive's
or Dairy Holding's proposed resolution of the dispute. Promptly following Dairy
Holdings' receipt of Executive's written notice of disagreement, Dairy Holdings
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and Dairy Holdings' written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and Dairy Holdings of its decision within 40 days of its engagement.
The party whose proposed resolution is not accepted shall pay all of the
Arbiter's fees and expenses. If the Executive's proposed resolution is accepted,
Dairy Holdings also shall pay all of the Executive's reasonable out-of-pocket
fees and expenses (including reasonable fees and expenses of counsel and one
appraiser, accountant or investment banking firm) incurred in connection with
the arbitration. Each of Dairy Holdings and the Executive agrees to execute, if
requested by the Arbiter, a reasonable engagement letter with the Arbiter.


                                        4


      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and the Company or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by the Company or one of its subsidiaries (as applicable) which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by The Company or one of its
subsidiaries promptly after receipt of notice thereof given by the Executive;
provided that after a Change in Control, the Company or one of its subsidiaries
(as applicable) shall have the flexibility to appoint the Executive to a
reporting relationship different from that which existed prior to the Change in
Control, to make an immaterial change in Executive's duties, or to change the
Executive's title provided; (ii) any failure by the Company or one of its
subsidiaries (as applicable) to provide Executive with the annual base salary
Executive had previously received or the failure by The Company or one of its
subsidiaries (as applicable) to increase such annual each year after a Change in
Control by an amount which at least equals on a percentage basis, the mean
average percentage increase in base salary for all employees similarly situated
during the two full calendar years immediately preceding a Change in Control,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and


                                        5


which is remedied by the Company or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of the Company or one of its subsidiaries (as applicable) upon a Change
in Control to (A) continue in effect any employee benefit plan, compensation
plan, welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by the Company or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of the Company or
one of its subsidiaries as in effect for Executive immediately prior to such
Change in Control; (iv) after a Change in Control, any purported termination by
the Company or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on the Company's
or its subsidiaries' business to an extent substantially greater than the
Executive's current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Intentionally Omitted.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Limited
Liability Company Agreement of Dairy Holdings, dated as of April 10, 2001,
entered into by and among the members of Dairy Holdings, as amended from time to
time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.

      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.


                                        6


      1.32 Intentionally Omitted.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of the Company or any of
its subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board of Directors of the Company, after at least
three years employment with the Company or any of its subsidiaries after the
Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among Dairy
Holdings, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Intentionally Omitted.

      1.38 Intentionally Omitted.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with the Company and its subsidiaries is
terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Dairy Holdings,
whether pursuant to this Agreement or any other arrangement.

      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael, LLC, a
Delaware limited liability company.

2. Purchase and Sale of Units.


                                        7


      2.1 Intentionally Omitted.

      2.2 Intentionally Omitted.

      2.3 Contribution of Cash. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Dairy Holdings hereby agrees to receive, cash in an amount set
forth on Schedule I attached hereto in exchange for the number of Units set
forth on Schedule I.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

          (a) The Executive shall deliver to Dairy Holdings the amount of cash
set forth in Schedule I attached hereto by check or wire transfer of immediately
available funds; and

          (b) Dairy Holdings shall deliver to the Executive unit certificates
representing the number of Units set forth on Schedule I attached hereto.

      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Dairy Holdings.

      4.1 Representations of the Executive. The Executive represents and
warrants to Dairy Holdings that the statements contained in this Section 4.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date, with respect to himself:

          (a) Power and Authority. The Executive has full power and authority to
execute and deliver this Agreement and perform his obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the Executive,
enforceable in accordance with its terms and conditions. To the best of his
knowledge, the Executive need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

          (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is


                                        8


subject or conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Executive is a party or by which he is bound or to which any of his assets is
subject.

          (c) Brokers' Fees. The Executive has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Dairy Holdings could
become liable or obligated.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Dairy Holdings that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE
            EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED AND MODIFIED FROM
            TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF
            AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Dairy
      Holdings indicating that the Units are subject to restrictions on transfer
      and, if Dairy Holdings should at some time in the future engage the
      services of a securities transfer agent, appropriate stop-transfer
      instructions will be issued to such transfer agent with respect to the
      Units.

4.3 [Reserved]


                                        9


      4.4 Representations of Dairy Holdings. Dairy Holdings represents to the
Executive that the statements contained in this Section 4.4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date, with respect to itself:

          (a) Organization and Power. Dairy Holdings is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware with full power and authority to enter into this Agreement
and perform its obligations hereunder.

          (b) Authorization. The execution, delivery and performance of this
Agreement by Dairy Holdings and the consummation of the transactions
contemplated hereby by Dairy Holdings have been duly and validly authorized by
all requisite limited liability company action on the part of Dairy Holdings,
and no other proceedings on its part are necessary to authorize the execution,
delivery or performance of this Agreement. This Agreement has been duly executed
and delivered by Dairy Holdings, and this Agreement constitutes a valid and
binding obligation of Dairy Holdings, enforceable in accordance with its terms
and conditions. Dairy Holdings need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

          (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Dairy Holdings is subject or any
provision of its charter or bylaws or conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Dairy Holdings is a party or by which it is bound or to which any of
its assets is subject.

          (d) Intentionally Omitted.

          (e) Capitalization. All of the issued and outstanding Units have been
duly authorized and are validly issued. Except as set forth in the Transaction
Documents, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require Dairy Holdings to issue, sell, or
otherwise cause to become outstanding any of its Units. Except as set forth in
the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Dairy Holdings. Except as set forth in the Transaction Documents,
there are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Dairy Holdings.

5. Covenants of the Executive and Dairy Holdings

      5.1 Covenants. The Executive and/or Dairy Holdings each agree as follows
with respect to the period between the execution of this Agreement and the
Closing:


                                       10


          (a) General. The Executive and Dairy Holdings each will use his or its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement.

          (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

          (a) If the Executive's employment with the Company and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Dairy Holdings, and Dairy Holdings shall be
required to purchase (subject to the provisions of Section 8 hereof), on one
occasion from the Executive and his Permitted Transferees, if applicable, all
(but not less than all) of the number of Units then held by the Executive and
such other number of Units held by the Executive's Permitted Transferees as the
Executive may request provided that in the aggregate such number does not exceed
the product of (x) the total number of Units (by class) collectively held by the
Executive and all of his Permitted Transferees and (y) the Applicable Percentage
(measured as of the Termination Date), at a price per unit equal to the Fair
Market Value of such unit (measured as of the delivery of the notice referred to
in Section 7.1(b)).

          (b) If the Executive desires to exercise its option to require Dairy
Holdings to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Dairy Holdings setting forth the intention of
Executive and Permitted Transferees, if applicable, to collectively sell all
Units pursuant to Section 7.1(a) within the period described above, which notice
shall specify the number of Units to be sold and shall include the signature of
the Executive and each Permitted Transferee desiring to sell Units. Subject to
the provisions of Section 8.1, the closing of the purchase shall take place at
the principal office of Dairy Holdings on the later of the 30th day after the
giving of such notice and the date that is 10 business days after the final
determination of Fair Market Value. Subject to the provisions of Section 8.1,
the Executive shall deliver to Dairy Holdings duly executed instruments
transferring title to units to Dairy Holdings, against payment of the
appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.


                                       11


      7.2 Call Options.

          (a) If the Executive's employment with the Company or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Dairy Holdings shall have the right
and option to purchase, and the Executive and the Executive's Permitted
Transferees (hereinafter referred to as the "Executive Group") shall be required
to sell to Dairy Holdings, any or all of such Units then held by such member of
the Executive Group (it being understood that if Units of any class subject to
repurchase hereunder may be repurchased at different prices, Dairy Holdings may
elect to repurchase only the portion of the Units of such class subject to
repurchase hereunder at the lower price), at a price per unit equal to the
applicable purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with the Company and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with the Company and its
      subsidiaries is terminated by the Company and its subsidiaries without
      Cause or by the Executive for Good Reason;

            (iii) if the Executive's active employment with the Company and its
      subsidiaries is terminated (A) by the Company or any of its subsidiaries
      for Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Dairy Holdings' rights under this Section 7.2(a) shall not be
available in the event of the termination of Executive's employment by the
Company or its subsidiaries without Cause or by Executive for Good Reason, in
either case following a sale by the Company or its subsidiaries of substantially
all of the line of business in which Executive primarily performs his services.

          (b) If Dairy Holdings desires to exercise one of its options to
purchase Units pursuant to this Section 7.2, Dairy Holdings shall, not later
than the expiration of the applicable period described for such purchase in
Section 7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Dairy Holdings on the later
of the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Dairy Holdings duly
executed instruments transferring title to Units to Dairy Holdings, against
payment of the appropriate purchase


                                       12


price by cashier's or certified check payable to the Executive or by wire
transfer of immediately available funds to an account designated by the
Executive.

          (c) In the event of a purchase by Dairy Holdings pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Dairy Holdings is less than or equal to the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            the lesser of (x) the Fair Market Value (measured as of the date of
            the Call Notice) and (y) the Cost of such Unit (the "Unvested Unit
            Purchase Price"), and (ii) if the number of such Units exceeds the
            Unvested Percentage of such class, the purchase price for each Unit
            shall be (A) for a number of Units of such class equal to the result
            of (x) the Unvested Percentage and (y) the total number of Units of
            such class held by the Executive Group, the Unvested Unit Purchase
            Price, and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Dairy Holdings shall have the right to revoke the
exercise of its option pursuant to this Section 7.2 for all or any portion of
the Units elected to be repurchased by it by delivering notice of such
revocation in writing to the Executive Group during the ten-day period beginning
on the date that Dairy Holdings is given written notice that the Fair Market
Value of a Unit was finally determined to be an amount at least 10% greater than
the per Unit repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Dairy Holdings purchases Units at Fair Market Value pursuant to the terms
of this Section 7.2 and within six months of the date of the determination of
such Fair Market Value both (A) a Sale of the Company or a Public Offering
occurs and (B) in connection with such transaction, the per share value of the
Units exceeds the per share purchase price paid by Dairy Holdings to Executive
under this Section 7.2, the


                                       13


Executive shall be entitled to receive from Dairy Holdings the benefit of such
higher valuation for the Units purchased. The excess of (x) the net proceeds
which the Executive would have received in such Sale of the Company or Public
Offering from the sale in such transaction of all Units repurchased by Dairy
Holdings under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Dairy Holdings, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Dairy Holdings shall not excuse, or constitute a waiver of its rights against,
the defaulting member.

8. Certain Limitations on Dairy Holdings's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Dairy Holdings elects or is required
to purchase any Units pursuant to Section 7, Dairy Holdings shall pay the
purchase price for the Units it purchases (i) first, by offsetting indebtedness,
if any, owing from the Executive to Dairy Holdings (which indebtedness shall be
applied pro rata against the proceeds receivable by each member of the Executive
Group receiving consideration in such repurchase) and (ii) then, by Dairy
Holdings' delivery of a check or wire transfer of immediately available funds
for the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Units so purchased, duly
endorsed; provided that if such cash payment would result (A) in a violation of
any law, statute, rule, regulation, policy, order, writ, injunction, decree or
judgment promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its subsidiaries or
any of its or their property or (B) after giving effect thereto, a Financing
Default, or (C) if the Board determines in good faith that immediately prior to
such purchase there shall exist a Financing Default which prohibits such
purchase, dividend or distribution ((A) through (C) collectively the "Cash
Deferral Conditions"), the portion of the cash payment so affected may be made
by Dairy Holdings' delivery of preferred units of Dairy Holdings with a
liquidation preference equal to the balance of the purchase price; which
preferred units shall accrue yield annually at the "prime rate" published in The
Wall Street Journal on the date of issuance, which yield shall be payable at
maturity or upon payment of distributions by Dairy Holdings (other than tax
distributions). Each such preferred unit shall as of its issuance be deemed to
have basic contributions made with respect to such unit equal to (A) the portion
of the cash payment paid by the issuance of such preferred units divided by (B)
the number of preferred units so issued in the repurchase. Any such preferred
units issued shall be promptly redeemed (i) when the Cash Deferral Condition
which prompted their issuance no longer exists, (ii) upon consummation of an IPO
of the Company or Holdings (or their successors) (to the extent allowed by the
underwriters of such IPO), or (iii) upon a Sale of the Company from net cash
proceeds, if any, payable to Dairy Holdings or its unitholders (other than
proceeds required to be paid to Holdings);


                                       14


to the extent that sufficient net cash proceeds are not so payable, the
preferred units shall be cancelled in exchange for such non-cash consideration
received by unitholders in the Sale of the Company having a fair market value
equal to the principal of and accrued yield on the preferred units. If a yield
is required to be paid on any preferred units prior to maturity and any Cash
Deferral Conditions exist, such yield may be cumulated and accrued until and to
the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with the
Company or its subsidiaries terminates, (i) Executive, for himself or on behalf
of any other person, firm, partnership, corporation, or other entity, engages,
directly or indirectly, as an executive, agent, representative, consultant,
partner, shareholder or holder of any other financial interest, in any business
that competes with the Company or its subsidiaries in the line of business
Executive is employed in by the Company or its subsidiaries (as applicable), as
such business is described in any employment or severance agreement then in
effect between Executive and the Company or one of its subsidiaries or, if no
such agreement is then in effect, as described on Schedule II attached hereto (a
"Competing Business"), it being understood and agreed that Executive's
activities shall not satisfy this clause (i) where Executive is employed by a
person, firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, and Executive is not engaged in or
responsible for the Competing Business of such entity. Executive may also,
without satisfying clause (i) be a passive owner of not more than 2% of the
outstanding publicly traded stock of any class of a Competing Business so long
as Executive has no active participation in the business of such entity, except
to the extent permitted above; or (ii) Executive (A) directly or indirectly
through another entity, induces or attempts to induce any employee of the
Company or its subsidiaries to leave the employ of the Company or its
subsidiaries, or in any way interfere with the relationship between the Company
or any of its subsidiaries and any employee thereof, (B) knowingly hires any
person who was an employee of the Company or any of its subsidiaries within 180
days prior to the time such employee was hired by Executive, (C) induces or
attempts to induce any customer, supplier, licensee or other business relation
of the Company or any of its subsidiaries to cease doing business with the
Company or its subsidiaries or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any subsidiary or (D) directly or indirectly acquires or attempt to
acquire an interest in any business relating to the business of the Company or
any of its subsidiaries and with which the Company or any of its subsidiaries
has entertained discussions or has requested and received information relating
to the acquisition of such business by the Company or its subsidiaries in the
one-year period immediately preceding Executive's termination of employment with
the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.


                                       15


      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Dairy Holdings, within ten business
days following the Activity Date, an amount equal to the excess, if any, of (A)
the aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Dairy Holdings a
written agreement of the proposed transferee (a) evidencing such Person's
undertaking to be bound by the terms of this Agreement and (b) acknowledging
that the Units transferred to such Person will continue to be Units for purposes
of this Agreement in the hands of such Person. Any transfer or attempted
transfer of Units in violation of any provision of this Agreement or the
Securityholders Agreement shall be void, and Dairy Holdings shall not record
such transfer on its books or treat any purported transferee of such Units as
the owner of such Units for any purpose.

      10.2 Deemed Transfer of Units. If Dairy Holdings shall deliver, at the
time and place and in the amount and form provided in this Agreement, the
consideration for the Units to be repurchased in accordance with the provisions
of this Agreement, then from and after such time, the Person from whom such
units are to be repurchased shall no longer have any rights as a holder of such
units (other than the right to receive payment of such consideration in
accordance with this Agreement), and such Units shall be deemed purchased in
accordance with the applicable provisions hereof and Dairy Holdings shall be
deemed the owner and holder of such Units, whether or not certificates therefor
have been delivered as required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Dairy Holdings or any successor or assign
of Dairy Holdings (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Units, by reason of any dividend payable in units, issuance
of units, combination, recapitalization, reclassification, merger, consolidation
or otherwise.

      10.4 Executive's Employment by the Company. Nothing contained in this
Agreement shall be deemed to obligate the Company or any subsidiary of the
Company to employ the Executive in any capacity whatsoever or to prohibit or
restrict the Company (or any such subsidiary) from terminating the employment of
the Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Dairy Holdings against any and all losses, liabilities, damages,
judgments, fines, fees or expenses, including, without limitation, attorneys'
fees (for purposes of this Section 10.5, hereinafter "Losses"), incurred in
connection with any failure to withhold amounts relating to the Units acquired
herein by


                                       16


the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Dairy Holdings properly failed to withhold amounts relating to the Units
acquired herein by Executive, Executive shall provide Dairy Holdings with a Form
4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Dairy Holdings and/or any of its affiliates is entitled to
any tax deduction with respect to the issuance of Units, (i) Dairy Holdings
shall specially allocate such deduction to the Executive and/or (ii) Holdings
shall pay, or cause any affiliate to pay, as the case may be, Executive an
amount equal to 40% of such deduction, such amount to be grossed up to reflect
any additional deduction to Holdings and/or any of its affiliates (as the case
may be) provided that if any Cash Deferral Condition exists at the time such
payment is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Dairy Holdings shall notify the other
(in a manner described in Section 10.10 of this Agreement) within 20 days of
first receiving notice of an audit or other proceeding being conducted by the
Internal Revenue Service or any state or local taxing authority relating to the
Units acquired herein by the Management Investors, and both Executive and Dairy
Holdings shall assist each other during the course of such audit or other
proceeding to the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Dairy Holdings a
valid undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Dairy Holdings and the members of the Executive Group hereby submits to
the exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. Each of the members of the Executive Group and
Dairy Holdings hereby irrevocably waives any objections which 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 brought in any court of competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum.


                                       17


      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

               (a)    If to Dairy Holdings
                      M-Foods Dairy Holdings, LLC
                      c/o Vestar Capital Partners IV, L.P.
                      1225 Seventeenth Street
                      Suite 1660
                      Denver, CO 80202
                      Attention: James P. Kelley
                      Facsimile: (303) 292-6639

               with copies to:

                      Vestar Capital Partners IV, L.P.
                      245 Park Avenue, 41st Floor
                      New York, NY  10167
                      Attention: General Counsel
                      Facsimile: (212) 808-4922

                      Kirkland & Ellis
                      200 East Randolph Drive
                      Chicago, IL 60601
                      Attention: Stephen L. Ritchie
                      Facsimile: (312) 861-2200

               (b) If to the Executive, to the address as shown on the unit
register of Dairy Holdings.

               with a copy to:

                      Skadden, Arps, Slate, Meagher & Flom LLP
                      Four Times Square
                      New York, NY 10036-6522
                      Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises,


                                       18


representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein and therein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Dairy Holdings under this Agreement shall be cumulative and not exclusive of
any rights or remedies which either would otherwise have hereunder or at law or
in equity or by statute, and no failure or delay by either party in exercising
any right or remedy shall impair any such right or remedy or operate as a waiver
of such right or remedy, nor shall any single or partial exercise of any power
or right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       19


      IN WITNESS WHEREOF, the parties have executed this Management Unit
Subscription Agreement as of the date first above written.

                                M-FOODS DAIRY HOLDINGS, LLC


                                By:
                                   ----------------------------------------

                                Its:
                                    ---------------------------------------


                                M-FOODS HOLDINGS, INC.


                                By:
                                   ----------------------------------------

                                Its:
                                    ---------------------------------------
                                              Max R. Hoffmann


                                CONSENT OF SPOUSE

          I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Unit Subscription
Agreement (the "Agreement") and that I understand its contents. I am aware that
the Agreement provides for the repurchase of my spouse's Units (as defined in
the Agreement) under certain circumstances and imposes other restrictions on the
transfer of such Units. I agree that my spouse's interest in the Units is
subject to the Agreement and any interest I may have in such Units shall also be
irrevocably bound by the Agreement and, further, that my community property
interest in such Units, if any, shall be similarly bound by the Agreement.

          I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                    Acknowledged and agreed this ___ day
                                    of _____________, 2001.


                                    ---------------------------------------


                                    Name:
                                         ----------------------------------


                                    ---------------------------------------
                                                Witness


                                   SCHEDULE I

               -----------------------------------------------------------------
                     Cash                                       Units
               -----------------------------------------------------------------
                    $236.18                              921.83 Class A Units
                                                        3,078.17 Class B Units
                                                          4,000 Class C Units
               -----------------------------------------------------------------


                                   SCHEDULE II

Competing Business: Production, distribution or sale of refrigerated potato
products or specialty dairy products and mixes


                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Dairy Holdings,
LLC ("Dairy Holdings") on ________, 2001. The undersigned desires to make an
election to have the Units taxed under the provision of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the
undersigned purchased the Units.

          Therefore, pursuant to Code ss.83(b) and Treasury Regulation ss.1.83-2
promulgated thereunder, the undersigned hereby makes an election, with respect
to the Units (described below), to report as taxable income for calendar year
2001 the excess, if any, of the Units' fair market value on ______, 2001 over
the purchase price thereof.

          The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

          1. The name, address and social security number of the undersigned:

                      ______________________________
                      ______________________________
                      ______________________________
                      SSN:__________________________

          2. A description of the property with respect to which the election is
being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

          3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

          4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by The Company or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Dairy Holdings at
a price per Unit equal to the lesser of (x) fair market value (measured as of
the date of such repurchase) and (y) cost. The Units are also subject to
transfer restrictions.

          5. The aggregate fair market value on ______ __, 2001 of the property
with respect to which the election is being made, determined without regard to
any lapse restrictions: $______.

          6. The aggregate amount paid for such property: $_______.


          A copy of this election has been furnished to the Secretary of Dairy
Holdings pursuant to Treasury Regulations ss.1.83-2(e)(7).

Dated:  ________, 2001                      _____________________________
                                                     [Name]

EX-10.28

                                                                   Exhibit 10.28

                                                                [Execution Copy]

                     MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this "Agreement") is made as
of April 10, 2001, by and among M-Foods Dairy Holdings, LLC, a Delaware limited
liability company ("Dairy Holdings"), Harold D. Sprinkle (the "Executive"), and
for the purposes of Section 10.5 hereof, M-Foods Holdings, Inc., a Delaware
corporation ("Holdings").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of the Company or one or more of its
subsidiaries and who will hold interests in Dairy Holdings (collectively with
the Executive, the "Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive desires
to contribute cash in the amount set forth on Schedule I hereto in exchange for
Units of Dairy Holdings in the amounts set forth on Schedule I attached hereto;
and

            WHEREAS, subsequent to (A) the Acquisition and the transactions
relating thereto and (B) the transactions set forth herein and the other
Management Unit Subscription Agreements entered into between Dairy Holdings and
the Management Investors, the Company shall be an affiliate of Dairy Holdings
and, therefore, as set forth herein, certain events occurring between the
Executive and the Company or its subsidiaries will create certain events between
the Executive and Dairy Holdings.

            NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:

1.    Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.


      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean the Management Committee of Dairy
Holdings.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and the
Company or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with the Company
or one of its subsidiaries (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Company which
specifically identifies the manner in which the Company believes that the
Executive has not substantially performed the Executive's duties; (ii) the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company or one of its
subsidiaries; or (iii) conviction of a felony or guilty or nolo contendere plea
by the Executive with respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company or one
of its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board of Directors of the Company
or upon the instructions of the Chief Executive Officer of the Company (while
the Executive does not serve as such) or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company and its
subsidiaries. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than 75% of the entire membership of the Board of Directors of the Company
(excluding the Executive) at a meeting of the Board of Directors of the Company
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board of Directors of the Company) finding that, in the good
faith opinion of the Board of Directors of the Company, the


                                        2


Executive is guilty of the conduct described in (i), (ii) or (iii) above, and
specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or indirectly, a majority of the Board of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means the Class A Units of
Dairy Holdings.

      1.8 Class B Units. The term "Class B Units" means the Class B Units of
Dairy Holdings.

      1.9 Class C Units. The term "Class C Units" means the Class C Units of
Dairy Holdings.

      1.10 Closing. The "Closing" for the contribution of cash in exchange for
Units hereunder shall occur immediately prior to the consummation of the
Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Intentionally Omitted.

      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and the Company or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job


                                        3


responsibilities as a result of chronic illness, physical, mental or any other
disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of the Company or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to the Company or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Dairy Holdings at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
Dairy Holdings in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of Dairy Holdings and the Executive setting forth their respective resolutions
of the dispute and the bases therefor and (ii) accepting either the Executive's
or Dairy Holding's proposed resolution of the dispute. Promptly following Dairy
Holdings' receipt of Executive's written notice of disagreement, Dairy Holdings
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and Dairy Holdings' written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and Dairy Holdings of its decision within 40 days of its engagement.
The party whose proposed resolution is not accepted shall pay all of the
Arbiter's fees and expenses. If the Executive's proposed resolution is accepted,
Dairy Holdings also shall pay all of the Executive's reasonable out-of-pocket
fees and expenses (including reasonable fees and expenses of counsel and one
appraiser, accountant or investment banking firm) incurred in connection with
the arbitration. Each of Dairy Holdings and the Executive agrees to execute, if
requested by the Arbiter, a reasonable engagement letter with the Arbiter.


                                        4


      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and the Company or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by the Company or one of its subsidiaries (as applicable) which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by The Company or one of its
subsidiaries promptly after receipt of notice thereof given by the Executive;
provided that after a Change in Control, the Company or one of its subsidiaries
(as applicable) shall have the flexibility to appoint the Executive to a
reporting relationship different from that which existed prior to the Change in
Control, to make an immaterial change in Executive's duties, or to change the
Executive's title provided; (ii) any failure by the Company or one of its
subsidiaries (as applicable) to provide Executive with the annual base salary
Executive had previously received or the failure by The Company or one of its
subsidiaries (as applicable) to increase such annual each year after a Change in
Control by an amount which at least equals on a percentage basis, the mean
average percentage increase in base salary for all employees similarly situated
during the two full calendar years immediately preceding a Change in Control,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and


                                        5


which is remedied by the Company or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of the Company or one of its subsidiaries (as applicable) upon a Change
in Control to (A) continue in effect any employee benefit plan, compensation
plan, welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by the Company or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of the Company or
one of its subsidiaries as in effect for Executive immediately prior to such
Change in Control; (iv) after a Change in Control, any purported termination by
the Company or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on the Company's
or its subsidiaries' business to an extent substantially greater than the
Executive's current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Intentionally Omitted.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Limited
Liability Company Agreement of Dairy Holdings, dated as of April 10, 2001,
entered into by and among the members of Dairy Holdings, as amended from time to
time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.

      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.


                                        6


      1.32  Intentionally Omitted.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of the Company or any of
its subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board of Directors of the Company, after at least
three years employment with the Company or any of its subsidiaries after the
Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among Dairy
Holdings, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Intentionally Omitted.

      1.38 Intentionally Omitted.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with the Company and its subsidiaries is
terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Dairy Holdings,
whether pursuant to this Agreement or any other arrangement.

      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael, LLC, a
Delaware limited liability company.

2.    Purchase and Sale of Units.


                                       7


      2.1   Intentionally Omitted.

      2.2   Intentionally Omitted.

      2.3 Contribution of Cash. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Dairy Holdings hereby agrees to receive, cash in an amount set
forth on Schedule I attached hereto in exchange for the number of Units set
forth on Schedule I.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Dairy Holdings the amount of cash
set forth in Schedule I attached hereto by check or wire transfer of immediately
available funds; and

            (b) Dairy Holdings shall deliver to the Executive unit certificates
representing the number of Units set forth on Schedule I attached hereto.

      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3.    [Reserved]

4.    Representations and Warranties of the Executive and Dairy Holdings.

      4.1 Representations of the Executive. The Executive represents and
warrants to Dairy Holdings that the statements contained in this Section 4.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is


                                        8


subject or conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Executive is a party or by which he is bound or to which any of his assets is
subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Dairy Holdings could
become liable or obligated.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Dairy Holdings that:


            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE
            EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED AND MODIFIED FROM
            TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF
            AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Dairy
      Holdings indicating that the Units are subject to restrictions on transfer
      and, if Dairy Holdings should at some time in the future engage the
      services of a securities transfer agent, appropriate stop-transfer
      instructions will be issued to such transfer agent with respect to the
      Units.

      4.3   [Reserved]


                                       9


      4.4 Representations of Dairy Holdings. Dairy Holdings represents to the
Executive that the statements contained in this Section 4.4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date, with respect to itself:

            (a) Organization and Power. Dairy Holdings is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware with full power and authority to enter into this Agreement
and perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Dairy Holdings and the consummation of the transactions
contemplated hereby by Dairy Holdings have been duly and validly authorized by
all requisite limited liability company action on the part of Dairy Holdings,
and no other proceedings on its part are necessary to authorize the execution,
delivery or performance of this Agreement. This Agreement has been duly executed
and delivered by Dairy Holdings, and this Agreement constitutes a valid and
binding obligation of Dairy Holdings, enforceable in accordance with its terms
and conditions. Dairy Holdings need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Dairy Holdings is subject or any
provision of its charter or bylaws or conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Dairy Holdings is a party or by which it is bound or to which any of
its assets is subject.

            (d) Intentionally Omitted.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Dairy Holdings to issue, sell,
or otherwise cause to become outstanding any of its Units. Except as set forth
in the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Dairy Holdings. Except as set forth in the Transaction Documents,
there are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Dairy Holdings.

5.    Covenants of the Executive and Dairy Holdings

      5.1 Covenants. The Executive and/or Dairy Holdings each agree as follows
with respect to the period between the execution of this Agreement and the
Closing:


                                       10


            (a) General. The Executive and Dairy Holdings each will use his or
its commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement.

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6.    [Reserved]

7.    Certain Sales Upon Termination of Employment.

      7.1   Put Option.

            (a) If the Executive's employment with the Company and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Dairy Holdings, and Dairy Holdings shall be
required to purchase (subject to the provisions of Section 8 hereof), on one
occasion from the Executive and his Permitted Transferees, if applicable, all
(but not less than all) of the number of Units then held by the Executive and
such other number of Units held by the Executive's Permitted Transferees as the
Executive may request provided that in the aggregate such number does not exceed
the product of (x) the total number of Units (by class) collectively held by the
Executive and all of his Permitted Transferees and (y) the Applicable Percentage
(measured as of the Termination Date), at a price per unit equal to the Fair
Market Value of such unit (measured as of the delivery of the notice referred to
in Section 7.1(b)).

            (b) If the Executive desires to exercise its option to require Dairy
Holdings to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Dairy Holdings setting forth the intention of
Executive and Permitted Transferees, if applicable, to collectively sell all
Units pursuant to Section 7.1(a) within the period described above, which notice
shall specify the number of Units to be sold and shall include the signature of
the Executive and each Permitted Transferee desiring to sell Units. Subject to
the provisions of Section 8.1, the closing of the purchase shall take place at
the principal office of Dairy Holdings on the later of the 30th day after the
giving of such notice and the date that is 10 business days after the final
determination of Fair Market Value. Subject to the provisions of Section 8.1,
the Executive shall deliver to Dairy Holdings duly executed instruments
transferring title to units to Dairy Holdings, against payment of the
appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.


                                       11


      7.2   Call Options.

            (a) If the Executive's employment with the Company or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Dairy Holdings shall have the right
and option to purchase, and the Executive and the Executive's Permitted
Transferees (hereinafter referred to as the "Executive Group") shall be required
to sell to Dairy Holdings, any or all of such Units then held by such member of
the Executive Group (it being understood that if Units of any class subject to
repurchase hereunder may be repurchased at different prices, Dairy Holdings may
elect to repurchase only the portion of the Units of such class subject to
repurchase hereunder at the lower price), at a price per unit equal to the
applicable purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with the Company and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with the Company and its
      subsidiaries is terminated by the Company and its subsidiaries without
      Cause or by the Executive for Good Reason;

            (iii) if the Executive's active employment with the Company and its
      subsidiaries is terminated (A) by the Company or any of its subsidiaries
      for Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Dairy Holdings' rights under this Section 7.2(a) shall not be
available in the event of the termination of Executive's employment by the
Company or its subsidiaries without Cause or by Executive for Good Reason, in
either case following a sale by the Company or its subsidiaries of substantially
all of the line of business in which Executive primarily performs his services.

            (b) If Dairy Holdings desires to exercise one of its options to
purchase Units pursuant to this Section 7.2, Dairy Holdings shall, not later
than the expiration of the applicable period described for such purchase in
Section 7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Dairy Holdings on the later
of the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Dairy Holdings duly
executed instruments transferring title to Units to Dairy Holdings, against
payment of the appropriate purchase


                                       12


price by cashier's or certified check payable to the Executive or by wire
transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Dairy Holdings pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Dairy Holdings is less than or equal to the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            the lesser of (x) the Fair Market Value (measured as of the date of
            the Call Notice) and (y) the Cost of such Unit (the "Unvested Unit
            Purchase Price"), and (ii) if the number of such Units exceeds the
            Unvested Percentage of such class, the purchase price for each Unit
            shall be (A) for a number of Units of such class equal to the result
            of (x) the Unvested Percentage and (y) the total number of Units of
            such class held by the Executive Group, the Unvested Unit Purchase
            Price, and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Dairy Holdings shall have the right to revoke the
exercise of its option pursuant to this Section 7.2 for all or any portion of
the Units elected to be repurchased by it by delivering notice of such
revocation in writing to the Executive Group during the ten-day period beginning
on the date that Dairy Holdings is given written notice that the Fair Market
Value of a Unit was finally determined to be an amount at least 10% greater than
the per Unit repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Dairy Holdings purchases Units at Fair Market Value pursuant to the terms
of this Section 7.2 and within six months of the date of the determination of
such Fair Market Value both (A) a Sale of the Company or a Public Offering
occurs and (B) in connection with such transaction, the per share value of the
Units exceeds the per share purchase price paid by Dairy Holdings to Executive
under this Section 7.2, the


                                       13


Executive shall be entitled to receive from Dairy Holdings the benefit of such
higher valuation for the Units purchased. The excess of (x) the net proceeds
which the Executive would have received in such Sale of the Company or Public
Offering from the sale in such transaction of all Units repurchased by Dairy
Holdings under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Dairy Holdings, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Dairy Holdings shall not excuse, or constitute a waiver of its rights against,
the defaulting member.

8.    Certain Limitations on Dairy Holdings's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Dairy Holdings elects or is required
to purchase any Units pursuant to Section 7, Dairy Holdings shall pay the
purchase price for the Units it purchases (i) first, by offsetting indebtedness,
if any, owing from the Executive to Dairy Holdings (which indebtedness shall be
applied pro rata against the proceeds receivable by each member of the Executive
Group receiving consideration in such repurchase) and (ii) then, by Dairy
Holdings' delivery of a check or wire transfer of immediately available funds
for the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Units so purchased, duly
endorsed; provided that if such cash payment would result (A) in a violation of
any law, statute, rule, regulation, policy, order, writ, injunction, decree or
judgment promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its subsidiaries or
any of its or their property or (B) after giving effect thereto, a Financing
Default, or (C) if the Board determines in good faith that immediately prior to
such purchase there shall exist a Financing Default which prohibits such
purchase, dividend or distribution ((A) through (C) collectively the "Cash
Deferral Conditions"), the portion of the cash payment so affected may be made
by Dairy Holdings' delivery of preferred units of Dairy Holdings with a
liquidation preference equal to the balance of the purchase price; which
preferred units shall accrue yield annually at the "prime rate" published in The
Wall Street Journal on the date of issuance, which yield shall be payable at
maturity or upon payment of distributions by Dairy Holdings (other than tax
distributions). Each such preferred unit shall as of its issuance be deemed to
have basic contributions made with respect to such unit equal to (A) the portion
of the cash payment paid by the issuance of such preferred units divided by (B)
the number of preferred units so issued in the repurchase. Any such preferred
units issued shall be promptly redeemed (i) when the Cash Deferral Condition
which prompted their issuance no longer exists, (ii) upon consummation of an IPO
of the Company or Holdings (or their successors) (to the extent allowed by the
underwriters of such IPO), or (iii) upon a Sale of the Company from net cash
proceeds, if any, payable to Dairy Holdings or its unitholders (other than
proceeds required to be paid to Holdings);


                                       14


to the extent that sufficient net cash proceeds are not so payable, the
preferred units shall be cancelled in exchange for such non-cash consideration
received by unitholders in the Sale of the Company having a fair market value
equal to the principal of and accrued yield on the preferred units. If a yield
is required to be paid on any preferred units prior to maturity and any Cash
Deferral Conditions exist, such yield may be cumulated and accrued until and to
the extent that such prohibition no longer exists.

9.    Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with the
Company or its subsidiaries terminates, (i) Executive, for himself or on behalf
of any other person, firm, partnership, corporation, or other entity, engages,
directly or indirectly, as an executive, agent, representative, consultant,
partner, shareholder or holder of any other financial interest, in any business
that competes with the Company or its subsidiaries in the line of business
Executive is employed in by the Company or its subsidiaries (as applicable), as
such business is described in any employment or severance agreement then in
effect between Executive and the Company or one of its subsidiaries or, if no
such agreement is then in effect, as described on Schedule II attached hereto (a
"Competing Business"), it being understood and agreed that Executive's
activities shall not satisfy this clause (i) where Executive is employed by a
person, firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, and Executive is not engaged in or
responsible for the Competing Business of such entity. Executive may also,
without satisfying clause (i) be a passive owner of not more than 2% of the
outstanding publicly traded stock of any class of a Competing Business so long
as Executive has no active participation in the business of such entity, except
to the extent permitted above; or (ii) Executive (A) directly or indirectly
through another entity, induces or attempts to induce any employee of the
Company or its subsidiaries to leave the employ of the Company or its
subsidiaries, or in any way interfere with the relationship between the Company
or any of its subsidiaries and any employee thereof, (B) knowingly hires any
person who was an employee of the Company or any of its subsidiaries within 180
days prior to the time such employee was hired by Executive, (C) induces or
attempts to induce any customer, supplier, licensee or other business relation
of the Company or any of its subsidiaries to cease doing business with the
Company or its subsidiaries or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any subsidiary or (D) directly or indirectly acquires or attempt to
acquire an interest in any business relating to the business of the Company or
any of its subsidiaries and with which the Company or any of its subsidiaries
has entertained discussions or has requested and received information relating
to the acquisition of such business by the Company or its subsidiaries in the
one-year period immediately preceding Executive's termination of employment with
the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.


                                       15


      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Dairy Holdings, within ten business
days following the Activity Date, an amount equal to the excess, if any, of (A)
the aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10.   Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Dairy Holdings a
written agreement of the proposed transferee (a) evidencing such Person's
undertaking to be bound by the terms of this Agreement and (b) acknowledging
that the Units transferred to such Person will continue to be Units for purposes
of this Agreement in the hands of such Person. Any transfer or attempted
transfer of Units in violation of any provision of this Agreement or the
Securityholders Agreement shall be void, and Dairy Holdings shall not record
such transfer on its books or treat any purported transferee of such Units as
the owner of such Units for any purpose.

      10.2 Deemed Transfer of Units. If Dairy Holdings shall deliver, at the
time and place and in the amount and form provided in this Agreement, the
consideration for the Units to be repurchased in accordance with the provisions
of this Agreement, then from and after such time, the Person from whom such
units are to be repurchased shall no longer have any rights as a holder of such
units (other than the right to receive payment of such consideration in
accordance with this Agreement), and such Units shall be deemed purchased in
accordance with the applicable provisions hereof and Dairy Holdings shall be
deemed the owner and holder of such Units, whether or not certificates therefor
have been delivered as required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Dairy Holdings or any successor or assign
of Dairy Holdings (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Units, by reason of any dividend payable in units, issuance
of units, combination, recapitalization, reclassification, merger, consolidation
or otherwise.

      10.4 Executive's Employment by the Company. Nothing contained in this
Agreement shall be deemed to obligate the Company or any subsidiary of the
Company to employ the Executive in any capacity whatsoever or to prohibit or
restrict the Company (or any such subsidiary) from terminating the employment of
the Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Dairy Holdings against any and all losses, liabilities, damages,
judgments, fines, fees or expenses, including, without limitation, attorneys'
fees (for purposes of this Section 10.5, hereinafter "Losses"), incurred in
connection with any failure to withhold amounts relating to the Units acquired
herein by


                                       16


the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Dairy Holdings properly failed to withhold amounts relating to the Units
acquired herein by Executive, Executive shall provide Dairy Holdings with a Form
4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Dairy Holdings and/or any of its affiliates is entitled to
any tax deduction with respect to the issuance of Units, (i) Dairy Holdings
shall specially allocate such deduction to the Executive and/or (ii) Holdings
shall pay, or cause any affiliate to pay, as the case may be, Executive an
amount equal to 40% of such deduction, such amount to be grossed up to reflect
any additional deduction to Holdings and/or any of its affiliates (as the case
may be) provided that if any Cash Deferral Condition exists at the time such
payment is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Dairy Holdings shall notify the other
(in a manner described in Section 10.10 of this Agreement) within 20 days of
first receiving notice of an audit or other proceeding being conducted by the
Internal Revenue Service or any state or local taxing authority relating to the
Units acquired herein by the Management Investors, and both Executive and Dairy
Holdings shall assist each other during the course of such audit or other
proceeding to the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Dairy Holdings a
valid undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Dairy Holdings and the members of the Executive Group hereby submits to
the exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. Each of the members of the Executive Group and
Dairy Holdings hereby irrevocably waives any objections which 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 brought in any court of competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum.


                                       17


      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

            (a)   If to Dairy Holdings
                  M-Foods Dairy Holdings, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 292-6639

            with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 808-4922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 861-2200

            (b) If to the Executive, to the address as shown on the unit
register of Dairy Holdings.

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036-6522
                  Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises,


                                       18


representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein and therein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Dairy Holdings under this Agreement shall be cumulative and not exclusive of
any rights or remedies which either would otherwise have hereunder or at law or
in equity or by statute, and no failure or delay by either party in exercising
any right or remedy shall impair any such right or remedy or operate as a waiver
of such right or remedy, nor shall any single or partial exercise of any power
or right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                  * * * * *


                                       19


      IN WITNESS WHEREOF, the parties have executed this Management Unit
Subscription Agreement as of the date first above written.

                                    M-FOODS DAIRY HOLDINGS, LLC

                                    By:
                                        ------------------------------------

                                    Its:
                                        ------------------------------------

                                    M-FOODS HOLDINGS, INC.

                                    By:
                                        ------------------------------------

                                    Its:
                                        ------------------------------------

                                    ----------------------------------------
                                                Harold D. Sprinkle


                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Unit Subscription
Agreement (the "Agreement") and that I understand its contents. I am aware that
the Agreement provides for the repurchase of my spouse's Units (as defined in
the Agreement) under certain circumstances and imposes other restrictions on the
transfer of such Units. I agree that my spouse's interest in the Units is
subject to the Agreement and any interest I may have in such Units shall also be
irrevocably bound by the Agreement and, further, that my community property
interest in such Units, if any, shall be similarly bound by the Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                    Acknowledged and agreed this ___ day of
                                    _____________, 2001.

                                    ----------------------------------------

                                    Name:
                                         -----------------------------------

                                    ----------------------------------------
                                                     Witness


                                   SCHEDULE I

- --------------------------------------------------------------------------------
                 Cash                                    Units
- --------------------------------------------------------------------------------
                $35.54                            4,000 Class B Units
                                                  4,000 Class C Units
- --------------------------------------------------------------------------------


                                 SCHEDULE II

Competing Business: Production, distribution or sale of eggs or egg products


                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Dairy Holdings,
LLC ("Dairy Holdings") on ________, 2001. The undersigned desires to make an
election to have the Units taxed under the provision of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the
undersigned purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1.    The name, address and social security number of the
                  undersigned:

                  ------------------------------

                  ------------------------------

                  SSN:
                      --------------------------

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by The Company or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Dairy Holdings at
a price per Unit equal to the lesser of (x) fair market value (measured as of
the date of such repurchase) and (y) cost. The Units are also subject to
transfer restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $-------.

            6. The aggregate amount paid for such property: $_______.


            A copy of this election has been furnished to the Secretary of Dairy
Holdings pursuant to Treasury Regulations ss.1.83-2(e)(7).

Dated:  ________, 2001              _____________________________
                                                [Name]

EX-10.29

                                                                   Exhibit 10.29

                                                                [Execution Copy]

                     MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this "Agreement") is made as
of April 10, 2001, by and among M-Foods Dairy Holdings, LLC, a Delaware limited
liability company ("Dairy Holdings"), Bradley L. Cook (the "Executive"), and for
the purposes of Section 10.5 hereof, M-Foods Holdings, Inc., a Delaware
corporation ("Holdings").

          WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of the Company or one or more of its
subsidiaries and who will hold interests in Dairy Holdings (collectively with
the Executive, the "Management Investors");

          WHEREAS, the Company entered into an Agreement and Plan of Merger with
Holdings and Protein Acquisition Corp., a Minnesota corporation, and a wholly
owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.) ("Merger
Sub"), dated as of December 21, 2000, as amended from time to time in accordance
with its terms (the "Merger Agreement"), pursuant to which Merger Sub shall be
merged with and into the Company (the "Acquisition"), in accordance with the
terms and conditions of the Merger Agreement and the relevant provisions of the
MBCA (as defined in the Merger Agreement), and the surviving corporation shall
be the Company;

          WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive desires
to contribute cash in the amount set forth on Schedule I hereto in exchange for
Units of Dairy Holdings in the amounts set forth on Schedule I attached hereto;
and

          WHEREAS, subsequent to (A) the Acquisition and the transactions
relating thereto and (B) the transactions set forth herein and the other
Management Unit Subscription Agreements entered into between Dairy Holdings and
the Management Investors, the Company shall be an affiliate of Dairy Holdings
and, therefore, as set forth herein, certain events occurring between the
Executive and the Company or its subsidiaries will create certain events between
the Executive and Dairy Holdings.

          NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:

1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.


      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean the Management Committee of Dairy
Holdings.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and the
Company or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with the Company
or one of its subsidiaries (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Company which
specifically identifies the manner in which the Company believes that the
Executive has not substantially performed the Executive's duties; (ii) the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company or one of its
subsidiaries; or (iii) conviction of a felony or guilty or nolo contendere plea
by the Executive with respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company or one
of its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board of Directors of the Company
or upon the instructions of the Chief Executive Officer of the Company (while
the Executive does not serve as such) or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company and its
subsidiaries. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than 75% of the entire membership of the Board of Directors of the Company
(excluding the Executive) at a meeting of the Board of Directors of the Company
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board of Directors of the Company) finding that, in the good
faith opinion of the Board of Directors of the Company, the


                                       2


Executive is guilty of the conduct described in (i), (ii) or (iii) above, and
specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or indirectly, a majority of the Board of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means the Class A Units of
Dairy Holdings.

      1.8 Class B Units. The term "Class B Units" means the Class B Units of
Dairy Holdings.

      1.9 Class C Units. The term "Class C Units" means the Class C Units of
Dairy Holdings.

      1.10 Closing. The "Closing" for the contribution of cash in exchange for
Units hereunder shall occur immediately prior to the consummation of the
Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Intentionally Omitted.

      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and the Company or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job


                                       3


responsibilities as a result of chronic illness, physical, mental or any other
disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of the Company or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to the Company or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Dairy Holdings at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
Dairy Holdings in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of Dairy Holdings and the Executive setting forth their respective resolutions
of the dispute and the bases therefor and (ii) accepting either the Executive's
or Dairy Holding's proposed resolution of the dispute. Promptly following Dairy
Holdings' receipt of Executive's written notice of disagreement, Dairy Holdings
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and Dairy Holdings' written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and Dairy Holdings of its decision within 40 days of its engagement.
The party whose proposed resolution is not accepted shall pay all of the
Arbiter's fees and expenses. If the Executive's proposed resolution is accepted,
Dairy Holdings also shall pay all of the Executive's reasonable out-of-pocket
fees and expenses (including reasonable fees and expenses of counsel and one
appraiser, accountant or investment banking firm) incurred in connection with
the arbitration. Each of Dairy Holdings and the Executive agrees to execute, if
requested by the Arbiter, a reasonable engagement letter with the Arbiter.


                                        4


      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and the Company or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by the Company or one of its subsidiaries (as applicable) which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by The Company or one of its
subsidiaries promptly after receipt of notice thereof given by the Executive;
provided that after a Change in Control, the Company or one of its subsidiaries
(as applicable) shall have the flexibility to appoint the Executive to a
reporting relationship different from that which existed prior to the Change in
Control, to make an immaterial change in Executive's duties, or to change the
Executive's title provided; (ii) any failure by the Company or one of its
subsidiaries (as applicable) to provide Executive with the annual base salary
Executive had previously received or the failure by The Company or one of its
subsidiaries (as applicable) to increase such annual each year after a Change in
Control by an amount which at least equals on a percentage basis, the mean
average percentage increase in base salary for all employees similarly situated
during the two full calendar years immediately preceding a Change in Control,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and


                                        5


which is remedied by the Company or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of the Company or one of its subsidiaries (as applicable) upon a Change
in Control to (A) continue in effect any employee benefit plan, compensation
plan, welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by the Company or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of the Company or
one of its subsidiaries as in effect for Executive immediately prior to such
Change in Control; (iv) after a Change in Control, any purported termination by
the Company or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on the Company's
or its subsidiaries' business to an extent substantially greater than the
Executive's current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Intentionally Omitted.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Limited
Liability Company Agreement of Dairy Holdings, dated as of April 10, 2001,
entered into by and among the members of Dairy Holdings, as amended from time to
time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.

      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.


                                        6


      1.32 Intentionally Omitted.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of the Company or any of
its subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board of Directors of the Company, after at least
three years employment with the Company or any of its subsidiaries after the
Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among Dairy
Holdings, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Intentionally Omitted.

      1.38 Intentionally Omitted.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with the Company and its subsidiaries is
terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Dairy Holdings,
whether pursuant to this Agreement or any other arrangement.

      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael, LLC, a
Delaware limited liability company.

2. Purchase and Sale of Units.


                                        7


      2.1 Intentionally Omitted.

      2.2 Intentionally Omitted.

      2.3 Contribution of Cash. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Dairy Holdings hereby agrees to receive, cash in an amount set
forth on Schedule I attached hereto in exchange for the number of Units set
forth on Schedule I.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

          (a) The Executive shall deliver to Dairy Holdings the amount of cash
set forth in Schedule I attached hereto by check or wire transfer of immediately
available funds; and

          (b) Dairy Holdings shall deliver to the Executive unit certificates
representing the number of Units set forth on Schedule I attached hereto.

      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Dairy Holdings.

      4.1 Representations of the Executive. The Executive represents and
warrants to Dairy Holdings that the statements contained in this Section 4.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date, with respect to himself:

          (a) Power and Authority. The Executive has full power and authority to
execute and deliver this Agreement and perform his obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the Executive,
enforceable in accordance with its terms and conditions. To the best of his
knowledge, the Executive need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

          (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is


                                        8


subject or conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Executive is a party or by which he is bound or to which any of his assets is
subject.

          (c) Brokers' Fees. The Executive has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Dairy Holdings could
become liable or obligated.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Dairy Holdings that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE
            EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED AND MODIFIED FROM
            TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF
            AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Dairy
      Holdings indicating that the Units are subject to restrictions on transfer
      and, if Dairy Holdings should at some time in the future engage the
      services of a securities transfer agent, appropriate stop-transfer
      instructions will be issued to such transfer agent with respect to the
      Units.

      4.3 [Reserved]


                                        9


      4.4 Representations of Dairy Holdings. Dairy Holdings represents to the
Executive that the statements contained in this Section 4.4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date, with respect to itself:

          (a) Organization and Power. Dairy Holdings is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware with full power and authority to enter into this Agreement
and perform its obligations hereunder.

          (b) Authorization. The execution, delivery and performance of this
Agreement by Dairy Holdings and the consummation of the transactions
contemplated hereby by Dairy Holdings have been duly and validly authorized by
all requisite limited liability company action on the part of Dairy Holdings,
and no other proceedings on its part are necessary to authorize the execution,
delivery or performance of this Agreement. This Agreement has been duly executed
and delivered by Dairy Holdings, and this Agreement constitutes a valid and
binding obligation of Dairy Holdings, enforceable in accordance with its terms
and conditions. Dairy Holdings need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

          (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Dairy Holdings is subject or any
provision of its charter or bylaws or conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Dairy Holdings is a party or by which it is bound or to which any of
its assets is subject.

          (d) Intentionally Omitted.

          (e) Capitalization. All of the issued and outstanding Units have been
duly authorized and are validly issued. Except as set forth in the Transaction
Documents, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require Dairy Holdings to issue, sell, or
otherwise cause to become outstanding any of its Units. Except as set forth in
the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Dairy Holdings. Except as set forth in the Transaction Documents,
there are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Dairy Holdings.

5. Covenants of the Executive and Dairy Holdings

      5.1 Covenants. The Executive and/or Dairy Holdings each agree as follows
with respect to the period between the execution of this Agreement and the
Closing:


                                       10


          (a) General. The Executive and Dairy Holdings each will use his or its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement.

          (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

          (a) If the Executive's employment with the Company and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Dairy Holdings, and Dairy Holdings shall be
required to purchase (subject to the provisions of Section 8 hereof), on one
occasion from the Executive and his Permitted Transferees, if applicable, all
(but not less than all) of the number of Units then held by the Executive and
such other number of Units held by the Executive's Permitted Transferees as the
Executive may request provided that in the aggregate such number does not exceed
the product of (x) the total number of Units (by class) collectively held by the
Executive and all of his Permitted Transferees and (y) the Applicable Percentage
(measured as of the Termination Date), at a price per unit equal to the Fair
Market Value of such unit (measured as of the delivery of the notice referred to
in Section 7.1(b)).

          (b) If the Executive desires to exercise its option to require Dairy
Holdings to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Dairy Holdings setting forth the intention of
Executive and Permitted Transferees, if applicable, to collectively sell all
Units pursuant to Section 7.1(a) within the period described above, which notice
shall specify the number of Units to be sold and shall include the signature of
the Executive and each Permitted Transferee desiring to sell Units. Subject to
the provisions of Section 8.1, the closing of the purchase shall take place at
the principal office of Dairy Holdings on the later of the 30th day after the
giving of such notice and the date that is 10 business days after the final
determination of Fair Market Value. Subject to the provisions of Section 8.1,
the Executive shall deliver to Dairy Holdings duly executed instruments
transferring title to units to Dairy Holdings, against payment of the
appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.


                                       11


      7.2 Call Options.

          (a) If the Executive's employment with the Company or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Dairy Holdings shall have the right
and option to purchase, and the Executive and the Executive's Permitted
Transferees (hereinafter referred to as the "Executive Group") shall be required
to sell to Dairy Holdings, any or all of such Units then held by such member of
the Executive Group (it being understood that if Units of any class subject to
repurchase hereunder may be repurchased at different prices, Dairy Holdings may
elect to repurchase only the portion of the Units of such class subject to
repurchase hereunder at the lower price), at a price per unit equal to the
applicable purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with the Company and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with the Company and its
      subsidiaries is terminated by the Company and its subsidiaries without
      Cause or by the Executive for Good Reason;

            (iii) if the Executive's active employment with the Company and its
      subsidiaries is terminated (A) by the Company or any of its subsidiaries
      for Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Dairy Holdings' rights under this Section 7.2(a) shall not be
available in the event of the termination of Executive's employment by the
Company or its subsidiaries without Cause or by Executive for Good Reason, in
either case following a sale by the Company or its subsidiaries of substantially
all of the line of business in which Executive primarily performs his services.

          (b) If Dairy Holdings desires to exercise one of its options to
purchase Units pursuant to this Section 7.2, Dairy Holdings shall, not later
than the expiration of the applicable period described for such purchase in
Section 7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Dairy Holdings on the later
of the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Dairy Holdings duly
executed instruments transferring title to Units to Dairy Holdings, against
payment of the appropriate purchase


                                       12



price by cashier's or certified check payable to the Executive or by wire
transfer of immediately available funds to an account designated by the
Executive.

          (c) In the event of a purchase by Dairy Holdings pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

          (i) if the Executive engages in any Competitive Activity (as defined
          in Section 9.1 of this Agreement), a price per unit equal to the
          lesser of (A) Fair Market Value (measured as of the Activity Date
          (as defined in Section 9.2 of this Agreement)) and (B) Cost;

          (ii) in the case of a termination of employment described in Section
          7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
          number of Units of any class to be purchased from the Executive
          Group by Dairy Holdings is less than or equal to the Unvested
          Percentage of such class, the purchase price for each Unit shall be
          the lesser of (x) the Fair Market Value (measured as of the date of
          the Call Notice) and (y) the Cost of such Unit (the "Unvested Unit
          Purchase Price"), and (ii) if the number of such Units exceeds the
          Unvested Percentage of such class, the purchase price for each Unit
          shall be (A) for a number of Units of such class equal to the result
          of (x) the Unvested Percentage and (y) the total number of Units of
          such class held by the Executive Group, the Unvested Unit Purchase
          Price, and (B) for the remainder of the Units of such class being
          repurchased, the Fair Market Value of such Unit (measured as of the
          date of the Call Notice); and

          (iii) in the case of a termination of employment described in
          Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
          Fair Market Value (measured as of the date of the Call Notice) and
          (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Dairy Holdings shall have the right to revoke the
exercise of its option pursuant to this Section 7.2 for all or any portion of
the Units elected to be repurchased by it by delivering notice of such
revocation in writing to the Executive Group during the ten-day period beginning
on the date that Dairy Holdings is given written notice that the Fair Market
Value of a Unit was finally determined to be an amount at least 10% greater than
the per Unit repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Dairy Holdings purchases Units at Fair Market Value pursuant to the terms
of this Section 7.2 and within six months of the date of the determination of
such Fair Market Value both (A) a Sale of the Company or a Public Offering
occurs and (B) in connection with such transaction, the per share value of the
Units exceeds the per share purchase price paid by Dairy Holdings to Executive
under this Section 7.2, the


                                       13



Executive shall be entitled to receive from Dairy Holdings the benefit of such
higher valuation for the Units purchased. The excess of (x) the net proceeds
which the Executive would have received in such Sale of the Company or Public
Offering from the sale in such transaction of all Units repurchased by Dairy
Holdings under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Dairy Holdings, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Dairy Holdings shall not excuse, or constitute a waiver of its rights against,
the defaulting member.

8. Certain Limitations on Dairy Holdings's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Dairy Holdings elects or is required
to purchase any Units pursuant to Section 7, Dairy Holdings shall pay the
purchase price for the Units it purchases (i) first, by offsetting indebtedness,
if any, owing from the Executive to Dairy Holdings (which indebtedness shall be
applied pro rata against the proceeds receivable by each member of the Executive
Group receiving consideration in such repurchase) and (ii) then, by Dairy
Holdings' delivery of a check or wire transfer of immediately available funds
for the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Units so purchased, duly
endorsed; provided that if such cash payment would result (A) in a violation of
any law, statute, rule, regulation, policy, order, writ, injunction, decree or
judgment promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its subsidiaries or
any of its or their property or (B) after giving effect thereto, a Financing
Default, or (C) if the Board determines in good faith that immediately prior to
such purchase there shall exist a Financing Default which prohibits such
purchase, dividend or distribution ((A) through (C) collectively the "Cash
Deferral Conditions"), the portion of the cash payment so affected may be made
by Dairy Holdings' delivery of preferred units of Dairy Holdings with a
liquidation preference equal to the balance of the purchase price; which
preferred units shall accrue yield annually at the "prime rate" published in The
Wall Street Journal on the date of issuance, which yield shall be payable at
maturity or upon payment of distributions by Dairy Holdings (other than tax
distributions). Each such preferred unit shall as of its issuance be deemed to
have basic contributions made with respect to such unit equal to (A) the portion
of the cash payment paid by the issuance of such preferred units divided by (B)
the number of preferred units so issued in the repurchase. Any such preferred
units issued shall be promptly redeemed (i) when the Cash Deferral Condition
which prompted their issuance no longer exists, (ii) upon consummation of an IPO
of the Company or Holdings (or their successors) (to the extent allowed by the
underwriters of such IPO), or (iii) upon a Sale of the Company from net cash
proceeds, if any, payable to Dairy Holdings or its unitholders (other than
proceeds required to be paid to Holdings);


                                       14



to the extent that sufficient net cash proceeds are not so payable, the
preferred units shall be cancelled in exchange for such non-cash consideration
received by unitholders in the Sale of the Company having a fair market value
equal to the principal of and accrued yield on the preferred units. If a yield
is required to be paid on any preferred units prior to maturity and any Cash
Deferral Conditions exist, such yield may be cumulated and accrued until and to
the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with the
Company or its subsidiaries terminates, (i) Executive, for himself or on behalf
of any other person, firm, partnership, corporation, or other entity, engages,
directly or indirectly, as an executive, agent, representative, consultant,
partner, shareholder or holder of any other financial interest, in any business
that competes with the Company or its subsidiaries in the line of business
Executive is employed in by the Company or its subsidiaries (as applicable), as
such business is described in any employment or severance agreement then in
effect between Executive and the Company or one of its subsidiaries or, if no
such agreement is then in effect, as described on Schedule II attached hereto (a
"Competing Business"), it being understood and agreed that Executive's
activities shall not satisfy this clause (i) where Executive is employed by a
person, firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, and Executive is not engaged in or
responsible for the Competing Business of such entity. Executive may also,
without satisfying clause (i) be a passive owner of not more than 2% of the
outstanding publicly traded stock of any class of a Competing Business so long
as Executive has no active participation in the business of such entity, except
to the extent permitted above; or (ii) Executive (A) directly or indirectly
through another entity, induces or attempts to induce any employee of the
Company or its subsidiaries to leave the employ of the Company or its
subsidiaries, or in any way interfere with the relationship between the Company
or any of its subsidiaries and any employee thereof, (B) knowingly hires any
person who was an employee of the Company or any of its subsidiaries within 180
days prior to the time such employee was hired by Executive, (C) induces or
attempts to induce any customer, supplier, licensee or other business relation
of the Company or any of its subsidiaries to cease doing business with the
Company or its subsidiaries or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any subsidiary or (D) directly or indirectly acquires or attempt to
acquire an interest in any business relating to the business of the Company or
any of its subsidiaries and with which the Company or any of its subsidiaries
has entertained discussions or has requested and received information relating
to the acquisition of such business by the Company or its subsidiaries in the
one-year period immediately preceding Executive's termination of employment with
the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.


                                       15



      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Dairy Holdings, within ten business
days following the Activity Date, an amount equal to the excess, if any, of (A)
the aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Dairy Holdings a
written agreement of the proposed transferee (a) evidencing such Person's
undertaking to be bound by the terms of this Agreement and (b) acknowledging
that the Units transferred to such Person will continue to be Units for purposes
of this Agreement in the hands of such Person. Any transfer or attempted
transfer of Units in violation of any provision of this Agreement or the
Securityholders Agreement shall be void, and Dairy Holdings shall not record
such transfer on its books or treat any purported transferee of such Units as
the owner of such Units for any purpose.

      10.2 Deemed Transfer of Units. If Dairy Holdings shall deliver, at the
time and place and in the amount and form provided in this Agreement, the
consideration for the Units to be repurchased in accordance with the provisions
of this Agreement, then from and after such time, the Person from whom such
units are to be repurchased shall no longer have any rights as a holder of such
units (other than the right to receive payment of such consideration in
accordance with this Agreement), and such Units shall be deemed purchased in
accordance with the applicable provisions hereof and Dairy Holdings shall be
deemed the owner and holder of such Units, whether or not certificates therefor
have been delivered as required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Dairy Holdings or any successor or assign
of Dairy Holdings (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Units, by reason of any dividend payable in units, issuance
of units, combination, recapitalization, reclassification, merger, consolidation
or otherwise.

      10.4 Executive's Employment by the Company. Nothing contained in this
Agreement shall be deemed to obligate the Company or any subsidiary of the
Company to employ the Executive in any capacity whatsoever or to prohibit or
restrict the Company (or any such subsidiary) from terminating the employment of
the Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Dairy Holdings against any and all losses, liabilities, damages,
judgments, fines, fees or expenses, including, without limitation, attorneys'
fees (for purposes of this Section 10.5, hereinafter "Losses"), incurred in
connection with any failure to withhold amounts relating to the Units acquired
herein by


                                       16


the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Dairy Holdings properly failed to withhold amounts relating to the Units
acquired herein by Executive, Executive shall provide Dairy Holdings with a Form
4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Dairy Holdings and/or any of its affiliates is entitled to
any tax deduction with respect to the issuance of Units, (i) Dairy Holdings
shall specially allocate such deduction to the Executive and/or (ii) Holdings
shall pay, or cause any affiliate to pay, as the case may be, Executive an
amount equal to 40% of such deduction, such amount to be grossed up to reflect
any additional deduction to Holdings and/or any of its affiliates (as the case
may be) provided that if any Cash Deferral Condition exists at the time such
payment is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Dairy Holdings shall notify the other
(in a manner described in Section 10.10 of this Agreement) within 20 days of
first receiving notice of an audit or other proceeding being conducted by the
Internal Revenue Service or any state or local taxing authority relating to the
Units acquired herein by the Management Investors, and both Executive and Dairy
Holdings shall assist each other during the course of such audit or other
proceeding to the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Dairy Holdings a
valid undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Dairy Holdings and the members of the Executive Group hereby submits to
the exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. Each of the members of the Executive Group and
Dairy Holdings hereby irrevocably waives any objections which 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 brought in any court of competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum.


                                       17


      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

               (a)    If to Dairy Holdings

                      M-Foods Dairy Holdings, LLC
                      c/o Vestar Capital Partners IV, L.P.
                      1225 Seventeenth Street
                      Suite 1660
                      Denver, CO 80202
                      Attention: James P. Kelley
                      Facsimile: (303) 292-6639

               with copies to:

                      Vestar Capital Partners IV, L.P.
                      245 Park Avenue, 41st Floor
                      New York, NY  10167
                      Attention: General Counsel
                      Facsimile: (212) 808-4922
                      Kirkland & Ellis
                      200 East Randolph Drive
                      Chicago, IL 60601
                      Attention: Stephen L. Ritchie
                      Facsimile: (312) 861-2200

               (b) If to the Executive, to the address as shown on the unit
register of Dairy Holdings.

               with a copy to:

                      Skadden, Arps, Slate, Meagher & Flom LLP
                      Four Times Square
                      New York, NY 10036-6522
                      Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises,


                                       18


representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein and therein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Dairy Holdings under this Agreement shall be cumulative and not exclusive of
any rights or remedies which either would otherwise have hereunder or at law or
in equity or by statute, and no failure or delay by either party in exercising
any right or remedy shall impair any such right or remedy or operate as a waiver
of such right or remedy, nor shall any single or partial exercise of any power
or right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       19


      IN WITNESS WHEREOF, the parties have executed this Management Unit
Subscription Agreement as of the date first above written.

                               M-FOODS DAIRY HOLDINGS, LLC

                               By:
                                  ----------------------------------------

                               Its:
                                   ---------------------------------------


                               M-FOODS HOLDINGS, INC.

                               By:
                                  ----------------------------------------

                               Its:
                                   ---------------------------------------


                                   ---------------------------------------
                                             Bradley L. Cook


                                CONSENT OF SPOUSE

          I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Unit Subscription
Agreement (the "Agreement") and that I understand its contents. I am aware that
the Agreement provides for the repurchase of my spouse's Units (as defined in
the Agreement) under certain circumstances and imposes other restrictions on the
transfer of such Units. I agree that my spouse's interest in the Units is
subject to the Agreement and any interest I may have in such Units shall also be
irrevocably bound by the Agreement and, further, that my community property
interest in such Units, if any, shall be similarly bound by the Agreement.

          I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                            Acknowledged and agreed this ___ day
                                            of _____________, 2001.


                                            ------------------------------------


                                            Name:
                                                 -------------------------------


                                            ------------------------------------

                                                          Witness


                                   SCHEDULE I

               -----------------------------------------------------------------
                     Cash                                    Units
               -----------------------------------------------------------------
                    $35.54                            4,000 Class B Units
                                                      4,000 Class C Units
               -----------------------------------------------------------------


                                   SCHEDULE II

Competing Business: Production, distribution or sale of eggs or egg products


                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Dairy Holdings,
LLC ("Dairy Holdings") on ________, 2001. The undersigned desires to make an
election to have the Units taxed under the provision of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the
undersigned purchased the Units.

          Therefore, pursuant to Code ss.83(b) and Treasury Regulation ss.1.83-2
promulgated thereunder, the undersigned hereby makes an election, with respect
to the Units (described below), to report as taxable income for calendar year
2001 the excess, if any, of the Units' fair market value on ______, 2001 over
the purchase price thereof.

          The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

          1. The name, address and social security number of the undersigned:

             ________________________________
             ________________________________
             ________________________________
             SSN: ___________________________

          2. A description of the property with respect to which the election is
being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

          3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

          4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by The Company or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Dairy Holdings at
a price per Unit equal to the lesser of (x) fair market value (measured as of
the date of such repurchase) and (y) cost. The Units are also subject to
transfer restrictions.

          5. The aggregate fair market value on ______ __, 2001 of the property
with respect to which the election is being made, determined without regard to
any lapse restrictions: $_______.

          6. The aggregate amount paid for such property: $_______.


          A copy of this election has been furnished to the Secretary of Dairy
Holdings pursuant to Treasury Regulations ss.1.83-2(e)(7).


Dated:  ________, 2001                      _____________________________
                                                          [Name]

EX-10.30

                                                                   Exhibit 10.30

                                                                [Execution Copy]

                     MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

      THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this "Agreement") is made as
of April 10, 2001, by and among M-Foods Dairy Holdings, LLC, a Delaware limited
liability company ("Dairy Holdings"), James Mohr (the "Executive"), and for the
purposes of Section 10.5 hereof, M-Foods Holdings, Inc., a Delaware corporation
("Holdings").

            WHEREAS, the Executive is an employee and shareholder of Michael
Foods, Inc., a Minnesota corporation (the "Company"), and one of several persons
who are or will be key employees of the Company or one or more of its
subsidiaries and who will hold interests in Dairy Holdings (collectively with
the Executive, the "Management Investors");

            WHEREAS, the Company entered into an Agreement and Plan of Merger
with Holdings and Protein Acquisition Corp., a Minnesota corporation, and a
wholly owned subsidiary of Holdings (n/k/a Michael Foods Acquisition Corp.)
("Merger Sub"), dated as of December 21, 2000, as amended from time to time in
accordance with its terms (the "Merger Agreement"), pursuant to which Merger Sub
shall be merged with and into the Company (the "Acquisition"), in accordance
with the terms and conditions of the Merger Agreement and the relevant
provisions of the MBCA (as defined in the Merger Agreement), and the surviving
corporation shall be the Company;

            WHEREAS, on the terms and subject to the conditions hereof and
pursuant to Section 721(a) of the Internal Revenue Code, the Executive desires
to contribute cash in the amount set forth on Schedule I hereto in exchange for
Units of Dairy Holdings in the amounts set forth on Schedule I attached hereto;
and

            WHEREAS, subsequent to (A) the Acquisition and the transactions
relating thereto and (B) the transactions set forth herein and the other
Management Unit Subscription Agreements entered into between Dairy Holdings and
the Management Investors, the Company shall be an affiliate of Dairy Holdings
and, therefore, as set forth herein, certain events occurring between the
Executive and the Company or its subsidiaries will create certain events between
the Executive and Dairy Holdings.

            NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:

1. Definitions.

      1.1 Acquisition. The term "Acquisition" shall have the meaning set forth
in the preface.

      1.2 Agreement. The term "Agreement" shall have the meaning set forth in
the preface.



      1.3 Applicable Percentage. Except as provided otherwise in the next
sentence, the term "Applicable Percentage" shall mean: (i) 0% during the
one-year period commencing on the Closing Date (ii) 20% during the one-year
period commencing on the first anniversary of the Closing Date; (iii) 40% during
the one-year period commencing on the second anniversary of the Closing Date;
(iv) 60% during the one-year period commencing on the third anniversary of the
Closing Date; (v) 80% during the one-year period commencing on the fourth
anniversary of the Closing Date; and (vi) 100% on and after the fifth
anniversary of the Closing Date. Notwithstanding the foregoing, (A) immediately
prior to and after the occurrence of a Sale of the Company, such Applicable
Percentage shall mean 100%, and (B) in the case of a termination of employment
described in Section 7.2(a)(iii)(B), such Applicable Percentage in clauses (i),
(ii) and (iii) shall be 0%, and in clauses (iv) and (v) and (vi) shall be 40%,
75% and 100%, respectively.

      1.4 Board. The "Board" shall mean the Management Committee of Dairy
Holdings.

      1.5 Cause. The term "Cause" used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and the
Company or one of its subsidiaries or, if no such agreement containing a
definition of "Cause" is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive's duties with the Company
or one of its subsidiaries (other than any such failure resulting from
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Company which
specifically identifies the manner in which the Company believes that the
Executive has not substantially performed the Executive's duties; (ii) the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company or one of its
subsidiaries; or (iii) conviction of a felony or guilty or nolo contendere plea
by the Executive with respect thereto.

      For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company or one
of its subsidiaries. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board of Directors of the Company
or upon the instructions of the Chief Executive Officer of the Company (while
the Executive does not serve as such) or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company and its
subsidiaries. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than 75% of the entire membership of the Board of Directors of the Company
(excluding the Executive) at a meeting of the Board of Directors of the Company
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board of Directors of the Company) finding that, in the good
faith opinion of the Board of Directors of the Company, the


                                        2


Executive is guilty of the conduct described in (i), (ii) or (iii) above, and
specifying the particulars thereof in detail.

      1.6 Change in Control. The term "Change in Control" means the consummation
of a transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties on an arm's-length
basis, pursuant to which (a) such party or parties, directly or indirectly,
acquire (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise) more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company Common Stock pursuant to an offering registered under
the 1933 Act, Vestar and its affiliates cease to have the ability to elect,
directly or indirectly, a majority of the Board of Directors of the Company.

      1.7 Class A Units. The term "Class A Units" means the Class A Units of
Dairy Holdings.

      1.8 Class B Units. The term "Class B Units" means the Class B Units of
Dairy Holdings.

      1.9 Class C Units. The term "Class C Units" means the Class C Units of
Dairy Holdings.

      1.10 Closing. The "Closing" for the contribution of cash in exchange for
Units hereunder shall occur immediately prior to the consummation of the
Acquisition.

      1.11 Closing Date. The term "Closing Date" shall mean the date on which
the Closing occurs.

      1.12 Closing Transactions. The term "Closing Transactions" shall have the
meaning set forth in Section 2.4.

      1.13 Company. The term "Company" shall have the meaning set forth in the
preface.

      1.14 Intentionally Omitted.

      1.15 Cost. The term "Cost" shall mean, with respect to Units, the cash or
fair market value of property per unit contributed by the Executive (as
proportionately adjusted for all subsequent distributions of units and other
recapitalizations).

      1.16 Disability. The term "Disability" used in connection with the
termination of employment of the Executive shall have the same meaning ascribed
to such term in any employment or severance agreement then in effect between
Executive and the Company or one of its subsidiaries or, if no such agreement
containing a definition of "Disability" is then in effect, shall mean a
determination by the Company in its sole discretion that Executive is unable to
perform his job


                                        3


responsibilities as a result of chronic illness, physical, mental or any other
disability for a period of six months or more.

      1.17 Employee and Employment. The term "employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of the Company or any of its subsidiaries, and the term "employment"
shall include service as a part- or full-time employee to the Company or any of
its subsidiaries.

      1.18 Executive. The term "Executive" shall have the meaning set forth in
the preface.

      1.19 Executive Group. The term "Executive Group" shall have the meaning
set forth in Section 7.2(a).

      1.20 Fair Market Value. The term "Fair Market Value" used in connection
with the value of Units shall mean the fair value of the Units determined in
good faith by the Board (without taking into account the effect of any
contemporaneous repurchase of Units at less than Fair Market Value under Section
7); provided that, with respect its calculation of the Fair Market Value of any
class of Units, the Board shall assume, as of such calculation date, the sale of
all of the assets of Dairy Holdings at fair value and the distribution of the
proceeds resulting therefrom in accordance with the distribution provisions set
forth in the LLC Agreement; provided further that if the Executive disagrees in
good faith with the Board's determination, the Executive shall promptly notify
Dairy Holdings in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the "Arbiter") selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of Dairy Holdings and the Executive setting forth their respective resolutions
of the dispute and the bases therefor and (ii) accepting either the Executive's
or Dairy Holding's proposed resolution of the dispute. Promptly following Dairy
Holdings' receipt of Executive's written notice of disagreement, Dairy Holdings
shall make available to Executive all data (including reports of employees and
outside advisors) relied upon by the Board in making its determination. The
Executive's and Dairy Holdings' written presentations must be submitted to the
Arbiter within 30 days of the Arbiter's engagement. The Arbiter shall notify the
Executive and Dairy Holdings of its decision within 40 days of its engagement.
The party whose proposed resolution is not accepted shall pay all of the
Arbiter's fees and expenses. If the Executive's proposed resolution is accepted,
Dairy Holdings also shall pay all of the Executive's reasonable out-of-pocket
fees and expenses (including reasonable fees and expenses of counsel and one
appraiser, accountant or investment banking firm) incurred in connection with
the arbitration. Each of Dairy Holdings and the Executive agrees to execute, if
requested by the Arbiter, a reasonable engagement letter with the Arbiter.


                                        4


      1.21 Financing Default. The term "Financing Default" shall mean an event
which would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the following as they may be
amended from time to time: (i) (A) one or more debt facilities or commercial
paper facilities of the Company, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
or credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time (the "Senior
Secured Credit Facilities") or (B) those certain 11-3/4% Senior Subordinated
Notes due 2011 in an aggregate principal amount of $200,000,000, issued by
Merger Sub on or about March 27, 2001, or any other similar notes or instruments
that the Company or its subsidiaries may issue from time to time (the "Senior
Subordinated Notes" and, together with the Senior Secured Credit Facilities, the
"Senior Financing Agreements"); (ii) any other agreement (other than an
agreement relating to the payment of trade payables in the ordinary course of
business and consistent with industry custom) under which an amount of
indebtedness of the Company or any of its subsidiaries in excess of $1,000,000
is outstanding as of the time of the aforementioned event, and any extensions,
renewals, refinancings or refundings thereof in whole or in part; (iii) any
provisions of the LLC Agreement (but not including amendments thereto after the
Closing Date) designating the terms of the Company's units or capital stock or
setting forth restrictive financial covenants; (iv) any amendment of, supplement
to or other modification of any of the instruments referred to in clauses (i)
through (iii) above; and (v) any of the securities issued pursuant to or whose
terms are governed by the terms of any of the agreements set forth in clauses
(i) through (iv) above, and any extensions, renewals, refinancings or refundings
thereof in whole or in part.

      1.22 Good Reason. The term "Good Reason" shall have the same meaning
ascribed to such term in any employment or severance agreement then in effect
between Executive and the Company or one of its subsidiaries or, if no such
agreement containing a definition of "Good Reason" is then in effect, shall mean
(i) upon a Change in Control, the assignment to the Executive of any duties
inconsistent with the Executive's title and position (including status, offices
and reporting requirements), authority, duties or responsibilities, or any other
action by the Company or one of its subsidiaries (as applicable) which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by The Company or one of its
subsidiaries promptly after receipt of notice thereof given by the Executive;
provided that after a Change in Control, the Company or one of its subsidiaries
(as applicable) shall have the flexibility to appoint the Executive to a
reporting relationship different from that which existed prior to the Change in
Control, to make an immaterial change in Executive's duties, or to change the
Executive's title provided; (ii) any failure by the Company or one of its
subsidiaries (as applicable) to provide Executive with the annual base salary
Executive had previously received or the failure by The Company or one of its
subsidiaries (as applicable) to increase such annual each year after a Change in
Control by an amount which at least equals on a percentage basis, the mean
average percentage increase in base salary for all employees similarly situated
during the two full calendar years immediately preceding a Change in Control,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and


                                       5


which is remedied by the Company or one of its subsidiaries (as applicable)
promptly after receipt of notice thereof given by the Executive; (iii) the
failure of the Company or one of its subsidiaries (as applicable) upon a Change
in Control to (A) continue in effect any employee benefit plan, compensation
plan, welfare benefit plan or material fringe benefit plan in which Executive is
participating immediately prior to such Change in Control or the taking of any
action by the Company or one of its subsidiaries which would adversely affect
Executive's participation in or reduce Executive's benefits under any such plan,
unless Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits, or (B) provide Executive with paid
vacation in accordance with the most favorable past practice of the Company or
one of its subsidiaries as in effect for Executive immediately prior to such
Change in Control; (iv) after a Change in Control, any purported termination by
the Company or one of its subsidiaries of the Executive's employment otherwise
than for Cause, death or Disability; or (v) after a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50 miles from the
office where the Executive is currently located or (B) travel on the Company's
or its subsidiaries' business to an extent substantially greater than the
Executive's current travel obligations.

      1.23 Holdings. The term "Holdings" shall have the meaning set forth in the
preface.

      1.24 Intentionally Omitted.

      1.25 LLC Agreement. The term "LLC Agreement" shall mean the Limited
Liability Company Agreement of Dairy Holdings, dated as of April 10, 2001,
entered into by and among the members of Dairy Holdings, as amended from time to
time in accordance with its terms.

      1.26 Management Investors. The term "Management Investors" shall have the
meaning set forth in the preface.

      1.27 Merger Agreement. The term "Merger Agreement" shall have the meaning
set forth in the preface.

      1.28 Merger Sub. The term "Merger Sub" shall have the meaning set forth in
the preface.

      1.29 Permitted Transferee. The term "Permitted Transferee" means any
transferee of Units pursuant to clauses (e) or (f) of the definition of "Exempt
Transfer" as defined in the Securityholders Agreement.

      1.30 Person. The term "Person" shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

      1.31 Public Offering. The term "Public Offering" shall have the meaning
set forth in the Securityholders Agreement.


                                       6


      1.32 Intentionally Omitted.

      1.33 Retirement. The term "Retirement" shall mean, with respect to the
Executive, the Executive's retirement as an employee of the Company or any of
its subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board of Directors of the Company, after at least
three years employment with the Company or any of its subsidiaries after the
Closing Date.

      1.34 Sale of the Company. The term "Sale of the Company" shall have the
meaning set forth in the Securityholders Agreement.

      1.35 Securities Act. The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.

      1.36 Securityholders Agreement. The term "Securityholders Agreement" shall
mean the Securityholders Agreement dated as of the Closing Date, among Dairy
Holdings, Vestar, the Management Investors, and the other securityholders a
party thereto, as it may be amended or supplemented thereafter from time to
time.

      1.37 Intentionally Omitted.

      1.38 Intentionally Omitted.

      1.39 Termination Date. The term "Termination Date" means the date upon
which Executive's employment with the Company and its subsidiaries is
terminated.

      1.40 Transaction Documents. The term "Transaction Documents" means,
collectively, the LLC Agreement, (ii) the Securityholders Agreement and (iii)
each of the other agreements, documents and instruments executed in connection
with the Merger Agreement and the transactions contemplated thereby.

      1.41 Units. The term "Units" shall mean the Class A Units, Class B Units,
Class C Units and any other class of equity securities issued by Dairy Holdings,
whether pursuant to this Agreement or any other arrangement.

      1.42 Unvested Percentage. The term "Unvested Percentage" shall mean the
result of one minus the Applicable Percentage.

      1.43 Vestar. The term "Vestar" means, collectively, Vestar Capital
Partners IV, L.P., a Delaware limited partnership, and Vestar/Michael, LLC, a
Delaware limited liability company.

2. Purchase and Sale of Units.


                                       7


      2.1 Intentionally Omitted.

      2.2 Intentionally Omitted.

      2.3 Contribution of Cash. Pursuant to the terms and subject to the
conditions set forth in this Agreement, the Executive hereby agrees to
contribute, and Dairy Holdings hereby agrees to receive, cash in an amount set
forth on Schedule I attached hereto in exchange for the number of Units set
forth on Schedule I.

      2.4 Closing Events. At the Closing, subject to the terms and conditions
set forth in this Agreement, the parties hereto shall consummate the following
"Closing Transactions":

            (a) The Executive shall deliver to Dairy Holdings the amount of cash
set forth in Schedule I attached hereto by check or wire transfer of immediately
available funds; and

            (b) Dairy Holdings shall deliver to the Executive unit certificates
representing the number of Units set forth on Schedule I attached hereto.

      2.5 Section 83(b) Election. With respect to the Units received by
Executive, within 30 days after the Closing, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

3. [Reserved]

4. Representations and Warranties of the Executive and Dairy Holdings.

      4.1 Representations of the Executive. The Executive represents and
warrants to Dairy Holdings that the statements contained in this Section 4.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date, with respect to himself:

            (a) Power and Authority. The Executive has full power and authority
to execute and deliver this Agreement and perform his obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Executive, enforceable in accordance with its terms and conditions. To the best
of his knowledge, the Executive need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (b) Noncontravention. To the best of his knowledge, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Executive is


                                        8


subject or conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Executive is a party or by which he is bound or to which any of his assets is
subject.

            (c) Brokers' Fees. The Executive has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Dairy Holdings could
become liable or obligated.

      4.2 Units Unregistered. The Executive acknowledges and represents that
Executive has been advised by Dairy Holdings that:

            (a) the offer and sale of the Units have not been registered under
      the Securities Act;

            (b) the Units must be held indefinitely and the Executive must
      continue to bear the economic risk of the investment in the Units unless
      the offer and sale of such Units are subsequently registered under the
      Securities Act and all applicable state securities laws or an exemption
      from such registration is available;

            (c) there is no established market for the Units and it is not
      anticipated that there will be any public market for the Units in the
      foreseeable future;

            (d) a restrictive legend in the form set forth below and the legends
      set forth in Section 8.2(a) and (b) of the Securityholders Agreement shall
      be placed on the certificates representing the Units:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            CERTAIN REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A
            MANAGEMENT UNIT SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE
            EXECUTIVE DATED AS OF APRIL 10, 2001, AS AMENDED AND MODIFIED FROM
            TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF
            AT THE ISSUER'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE"; and

            (e) a notation shall be made in the appropriate records of Dairy
      Holdings indicating that the Units are subject to restrictions on transfer
      and, if Dairy Holdings should at some time in the future engage the
      services of a securities transfer agent, appropriate stop-transfer
      instructions will be issued to such transfer agent with respect to the
      Units.

      4.3 [Reserved]


                                        9


      4.4 Representations of Dairy Holdings. Dairy Holdings represents to the
Executive that the statements contained in this Section 4.4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date, with respect to itself:

            (a) Organization and Power. Dairy Holdings is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware with full power and authority to enter into this Agreement
and perform its obligations hereunder.

            (b) Authorization. The execution, delivery and performance of this
Agreement by Dairy Holdings and the consummation of the transactions
contemplated hereby by Dairy Holdings have been duly and validly authorized by
all requisite limited liability company action on the part of Dairy Holdings,
and no other proceedings on its part are necessary to authorize the execution,
delivery or performance of this Agreement. This Agreement has been duly executed
and delivered by Dairy Holdings, and this Agreement constitutes a valid and
binding obligation of Dairy Holdings, enforceable in accordance with its terms
and conditions. Dairy Holdings need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

            (c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Dairy Holdings is subject or any
provision of its charter or bylaws or conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Dairy Holdings is a party or by which it is bound or to which any of
its assets is subject.

            (d) Intentionally Omitted.

            (e) Capitalization. All of the issued and outstanding Units have
been duly authorized and are validly issued. Except as set forth in the
Transaction Documents, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require Dairy Holdings to issue, sell,
or otherwise cause to become outstanding any of its Units. Except as set forth
in the Transaction Documents, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Dairy Holdings. Except as set forth in the Transaction Documents,
there are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Dairy Holdings.

5. Covenants of the Executive and Dairy Holdings

      5.1 Covenants. The Executive and/or Dairy Holdings each agree as follows
with respect to the period between the execution of this Agreement and the
Closing:


                                       10


            (a) General. The Executive and Dairy Holdings each will use his or
its commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement.

            (b) Notification. Each of the parties hereto shall disclose to the
other parties hereto in writing any material breach by such party of the
representations and warranties of such party contained in Section 4 hereof
promptly upon discovery thereof.

6. [Reserved]

7. Certain Sales Upon Termination of Employment.

      7.1 Put Option.

            (a) If the Executive's employment with the Company and its
subsidiaries terminates due to the Disability, death or Retirement of the
Executive prior to the earlier of (i) a Public Offering or (ii) a Sale of the
Company, for any Units issued 181 days or more prior to the date of termination
of employment of the Executive, within 120 days after such date of termination
of employment (or in the case of Units issued 180 days or less prior to such
date of termination or at any time after such date of termination of employment,
no earlier than 181 days and no later than 271 days after the date of issuance
of such Units), the Executive shall have the right, subject to the provisions of
Section 8 hereof, to sell to Dairy Holdings, and Dairy Holdings shall be
required to purchase (subject to the provisions of Section 8 hereof), on one
occasion from the Executive and his Permitted Transferees, if applicable, all
(but not less than all) of the number of Units then held by the Executive and
such other number of Units held by the Executive's Permitted Transferees as the
Executive may request provided that in the aggregate such number does not exceed
the product of (x) the total number of Units (by class) collectively held by the
Executive and all of his Permitted Transferees and (y) the Applicable Percentage
(measured as of the Termination Date), at a price per unit equal to the Fair
Market Value of such unit (measured as of the delivery of the notice referred to
in Section 7.1(b)).

            (b) If the Executive desires to exercise its option to require Dairy
Holdings to repurchase Units pursuant to Section 7.1(a), the Executive shall
send one written notice to Dairy Holdings setting forth the intention of
Executive and Permitted Transferees, if applicable, to collectively sell all
Units pursuant to Section 7.1(a) within the period described above, which notice
shall specify the number of Units to be sold and shall include the signature of
the Executive and each Permitted Transferee desiring to sell Units. Subject to
the provisions of Section 8.1, the closing of the purchase shall take place at
the principal office of Dairy Holdings on the later of the 30th day after the
giving of such notice and the date that is 10 business days after the final
determination of Fair Market Value. Subject to the provisions of Section 8.1,
the Executive shall deliver to Dairy Holdings duly executed instruments
transferring title to units to Dairy Holdings, against payment of the
appropriate purchase price by cashier's or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.


                                       11


      7.2 Call Options.

            (a) If the Executive's employment with the Company or any of its
subsidiaries terminates for any of the reasons set forth in clauses (i), (ii) or
(iii) below prior to a Sale of the Company, or if the Executive engages in
Competitive Activity (as defined in Section 9.1 of this Agreement), for any
Units issued 181 days or more prior to the date of Executive's termination of
employment or engagement in Competitive Activity, within 120 days after such
date (or in the case of Units issued 180 days or less prior to such date or at
any time after such date, no earlier than 181 days and no later than 271 days
after the date of issuance of such Units), Dairy Holdings shall have the right
and option to purchase, and the Executive and the Executive's Permitted
Transferees (hereinafter referred to as the "Executive Group") shall be required
to sell to Dairy Holdings, any or all of such Units then held by such member of
the Executive Group (it being understood that if Units of any class subject to
repurchase hereunder may be repurchased at different prices, Dairy Holdings may
elect to repurchase only the portion of the Units of such class subject to
repurchase hereunder at the lower price), at a price per unit equal to the
applicable purchase price determined pursuant to Section 7.2(c):

            (i) if the Executive's active employment with the Company and its
      subsidiaries is terminated due to the Disability, death or Retirement of
      the Executive;

            (ii) if the Executive's active employment with the Company and its
      subsidiaries is terminated by the Company and its subsidiaries without
      Cause or by the Executive for Good Reason;

            (iii) if the Executive's active employment with the Company and its
      subsidiaries is terminated (A) by the Company or any of its subsidiaries
      for Cause or (B) by the Executive for any other reason not set forth in
      Section 7.2(a)(i) or Section 7.2(a)(ii);

provided that Dairy Holdings' rights under this Section 7.2(a) shall not be
available in the event of the termination of Executive's employment by the
Company or its subsidiaries without Cause or by Executive for Good Reason, in
either case following a sale by the Company or its subsidiaries of substantially
all of the line of business in which Executive primarily performs his services.

            (b) If Dairy Holdings desires to exercise one of its options to
purchase Units pursuant to this Section 7.2, Dairy Holdings shall, not later
than the expiration of the applicable period described for such purchase in
Section 7.2(a), send written notice to each member of the Executive Group of its
intention to purchase Units, specifying the number of Units to be purchased (the
"Call Notice"). Subject to the provisions of Section 8, the closing of the
purchase shall take place at the principal office of Dairy Holdings on the later
of the 30th day after the giving of the Call Notice and the date that is 10
business days after the final determination of Fair Market Value. Subject to the
provisions of Section 8.1, the Executive shall deliver to Dairy Holdings duly
executed instruments transferring title to Units to Dairy Holdings, against
payment of the appropriate purchase


                                       12


price by cashier's or certified check payable to the Executive or by wire
transfer of immediately available funds to an account designated by the
Executive.

            (c) In the event of a purchase by Dairy Holdings pursuant to Section
7.2(a), the purchase price shall be (in each case after taking account of any
prior purchases pursuant to Section 7.2(a)):

            (i) if the Executive engages in any Competitive Activity (as defined
            in Section 9.1 of this Agreement), a price per unit equal to the
            lesser of (A) Fair Market Value (measured as of the Activity Date
            (as defined in Section 9.2 of this Agreement)) and (B) Cost;

            (ii) in the case of a termination of employment described in Section
            7.2(a)(i), Section 7.2(a)(ii), or Section 7.2(a)(iii)(B), (i) if the
            number of Units of any class to be purchased from the Executive
            Group by Dairy Holdings is less than or equal to the Unvested
            Percentage of such class, the purchase price for each Unit shall be
            the lesser of (x) the Fair Market Value (measured as of the date of
            the Call Notice) and (y) the Cost of such Unit (the "Unvested Unit
            Purchase Price"), and (ii) if the number of such Units exceeds the
            Unvested Percentage of such class, the purchase price for each Unit
            shall be (A) for a number of Units of such class equal to the result
            of (x) the Unvested Percentage and (y) the total number of Units of
            such class held by the Executive Group, the Unvested Unit Purchase
            Price, and (B) for the remainder of the Units of such class being
            repurchased, the Fair Market Value of such Unit (measured as of the
            date of the Call Notice); and

            (iii) in the case of a termination of employment described in
            Section 7.2(a)(iii)(A), a price per unit equal to the lesser of (A)
            Fair Market Value (measured as of the date of the Call Notice) and
            (B) Cost.

      Notwithstanding anything to the contrary contained in this Agreement, if
the Fair Market Value of Units subject to a Call Notice is finally determined to
be an amount at least 10% greater than the per Unit repurchase price for such
Unit in the Call Notice, Dairy Holdings shall have the right to revoke the
exercise of its option pursuant to this Section 7.2 for all or any portion of
the Units elected to be repurchased by it by delivering notice of such
revocation in writing to the Executive Group during the ten-day period beginning
on the date that Dairy Holdings is given written notice that the Fair Market
Value of a Unit was finally determined to be an amount at least 10% greater than
the per Unit repurchase price set forth in the Call Notice.

      Notwithstanding anything in this Section 7.2 to the contrary, in the event
that Dairy Holdings purchases Units at Fair Market Value pursuant to the terms
of this Section 7.2 and within six months of the date of the determination of
such Fair Market Value both (A) a Sale of the Company or a Public Offering
occurs and (B) in connection with such transaction, the per share value of the
Units exceeds the per share purchase price paid by Dairy Holdings to Executive
under this Section 7.2, the


                                       13


Executive shall be entitled to receive from Dairy Holdings the benefit of such
higher valuation for the Units purchased. The excess of (x) the net proceeds
which the Executive would have received in such Sale of the Company or Public
Offering from the sale in such transaction of all Units repurchased by Dairy
Holdings under this Section 7.2, less (y) the amount which the Executive
received from the purchase of such Units by Dairy Holdings, shall be paid by
certified or cashier's check or wire transfer of funds to Executive upon
consummation of such transaction; provided that, Executive shall have no rights
under this paragraph if, in connection with the determination of Fair Market
Value of the repurchased Units, the Arbiter was used.

      7.3 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Dairy Holdings shall not excuse, or constitute a waiver of its rights against,
the defaulting member.

8. Certain Limitations on Dairy Holdings's Obligations to Purchase Units.

      8.1 Payment for Units. If at any time Dairy Holdings elects or is required
to purchase any Units pursuant to Section 7, Dairy Holdings shall pay the
purchase price for the Units it purchases (i) first, by offsetting indebtedness,
if any, owing from the Executive to Dairy Holdings (which indebtedness shall be
applied pro rata against the proceeds receivable by each member of the Executive
Group receiving consideration in such repurchase) and (ii) then, by Dairy
Holdings' delivery of a check or wire transfer of immediately available funds
for the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Units so purchased, duly
endorsed; provided that if such cash payment would result (A) in a violation of
any law, statute, rule, regulation, policy, order, writ, injunction, decree or
judgment promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its subsidiaries or
any of its or their property or (B) after giving effect thereto, a Financing
Default, or (C) if the Board determines in good faith that immediately prior to
such purchase there shall exist a Financing Default which prohibits such
purchase, dividend or distribution ((A) through (C) collectively the "Cash
Deferral Conditions"), the portion of the cash payment so affected may be made
by Dairy Holdings' delivery of preferred units of Dairy Holdings with a
liquidation preference equal to the balance of the purchase price; which
preferred units shall accrue yield annually at the "prime rate" published in The
Wall Street Journal on the date of issuance, which yield shall be payable at
maturity or upon payment of distributions by Dairy Holdings (other than tax
distributions). Each such preferred unit shall as of its issuance be deemed to
have basic contributions made with respect to such unit equal to (A) the portion
of the cash payment paid by the issuance of such preferred units divided by (B)
the number of preferred units so issued in the repurchase. Any such preferred
units issued shall be promptly redeemed (i) when the Cash Deferral Condition
which prompted their issuance no longer exists, (ii) upon consummation of an IPO
of the Company or Holdings (or their successors) (to the extent allowed by the
underwriters of such IPO), or (iii) upon a Sale of the Company from net cash
proceeds, if any, payable to Dairy Holdings or its unitholders (other than
proceeds required to be paid to Holdings);


                                       14


to the extent that sufficient net cash proceeds are not so payable, the
preferred units shall be cancelled in exchange for such non-cash consideration
received by unitholders in the Sale of the Company having a fair market value
equal to the principal of and accrued yield on the preferred units. If a yield
is required to be paid on any preferred units prior to maturity and any Cash
Deferral Conditions exist, such yield may be cumulated and accrued until and to
the extent that such prohibition no longer exists.

9. Noncompetition.

      9.1 Competitive Activity. Executive shall be deemed to have engaged in
"Competitive Activity" if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive's employment with the
Company or its subsidiaries terminates, (i) Executive, for himself or on behalf
of any other person, firm, partnership, corporation, or other entity, engages,
directly or indirectly, as an executive, agent, representative, consultant,
partner, shareholder or holder of any other financial interest, in any business
that competes with the Company or its subsidiaries in the line of business
Executive is employed in by the Company or its subsidiaries (as applicable), as
such business is described in any employment or severance agreement then in
effect between Executive and the Company or one of its subsidiaries or, if no
such agreement is then in effect, as described on Schedule II attached hereto (a
"Competing Business"), it being understood and agreed that Executive's
activities shall not satisfy this clause (i) where Executive is employed by a
person, firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, and Executive is not engaged in or
responsible for the Competing Business of such entity. Executive may also,
without satisfying clause (i) be a passive owner of not more than 2% of the
outstanding publicly traded stock of any class of a Competing Business so long
as Executive has no active participation in the business of such entity, except
to the extent permitted above; or (ii) Executive (A) directly or indirectly
through another entity, induces or attempts to induce any employee of the
Company or its subsidiaries to leave the employ of the Company or its
subsidiaries, or in any way interfere with the relationship between the Company
or any of its subsidiaries and any employee thereof, (B) knowingly hires any
person who was an employee of the Company or any of its subsidiaries within 180
days prior to the time such employee was hired by Executive, (C) induces or
attempts to induce any customer, supplier, licensee or other business relation
of the Company or any of its subsidiaries to cease doing business with the
Company or its subsidiaries or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any subsidiary or (D) directly or indirectly acquires or attempt to
acquire an interest in any business relating to the business of the Company or
any of its subsidiaries and with which the Company or any of its subsidiaries
has entertained discussions or has requested and received information relating
to the acquisition of such business by the Company or its subsidiaries in the
one-year period immediately preceding Executive's termination of employment with
the Company.

      9.2 Activity Date. If Executive engages in Competitive Activity, the
"Activity Date" shall be the first date on which Executive engages in such
Competitive Activity.


                                       15


      9.3 Repayment of Proceeds. If Executive engages in Competitive Activity,
then Executive shall be required to pay to Dairy Holdings, within ten business
days following the Activity Date, an amount equal to the excess, if any, of (A)
the aggregate proceeds Executive received upon the sale or other disposition of
Executive's Units, over (B) the aggregate Cost of such Units.

10. Miscellaneous.

      10.1 Transfers to Permitted Transferees. Prior to the transfer of Units to
a Permitted Transferee (other than a transfer in connection with or subsequent
to a Sale of the Company), the Executive shall deliver to Dairy Holdings a
written agreement of the proposed transferee (a) evidencing such Person's
undertaking to be bound by the terms of this Agreement and (b) acknowledging
that the Units transferred to such Person will continue to be Units for purposes
of this Agreement in the hands of such Person. Any transfer or attempted
transfer of Units in violation of any provision of this Agreement or the
Securityholders Agreement shall be void, and Dairy Holdings shall not record
such transfer on its books or treat any purported transferee of such Units as
the owner of such Units for any purpose.

      10.2 Deemed Transfer of Units. If Dairy Holdings shall deliver, at the
time and place and in the amount and form provided in this Agreement, the
consideration for the Units to be repurchased in accordance with the provisions
of this Agreement, then from and after such time, the Person from whom such
units are to be repurchased shall no longer have any rights as a holder of such
units (other than the right to receive payment of such consideration in
accordance with this Agreement), and such Units shall be deemed purchased in
accordance with the applicable provisions hereof and Dairy Holdings shall be
deemed the owner and holder of such Units, whether or not certificates therefor
have been delivered as required by this Agreement.

      10.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions
of this Agreement shall apply, to the full extent set forth herein with respect
to Units, to any and all securities of Dairy Holdings or any successor or assign
of Dairy Holdings (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Units, by reason of any dividend payable in units, issuance
of units, combination, recapitalization, reclassification, merger, consolidation
or otherwise.

      10.4 Executive's Employment by the Company. Nothing contained in this
Agreement shall be deemed to obligate the Company or any subsidiary of the
Company to employ the Executive in any capacity whatsoever or to prohibit or
restrict the Company (or any such subsidiary) from terminating the employment of
the Executive at any time or for any reason whatsoever, with or without Cause.

      10.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Dairy Holdings against any and all losses, liabilities, damages,
judgments, fines, fees or expenses, including, without limitation, attorneys'
fees (for purposes of this Section 10.5, hereinafter "Losses"), incurred in
connection with any failure to withhold amounts relating to the Units acquired
herein by


                                       16


the Management Investors. In the event there is a determination within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, that
Dairy Holdings properly failed to withhold amounts relating to the Units
acquired herein by Executive, Executive shall provide Dairy Holdings with a Form
4669 or other suitable evidence of payment of taxes (which will include a
cancelled check or a copy of the relevant signed tax return) with respect to the
receipt of any distributions relating to the Units acquired herein by Executive.
To the extent either Dairy Holdings and/or any of its affiliates is entitled to
any tax deduction with respect to the issuance of Units, (i) Dairy Holdings
shall specially allocate such deduction to the Executive and/or (ii) Holdings
shall pay, or cause any affiliate to pay, as the case may be, Executive an
amount equal to 40% of such deduction, such amount to be grossed up to reflect
any additional deduction to Holdings and/or any of its affiliates (as the case
may be) provided that if any Cash Deferral Condition exists at the time such
payment is required, such payment shall be deferred until no such Cash Deferral
Condition exists. Each of Executive and Dairy Holdings shall notify the other
(in a manner described in Section 10.10 of this Agreement) within 20 days of
first receiving notice of an audit or other proceeding being conducted by the
Internal Revenue Service or any state or local taxing authority relating to the
Units acquired herein by the Management Investors, and both Executive and Dairy
Holdings shall assist each other during the course of such audit or other
proceeding to the extent that such assistance is reasonably requested.

      10.6 Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that no
Permitted Transferee shall derive any rights under this Agreement unless and
until such Permitted Transferee has executed and delivered to Dairy Holdings a
valid undertaking and becomes bound by the terms of this Agreement.

      10.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

      10.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

      10.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
each of Dairy Holdings and the members of the Executive Group hereby submits to
the exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. Each of the members of the Executive Group and
Dairy Holdings hereby irrevocably waives any objections which 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 brought in any court of competent
jurisdiction in the State of Delaware, and hereby further irrevocably waives any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum.


                                       17


      10.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

            (a)   If to Dairy Holdings

                  M-Foods Dairy Holdings, LLC
                  c/o Vestar Capital Partners IV, L.P.
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO 80202
                  Attention: James P. Kelley
                  Facsimile: (303) 292-6639

            with copies to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue, 41st Floor
                  New York, NY  10167
                  Attention: General Counsel
                  Facsimile: (212) 808-4922

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, IL 60601
                  Attention: Stephen L. Ritchie
                  Facsimile: (312) 861-2200

            (b)   If to the Executive, to the address as shown on the unit
register of Dairy Holdings.

            with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, NY 10036-6522
                  Attention: Eric L. Cochran

      10.11 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises,


                                       18


representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein and therein.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

      10.12 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages), and by
different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

      10.13 Rights Cumulative; Waiver. The rights and remedies of the Executive
and Dairy Holdings under this Agreement shall be cumulative and not exclusive of
any rights or remedies which either would otherwise have hereunder or at law or
in equity or by statute, and no failure or delay by either party in exercising
any right or remedy shall impair any such right or remedy or operate as a waiver
of such right or remedy, nor shall any single or partial exercise of any power
or right preclude such party's other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.

                                    * * * * *


                                       19


      IN WITNESS WHEREOF, the parties have executed this Management Unit
Subscription Agreement as of the date first above written.

                                  M-FOODS DAIRY HOLDINGS, LLC

                                  By:___________________________________________

                                  Its:__________________________________________


                                  M-FOODS HOLDINGS, INC.

                                  By:___________________________________________

                                  Its:__________________________________________

                                  ______________________________________________
                                                   James Mohr



                                CONSENT OF SPOUSE

            I, ____________, the undersigned spouse of Executive, hereby
acknowledge that I have read the foregoing Management Unit Subscription
Agreement (the "Agreement") and that I understand its contents. I am aware that
the Agreement provides for the repurchase of my spouse's Units (as defined in
the Agreement) under certain circumstances and imposes other restrictions on the
transfer of such Units. I agree that my spouse's interest in the Units is
subject to the Agreement and any interest I may have in such Units shall also be
irrevocably bound by the Agreement and, further, that my community property
interest in such Units, if any, shall be similarly bound by the Agreement.

            I am aware that the legal, financial and other matters contained in
the Agreement are complex and I am encouraged to seek advice with respect
thereto from independent legal and/or financial counsel. I have either sought
such advice or determined after carefully reviewing the Agreement that I hereby
waive such right.

                                    Acknowledged and agreed this ___ day of
                                    _____________, 2001.

                                    ____________________________________________

                                    Name:_______________________________________

                                    ____________________________________________
                                                      Witness



                                   SCHEDULE I

- --------------------------------------------------------------------------------
               Cash                                           Units
- --------------------------------------------------------------------------------
              $35.54                                   4,000 Class B Units
                                                       4,000 Class C Units
- --------------------------------------------------------------------------------



                                   SCHEDULE II

Competing Business: Production, distribution or sale of eggs or egg products



                                                                       EXHIBIT A

                       ELECTION TO INCLUDE UNITS IN GROSS
                     INCOME PURSUANT TO SECTION 83(b) OF THE
                              INTERNAL REVENUE CODE

      The undersigned purchased units (the "Units") of M-Foods Dairy Holdings,
LLC ("Dairy Holdings") on ________, 2001. The undersigned desires to make an
election to have the Units taxed under the provision of Section 83(b) of the
Internal Revenue Code of 1986, as amended ("Code ss.83(b)"), at the time the
undersigned purchased the Units.

            Therefore, pursuant to Code ss.83(b) and Treasury Regulation
ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Units (described below), to report as taxable income for calendar
year 2001 the excess, if any, of the Units' fair market value on ______, 2001
over the purchase price thereof.

            The following information is supplied in accordance with Treasury
Regulation ss.1.83-2(e):

            1. The name, address and social security number of the undersigned:
            _____________________________
            _____________________________
            _____________________________
            SSN:_________________________

            2. A description of the property with respect to which the election
is being made: ________ Class A Units ____ Class B Units ____ and Class C Units.

            3. The date on which the property was transferred: _________, 2001.
The taxable year for which such election is made: calendar year 2001.

            4. The restrictions to which the property is subject: The Units are
subject to a time-based vesting schedule. If the undersigned ceases to be
employed by The Company or any of its subsidiaries under certain circumstances,
all or a portion of the Units may be subject to repurchase by Dairy Holdings at
a price per Unit equal to the lesser of (x) fair market value (measured as of
the date of such repurchase) and (y) cost. The Units are also subject to
transfer restrictions.

            5. The aggregate fair market value on ______ __, 2001 of the
property with respect to which the election is being made, determined without
regard to any lapse restrictions: $_______.

            6. The aggregate amount paid for such property: $_______.



            A copy of this election has been furnished to the Secretary of Dairy
Holdings pursuant to Treasury Regulations ss.1.83-2(e)(7).


Dated:  ________, 2001                             _____________________________
                                                               [Name]

EX-21.1

                                                                    Exhibit 21.1


                       Subsidiaries of Michael Foods, Inc.



Entity                                                 Jurisdiction of Incorporation
                                                    

Michael Foods of Delaware, Inc.                        Delaware
M. G. Waldbaum Company                                 Nebraska
Papetti's Hygrade Egg Products, Inc.                   Minnesota
Papetti Electroheating Corporation                     New Jersey
Casa Trucking, Inc.                                    Minnesota
MFI Food Canada, Inc.                                  Canada
MIKLFS, Inc.                                           Virgin Islands
Northern Star Co.                                      Minnesota
Minnesota Products, Inc.                               Minnesota
Farm Fresh Foods, Inc.                                 Nevada
Crystal Farms Refrigerated Distribution Company        Minnesota
WFC, Inc.                                              Wisconsin
Wisco Farm Cooperative                                 Wisconsin
Kohler Mix Specialties, Inc.                           Minnesota
Midwest Mix, Inc.                                      Minnesota
Kohler Mix Specialties of Connecticut, Inc.            Connecticut
M-Foods Dairy, LLC                                     Delaware
M-Foods Dairy TXCT, LLC                                Delaware

EX-23.1

                                                                   EXHIBIT 23.1

             CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our reports dated May 15, 2001, accompanying the financial
statements and schedules of Michael Foods, Inc. and subsidiaries (a
wholly-owned subsidiary of M-Foods Holdings, Inc.); Michael Foods, Inc. and
subsidiaries (the "Predecessor"); M-Foods Dairy, LLC; Kohler Mix - MN (an
operating unit of Michael Foods, Inc.); M-Foods Dairy TXCT, LLC; and Kohler
Mix - TXCT (an operating unit of Michael Foods, Inc.), all contained in the
Registration Statement and Prospectus. We consent to the use of the
aforementioned reports in the Registration Statement and Prospectus, and to
the use of our name as it appears under the caption "Experts."


/s/ GRANT THORNTON LLP



Minneapolis, Minnesota

June 22, 2001